3.11.3 Individual Income Tax Returns

Manual Transmittal

November 17, 2017

Purpose

(1) This transmits revised IRM 3.11.3, Returns and Documents Analysis - Individual Income Tax Returns - Code and Edit.

Material Changes

(1) Various editorial changes were made throughout the IRM, e.g., updating IRM references; correcting spelling or grammatical errors; updating information that changes annually, such as tax years; updating website addresses/links; adding or correcting IRM references; formatting; etc.

(2) Updated exemption, standard deduction and additional standard deduction amounts, references to all money amounts, tolerances, limitations, and EIC money amounts throughout IRM

(3) Updated line numbers for forms and schedules throughout IRM

(4) Updated Form 6001 correspondence instructions throughout based on revised form.

(5) Deleted prior year instructions for TY07 and prior as appropriate throughout IRM

(6) IRM 3.11.3.1 Added Internal Controls to section; existing information was rewritten, reorganized or deleted as appropriate.

(7) IRM 3.11.3.2.2.1(3) Changed sequence number to serial number

(8) IRM 3.11.3.3.2(11) Added new paragraph with instruction to edit line numbers for T-lines when they are missing or incomplete.

(9) IRM 3.11.3.3.3 Added instruction to delete forms/schedules within sequence range not transcribed.

(10) IRM 3.11.3.3.3(1) Deleted number

(11) IRM 3.11.3.3.3(4) Changed number to code and note to example

(12) IRM 3.11.3.3.3(8) Added, together and

(13) IRM 3.11.3.3.3(10) & (11) Removed Form 8917 from list of transcribed forms.

(14) IRM 3.11.3.3.4.1(4) Form 3471, line 11, added edit "50" when there is a notation on the return

(15) IRM 3.11.3.3.6(7) Added "fully code and edit the return and" to the instruction.

(16) IRM 3.11.3.3.6(7)b Added "If a credit card is attached" .

(17) IRM 3.11.3.3.6.1(1) Changed leave to edit an Action Trail and added edit to notations

(18) IRM 3.11.3.3.6.1(2) Added note to first bullet regarding timely received date after April 23rd.

(19) IRM 3.11.3.3.6.1(2) Changed written to edit an Action Trail

(20) IRM 3.11.3.3.6.1(3) Added internally for routing with Form 4227

(21) IRM 3.11.3.3.6.1(4) Added "the work leader will" .

(22) IRM 3.11.3.3.6.1(4) Added new instructions for send original items back to taxpayer using Form 14219

(23) IRM 3.11.3.3.7.1(3) Rewritten to clarify caption editing with Action Code "480" .

(24) IRM 3.11.3.4.1 Added new (2) Edit all markings legibly and renumbered (3) and (4)

(25) IRM 3.11.3.4.2.1(1) Note - Added instruction for editing entity deleted in error.

(26) IRM 3.11.3.4.2.4(1) Added new (b) instructions when adjusting a T-line amount

(27) IRM 3.11.3.4.2.4(1) Added the word "entire" to item (d) in list.

(28) IRM 3.11.3.4.2.4(1) new (f) added, or similar notation.

(29) IRM 3.11.3.4.2.4(1)f Exception - Revised to address Form 6251 attached to Form 1040EZ.

(30) IRM 3.11.3.4.3(4) Added Forms 6001, 6001-A, and 3531 to bullet list.

(31) IRM 3.11.3.5.1(1) Changed correspond to request and deleted the last sentence

(32) IRM 3.11.3.5.1(2) Changed wording to, and the signature is not located in the appropriate location

(33) IRM 3.11.3.5.2(1) Exception - Added "or similar statement" .

(34) IRM 3.11.3.5..2.1(2)c Added reference to Exhibit 3.11.3-16.

(35) IRM 3.11.3.5.2.1(4) Deleted (d) as unnecessary, list was relettered and a new (g) with instruction to edit or stamp "Return for Signature" with current dated was added.

(36) IRM 3.11.3.5.2.1(4) Revised (g) and added note regarding appropriate action trail.

(37) IRM 3.11.3.5.2.1(1) Changed processed to received

(38) IRM 3.11.3.5.2.1 Deleted (3)e; information duplicated in (4)g. Editorial changes made to (4)g.

(39) IRM 3.11.3.5.2.2(5) Added Form 6001-A and added "or an indication of ID Theft is present" to (5)h, 5th bullet.

(40) IRM 3.11.3.5.2.2(7) changed ACA issue to missing Form 8962

(41) IRM 3.11.3.5.3(1) Added "original" to Form 3531.

(42) IRM 3.11.3.5.3.2 Revised instructions to clarify only undeliverable are routed to Entity and to add instruction for editing AC 640.

(43) IRM 3.11.3.5.3.2(4) Added new (4) regarding correspondence conditions.

(44) IRM 3.11.3.5.3.2(5) Chart - Added instruction for 1040A Line 34.

(45) IRM 3.11.3.5.3.2(5) Removed bullets from Signature block Action Required and added referral to Exhibit 3.11.3-12.

(46) IRM 3.11.3.5.3.2(5) Deleted combined tax liabilities and changed IRM reference for missing dependent TIN to X dependent’s name

(47) IRM 3.11.3.5.3.2(6) Chart - Deleted first row as no longer relevant; revised 3rd row ACTION side into a steplist; revised Form 2441 ACTION side (b) to state "X" qualifying person’s name and deleted Form 5329 row as no longer applicable..

(48) IRM 3.11.3.6(3) Added Blind Trust Returns to the bullet list.

(49) IRM 3.11.3.6.1.2(1) Added note to hand-carry KITA returns to work leader unless batched as KITA.

(50) IRM 3.11.3.6.1.3(3) Deleted instruction to edit RPC D when the taxpayer attaches Form 8915; no longer valid.

(51) IRM 3.11.3.6.1.6(6) Removed restriction per guidance from Chief Counsel received during clearance review.

(52) IRM 3.11.3.6.2.1(1) Added to the exception instruction not to research for TC150 if SPC B has been edited.

(53) IRM 3.11.3.6.2.1(1) Exception - Added bullet to process as original if SPC "B" has been edited by IVO/IVTO.

(54) IRM 3.11.3.6.2.1(1) Added "Filed" to the list.

(55) IRM 3.11.3.6.2.1(1) Added instruction to take fully coded/edited return to lead

(56) IRM 3.11.3.6.2.1(1) Added an accepted electronically file return and new bullet for Form W-7 renewal only

(57) IRM 3.11.3.6.2.1(2) Added work leader instructions for research and results

(58) IRM 3.11.3.6.2.3 Rewrote (1) correspondence reminder to clarify instruction; (7) added "and missing signature" .

(59) IRM 3.11.3.6.2.7(1) Added new (1) to define CIS returns

(60) IRM 3.11.3.6.2.10 Revised chart in (1) to identify Recovery Processing vs. Simultaneous Processing of Form 8938; added new (2) regards to processing guidance.

(61) IRM 3.11.3.6.2.13(3) Added Private Delivery Service Address per IRM 10.2.13.4.4.1.

(62) IRM 3.11.3.6.2.13(4) Removed unnecessary information for clarity of instruction.

(63) IRM 3.11.3.6.2.13(5) a) Added action code editing instructions for remit and non remit International returns

(64) IRM 3.11.3.6.2.17(4) Added June

(65) IRM 3.11.3.6.2.18(5) Added "or invalid signature" .

(66) IRM 3.11.3.7.4(1) Reworded prior year definition.

(67) IRM 3.11.3.7.4(1) Reworded prior year definition.

(68) IRM 3.11.3.7.4(2) and (3) deleted. Added new (3) with statute of limitations instructions reference

(69) IRM 3.11.3.7.5(1) Added new bullet "edit the caption" .

(70) IRM 3.11.3.8.1(1) Added instruction to see IRM 3.11.3.8.2 for returns with no received date.

(71) IRM 3.11.3.8.1(4) and Note - rewarded to clarify that when editing received date must be in MMDDYY format.

(72) IRM 3.11.3.8.1(4) Added note indicating a dash (-) in place of a number within the received date is considered an incomplete date.

(73) IRM 3.11.3.8.1(5) Removed instruction to circle received date when found on other than the front page.

(74) IRM 3.11.3.8.1(5) Reworded editing received date instruction

(75) IRM 3.11.3.8.2(3)a Added note with instruction when the Return for Signature date is missing.

(76) IRM 3.11.3.8.2.3(3) Added DHL to the list of designated Private Delivery Services.

(77) IRM 3.11.3.8.3(1) Deleted Exception, not applicable for 2018.

(78) IRM 3.11.3.8.3(4) Note removed from table and added within paragraph.

(79) IRM 3.11.3.8.4(5) Note removed from table and added within paragraph.

(80) IRM 3.11.3.9.2.1(3) Corrected 1st bullet by adding "Number" after Individual Taxpayer Identification.

(81) IRM 3.11.3.9.2.1(4) Added Exception not necessary to delete invalid TIN for dependents when the name has been deleted.

(82) IRM 3.11.3.9.2.1.1(2) Added Note instructing to underline an edited ITIN on a photocopied return.

(83) IRM 3.11.3.9.2.2.2(3)d Added instruction to underline "in care of" or "c/o" when underlining name as AIL.

(84) IRM 3.11.3.9.2.3.1(2) Added note to 2nd Then Box to detach and route Form 56 with Form 8822 when present.

(85) IRM 3.11.3.10.1(1) Added Reminder to not edit caption when corresponding for documentary evidence.

(86) IRM 3.11.3.10.1(1) Reformatted from bullet list to paragraph form.

(87) IRM 3.11.3.10.2(5) Added IRM reference for possible filing status editing.

(88) IRM 3.11.3.10.3 Added Note to correspond when signature name does not match documentary evidence name.

(89) IRM 3.11.3.10.3(1) Caution removed, information already included in (4).

(90) IRM 3.11.3.10.3(4) Added note to 1st Then Box indicating that signature name and name on documentary evidence must match, otherwise correspond.

(91) IRM 3.11.3.10.3(7) (a) Added correspond if an original signature is missing or invalid

(92) IRM 3.11.3.11.1(4) Note revised by adding instruction to circle out AIL if already present.

(93) IRM 3.11.3.11.1(4) Added note not to edit AIL or underline when corresponding for documentary evidence

(94) IRM 3.11.3.11.2(4) Removed restriction from (a) and (b) and revised to mark only the tolerance as OUO per suggestion of Chief Counsel and for consistency with other IRM references.

(95) IRM 3.11.3.12.1(2) Revised "FS 5" for TY 2017.

(96) IRM 3.11.3.12.2.5(2) Revised Filing Status 5 information for 2018 adding that a name can be listed on line 4 or attachment.

(97) IRM 3.11.3.13.2.2.3(3) Added to Exception - in exemption position 3

(98) IRM 3.11.3.13.3.1(1) Added Form 8965 as a reference for locating missing dependent TIN.

(99) IRM 3.11.3.13.3.1(3) Added words "invalid or" to sentence.

(100) IRM 3.11.3.13.3.2(2) Added instruction that Form 8965 can not be used to determine Dependent Name Control.

(101) IRM 3.11.3.13.3.1(4) Added to Exception - when any of the following apply

(102) IRM 3.11.3.13.3.2(1) Added Note to honor taxpayer made ditto marks for duplicate dependent last names

(103) IRM 3.11.3.14(3) Added Job Aid number 2431-009

(104) IRM 3.11.3.14.1(2) Revised Figure 3.11.3-71 to show three-alpha character code.

(105) IRM 3.11.3.14.1(2) Revised from 4-digit numeric to three-alpha character software code.

(106) IRM 3.11.3.14.1(2) Added note indicating "1040" is not a valid indication of computer-generated returns.

(107) IRM 3.11.3.14.1(2) Note - Deleted, no longer applicable.

(108) IRM 3.11.3.14.2.1 Revised (1) and (2) by adding "or reported" to match changes made in other instructions in this IRM.

(109) IRM 3.11.3.14.2.1(2) Rearranged table to place items in alphabetical order and separated "VA Benefits/Payments" to read "VA Benefits" and "Welfare Benefits/Payments" .

(110) IRM 3.11.3.14.2.1(2) Chart - Prisoner - changed (4) to (6)

(111) IRM 3.11.3.14.2.2(1) Added "by more than $1" .

(112) IRM 3.11.3.14.2.3(1) Added "by more than $1" .

(113) IRM 3.11.3.14.2.4(1) Added "by more than $1" .

(114) IRM 3.11.3.14.2.6(1) Corrected line numbers in the 1st and 2nd Then box.

(115) IRM 3.11.3.14.2.6(2) Chart - Added "or reported" to the last then box, revising the note for Correspondence.

(116) IRM 3.11.3.14.2.8(1) Reworded to include specific form to correspond for.

(117) IRM 3.11.3.14.2.12(1) Chart - Added "or reported" to the last then box, revising the note for Correspondence.

(118) IRM 3.11.3.14.2.15(2) Chart - Form 2555 - changed (7) to (8)

(119) IRM 3.11.3.14.2.15(3)b Added words "the dotted portion of" to the instruction.

(120) IRM 3.11.3.14.2.15(5) Revised by adding "or reported" to match changes made in other instructions in this IRM.

(121) IRM 3.11.3.14.2.16(1) Added Schedule C-EZ

(122) IRM 3.11.3.14.3.2(1) Reworded correspondence text for Form 2106

(123) IRM 3.11.3.14.3.3(1) Reworded correspondence text for Form 8889

(124) IRM 3.11.3.14.3.4(1) Reworded correspondence text for Form 3903

(125) IRM 3.11.3.14.3.9(3) Deleted, instruction no longer applicable.

(126) IRM 3.11.3.14.3.10 Added new (1) to say: "Reserved, take no action" .

(127) IRM 3.11.3.14.3.11(1) Revised instruction to correspond only if an amount is also present on line 12 or line 18.

(128) IRM 3.11.3.14.3.12(1) Reworded bullets for added clarity and consistency.

(129) IRM 3.11.3.14.4.3(1) Revised chart with updated standard deduction amounts.

(130) IRM 3.11.3.14.4.5(1) Reworded to include specific form to correspond for.

(131) IRM 3.11.3.14.4.7(3) Added if Form 1095-A not attached

(132) IRM 3.11.3.14.4.5(1) Reworded to clarify correspondence instructions.

(133) IRM 3.11.3.14.5.1(1) Reworded to include specific form to correspond for.

(134) IRM 3.11.3.14.5.3(1) Reworded to include specific form to correspond for.

(135) IRM 3.11.3.14.5.4(1) Reworded to include specific form to correspond for.

(136) IRM 3.11.3.14.5.5(1) Reworded to include specific form to correspond for.

(137) IRM 3.11.3.14.5.6(1) Reworded to include specific form to correspond for.

(138) IRM 3.11.3.14.6.3(1) Reworded to include specific form to correspond for.

(139) IRM 3.11.3.14.6.4(1) Reworded to include specific form to correspond for.

(140) IRM 3.11.3.14.6.6(3)Chart Reworded to include specific form to correspond for.

(141) IRM 3.11.3.14.7.1(1) Added to third And box, or if you can determine it is included in amount on line 64

(142) IRM 3.11.3.14.7.3 Revised subsection with updated EIC tolerance amounts.

(143) IRM 3.11.3.14.7.3(4) Removed the word "any" from the sentence.

(144) IRM 3.11.3.14.7.6(1) Reworded to include specific form to correspond for.

(145) IRM 3.11.3.14.7.7(1) Reworded to include specific form to correspond for.

(146) IRM 3.11.3.14.7.7(3) Added if Form 1095-A not attached

(147) IRM 3.11.3.14.7.9(4) Revised Exception to add no need to research IRP if corresponding for other missing information.

(148) IRM 3.11.3.14.7.9(5) Added Note to indicate there is no need to research IRP if corresponding for other missing information.

(149) IRM 3.11.3.14.7.10(1) Reworded to include specific form to correspond for.

(150) IRM 3.11.3.14.8(1) Note - Deleted OUO restriction in note, not OUO.

(151) IRM 3.11.3.14.8.5 Reorganized section; (4) deleted and (2) and (3) rewritten.

(152) IRM 3.11.3.14.10(6) Added "or scanned" to (6)a for clarification.

(153) IRM 3.11.3.14.10(8) m - added information that Efile Graphic Print is valid even if notation is deleted.

(154) IRM 3.11.3.14.10(10) Changed "no" jurat to "a missing or altered jurat".

(155) IRM 3.11.3.14.10(14)c Corrected note from "use" to "if using" .

(156) IRM 3.11.3.14.10(16) Added Form 3531 as the form to use when corresponding.

(157) IRM 3.11.3.15(2) Revised T-Line chart.

(158) IRM 3.11.3.15.4(2) Clarified correspondence instruction.

(159) IRM 3.11.3.15.8(1) Chart - Revised note to state that Form 8283 cannot be used in lieu of Form 1098C or similar statement.

(160) IRM 3.11.3.15.10.1(1) Rewritten to include a bullet list instead of sentence format.

(161) IRM 3.11.3.15.10.1(2) Corrected "paragraph" to "box" in the note.

(162) IRM 3.11.3.15.10.1(2) Rewrote (2) for clarity, deleted (3) and added information from (3) to (2).

(163) IRM 3.11.3.16.3(1) Added "for Form 8815" for correspondence clarification.

(164) IRM 3.11.3.19.1(2) Rewritten to clarify when not to delete Schedule E.

(165) IRM 3.11.3.19.1(2) Added - a transcribed box is checked on Schedule E.

(166) IRM 3.11.3.25.2(5)e Added reference to (3) above.

(167) IRM 3.11.3.25.2(7) Added note when and EIN is present with an individual’s name.

(168) IRM 3.11.3.26.1(4) Reworded (4) and removed exception.

(169) IRM 3.11.3.32.1(7) Added "1040EZ" .

(170) IRM 3.11.3.32.1.2(3) Added exception editing when unable to determine which taxpayer is filing Form 5329.

(171) IRM 3.11.3.32.2(7) Deleted as no longer applicable, subsequent paragraphs renumbered.

(172) IRM 3.11.3.40.1(5) Reworded to reflect TY2017 changes to Form 8862.

(173) IRM 3.11.3.40.3(1)a Added "1040A" .

(174) IRM 3.11.3.40.9(3) Added note to clarify 6 and 1/2 month editing.

(175) IRM 3.11.3.41.14(5) replaced "processed" with "received" .

(176) IRM 3.11.3.41.14(6) Chart - corrected references from (7) to (9) throughout.

(177) IRM 3.11.3.41.14(8) Corrected to reference (9) instead of (7).

(178) IRM 3.11.3.41.14(9)f Rewritten to clarify correspondence for Schedule H with missing signature or documentary evidence.

(179) IRM 3.11.3.42.1 Chart - changed wording to say "blank" .

(180) IRM 3.11.3.42.1(8) Added new paragraph to reflect changes for TY2017.

(181) IRM 3.11.3.44.1(4) Added new paragraph to reflect changes for TY2017.

(182) IRM 3.11.3.44.2(3) Revised to add "unless corresponding for other missing information" .

(183) IRM 3.11.3.44.4(2) Revised bullets to clarify under what circumstances to correspond for the Form 8863.

(184) IRM 3.11.3.49 Minor text changes in (5) and (7) - (12)

(185) IRM 3.11.3.53(5) Chart - Added "Yes and No" to the last box for clarification.

(186) IRM 3.11.3.56 Added instruction not to X Form 8867 when there are T-lines present.

(187) IRM 3.11.3.56(2) Revised T-lines for Form 8867.

(188) IRM 3.11.3.59(3) Added new paragraph regarding "QSEHRA" notated on top of Form 8962.

(189) IRM 3.11.3.59(4) Added instructions to X Form 8962 when blank or entries in only Part I

(190) IRM 3.11.3.60(3) Revised the instructions to X Form 8965 when blank and do not X when entries in only Part I

(191) IRM 3.11.3.60(6) Added TIN notations to Form 8965

(192) IRM 3.11.3.61 Revised wording from "correspond if missing" to "if missing, correspond for Form xxxx" throughout section.

(193) IRM 3.11.3.61(4) Deleted, the current year

(194) IRM 3.11.3.61.1(2) Revised from 4-digit numeric to three-alpha character software code.

(195) IRM 3.11.3.61.1(3) Note removed as no longer relevant.

(196) IRM 3.11.3.61.1(3) Added note indicating "1040" is not a valid indication of computer-generated returns.

(197) IRM 3.11.3.61.2.2(1) Added "by more than $1" .

(198) IRM 3.11.3.61.2.3(1) Added "by more than $1" .

(199) IRM 3.11.3.61.2.4(1) Added "by more than $1" .

(200) IRM 3.11.3.61.2.8(1) Added "or the amount differs" to match IRM 3.11.3.14.2.13(1).

(201) IRM 3.11.3.61.2.12(3) Deleted, instruction no longer applicable.

(202) IRM 3.11.3.61.2.13 Added new (1) to say: "Reserved, take no action" .

(203) IRM 3.11.3.61.3.3(3) Added if Form 1095-A not attached

(204) IRM 3.11.3.61.3.12(2) Note - Changed "wage" to "income" .

(205) IRM 3.11.3.61.3.12(3) Note - Revised for consistency with Form 1040 and Form 1040-EZ instructions.

(206) IRM 3.11.3.61.3.12(3) Corrected IRM reference in first bullet.

(207) IRM 3.11.3.61.3.14(3) Reworded information in regard to EIC being claimed with children and added "or source of earned income" .

(208) IRM 3.11.3.61.3.18(3) Added if Form 1095-A not attached

(209) IRM 3.11.3.61.3.24(3) Rewritten for consistency with Form 1040 instructions.

(210) IRM 3.11.3.61.20(2) Note - Added "fully edited" to hand carry instructions.

(211) IRM 3.11.3.62.1(2) Deleted Note, no longer applicable.

(212) IRM 3.11.3.62.1(2) Revised from 4-digit numeric to three-alpha character software code.

(213) IRM 3.11.3.62.1(2) Added Note advising that "1040" is not a valid software code for Form 1040EZ.

(214) IRM 3.11.3.62.2(7) Added Filer/Non-filer

(215) IRM 3.11.3.62.8(2) Deleted second Note, information was stated twice in same tridoc.

(216) IRM 3.11.3.62.8(5) Reworded for clarity.

(217) IRM 3.11.3.62.9(3) Added "or source of earned income"

(218) IRM 3.11.3.62.12(1) Exception - Added "or the return is uncomputed" to the end of sentence.

(219) IRM 3.11.3.63.2(1) Chart - Added row for negative entry on Line 10, Form 1040A.

(220) IRM 3.11.3.64.1(6) Added exception to correspond for signature regardless of tax year.

(221) IRM 3.11.3.64.2(1) a. Changed text to the return due date was 2 years and 9 months from the current due date

(222) IRM 3.11.3.64.2(1) Replaced the words "will expire" with "generally expires" .

(223) IRM 3.11.3.64.2(1) Example - changed from "will expire" to "may expire" .

(224) IRM 3.11.3.64.2(3) Chart - Added exception to first THEN box; correspond for missing signature prior to routing to Statute for clearance.

(225) IRM 3.11.3.64.2(3) Exception - revised to include additional criteria indicating return should not be sent to Statute Unit.

(226) IRM 3.11.3.64.2(3) Exception - Added SPC "B" to the list of returns that should not be sent to Statute Control.

(227) IRM 3.11.3.64.2(4) Added that (3) Exception is applicable to (4).

(228) IRM 3.11.3.64.3.1.2.9(3) Reworded to include specific form to correspond for.

(229) IRM 3.11.3.64.3.1.4(2) Corrected TY05 to say TY07 and later.

(230) IRM 3.11.3.64.3.1.4 Added (2) instructing to correspond for missing form for TY05 and later.

(231) IRM 3.11.3.64.3.1.13 Updated information to be marked as OUO.

(232) IRM 3.11.3.64.3.2.6(1) Added "godchild or boy/girlfriend’s child" . IRM 3.11.3.64.3.2.9 Deleted paragraphs 2, 3, 4, and 5. Instructions no longer valid for editing prior year Schedule SE.

(233) IRM 3.11.3.64.3.2.20(4) first bullet, Added -A to Form 6001

(234) IRM 3.11.3.64.3.2.20(7) Added, If the date of purchase is missing or incomplete

(235) IRM 3.11.3.64.3.2.20(8) Added changed but to and

(236) IRM 3.11.3.64.3.2.20(9) Added and/or/with as needed

(237) IRM 3.11.3.64.3.2.20(11) Added, use Form 6001-A, paragraph N

(238) IRM 3.11.3.64.3.2.20(12) Clarified location on Form 5405

(239) IRM 3.11.3.64.3.2.20(14) Added present in Part IV

(240) IRM 3.11.3.64.3.2.20(18) Changed boxes to box and are to is

(241) IRM 3.11.3.64.3.2.24 Added (6) thru (12) with instructions for TY05 - TY87.

(242) IRM 3.11.3.64.3.2.25(2) Exception - Removed "claimed" and replaced with "present on line 6c" .

(243) IRM 3.11.3.64.3.2.28 Removed information regarding Adoption Credit Review Box, no longer applicable.

(244) IRM 3.11.3.64.3.2.30(1) a Corrected the tax year to be TY15.

(245) IRM 3.11.3.64.3.2.31 (1) Added through TY12 and changed the editing for PY Form 8867

(246) IRM 3.11.3.64.3.2.31 (2) Added editing info for TY11, Form 8867

(247) IRM 3.11.3.64.3.2.40 Added Form 8938 Instructions to Prior Year section. All subsequent subsections renumbered.

(248) IRM 3.11.3.64.3.3.4 Added (4) thru (6) with instructions for TY05 - TY01

(249) IRM 3.11.3.64.3.3.9 Added (2) instructing to correspond for missing form for TY05 and later.

(250) Exhibit 3.11.3-1 Updated Form 8830, revised Form 8862, added Form 8904 and Form 14950.

(251) Exhibit 3.11.3-1 Revised routing instructions for CP2000.

(252) Exhibit 3.11.3-1 Revised instructions for CP59, CP501-503, 501H-503H, and CP515-518. Added CP63, ACS Letter 16 and ACS Letter 18.

(253) Exhibit 3.11.3-1 Added literal to the instruction regards to State/Local returns.

(254) Exhibit 3.11.3-1 Revised CP 500 Series; expanded on routing procedures for Form 3911; corrected paragraph number for Form 8816 and added new instruction regards to State/Local returns.

(255) Exhibit 3.11.3-1 Revised CP 22 routing instructions

(256) Exhibit 3.11.3-1 Updated Form 8938 with seealso reference to IRM 3.11.3.64.3.2.40

(257) Exhibit 3.11.3-1 Added processing exception to CP 01H.

(258) Exhibit 3.11.3-1 Attachment Guide "Personal Documents" Information, corrected Form number to be Form 14219, Return of Documentation to the Taxpayer.

(259) Exhibit 3.11.3-1 Attachment Guide updated to include additional International Forms 390, 482, 14653, and 14654.

(260) Exhibit 3.11.3-1 Form 911, Changed to yes detach and route to Taxpayer Advocate and continue processing return

(261) Exhibit 3.11.3-1 Added Form 13441-A, Health Coverage Tax Credit (HCTC) Monthly Registration and Update

(262) Exhibit 3.11.3-3 Redefined Audit Code "U" and added Audit Codes "2" and "3" .

(263) Exhibit 3.11.3-4 Redefined Computer Condition Codes "G" and "1" .

(264) Exhibit 3.11.3-5 Added Return Processing Code "X" and redefined RPC "D" .

(265) Exhibit 3.11.3-6 Redefined Special Processing Code "V" .

(266) Exhibit 3.11.3-6 Revised Special Processing Code "B" to include ITVA function may edit this code.

(267) Exhibit 3.11.3-6 Removed information regards to TC150 posted, not required to research for TC150.

(268) Exhibit 3.11.3-11 Removed restriction, no longer OUO.

(269) Exhibit 3.11.3-12 Note - Added presence of SPC B to list of returns not to be sent to IVO.

(270) Exhibit 3.11.3-14 Corrected the RICS acronym.

(271) Exhibit 3.11.3-16 Added new exhibit with instructions for completing Form 3531, subsequent Exhibit renumbered accordingly.

(272) Exhibit 3.11.3-17 Revised for 2018 to coincide with revision of Form 6001.

(273) Exhibit 3.11.3-17 Corrected the IRM references to numbers 6, 29, 32, 35, 40, 44, 48. Changed the text in numbers 51, 52, 53, 54

Effect on Other Documents

IRM 3.11.3, Individual Income Tax Returns, dated November 04, 2016 (effective January 1, 2017), is superseded. This IRM also incorporates the following IRM Procedural Updates (IPUs) issued between January 2017 through September 2017: 17U0022, 17U0115, 17U0197, 17U0229, 17U0295, 17U0349, 17U0377, 17U0430, 17U0475, 17U0492, 17U0503, 17U0534, 17U0599, 17U0732, 17U0746, 17U0928, and 17U0948, 17U1032, 17U1060, 17U1119, 17U1356.

Audience

Wage and Investment, Code and Edit Tax Examiners

Effective Date

(01-01-2018)

Linda J Brown
Director, Submission Processing
Wage and Investment Division

Program Scope and Objectives

  1. Purpose: The Document Perfection Operation, Code & Edit Unit, prepares paper returns for processing by reviewing and editing the documents with specialized processing codes for use downstream.

  2. Audience: Tax examiners in Wage and Investment Division (W&I), Submission Processing Service Centers, Code & Edit Units are the primary users of this IRM.

  3. Policy Owner: The Director of Submission Processing is responsible for the policies in this IRM.

  4. Program Owner: The Code & Edit/ERS IMF Section of the Paper Processing Branch of Submission Processing is responsible for the procedures and all updates related to this IRM.

  5. Primary Stakeholders: Submission Processing (SP).

Background

  1. This section of the Internal Revenue Manual (IRM) provides instructions for coding and editing individual income tax returns for computer processing. Special codes are entered into the computer to perform specific functions. Editing is necessary because many returns are incomplete, contain invalid or misplaced entries or are computed incorrectly.

  2. Instructions in this manual are for Form 1040, Form 1040A, Form 1040EZ and attachments to the return..

Authority

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

    • IRC 6201(a)

    • IRC 6213(b)

    • IRC 6402(a)

    • IRC 6511

Responsibilities

  1. The Director, SP Office is responsible for monitoring operational performance for the Submission Processing campus.

  2. The Operations Manager is responsible for monitoring operational performance for their operation.

  3. The team manager/lead is responsible for performance monitoring and ensuring employees have the tools to perform their duties.

  4. The team employees are responsible for following the instructions contained in this IRM and maintaining updated IRM procedures.

Program Objectives and Review

  1. Program Goals: To timely review and edit all returns received in Code & Edit (C&E).

  2. Program Reports: The Monitoring Section under Submission Processing Program Management/Process Assurance monitors the Code & Edit reports.

  3. Program Effectiveness: The program goals are measured by the following reviews:

    • Embedded Quality Submission Processing (EQSP)

    • Balanced Measures

    • Managerial Reviews

  4. Annual Review: The processes included in this manual are reviewed annually to ensure accuracy and promote consistent tax administration.

Terms/Definitions/Acronyms

  1. See Exhibit 3.11.3-14 for a glossary of frequently used terms and acronym listing.

Related Resources

  1. Job Aid 2431-009, Coding & Editing Individual Income Tax Returns - Current Year Job Aid Form 1040, Form 1040A and Form 1040EZ, was developed as a reference guide for this manual. This manual refers the tax examiner to clarifying information or exhibits in the Job Aid, where appropriate. When a conflict between any referenced material and the IRM instructions occur, the IRM instructions take precedence.

General Guidelines

  1. Instructions in this manual are for a typical return. Apply the instructions as far as possible when a situation is not explained.

  2. Take no action when there is not a specific instruction for a situation.

  3. Refer conflicts between general and specific instructions, unusual situations, and complex cases to your work leader.

  4. Any line in this manual which is marked with a "#" is for official use only and must not be disclosed.

  5. IRM deviations must be submitted in writing following the instructions in IRM 1.11.2.2, Internal Management Documents System - Internal Revenue Manual (IRM) Process - IRM Standards, and elevated through appropriate channels for executive approval.

  6. The general guidelines described in more detail in this subsection of the manual are:

    • Programs worked in Code & Edit

    • Identifying "numbered" and "unnumbered" returns

    • Routing completed work

Programs Worked

  1. Code & Edit works the Form 1040, Form 1040A and Form 1040EZ programs listed below:

    Program Code Description
    4311X Other-than-full-paid Forms 1040
    43210 Full-paid Forms 1040
    4411X Other-than-full-paid Forms 1040A
    44120 Full-paid Forms 1040A
    4713X Other-than-full-paid Forms 1040EZ
    47140 Full-paid Forms 1040EZ
  2. Austin also works the following ITIN programs:

    • 4317X - Forms 1040

    • 4417X - Forms 1040A

    • 4716X - Forms 1040EZ

Identifying "Numbered" and "Unnumbered" Returns

  1. A "numbered" return has a fourteen-digit Document Locator Number (DLN) imprinted in the top right margin. Do not remove a numbered return from the block.

  2. An "unnumbered" return has no DLN. These documents are numbered after coding and editing. Unnumbered returns may be removed from the block, as instructed.

Document Locator Number (DLN)
  1. DLNs are unique numbers assigned to every return processed by the Automatic Data Processing (ADP) Systems. The DLN is used to control, identify, and locate the document.

  2. The sixth, seventh, and eighth digits in the DLN make up the Julian date.

    1. The Julian date is the numeric day of the year. For example, April 15, 2018, is Julian date 105, which is the 105th day of 2018.

  3. The twelfth and thirteenth digits of the DLN are the serial number.

    1. Returns in a block are numbered from "00" to "99" . The maximum number of returns in a numbered block is 100.

    2. Numbered returns in a block must be kept in serial number order.

Routing Completed Work

  1. After coding and editing:

    If returns are Then
    Numbered and blocked, Send them to be transcribed.
    Unnumbered and not blocked, Send them to be numbered and blocked.

General Instructions

  1. The general instructions for all Form 1040-series returns are provided here. The general instructions in this section include:

    • Perfecting transcription lines

    • Identifying the transcribed forms and schedules by sequence code

    • Preparing Form 3471 - Edit Sheet and Form 4227 - Intra-SC Reject or Routing Slip

    • Editing "Action Trails"

    • Handling attachments to returns

    • Editing special processing and unallowable codes

Stamping Tax Examiner (TE) Numbers

  1. Every Code & Edit Tax Examiner (TE) is assigned a unique TE Number.

  2. Stamp your TE number in the upper left-hand corner of the document. All returns must be stamped with your TE number.

    Exception:

    It is only necessary to stamp the first document in a block when working numbered returns.

  3. Stamp your TE number in the upper left-hand corner of all detached documents.

    Exception:

    Do not stamp your TE number on original documents that are being mailed back to the taxpayer.

  4. Line through the TE number when corresponding and the return is going to be sent back to the taxpayer.

  5. Line through the old TE number and stamp the document with your TE number when working returns which were TE stamped before (e.g., misblocked, converted or correspondence returns).

Transcription Lines (T-Lines) and Transcription Compute Lines (T-Compute Lines)

  1. Not all entries on forms and schedules are entered into the computer during processing. Only the information from transcription lines (T-Lines) or computed transcription lines (T-Compute Lines) is entered into the computer after coding and editing.

  2. T-Lines and T-Compute Lines are listed in this manual in the overview information for each form or schedule. The edited locations of all T-Lines and T-Compute Lines are illustrated in Job Aid 2431-009.

  3. Always compute and edit a T-Compute Line when it is blank and there are entries leading to a total. Compute and edit a T-Compute Line that is not blank only when required to do so in the line-by-line instructions.

    Note:

    Use the tax form instructions when computing T-Compute Line totals unless other directions are provided in the line-by-line instructions.

  4. Edit T-Line and T-Compute line amounts when they are illegible, obviously misplaced, or when instructed to do so in the line-by-line instructions.

  5. Correct the entry by referring to other schedules, attachments, or entries on the return only when directed.

  6. Delete an entry on a transcribed line when the meaning of the line has been changed, unless otherwise instructed. (See Figure 3.11.3-1a).

  7. Delete an obviously misplaced amount and edit to the correct T-Line or T-Compute Line, when appropriate. (See Figure 3.11.3-1b).

  8. Use attachments to prepare "dummy" forms or schedules when they are required to support entries on transcribed lines.

  9. Edit the combined total of the amounts when a T-Line or T-Compute Line has multiple entries. See Figure 3.11.3-2.

  10. Do not math verify the transcribed lines on forms or schedules, unless specifically directed to do so in the line-by-line instructions.

  11. Edit line numbers for T-lines that contain significant entries when line numbers are missing or incomplete.

    Figure 3.11.3-1

    This is an Image: 33440001.gif
     

    Please click here for the text description of the image.

    Figure 3.11.3-2

    This is an Image: 33440002.gif
     

    Please click here for the text description of the image.

Transcribed Schedules and Forms

  1. In the upper-right margin of each form or schedule is a preprinted number called a sequence code. The Integrated Submission and Remittance Processing (ISRP) operators transcribe forms and schedules by their sequence code. The transcribed sequence codes range from 02 through 75. See the tables at the end of this subsection for a list of the sequence codes for all transcribed schedules and forms. Any document not on the list is not a transcribed form or schedule. Any form or schedule within this sequence code range that is not transcribed must be deleted.

  2. Delete any form, schedule or document that will not be transcribed when there is a transcribed form or schedule afterward. Leave all non-transcribable forms/schedules intact after the last transcribed page.

    Exception:

    For Form 8938 instructions, refer to IRM 3.11.3.6.2.10.

  3. When a return has a large number of non-transcribable forms, "X" the top page and combine the remaining pages together with a rubber band, staple, or clip.

    Note:

    When instructed to "X" the page, edit the "X" across the entire page.

  4. Delete any form that shares a sequence code with a transcribed form.

    Note:

    Examples include, but are not limited to the following:
    - Form 2106 (Seq. 54) (TY07 and prior)
    - Form 3468 (Seq. 52) (TY09 and prior)
    - Form 3903 (Seq. 62) (TY10 and prior)
    - Form 4563 (Seq. 68)
    - Form 5884-B (Seq. 65)
    - Form 8621 (Seq. 69)
    - Form 8801 (Seq. 74)
    - Form 8829 (Seq. 66) (TY09 and prior)
    - Form 8862 (Seq. 43A)
    - Form 8949 (Seq. 12A)
    - Schedule D-1 (Seq. 12A) (TY10 and prior)

  5. "X" a transcribed schedule or form if it is blank or has no significant T-line entries, unless specifically instructed otherwise.

    Exception:

    Do not "X" Form 8938 when there are no significant entries on T-Lines.

  6. If a non-transcribable form or schedule is found between pages 1 and 2 of Form 1040 or 1040A, fold or delete the page. If a form or schedule is found with significant T-line entries, move it from between pages 1 and 2.

  7. Delete duplicate forms or schedules with the exact same amounts that are filed for the same taxpayer.

  8. For transcribed forms or schedules with multiple pages, rearrange the pages so they are together and in the proper order (page 1, page 2, etc.).

  9. Leave Forms W-2 and 1099, Form 1040-V, taxpayer statements, deposit slips, small forms, and other items where found when they do not obstruct T-lines or any part of the caption area.

  10. The following forms and schedules are valid transcribed attachments for Form 1040:

    Transcribed Form or Schedule Sequence Code
    Schedule A 07
    Schedule B 08
    Schedule C/C-EZ 09, 10, 11
    Schedule D 12
    Schedule E 13
    Schedule F 14, 15
    Schedule R 16
    Schedule SE 17, 18
    Form 1116 19
    Schedule J 20
    Form 2441 21
    Form 3800 22
    Form 4136 23
    Form 4137 24, 25
    Form 4684 26
    Form 4797 27
    Form 4972 28
    Form 5329 29, 30
    Form 6198 31
    Form 6251 32
    Form 8615 33
    Form 4835 37
    Form 8839 38
    Form 8853 39
    Form 8814 40, 41, 42
    Schedule EIC 43
    Schedule H 44, 45
    Schedule 8812
    Form 8812 (TY2011 and prior)
    47
    Form 8606 48, 49
    Form 8863 50
    Form 4952 51
    Form 8889 52, 53
    Form 8880 54
    Form 8888 56
    Form 5405 58, 59
    Form 8919 61, 62
    Form 8958 63
    Form 8941 65, 66
    Form 8910 68
    Form 8936 69
    Form 8867 70
    Form 8959 71
    Form 8960 72
    Form 8962 73, 74
    Form 8965 75
    Form 8938 175
  11. The following forms and schedules are valid transcribed attachments for Form 1040A:

    Transcribed Form or Schedule Sequence Code
    Schedule B 08
    Schedule R 16
    Form 2441 21
    Form 8615 33
    Schedule EIC 43
    Schedule 8812
    Form 8812 (TY2011 and prior)
    47
    Form 8606 48, 49
    Form 8863 50
    Form 8880 54
    Form 8888 56
    Form 8867 70
    Form 8962 73, 74
    Form 8965 75
  12. The following forms are valid transcribed attachments for Form 1040EZ:

    Transcribed Form Sequence Code
    Form 8888 56
    Form 8867 70
    Form 8965 75

Internal-Use Forms 3471 and 4227

  1. Code and Edit uses the following two general internal-use forms:

    • Form 3471, Edit Sheet

    • Form 4227, Intra-SC Reject or Routing Slip

  2. The conditions requiring use of these forms are found in the line-by-line instructions.

Form 3471 - Edit Sheet
  1. Form 3471, Edit Sheet, is transcribed as sequence code number “02”.

  2. Edit money amounts on Form 3471 in dollars only for all form types (1040/A/EZ).

  3. Staple Form 3471 to the left side margin of page 1:

    1. Form 1040 or Form 1040A, below the filing status area.

    2. Form 1040EZ, below the caption area.

      Note:

      If using Form 3471-E, staple it to the back of the return facing out.

  4. Edit Form 3471 as follows:

    Form 3471 Action
    Lines 1, 2 and 3 - Unallowable Codes and amounts
    1. Edit all Unallowable Codes in the order found.

    2. When there are more than three unallowables, edit the first two on lines 1 and 2, and Unallowable Code "98" on line 3 with no money amount. Edit the remaining Unallowable Codes and amounts in the Processing Memo space.

      Note:

      For more information on Unallowable Codes, refer to IRM 3.11.3.3.7.6.

    Line 6, Late filing code

    Returns may be received from Examination or Collection with penalty and interest amounts entered. These amounts will usually be present on Form 4364, Delinquency Computations.

    Note:

    Use the instructions in IRM 3.11.3.14.8.5 when penalty and interest amounts are entered by the taxpayer.

    1. Edit "1" when Failure to File (FTF) or Failure to Pay (FTP) penalties or interest have been entered on a full or part-paid return and≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ "

    2. Also edit a received date ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ " in this case.

    Note:

    for more information see the line-by-line instructions for returns received ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Line 7, Pre-delinquent penalty Edit an amount when both of the following apply:
    1. The return has a received date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. There is a notation this penalty is to be applied.

    Line 11, ID number penalty Edit "50" when there is a notation on the return this penalty is to be assessed and an amount is present.

    Note:

    Examination or Collection will indicate when this penalty is to be assessed.

Form 4227 - Intra-SC Reject or Routing Slip
  1. Some returns need research, referral, or action before they can be processed. Form 4227, Intra-SC Reject or Routing Slip, is often used to identify these special conditions and initiate actions.

  2. Take the following actions when a numbered return needs research, referral, or action before further processing:

    1. Edit the appropriate Action Code.

    2. Prepare Form 4227 and note the reason for rejection.

    3. Staple below the caption area of return.

    4. Leave the return in the block.

  3. Prepare Form 4227 when an unnumbered return/document is withdrawn from processing, and:

    If the return/document is Then
    Leaving the campus, Pull the document for routing to Receipt and Control for shipment to appropriate campus.
    Not leaving the campus, Pull the document for routing to the appropriate function.

Action Trail

  1. An "Action Trail" is written on a return/document as a record of the actions taken.

  2. Always leave an Action Trail when Computer Condition Code "Y" is edited. Give the reason for the "Y" code in the Action Trail.

  3. Edit an Action Trail when a return/document is detached. For example, notations such as "detached 1040X" or "detached taxpayer correspondence" must be made.

  4. The Action Trail is written on Form 1040, Form 1040A or Form 1040EZ in the lower-left margin of page 1. Refer to Job Aid 2431-009 for an illustration of the editing location.

Attachments to Return

  1. Examine all attachments to the return. Leave the attachments with the return unless specifically instructed otherwise. Refer to the Attachment Guide in Exhibit 3.11.3-1 for specific attachment-by-attachment instructions. Research either an attachment or a notation on the return, as appropriate.

  2. Immediately hand carry any discovered remittance to the manager or work leader. (Manager/work leader shall refer to IRM 3.8.46, Discovered Remittance).

  3. Take either of the following actions when there is a notation on the return that indicates it needs to be routed elsewhere:

    1. Edit the information on a blank piece of paper.

    2. Photocopy the notation.

  4. Generally, all taxpayer-initiated correspondence must be responded to within 30 days.

    1. Detach and route all correspondence addressing an issue not directly related to the processing of the return.

      Note:

      Examples include, "I didn't receive my refund last year" , or "I need a payment plan" , etc.

    2. Do not detach correspondence attached to an original return which asks a question or raises an issue about the processing of the return or if the correspondence contains only a general comment submitted with a payment.

      Note:

      Examples include, "Here is my payment" , "I will pay you in two months" , or "Apply my refund to the amount that I owe from last year" , etc.

  5. Route to Examination any taxpayer-initiated correspondence related to Earned Income Credit (EIC) fraud. Use Form 4227 and notate "EIC fraud informant" . Correspondence that must be routed to Examination will state the following:

    1. The taxpayer was unable to file electronically because another taxpayer had already filed and claimed the same qualifying exemption(s), and/or

    2. The name and/or social security number of the other taxpayer involved.

  6. Route any taxpayer-initiated correspondence from an informant claiming they know of an individual or business who is not claiming the proper amount of income on a tax return or filed a Form 3949-A, Information Referral, to Fresno (FSPC), Stop 31313 following PII guidelines.

  7. When a taxpayer submits a credit card and/or credit card number, fully code and edit the return and immediately take the return and all attachments to your work leader. The work leader will:

    1. Edit Action Code "460" , sanitize any credit card information on the return and continue processing.

    2. If a credit card is attached, prepare Form 4287, Record of Discovered Remittances, a photocopy of page one of the return, and route to Receipt & Control with the credit card to be returned to the taxpayer via Express Mail.

    3. Prepare Letter 3956C, Processing Form 1040 Received With Credit Card/Credit Card Information, and send to the taxpayer via 1st Class Mail.

    Note:

    Do not take return to your work leader when you can determine the number written on the return is the confirmation number for the credit card payment (not the actual credit card number).

  8. Credit card payment returns must be batched as remittance returns so they will receive the remittance indicator. If the return is received with a credit card confirmation number and no amount is indicated, or the amount does not match the balance due line on the return, batch as Part Paid.

Detached Documents
  1. Always edit an Action Trail on the return when an attachment is removed. For example, when a form or letter is detached from a return, edit notations such as "detached 9465" or "detached TP correspondence" .

  2. Also, edit an Action Trail on the detached document unless it's an original document. If present on the return, all of the following must be present or edited on all detached items:

    • Current date if before ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , otherwise use the received date in "MMDDYY" format.

      Note:

      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ a timely return with no received date, edit a date of "041718" .

    • Tax period in "YYMM" format.

    • Form from which detached.

    • Taxpayer's name(s).

    • Primary/secondary taxpayer's identification number(s).

    • Taxpayer's address.

    Note:

    When sending a return back to a taxpayer, do not detach any documents.

    Exception:

    Detach and process any remittance. Do not mail back a remittance to the taxpayer.

  3. Internally route detached items using Form 4227.

  4. When returning original documents back to the taxpayer, the work leader will complete and attach Form 14219, Return of Documentation to the Taxpayer. Check the appropriate box on Form 14219 to Identify the returned item.

Processing Codes

  1. Certain conditions require the editing of processing codes. There are six types of processing codes. They are:

    • Action Code

    • Audit Code

    • Computer Condition Code (CCC)

    • Return Processing Code (RPC)

    • Special Processing Code (SPC)

    • Unallowable Code (UAC)

  2. Processing codes may be either alpha or numeric. Use CAPITAL BLOCK LETTERS when editing codes that are alphas.

  3. It is critical that processing codes are edited legibly.

  4. Refer to Job Aid 2431-009 for an illustration of the editing locations of processing codes. The edited location of these codes may vary by return type.

  5. When other functions have edited CCCs, RPCs, SPCs, etc., in the wrong location, delete the coding and edit it to the correct location.

  6. Re-edit any valid black edit marks in red on photocopied returns, unless editing is underlined in red.

  7. The conditions for editing processing codes are located in the line-by-line instructions.

Action Code
  1. An Action Code is a three-digit numeric character used to reject a document and identify the reason for rejection.

  2. Assign only one Action Code to a document. Edit Action Codes in the following priority:

    1. "310"

    2. "4XX"

    3. "6XX"

    4. "2XX"

    5. "3XX"

  3. Continue perfecting returns assigned any Action Code except "480" or "6XX" . Edit only the caption area when Action Code "6XX" is edited. When editing Action Code 480 edit the caption area and see IRM 3.11.3.7.5 .

  4. Edit the Action Code in the center of the bottom margin on page 1 of Form 1040, Form 1040A or Form 1040EZ.

  5. Refer to the table in Exhibit 3.11.3-2 for an explanation of each Action Code.

Audit Code
  1. An Audit Code is an alpha character used to identify questionable conditions for Examination.

  2. Edit Audit Codes horizontally in the right-bottom margin on page 1 of Form 1040, Form 1040A or Form 1040EZ.

  3. Refer to the table in Exhibit 3.11.3-3 for the explanation of each Audit Code.

Computer Condition Code (CCC)
  1. A Computer Condition Code (CCC) is an alpha or numeric character used to alert the computer and Master File of a special condition. Computer Condition Codes will post to the Master File.

  2. When CCC "3" is edited, it must be first.

  3. Always edit an Action Trail when CCC "Y" is edited.

  4. Edit the CCC horizontally in the following location on:

    1. Form 1040 or Form 1040A - in the upper-center portion of the filing status area.

    2. Form 1040EZ - to the left of line 1, under "Foreign Province/State/County."

  5. Refer to the table in Exhibit 3.11.3-4 for an explanation of each CCC.

Return Processing Code (RPC)
  1. A Return Processing Code (RPC) is an alpha or numeric character used to alert the computer to a special condition or computation. These codes are used for center processing and do not post to the Master File.

  2. Edit RPC’s vertically in the margin on:

    1. Form 1040 to the right of line 22

    2. Form 1040A to the right of line 15

    3. Form 1040EZ to the right of line 10

  3. Refer to the table in Exhibit 3.11.3-5 for an explanation of each RPC.

Special Processing Code (SPC)
  1. A Special Processing Code (SPC) is an alpha or numeric character used to flag a condition or trigger a computation. These codes are used for center processing and do not post to the Master File. These codes supplement the Return Processing Codes.

  2. Edit SPC’s vertically in the right margin, between the spouse’s social security number and the Presidential Election Campaign boxes.

  3. Refer to the table in Exhibit 3.11.3-6 for an explanation of each SPC.

Unallowable Code (UAC)
  1. An Unallowable Code (UAC) is a two-digit numeric character used to identify certain conditions on a tax return that are unallowable by law.

  2. Search all attachments to find unallowable items.

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

    Exception:

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

  4. Do not edit UACs when the only dollar amount is a total of allowable and unallowable items. There must be separate dollar figures for unallowable coding, unless otherwise instructed.

  5. Prepare Form 3471 using the instructions at IRM 3.11.3.3.4.1 when coding unallowables.

  6. Refer to the table in Exhibit 3.11.3-7 for an explanation of each UAC.

Editing

  1. Editing is done to prepare returns and attachments for transcription and computer processing.

  2. The editing instructions described in more detail in this subsection are about:

    • Types and uses of specific edit markings

    • Dollars and cents editing

Edit Markings, General

  1. Always use a red erasable pen for edit markings. Perfect any taxpayer entered red marks that might interfere with transcription.

    Note:

    Never use other correction items, such as white-out.

  2. Never alter, erase, or obliterate a taxpayer's entry.

  3. Edit all markings legibly.

  4. Any reference to "significant entry" or "significant amount" is defined as a positive or negative number/dollar amount other than zero.

Types of Edit Markings

  1. Different edit conditions require different types of edit markings. Edit markings consist of:

    • Circling

    • Underlining

    • Arrowing

    • "X" -ing

    • Bracketing

    • Checking

Circling
  1. Circle information that is not to be transcribed when editing:

    • Caption data (except date of death)

    • Received dates

    • Filing status boxes

    • Other cases described in the line-by-line instructions

      Note:

      Never circle dollar amounts. If an entry or editing was circled out in error, re-edit or arrow to the proper location if necessary.

Underlining
  1. Underline when editing:

    • The additional information line and other caption data

    • Tax period on Prior Year returns

    • Other cases specified in this manual

Arrowing
  1. Use arrowing when indicating:

    • The correct T-line for a misplaced entry. See Figure 3.11.3-3.

    • Transcription is to continue (where indicated in line-by-line instructions)

    Note:

    A double-ended arrow or "underline with arrow" may be used to edit a dollar amount to multiple T-lines. See Figure 3.11.3-3.

    Figure 3.11.3-3

    This is an Image: 33440003.gif
     

    Please click here for the text description of the image.

"X" -ing
  1. An "X" may be used to delete an entry or an entire form or schedule.

    1. Place an "X" to the left of an amount on a T-line when it is not to be transcribed.

    2. When adjusting an amount, edit an "X" to the left of the amount on the T-line and edit the adjusted amount to the left of the "X" .

    3. "X" an illegible amount and re-edit the information above or to the left of the "X" -ed entry. Be careful to edit the amount where it will not be mistaken for an entry on another T-line.

      Note:

      If necessary, edit the amount where space is available and arrow to the "X" -ed entry.

    4. Edit an "X" across the entire form or schedule if it must be deleted.

    5. "X" a transcribed schedule or form when it is blank or has no significant T-line entry, unless specifically instructed otherwise.

    6. "X" any transcribed schedule or form with "Alt Min Tax" , "AMT" , or "AMT-CR" or similar notation across the top.

    Exception:

    Do not delete Form 6251, Alternative Minimum Tax-Individuals unless it is attached to a Form 1040A or Form 1040EZ with no T-line entries on Form 6251.

Bracketing
  1. Use brackets to indicate a negative dollar amount when determining a T-Compute line amount.

    Note:

    Bracketing (as it relates to dollar amounts) is necessary only when the tax examiner is computing the line.

  2. Do not bracket the following:

    • Existing negative amounts on a return.

    • Amounts with preprinted brackets on the form/schedule.

Checking
  1. Use the check mark as directed in line-by-line instructions to indicate the information needs to be transcribed by ISRP.

Dollars and Cents Editing

  1. Allow taxpayers to round or truncate (i.e., "drop the cents" ) amounts. Use only dollar amounts when computing amounts on forms or schedules.

    Exception:

    Use dollars and cents when computing withholding and excess social security tax.

  2. Draw a vertical line between the dollars and cents figures when dollars or cents are in the wrong column:

    1. On each line that is to be transcribed, or

    2. Down the entire front of the form or schedule.

    Exception:

    It is not required to draw a vertical line when column(s) are not present and the dollars and cents have been separated by a decimal.

  3. Dollars and cents editing is required on certain T-lines for any of the following conditions:

    1. A substitute form is used with dollars and cents not clearly separated by a decimal point or slash.

      Exception:

      Do not draw a vertical line to separate dollars and cents when only dollar amounts are present on a dollars and cents T-line.

    2. An entry is illegible.

    3. Other editing requires a change to the taxpayer's entries.

    4. When computing and editing an entry as directed in line-by-line instructions.

      Exception:

      Do not edit "00" to indicate no cents.

  4. Edit all forms and schedules in dollars only, with the following exceptions:

    • Form 1040 - lines 63 through 79

    • Form 1040A - lines 39 through 51

    • Form 1040EZ - all lines

    • Form 6001 and 6001-A

    • Form 3531

Correspondence

  1. Correspondence is necessary when a return is incomplete or illegible and it cannot be processed.

  2. The correspondence instructions in this subsection of the manual are:

    • General correspondence procedures

    • Correspondence when sending return back to the taxpayer

    • Correspondence when not sending return back to the taxpayer

General Correspondence Information

  1. When the first correspondence condition is identified, request all missing required information. Include forms and/or schedules, Forms W-2, regardless of correspondence tolerances (with the exception of Form 1116, Form 2106, Form 8283, Form 8812, Schedule 8812 and Schedule EIC) identified in the line-by-line IRM instructions.

  2. Do not correspond with a taxpayer more than one time, unless specifically directed to in the line-by-line instructions.

    1. Correspond a second time if the taxpayer sends back a return and the signature is not located in the appropriate "Sign Here" area, under the jurat statement. For a taxpayer's signature to be valid, it must be in the "Sign Here" space provided under the jurat. The only exception to this rule is when the taxpayer him/herself has signed in the wrong area and arrowed their signature to the appropriate place.

  3. Do not correspond when information is missing and any of the following conditions apply:

    • The tax return is for TY07 and prior. See IRM 3.11.3.64.3(6)

      Exception:

      Correspond for signature regardless of tax year. See IRM 3.11.3.14.10.

    • "Substitute for Return Prepared by IRS" is noted on the return, or the return has been "dummied" .

    • "Section 6020(b)" or "prompt assessment" is written on the return.

    • The return has a notation, statement or letter attached indicating the return is a copy or amended. Notations may include "corrected" , "revised" , "tentative" , "amended" , "superseding" , "copy" or similar. Also see the amended return instructions in IRM 3.11.3.6.2.1 for additional instructions.

    • An Examination case is indicated. See the instructions in IRM 3.11.3.6.1.5 for additional instructions and a list of the attachments and notations by which an Examination case may be identified.

    • The taxpayer has written "For payment only" , or included a similar statement on the return.

    • International Returns (except AUSPC)

    • A "Hardship" case is indicated. See IRM 3.11.3.6.1.4.

    • There is an indication the return has been prepared (dummied) by Accounts Management. See IRM 3.11.3.6.2.1(2).

  4. Do not correspond for missing forms or schedules to support a credit or exemption claimed for a dependent when both of the following conditions apply:

    • The return was received with Form W-7 attached.

    • The ITIN application was rejected for the person who would have entitled the taxpayer to the credit and/or exemption.

      Note:

      Do not correspond for divorce decree, Form 8332, or Form 2120 when there is an indication the ITIN application(s) was rejected for the qualifying dependent(s).

  5. With the exception of returns coming from Collection and Correspondence Imaging System (CIS), send an unnumbered return to the originating area indicating what information is required.

General Correspondence Procedures

  1. Request a missing secondary TIN only when other correspondence is required and the Filing Status is 2, 3, or 6.

    Exception:

    Do not request a secondary TIN when there is an indication the ITIN application was rejected or Non-resident Alien (NRA) or similar statement.

  2. Special additional information line editing is required any time correspondence is required on a:

    • Decedent return - see IRM 3.11.3.10

    • Fiduciary return - see IRM 3.11.3.11

    • Minor's return - see IRM 3.11.3.11.2

  3. If Form 1040 or 1040A is missing page 1 or page 2, take the return to your work leader for research.

    Note:

    Work leader will follow the incomplete return instructions at IRM 3.11.3.6.2.4.

Correspondence When Sending Return Back to the Taxpayer
  1. Send a return back to the taxpayer in the following specific circumstances:

    • A misfiled return. (See IRM 3.11.3.6.2.16)

    • Early filed loose Schedule H for tax year 2018. Use Notice 1208, You Filed Schedule H (Household Employment Taxes) Too Early

    • Current year Loose Schedule H (received April 17, 2018 or earlier) - Use Notice 1207, File Schedule H (Household Employment Taxes) With Your Individual Income Tax Return

    • Missing or invalid signature(s) (See IRM 3.11.3.14.10).

    Exception:

    Do not mail back numbered or secured returns or signed returns missing documentary evidence, including fiduciary and Power of Attorney (POA) returns.

    Reminder:

    Do not correspond when conditions in 3.11.3.5.1(3) apply.

  2. If the required valid legal signature is missing or not below the jurat statement, send the return back to the taxpayer using Form 3531.

    Note:

    A valid legal signature is an original signature written below the jurat statement in the "Sign here" box on the return.

    1. Stop editing the return after identifying a missing or invalid signature.

    2. Examine the return for other missing items.

    3. Complete Form 3531 (See Exhibit 3.11.3-16):
      - Mark the appropriate signature box.
      - Request all missing required information.

    Exception:

    KCSPC and FSPC only: If transshipping International Returns or returns with Form W-7 attached, do not correspond for missing signature(s).

  3. Prepare Form 3531 using the following steps:

    1. Write legibly.

    2. Check the applicable missing signature box.

    3. Check all the appropriate box(es).

    4. Enter money amounts in dollars and cents. Bracket negative amounts.

  4. Prepare the return to be sent back to the taxpayer using the following steps:

    1. Line through your TE number.

    2. Remove all internal documents (such as Form 3471 or Form 4227) if attached.

      Note:

      If second correspondence is required, remove original Form 3531.

    3. Do not detach attachments.

    4. Delete any IRS Received Date.

    5. Perfect a missing or incomplete address from an attached envelope. If unable to perfect from an attached envelope, research.

    6. Edit an Action Trail to notate issued correspondence.

    7. Edit or stamp "Returned for Signature" with the current date unless it is being returned as a misfiled return.

    8. Attach the correspondence sheet face up to the return immediately below the caption area.

      Caution:

      When stapling the correspondence sheet to the return, ensure you are attaching only one return.

    9. Remove the return from the batch and place it in the designated area.

Correspondence When Not Sending Return Back to the Taxpayer
  1. Complete all possible editing and identify all correspondence issues, when you are not sending the return back to the taxpayer.

  2. Perfect a missing or incomplete address from an attached envelope. If unable to perfect from an attached envelope, research.

  3. Request all missing required forms/schedules in the taxpayer correspondence. Do not attempt to dummy missing forms/schedules when other correspondence is required.

  4. A correspondence action sheet (CAS) is a form used to initiate a letter requesting information from a taxpayer. A CAS is used with returns that are not sent back to the taxpayer. The following CAS forms are used:

    1. Form 6001 is used to generate Letter 12C, Individual Return Incomplete for Processing: Form 1040, Form 1040A and 1040EZ. See Exhibit 3.11.3-15.

    2. Form 6001-A is used to generate Letter 12C for Prior Year returns.

    3. Form 3696-A is used to generate miscellaneous Correspondex (C) letters (e.g., Letter 369C used to deny reasonable cause).

  5. Prepare Form 6001/Form 6001-A to initiate Letter 12C using the following steps:

    1. Write legibly.

    2. Check all the appropriate boxes.

    3. Complete all information required for each paragraph selected (e.g., forms, lines, amounts, etc.).

    4. Enter money amounts in dollars and cents. Bracket negative amounts.

    5. Use Exhibit 3.11.3-17, Correspondence Fill-in Paragraphs, when paragraph h is selected.

      Note:

      Take all other fill-in paragraphs to your manager/lead for his/her text approval and initials next to paragraph h.

    6. When paragraphs J - O are not enough to request all missing forms and schedules, use paragraph h with fill-in paragraph "48" instead.

    7. Always select the applicable fax number paragraph (k - o) specific to your campus.

      Note:

      No entry is required in the fill-in fields of the fax number paragraph (k - o).

  6. Attach the CAS to Form 1040, Form 1040A, or Form 1040EZ below the caption area.

    Caution:

    When stapling the correspondence sheet face up to the return, ensure you are attaching only one return.

  7. Edit Action Code "211" on all returns requiring correspondence when the return is not being mailed back to the taxpayer. See Figure 3.11.3-4.

    Exception:

    Edit Action Code "224" when corresponding for missing Form 8962.

  8. If a received date is required and not present on the return, edit the received date before corresponding. Refer to the received date editing instructions at IRM 3.11.3.8.

    Figure 3.11.3-4

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    Please click here for the text description of the image.

General Response Procedures

  1. Move all correspondence sheets to the back of the return. If second correspondence is required, remove original Form 3531.

  2. See the instructions in Correspondence Action Chart at IRM 3.11.3.5.3.2 for processing "no reply" or "incomplete reply" , and undeliverable correspondence.

Reply Instructions
  1. Perfect the return.

  2. Edit the received date on returns identified as "Returned for Signature" , following the instructions at IRM 3.11.3.8.2(3).

No Reply/Incomplete Reply/Undeliverable Correspondence
  1. Use the Correspondence Action Chart and continue processing the return when any of the following no reply conditions are present:

    • Taxpayer does not provide all requested information.

    • Correspondence is returned by the USPS as undeliverable.

    • One or more correspondence conditions were not included when the first correspondence was sent.

  2. Edit CCC "U" on all no reply returns, except when any of the following apply:

    1. Withholding support was the only item not provided.

    2. The correspondence was not required.

    3. One or more correspondence conditions were not included when the first correspondence was sent.

  3. If a no reply correspondence condition is not identified in the chart below, edit CCC"U" and take no further action.

  4. Unless there is evidence to the contrary, assume that all correspondence conditions were included when the correspondence was sent.

  5. If CCC "3" is edited, edit it first.

  6. Refer to the following Correspondence Action Chart:

    Forms 1040, 1040A and 1040EZ

    CORRESPONDENCE REQUIRED FOR THE FOLLOWING CONDITION on FORMS 1040, 1040A AND 1040EZ ACTION REQUIRED FOR INCOMPLETE REPLY OR NO REPLY
    Dependent TIN - Dependents claimed with no TIN "X" dependent’s name
    Line 6c -Exemption Position 3 missing supporting documentation to substantiate claim for dependent. (Form 8332, Form 2120 or divorce decree is not present.) Entries must be present on Forms 8332 or 2120. "X" Exemption Position 3.
    Signature
    • Missing Jurat

    • Missing or one signature on a joint return

    • Photocopied signature

    • Refund on a joint return and spouse refuses to sign

    • Condition requiring two witnesses

    • Minor child's return signed by other than a parent or relationship is not indicated

    1. Review unsigned return for possible IVO referral conditions. If found, place the return in the appropriate IVO Review Box with a note indicating the IVO condition. See Exhibit 3.11.3-12 .

    2. If no IVO referral criteria is present, route undeliverable returns to the Entity Function and do not edit CCC "U" .

    3. If the taxpayer responds and sends back a return that shows the signature present in an area other than the Sign Here area under the jurat on the return, or has signed on Form 3531, send the return back to the taxpayer a second time.

      Exception:

      If the taxpayer signed an attached CP59 or Letter 143C, do not correspond for a signature under the jurat on the return. This signature is acceptable.

    4. If the return is not signed after correspondence (or second correspondence if applicable) for signature, edit Action Code "640" and continue processing.

      Exception:

      If the taxpayer signed an attached CP59 or Letter 143C, do not correspond for a signature under the jurat on the return. This signature is acceptable.

    .
    Blank return with missing signature If the taxpayer returns an unsigned blank return, edit RPC "L" and continue processing.
    Power of Attorney missing. If the return is not signed by the taxpayer, edit CCC "3" .
    Fiduciary Returns - required documentary evidence not present. Edit CCC "3" .
    Decedent Return  
    a. Date of Death missing a. Edit CCC "3" .
    b. Required documentary evidence not present. b. Edit CCC "3" . Do not edit the AIL or CCC "L" or "W" .
    c. Proper additional information line (AIL) cannot be determined. c. Edit CCC "3" . Do not edit the AIL or CCC "L" or "W" .
    d. Form 1310 not signed or is incomplete. d. Edit CCC "3" . Do not edit the AIL or CCC "L" or "W" .
    e. Signature missing on Form 1040/1040A/1040EZ but a completed Form 1310 with correct answers and signature is attached. e. See Signature instruction above.
    f. Signature missing on Form 1040/1040A/1040EZ and Form 1310 is attached, but not signed. f. See Signature instruction above.

     

    Form 1040, Pages 1 and 2

    FORM 1040, PAGES 1 and 2 ACTION REQUIRED FOR INCOMPLETE REPLY OR NO REPLY
    Line 12 - Schedule C/C-EZ or statement not attached. Prepare dummy Schedule C. Edit a positive amount on line 1. Edit a negative amount on line 28. Edit Audit Code "B" when the amount on line 12 is a loss of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .
    Line 13 - Schedule D or statement not attached  
    a. Gain of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Schedule D not attached. a. Prepare dummy Schedule D and edit the amount on line 7.
    b. Loss of ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Schedule D not attached. b. Prepare dummy Schedule D and edit the amount on line 7. Edit Audit Code "B" when the amount on line 13 is a loss of ≡ ≡ ≡ ≡ ≡ ≡ ≡ .
    Line 14 - Form 4797, Form 4684, or statement not attached. Edit Audit Code "B" if a loss of ≡ ≡ ≡ ≡ ≡ ≡ ≡ is claimed.
    Line 17 - Schedule E, statement, or clear indication of type of income missing. Prepare dummy Schedule E. Edit a positive amount on line 24, a negative amount on line 25. Edit Audit Code "B" when the amount on line 17 is a loss of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .
    Line 18 - Schedule F or statement not attached. Prepare dummy Schedule F. Edit a positive or negative amount on line 9. Edit Audit Code "B" when the amount on line 18 is a loss of ≡ ≡ ≡ ≡ ≡ ≡ ≡ .
    Line 21 - Gambling net loss indicated and Schedule C not attached. "X" line 21.
    Line 22 - Gain or loss of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and lines 7 through 21 are blank. Edit the amount on line 21.
    Line 24 - ≡ ≡ ≡ ≡ ≡ ≡ and Form 2106 not attached. "X" line 24.
    Line 25 - Amount claimed and Form 8889 not attached. "X" line 25.
    Line 26 - ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 3903 not attached. "X" line 26.
    Line 34 - Amount claimed and Form 8917 not attached. "X" line 34.
    Line 35 - Amount claimed and Form 8903 not attached. "X" line 35.
    Line 36 - ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , and not supported by entry on lines 23 through 36, dotted portion, or a statement. "X" line 36.
    Line 48 - ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 1116 not attached. "X" line 48.
    Line 49 - Amount claimed and Form 2441 not attached. "X" line 49.
    Line 50 - Amount claimed and Form 8863 not attached. "X" line 50.
    Line 51 - Amount claimed and Form 8880 not attached. "X" line 51.
    Line 52 - Amount claimed, Schedule 8812 not attached, and ITINs are shown for children claiming eligibility for Child Tax Credit on line 6c, Form 1040. "X" line 52.
    Line 53 - ≡ ≡ ≡ ≡ ≡ ≡ claimed and Form 5695 is not attached. "X" line 53.
    Line 54 - amount claimed and not supported by form/schedule "X" line 54.
    Line 55 - ≡ ≡ ≡ ≡ ≡ ≡ ≡ and not supported by an entry on lines 48 - 54 or a write-in. "X" line 55.
    Line 57 - Schedule SE not attached. Divide SE Tax amount by .153 to determine SE income subtotal amount. Then divide the subtotal amount by .9235 to determine the SE income total amount. Edit the total amount on Schedule SE, line 3. Prepare a dummy Schedule SE for the primary taxpayer if Social Security wages are $127,200 or less; otherwise, prepare a dummy Schedule SE for the secondary taxpayer.
    For prior year, see IRM 3.11.3.64.3.2.9
    Line 58 - Amount claimed and Form 4137 or Form 8919 not attached. "X" line 58.
    Line 59 - Form 5329 not attached, no indication of No on line 59, and the amount claimed is not 10% of any combination of lines 15b, 16b, or attached Form(s) 1099-R. Prepare a dummy Form 5329. Edit the amount from line 59 to line 17 of Form 5329. Process for the primary taxpayer if a determination cannot be made.
    Line 60a - Amount claimed and Schedule H not attached. "X" line 60a.
    Line 62 - Amount claimed and Forms 8959 and 8960 not attached, and no indication from box c. "X" line 62.
    Line 64 - Amount is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and withholding document is not present. "X" line 64.
    Line 66a - Amount claimed and no source of earned income is present. "X" line 66a and edit RPC "B" .
    Line 67 - Amount claimed and Schedule 8812 not attached. "X" line 67.
    Line 68 - Amount claimed and Form 8863 not attached. "X" line 68.
    Line 71 - ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and either no Form W-2 is attached or not all of the Forms W-2 are attached. "X" line 71.
    Line 72 - Any amount claimed and Form 4136 not attached. "X" line 72.
    Line 73 - ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 2439 or other refundable credits are not attached. "X" line 73.

     

    Supporting Forms and Schedules

    SUPPORTING FORMS and SCHEDULES ACTION REQUIRED FOR INCOMPLETE REPLY OR NO REPLY
    Schedule A  
    a. Line 9 -- Amount present, no entries on lines 5 through 8. a. "X" line 9.
    b. Line 15 - Amount present, no entries on lines 10 through 14, and line 6 is blank. b. "X" line 15.
    c. Line 17 - Amount present
    -≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8283 not attached or
    -≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , Art is indicated on Form 8283 and separate appraisal not attached or
    -≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and separate appraisal not attached or
    - Form 8283, page 2, has significant entries but not signed.
    c. "X" line 17.
    d. Line 19 -- Amount present, no entries on lines 16 through 18 d. "X" line 19.
    e. Line 20 - Amount present and Form 4684 not attached. e. "X" line 20.
    f. Line 21 - ≡ ≡ ≡ ≡ ≡ ≡ ≡ , and Form 2106 or Form 2106-EZ, or similar statement not attached. f. "X" line 24.
    g. Line 27 - Amount claimed and lines 21 through 24 are blank. g. Edit line 27 amount to line 28. If the amount is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , edit Audit Code "B" .
    Schedule B - Amount on line 3 and Form 8815 not attached. Adjust line 8a, Form 1040, by adding the amount claimed on line 3, Schedule B. "X" line 3 on Schedule B.
    Schedule C - Line 31 - Loss of ≡ ≡ ≡ ≡ ≡ ≡ ≡ , line 32b box is checked, and Form 6198 not attached. Adjust line 28, Schedule C, to equal line 7, Schedule C.
    Schedule E - Lines 28A through 28D - Loss of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ indicated in column (f) or (h), corresponding column (e) box (Check if any amount is not at risk) is marked, and Form 6198 not attached. "X" line 31, Schedule E.
    Schedule F - Box on line 36b checked, line 34 is a loss of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , and Form 6198 not attached. Adjust line 33 to equal line 9 if the cash method is used or to equal line 50 if the accrual method is used.
    Schedule R
    • Boxes 1 through 9 are blank

    • No entry on line 11 and box 2, 4, 5, 6 or 9 is checked.

    • No entry on line 13c.

    "X" Schedule R.
    Schedule SE - Cannot determine the proper allocation of SE amounts. Process Schedule SE for the primary taxpayer if primary wages are $127,200 or less. Otherwise, process Schedule SE for the secondary taxpayer.
    Form 2441  
    a. Line 1, Column (c) is blank. a. "X" line 3, Form 2441.
    b. Line 2, Column (b) is blank. b. "X" qualifying person’s name.
    Form 3800 (Part III) - Any entries present in Part III must be supported by the source form or show an EIN in Column b, Part III. "X" any credits claimed in Part III not supported by the appropriate source form or without an EIN in Column b, Part III.
    Form 4137 - Cannot determine correct allocation. Process Form 4137 for the primary taxpayer if primary wages are $127,200 or less. Otherwise, process Form 4137 for the secondary taxpayer.
    Form 5405 - Complete settlement statement (Form HUD-1) not present. "X" Form 5405.
    Form 8606 - More than one name is present in the caption and proper allocation cannot be determined. Process Form 8606 for the primary taxpayer.
    Form 8615 - Parent's name control cannot be determined. Edit the primary taxpayer's name control.
    Schedule EIC
    • Number of months is not indicated.

    • Child's TIN is missing and no support for a child who was born in the tax period and died in the same or next consecutive tax period.

    "X" the child's name.
    Schedule H - Cannot determine proper allocation of Schedule H amounts. Process Schedule H for the primary taxpayer.
    Loose Schedule H - Cannot determine if Schedule H should be filed loose or attached to a Form 1040. Process Schedule H with a dummied Form 1040. See IRM 3.11.3.41.14.
    Schedule 8812 - Boxes in Part I are not checked and ITIN dependents with corresponding CTC box checked are claimed on Form 1040/1040A, Line 6c "X" Line 52/67, Form 1040 (line 35/43, Form 1040A).
    Form 8917 - Name control and/or TIN cannot be perfected or cannot determine which taxpayer is claiming the deduction. "X" Form 8917.
    Form 8919 - Unable to determine which taxpayer is filing Form 8919. Process Form 8919 for the primary taxpayer if primary wages are $127,200 or less. Otherwise, process Form 8919 for the secondary taxpayer.

     

    Form 1040A, Pages 1 and 2

    FORM 1040A, PAGES 1 and 2 ACTION REQUIRED FOR INCOMPLETE REPLY OR NO REPLY
    Line 19 - Amount claimed and Form 8917 not attached. "X" line 19.
    Line 20 - ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and not supported by entry on lines 16 through 19 or a statement. "X" line 20.
    Line 31 - Amount claimed and Form 2441 not attached. "X" line 31.
    Line 32 - Amount claimed and Schedule R not attached. "X" line 32.
    Line 33 - Amount claimed and Form 8863 not attached. "X" line 33.
    Line 34 - Amount claimed and Form 8880 not attached. "X" line 34.
    Line 35 - Amount claimed, Schedule 8812 not attached, and ITINs are shown for children claiming eligibility for Child Tax Credit on line 6c, Form 1040A. "X" line 35.
    Line 36 - ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and lines 31 through 35 are blank. "X" line 36.
    Line 40 - Amount is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and withholding document is not present. "X" line 40.
    Line 42a - Amount claimed and no source of earned income is indicated. "X" line 42a and edit RPC "B" .
    Line 43 - Amount claimed and Schedule 8812 not attached. "X" line 43.
    Line 44 - Amount claimed and Form 8863 not attached. "X" line 44.

     

    Form 1040A - Forms and Schedules

    FORM 1040A - FORMS and SCHEDULES SEE SUPPORTING FORMS AND SCHEDULES

     

    Form 1040EZ

    FORM 1040EZ ACTION REQUIRED FOR INCOMPLETE REPLY OR NO REPLY
    Line 7 - Amount is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and withholding document is not present. "X" line 7.
    Line 8a - Amount claimed and no source of earned income indicated. "X" line 8a and edit RPC "B" .

     

Special Situations and Returns

  1. While the instructions in this manual are generally based on the typical return, there are some special situations and return types that occur frequently enough to be included.

  2. The instructions included in this subsection of the manual include the following special situations:

    • Combat Zone and Other Military Operations

    • Killed in Terrorist Action (KITA)

    • Natural Disaster/Emergency Relief Program

    • Hardship

    • Examination Cases

    • Frivolous Filer/Non-Filer returns

    • Refund Schemes

    • Identity Theft

  3. The special return instructions included in this subsection are for the following:

    • Amended Returns

    • Blank Returns

    • Blind Trust Returns

    • Blocked or Deferred Income Returns

    • Correspondence Imaging System (CIS) Returns

    • Combined Tax Liabilities

    • Community Property Returns

    • Form 8938, Statement of Foreign Financial Assets

    • Incomplete Returns

    • Injured Spouse Returns

    • Innocent Spouse

    • International Returns

    • Joint Committee Returns

    • Misblocked Returns

    • Misfiled Returns

    • Reinput Returns

    • Returns Secured by Collection

    • Short-period Returns

    • Substitute for Return

    • Uncomputed Returns

    • Unprocessable Returns

    • 52-53 week return

Special Situations

  1. Follow the instructions in this subsection of the manual in addition to the regular editing instructions, unless otherwise specified.

Combat Zone and Other Military Operations
  1. The deadlines for filing an income tax return and paying the income tax may be postponed for certain persons involved in the following types of military operations:

    1. Members of the armed forces and certain persons supporting them in a Combat Zone designated in an Executive Order by the President;

    2. Members of the armed forces serving in a contingency operation designated by the Department of Defense or arising by operation of law.

    3. Members of the armed forces serving in an area certified by the Department of Defense for which the member receives hostile fire/imminent danger pay,

    4. Members of the armed forces and certain persons supporting them in a Qualified Hazardous Duty Area (designated by an act of Congress).

  2. Generally, though, military personnel have the same filing requirements as civilians.

  3. Refer any question concerning a military return to your work leader. The work leader will hand carry the return to Tax Accounts when the proper action cannot be determined.

  4. Follow normal correspondence procedures when required information is missing from the return. See IRM 3.11.3.6.1.1.2.

Military Operations
  1. Take the following actions when a military operation is noted on the return:

    If the taxpayer notes And the Tax Year is Then
    "Military Spouses Residency Relief Act" , "MSRRA" or similar statement at the top of their return 09 or later
    1. Edit CCC "M" .

    2. Edit CCC "P" .

      Note:

      If the taxpayer shows no wages present on line 7, withholding is significant on line 64 and line 76a shows a refund of all withholding, edit RPC "G" .

    3. If the MSRRA filing is FS 3, the following signed and dated declaration must be present:
      "I am claiming ___________ as my residence or domicile under the Military Spouses Residency Relief Act (MSRRA). Under penalties of perjury, I declare that I am qualified for relief under MSRRA because I am present in __________ solely to accompany my spouse, who is a service member serving in compliance with military orders, and my claimed residence or domicile is the same as my spouse's residence or domicile."

    4. Correspond if this signed and dated declaration is not present on a MSRRA filing claiming FS 3. Stamped or faxed signatures are not acceptable. Correspond using fill-in "5" , per Exhibit 3.11.3-17.

    "Haiti" or "Operation Unified Response" 09 - 10 Edit CCC "Z" if Form W-2 is not issued by Department of Defense (DOD) or Defense Finance and Accounting Services (DFAS).
    • "Operation New Dawn"

    • "New Dawn"

    • "Enduring Freedom"

    • "Operation Enduring Freedom"

    • "Operation Iraqi Freedom"

    • "Iraq"

    • "Operation Noble Eagle"

    • "Combat Zone" OR similar statement

    01 or later
    1. Check to see if Form W-2 is from the Department of Defense (DOD) or Defense Finance and Accounting Services (DFAS).

      1. If Form W-2 is issued by DOD or DFAS, take no action.

      2. If Form W-2 is NOT issued by DOD or DFAS, edit CCC "K" .

    • "Desert Storm"

    • "Joint Guard"

    • "Joint Forge"

    • "Northern Forge"

    • "Northern Watch"

    .
    90 or later Edit CCC "Z"
    "Former Yugoslavia" 00 - 94
    1. Edit CCC "D"

    2. Edit CCC "M" if balance due

    • "Haiti"

    • "Operation Uphold Democracy"

    • "Operation GTMO"

    94 or later
    1. Edit CCC "D" .

    2. Edit CCC "M" if balance due.

    • "Somalia"

    • "Somalia Restore Hope"

    92 or 93
    1. Edit CCC "D" .

    2. Edit CCC "M" if balance due.

    "UN Operation" 92 or later
    1. Edit CCC "D"

    2. Edit CCC "M" if balance due.

    Note:

    Colombia is not a recognized military operation

  2. Edit CCC "Y" and an Action Trail when a military operation or tax period other than one listed in the table in (1) above is named.

  3. Edit CCC "Y" and an Action Trail when the taxpayer excluded income due to combat or military pay.

Correspondence on Military Operation/Combat Zone Returns
  1. One signature is acceptable on a joint return in the following situations:

    • Spouse overseas and signing spouse authorized by a power of attorney (e.g., Form 2848) or similar signed document which clearly defines the scope of authorization granted to the POA.

    • Spouse in combat zone/qualified hazardous duty area and signing spouse attaches statement.

    • Spouse is member of the Armed Forces who is in a missing status in a combat zone.

  2. Follow normal correspondence procedures when other required information is missing from the return.

  3. Address the correspondence to the authorized person when a Power of Attorney (POA), or similar signed document, clearly defining the scope of authorization granted to the POA, is attached.

Killed in Terrorist Action (KITA)
  1. Route all returns identified as "KITA/KIA" , "KITA-Oklahoma City" , "KITA-9/11" or "KITA-Anthrax" to CIS/AM and notate KITA in the Action Trail.

    Note:

    Hand-carry KITA returns to the Work Leader unless batch as KITA or follow local procedures.

  2. Route Form 1040 returns when the taxpayer has written "Sec 692(d)(2)" on the "Other Payments" line with a money amount to the right, to CIS/AM and notate KITA in the Action Trail.

  3. Form 1040A or 1040EZ with Sec 692(d)(2) written anywhere on the return must be converted to a Form 1040 before sending the return to CIS/AM.

Natural Disaster/Emergency Relief Program
  1. The taxpayer may identify the name of a disaster or emergency on the front of his/her return or on an attachment.

  2. If the taxpayer requests the refund be mailed to a temporary mailing address, edit Action Code "341" .

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

    Exception:

    Do not correspond for withholding, excess social security tax, or support for earned income.

Hardship
  1. Taxpayers, their representatives, or IRS employees may complete Form 911, Request for Taxpayer Advocate Service Assistance (and Application For Taxpayer Assistance Order), when a taxpayer is experiencing a hardship. Hardship alone, however, is not a basis for referring cases to the Taxpayer Advocate Service (TAS). The IRS must take steps whenever possible to resolve the matter before referring the taxpayer to TAS.

  2. Refer a return with a notation of an actual or potential hardship to your work leader. The term hardship is used broadly and covers more than just hardship in a financial sense. TAS has developed nine criteria to determine which taxpayers qualify for TAS assistance.

  3. The local Taxpayer Advocate will make the final decision on whether a taxpayer meets TAS criteria. See IRM 13.1.7 for a complete list of TAS case criteria. Refer to the Attachment Guide in Exhibit 3.11.3-1 for procedures for routing Form 911 to the TAS Office and Taxpayer Advocate Service Case Criteria, for further instructions.

  4. When local Taxpayer Advocate walks a return through Code and Edit on the basis of hardship, in addition to normal editing, perform all of the actions below:

    1. Edit CCC "O" .

    2. Edit CCC "Y" and an Action Trail.

    3. "X" the refund line on the return.

      Note:

      If correspondence conditions are identified during editing, give the return back to TAS and do not correspond.

Examination Cases
  1. Ensure review boxes are established in Code and Edit for Examination (Exam). See Exhibit 3.11.3-13.

  2. Returns with the following notations or attachments have been Examination cases. Edit these returns using regular editing procedures with the exception of the special instructions in this subsection of the manual.

    • "Exam has original delinquent return – Process this copy as an original"

    • "Original delinquent return secured by Examination"

    • Form 3198, Special Handling Notice for Examination Case Processing

    • Examination work papers

    • Copy of Form 5546, Examination Return Charge-Out Sheet

    • Form 13133, Expedite Processing Cycle

  3. Follow the instructions about penalties in the blocks in the special handling area of Form 3198. Also, follow the instructions noted in the blocks at the bottom of the Form 3198.

  4. Edit the Received Date, if noted. Otherwise, follow the regular Received Date procedures in IRM 3.11.3.8.

  5. Do not correspond. Do not send the return back to the taxpayer.

  6. If the return cannot be processed, route the return to Examination for additional action using Form 4227. Note on Form 4227, "return to originator" .

    1. Pull an unnumbered return from the batch and route it to Examination.

    2. Edit Action Code "640" when the return is numbered.

    Exception:

    Refer an unprocessable return to the work leader when Form 13133 is attached. The work leader will contact the Examining Officer at the number provided to resolve the problem.

Frivolous Filer/Non-Filer Returns
  1. Ensure review boxes are established in Code and Edit for Frivolous Return Program (FRP). See Exhibit 3.11.3-11.

  2. Route to Frivolous Return Program (FRP) any return on which the taxpayer:

    1. Argues -for any reason- the filing of a tax return or the paying of a tax is not required.

    2. Makes use of a frivolous argument to reduce income or tax liability. (See (6) below for examples.)

    3. Marks out or alters -in any manner- the penalty of perjury statement (i.e., jurat) above the signature.

      Note:

      If the return has already been reviewed by the Exam FRP Coordinator, a Frivolous Return Program (FRP) stamp will be present in the upper-left corner. Continue processing if present.

  3. Pull unnumbered returns and prepare Form 4227. Notate "Frivolous" .

  4. Leave numbered returns in the block and edit Action Code "331" , unless otherwise noted.

  5. When a return meets criteria for a frivolous filing determination as shown in paragraph (6) below, route the return to FRP. FRP will review the return and if it meets their criteria for frivolous filing, they will edit or stamp Audit Code "R" .

  6. Some common examples of frivolous returns are listed below. This list is not all-inclusive, but represents the current most common types of frivolous filings. See Exhibit 3.11.3-11 for additional examples and complete descriptions.

    • All withholding from Form 1099-OID and/or Form 1099-A

    • Form 2439 of $10,000 or more

      Example:

      Mutual funds and real estate investment trusts (REITs) are the most common sources of Form 2439. Some fraudulent uses are obvious. Filers may create a Form 2439 in the name of their employer and file it along with the Form W-2 from that employer. Filers may create a Form 2439 in the name of well-known businesses, such as restaurants and department stores. These Forms 2439 and others from unlikely sources are suspect.

    • Wages not income

    • Wages of primary taxpayer deducted on Schedule A or C

    • Zero return with and without refund claimed

    • Zero return with and without Forms W-2 attached

    • Zero return with frivolous argument

    • Zero or little income return and substitute Form W-2, Form 4852 or corrected Form 1099 attached

    • Altered Form or Jurat, or a reference to "UCC 1-207"

    • Entitlement refund request - The filer asserts an exemption from taxation and requests a refund related to their birthright. These include Reparations for Slavery (40 Acres and a Mule, Black Investment Tax, African American Tax, etc.), Native American Indian Treaty, Bosnian Refugee, Daughters of the American Revolution, etc. Filers often use Form 2439 in aid of these frivolous arguments and the suspect Form 2439 provides the source of the refund.

    • Constitutional amendment - 1st, 5th, 13th, 16th, etc. - cited in defense of an assertion that the tax code is unconstitutional.

    • IRC cited in defense of exemption from taxation - IRC § 861, 1001, 1341, 3121, etc.

    • Taxes are voluntary; the IRS has no authority; the law does not require

    • Not a person, not a citizen, untaxed

    • Protest against government action or inaction

    • Prisoner return citing any frivolous argument

    • Prisoner return attaching calculations of income derived from work assignments within the prison and generally claiming a refund of withholding, perhaps supported by substitute Form W-2)

    • Confused taxpayer filings - outlandish dollar amounts on any line or nonsensical gibberish

    • A thumbprint or fingerprint present in the signature area of a return.

    • Form 2555 - Deduction used on line 21 to eliminate income even though taxpayer and employer are U.S. residents

      Note:

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

Refund Schemes
  1. Integrity and Verification Operation (IVO) will review returns for refund schemes that in general make use of excessive withholding or false earnings. IVO also reviews Operation Mass Mailing (OMM) refund returns, which are often identical or vary slightly. OMM refund schemes are commonly filed in bulk where the returns show common features and evident patterns. The returns are usually filed together and are often batched within the same block of work. See Exhibit 3.11.3-12 for IVO Review and OMM criteria.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

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

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

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

    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "

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

  4. Edit Audit Code "K" when Accounts Management requests that a return be identified for Examination.

  5. When refund scheme returns are sent through the pipeline for processing that have CCC "3" edited, do not research or correspond for source of earned income.

Identity Theft
  1. See Exhibit 3.11.3-1 when the taxpayer submits Form 14039, Form 14039 (SP), or police report(s) claiming Identity Theft.

Special Returns

  1. Follow the instructions in this section in addition to the regular editing requirements, unless otherwise instructed.

Amended Returns
  1. Take a fully coded/edited return to the work leader when any of the following notations or conditions are present:

    • Amended

    • Corrected

    • Revised

    • Superseding

    • Tentative

    • Duplicate

    • Copy

    • Substitute

    • Filed

    • Attached IRS Notice indicating a previous return posted for the same tax period

    • Taxpayer statement is present indicating the return is a copy of an accepted electronically filed return

    • Taxpayer statement is present indicating the return is an amendment to an electronically filed return

    • ITIN return indicating the return has been submitted for W-7 renewal only

    Exception:


    - Process the return as an original if "No TC150" has been annotated or if "Secured by Collections" or "TC-599-XX" appears anywhere on the return.
    - Process a photocopied return as an original when "Process as Original" has been edited on the return, indicating Exam has the original, delinquent return. If correspondence is required, see IRM 3.11.3.5.1(3).
    - Process the return as an original if SPC B has been edited by IVO/ITVA.

  2. The work leader will take the following actions:

    1. Research for the status of the return using the primary TIN and the tax period of the return. Refer to Job Aid 2431-009 for command code instructions.
      • Research CC IMFOLT for a TC150 to determine if a return has already posted.
      • Research CC ERINV to determine if there is a return in ERS.

    2. Research results:
      • If a TC150 has posted for the tax period of the return, route to 1040X unit.
      • If there is already a return in ERS for the same tax period, route to Rejects.
      • If no TC150 has posted and no return is in ERS, continue processing as an original return.

  3. Process a return prepared (dummied) by Accounts Management as an original return and do not correspond for missing information or a signature.

  4. If a return with or without a notation of "TC150" is received and "PAO" is edited in the upper left margin, continue processing as an original return. Correspond, if necessary.

Amended Joint MFA or MFS Return
  1. If a return has "Amended Joint MFA" (married filing alien) or "Amended Joint MFS" (multiple filing status) stamped on top:

    1. Edit Action Code "460" .

    2. Prepare Form 4227 with instructions to route to Examination and leave the return in the batch.

Unprocessable Return
  1. A return is unprocessable when all of the caption data is missing or illegible and the caption cannot be perfected from attachments or through research.

  2. Handle unprocessable returns as follows:

    If the return is Then
    Numbered,
    1. Edit Action Code "640" .

    2. Prepare Form 4227 instructing the Reject Unit to void the DLN and dispose of the return.

    Unnumbered, Give the return to your work leader. The work leader will destroy the return in accordance with classified waste procedures.
Blank Return
  1. Edit RPC "L" on returns with all zeros or no significant entries present, or edited from attachments, on any of the following T-Lines:

    • Lines 7 through 79, Form 1040

    • Lines 7 through 51, Form 1040A

    • Lines 1 through 14, Form 1040EZ

    Reminder:

    When RPC "L" has been edited on the return, do not edit CCC "B" . RPC "L" does not negate the need for a Dependency Status Indicator (DSI), when applicable.

    Reminder:

    Correspond for a missing signature on a blank return using Form 3531, box 7.

  2. Refer the return to your work leader when caption information is missing and cannot be perfected using instructions in IRM 3.11.3.9.2.

  3. Treat the blank return as amended when a statement is present indicating that a return will be filed later. See the amended return instructions in IRM 3.11.3.6.2.1.

  4. Edit CCC "E" when a statement indicates the taxpayer will have no future filing requirements.

  5. Refer to the instructions in IRM 3.11.3.6.1.6 when the return has been filed as a frivolous filer return.

  6. Refer to IRM 3.11.3.6.2.20 for processing instructions when there is an indication the return is a Substitute For Return (SFR) or an Automated Substitute for Return (ASFR).

  7. If a return is blank and missing signature, correspond using Form 3531, box 7.

Incomplete Return
  1. If a Form 1040 or Form 1040A is missing page 1 or page 2, take return to the work leader.

  2. The work leader will:

    1. Research for the status of the return, including CC ERINV for a possible ERS status.
      • If TC150 has posted, route to Form 1040X unit.
      • If there is already a return in ERS, route to Rejects.

    2. If no TC150 has posted and not in ERS, prepare return for correspondence and request all missing information. Research for an address, if necessary.

    3. If unable to correspond, destroy the page in accordance with classified waste procedures.

Uncomputed Return
  1. An uncomputed return is one filed by a taxpayer expecting the IRS to figure his/her tax. Do not confuse an uncomputed return with a return that has no tax due.

    Note:

    Do not edit CCC "B" on uncomputed returns.

  2. An uncomputed return can be identified as follows:

    1. Form 1040 has no entries on lines 44, 45, 46, 47, 56, 63, 75, 76a, 77 and, 78. See Figure 3.11.3-5.

    2. Form 1040A has no entries on lines 28, 29, 30, 37, 39, 47, 48a, 49 and 50.

    3. Form 1040EZ has a positive entry on line 6 and no entries on lines 10, 11, 12, 13a, and 14.

  3. An unnumbered, uncomputed return can be sent back to the taxpayer when corresponding.

  4. Edit CCC "Y" and an Action Trail on an uncomputed return when both of the following conditions are present:

    1. Separate income amounts are shown for each spouse on a joint return, and

    2. No exemptions are claimed in positions 2 through 7, or an allocation of exemptions is indicated.

      Example:

      The taxpayer notes, "My wife has the exemptions for our two children."

    Figure 3.11.3-5

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Blocked or Deferred Income Return
  1. If a return with a notation of blocked or deferred income is attached to another return:

    1. Write "Information Return-Blocked Return-Do Not Process" on the blocked income return.

    2. Place the blocked income return behind the processable return and continue editing.

    Note:

    Blocked or deferred income is not an indication of an International Return.

  2. Prepare Form 4227 and route the return to "Correspondence" when a return with an indication of blocked or deferred income is not attached to another return.

Correspondence Imaging System (CIS) Returns
  1. CIS returns are identified by a unique 10 character alpha numeric identifier that begins with the letters CIS (e.g. CIS1A2BCD1).

  2. Process CIS returns as original filings and circle any notations of duplicate, amended or similar statements.

  3. Re-edit any valid black edit marks in red on photocopied returns.

    Exception:

    Do not re-edit CIS returns when editing is underlined in red.

  4. Correspond for any missing required information as identified in the line-by-line instructions (except for a missing signature).

    Exception:

    If correspondence is required and Form 13596 and/or Form 3893 is attached, route the return back to Accounts Management.

Combined Tax Liability Return
  1. Returns with any of the following conditions are considered combined tax liability returns:

    • More than one tax period

    • More than one type of tax

    • More than one person filing a joint return other than those taxpayers considered to be spouses.

    • More than one person filing a single return

  2. If any of the conditions in (1) apply, edit CCC "Y" and an Action Trail on the return.

  3. Take no action when the return shows an ITIN and supporting documents reflect an SSN for the same taxpayer.

Community Property or Registered Domestic Partnership Return
  1. If there is an indication of Registered Domestic Partnership, "RDP" , "CCA 201021050" , or "CCA" on the return or an attached Form 8958, Allocation of Tax Amounts Between Certain Individuals in Community Property States, or allocation statement, edit CCC "Y" and an Action Trail.

  2. "X" any fractional exemption claimed.

  3. "X" the amount claimed for Excess Social Security taxes when wages are less than $63,600.

    Note:

    The maximum amount of earnings subject to Social Security tax is $127,200. Half of that equals $63,600.

  4. Edit RPC "C" when there is an indication of a pro-rata share and both of the following additional conditions apply:

    1. A S-TIN is present

    2. Lines 7 to 21 and 23 to 36, Form 1040 (lines 7 to 14b and 16 to 20, Form 1040A) have no entries.

Form 8938, Statement of Foreign Financial Assets
  1. For TY17, process Forms 1040 with an attached (TY17) Form 8938, Statement of Foreign Financial Assets, per the instructions in the table below:

    January through September - (Recovery Processing) October through December - (Simultaneous Processing)
    Process Form 1040 using current coding instructions, including the editing of CCC "H" .
    1. Fully code Form 1040, including the editing of CCC "H" .

    2. Only one Form 8938, pages 1 and 2, can be processed. If multiple Forms 8938 are attached, select the form that has the highest account, line 4 in Part V; or highest value, line 4 in Part VI, and delete the others.

      Note:

      Up to 25 pages of the "Continuation Statement" can be processed.

    3. Pull the Form 8938 from the return and sequence it to the back of the Form 1040 package, attaching the Form 8938 so that it is back-to-back with the parent return.

      Note:

      Sites may determine the best method of identifying Forms 8938 for transcription.

    4. Place the Form 1040 with the Form 8938 attached in a designated bin for collection by Code & Edit Clerical function.

    Reminder:

    Do not pull or convert Forms 1040A or Forms 1040EZ with Form 8938 attached, unless other conversion criterion is present.

    Reminder:

    Do not pull TY16 and prior Forms 1040 or Forms 8938.

    Reminder:

    Do not move or delete documents which will not be transcribed that are in order ahead of Form 8938.

  2. Management may implement simultaneous processing early. Coordinate with local Planning and Analysis Staff prior to implementing simultaneous processing to ensure pipeline resources are adequate and PCDs are not impacted.

Form 8379, Injured Spouse Allocation Return
  1. An "Injured Spouse" claim may be filed by one spouse to protect his or her share of a joint overpayment. These returns either have "Injured Spouse" written on them or Form 8379, Injured Spouse Allocation, is attached.

  2. Form 8379 may be filed with an original return or by itself. Claims filed without an original return must be sent to Accounts Management.

  3. Remove an unnumbered Injured Spouse return from a block that is not an Injured Spouse block only if the return is a refund/credit elect.

  4. If an Injured Spouse claim is attached to a numbered return that is not in an Injured Spouse block:

    1. Attach Form 4227 and note "Injured Spouse" .

    2. Edit Action Code "611" .

  5. If a current year Form 1040X is attached to a return with an Injured Spouse indication, take the following actions:

    1. "X" the Form 1040X and do not detach the Form 1040X from the return.

    2. Rebatch the return to an Injured Spouse block following the instructions in (3) or (4) above.

  6. If correspondence is required on an Injured Spouse return, research for TC150 prior to corresponding.

Form 8857, Innocent Spouse Relief Request
  1. A taxpayer may make a claim for relief from joint and separate tax liability or "relief from liability for community income" in the following four ways:

    1. Innocent Spouse Election - An election made by a person who filed a joint return and later showed that:
      • The understatement of tax on the return was attributable to an erroneous item of the other spouse, of which the electing spouse had no knowledge or reason to know,
      AND taking into account all the facts and circumstances, it would be unfair to hold the electing spouse liable for the underpayment of tax.

    2. Relief from Community Property Liability - An election made by a person who did not file a return as married filing jointly in a community property state and later showed that:
      • He or she did not include an item of community income in gross income that was attributable to the other spouse, and did not know or have reason to know of that item of community income.
      AND taking into account all the facts and circumstances, it would be unfair to hold the taxpayer liable for the understatement of tax.

    3. Separate Liability Election - An election made by a person who filed a joint return and later claimed separate liability from their spouse. The electing spouse must be legally separated, living apart for 12 months or more, or no longer married to the spouse with whom he or she filed the joint return at the time the claim was filed and must not have actual knowledge of the item(s) giving rise to the deficiency.

    4. Equitable Relief - Request made by a person who filed either a joint return, or a return that was not filed as "married filing jointly" in a community property state, and later showed that taking into account all of the facts and circumstances, it would be inequitable to hold that person liable.

  2. Taxpayers are instructed to file Form 8857, Request for Innocent Spouse Relief, to request relief if they are making the above claims.

  3. Edit CCC "3" when the taxpayer either attaches correspondence to the return and indicates "Innocent Spouse" , "Separate Liability Election" , "Equitable Relief" or "Joint and Several Liability" or when a Form 8857 is attached to the return.

  4. Innocent spouse relief requests are processed at Cincinnati Submission Processing Center (CSPC) only. When the taxpayer either attaches correspondence to the return that identifies him/her as a claimant or when Form 8857 is attached to the return:

    1. Detach and date stamp the correspondence/Form 8857 and all supporting documentation.

    2. Edit Action Trails on both the return and the correspondence/Form 8857.

    3. Prepare Form 4227, notating "Innocent Spouse Request" and attach it to the detached item.

    4. Give the request to the work leader.

    5. Leave the return in the block and continue processing.

  5. Send all claims to CSPCdaily, using the following address:
    Internal Revenue Service
    CSPC (Cincinnati Submission Processing Center)
    Stop #840F
    201 West Rivercenter Boulevard
    Covington, KY 41011

  6. For CSPC, follow local procedures for routing the claim to Examination.

International Return
  1. International tax returns are identified by the presence of one of the following:

    • An address outside the 50 United States and Washington D.C. (This does not include APO/DPO/FPO addresses).

    • Form 390 (American Samoa), American Samoa Individual Income Tax Return

    • Form 482.0, Individual Income Tax Return/Formulario 482 (Puerto Rico), Planilla de Contribucion Sobre Ingresos de Individuous

    • Form 1040CM (CNMI), CNMI Territorial Individual Income Tax

    • Form 1040 GUAM, Guam Individual Income Tax Return

    • Form W-2 from American Samoa (W-2AS)

    • Form W-2 from CNMI (W-2CM)

    • Form W-2 from Guam (W-2GU)

    • Form W-2 from Virgin Islands (W-2VI)

    • Form 499R-2/W-2PR (Puerto Rican Withholding)

    • Form 1040NR, U.S. Nonresident Alien Income Tax Return

    • Form 1040NR-EZ, U.S. Income Tax Returns for Certain Nonresident Aliens With No Dependents

    • Form 1040-PR, Planilla para la Declaración de la Contribución Federal sobre el Trabajo por Cuenta Propia (Incluyendo el Crédito Tributario Adicional por Hijos para Residentes Bona Fide de Puerto Rico)

    • Form 1040-SS, U.S. Self-Employment Tax Return

    • Form 1042-S, Form SSA-1042S, or Form RRB-1042S

    • Form 2555, Foreign Earned Income

    • Form 2555-EZ, Foreign Earned Income Exclusion

    • Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa

    • Form 5074, Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands (CNMI)

    • Form 8288-A, Statement of withholding under Section 1445

    • Form 8689, Allocation of Individual Income Tax to the U.S. Virgin Islands

    • Form 8804, Annual Return for Partnership Withholding Tax Under Section 1446

    • Form 8805, Statement of Withholding under Section 1446

    • Form 8813, Partnership Withholding Tax Payment

    • Form 8833, Treaty-Based Return Position Disclosure

    • Form 8854, Initial and Annual Expatriation Information Statement

    • Form 8891, U.S. Information Return for Beneficiaries of Certain Canadian Registered Retirement Plans

    • Form 8898, Statement for Individuals Who Begin or End Bona Fide Residence in a U.S. Possession

    • Dual Status -- Form 1040 and Form 1040NR filed together for the same tax year, "Dual Status" or "D/S" indicated on the return (taxpayer claims part year residence and part year non - residence). Always leave Form 1040 and Form 1040NR or Form 1040NR-EZ for the same taxpayer together.

    • Nonresident Alien (NRA) -- Primary or both taxpayers are nonresident Alien

      Exception:

      Primary taxpayer is an NRA with no Social Security Number (SSN); however, secondary taxpayer has an SSN and W-2 income.

    • International Tax Treaty -- taxpayer indicating exemption or exclusion of tax and/or income due to an International Tax Treaty.

      Note:

      An American Indian treaty return is not considered an international return. If no international condition exists, consider it a domestic return.

    • Treaty Trader

    • Fulbright Grantee

    • Notation of "Streamlined" on the return

    • Form 14653 (Streamlined Foreign Offshore)

    • Form 14654 (Streamlined Domestic Offshore)

    • Other Streamlined certification

    • IRC § 871, § 893, § 911,§ 913, § 931, § 932, § 933, § 934 or § 935 of the Internal Revenue Code (IRC) is notated anywhere on the return.

      Caution:

      If none of the International conditions listed above are present, consider it a domestic return and process it accordingly.

  2. Do not route returns to AUSPC unless one of the forms or conditions at IRM 3.11.3.6.2.13(1) is present or the taxpayer excludes income.

    Note:

    Foreign income (usually reported on line 7 or 21, Form 1040), FEC noted on line 7, Form 1040, or the presence of Form 1116 alone does not qualify for treatment as an international return. Do not forward these returns to AUSPC.

  3. Immediately forward international returns -- in their entirety -- to AUSPC at the following address:
    Internal Revenue Service
    Mail Stop 6063 Austin Submission Processing Campus
    P.O. Box 934
    Austin, TX 78767

    For Private Delivery Service (PDS) Mailing:
    Internal Revenue Service
    Mail Stop 6063 Austin Submission Processing Campus
    3651 S IH 35
    Austin, TX 78741

  4. If the return is unnumbered, take the following actions:

    1. Stop editing.

    2. Route the entire return to AUSPC.

      Exception:

      AUSPC only: Route to Receipt & Control for rebatching.

  5. If the return is numbered, take the following actions:

    1. Leave the return in the batch and edit Action Code "651" . (See Figure 3.11.3-6.)

      Exception:

      AUSPC only: Edit Action Code "610" for non-remit returns or "611" for remit returns.

    2. Stop editing.

    Figure 3.11.3-6

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Joint Committee Return
  1. Route to Examination returns with any of the following characteristics:

    1. The original tax liability on line 44 of Form 1040 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , and the total credit amount reported on line 55 of Form 1040 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ or more.

    2. The original tax liability on line 44 of Form 1040 is reduced by ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ by any combination of credits or disaster loss from the tax period immediately following the tax period of the return. For example, the return is for tax period 1712, but the disaster loss occurs during 2018.

  2. Prepare Form 4227 and indicate "potential Joint Committee return" when returns with the characteristics listed in (1) above are identified.

    1. Edit Action Code "334" and leave the return in the block if it is numbered.

    2. Pull unnumbered returns for routing to Examination.

  3. Edit CCC "O" and Audit Code "L" if after review Examination indicates the return is a "Joint Committee Return" .

Misblocked Return
  1. All documents in a block of work must be the same type of return. A misblocked return is one found in a block of work other than the one in which it belongs.

    Example:

    Form 1040 in a Form 1040A batch or an ITIN return in a batch of regular work.

  2. Remove an unnumbered misblocked return for rebatching. (This also includes when an unnumbered return is found in a numbered batch or a numbered return in an unnumbered batch).

    Caution:

    To ensure accuracy in the rebatching of returns the remittance indicator must be true to that batch. For example all full-paid returns must be batched together, all part-paid returns, etc. Also, credit card payments returns must be identified as remittance returns and batched as full or part paid returns.

  3. Numbered returns must not be removed from the block. Instead, take the following actions for all numbered returns:

    If Then
    Form 1040 is found in a Form 1040A or Form 1040EZ block, Edit Action Code "610" for non-remit returns or Action Code "611" for remit returns.
    Form 1040A or Form 1040EZ is found in a Form 1040 block, Convert entries to Form 1040 format and continue editing.
    Form 1040A is found in a Form 1040EZ block, or vice versa, Edit Action Code "610" for non-remit returns or Action code "611" for remit returns.
    If a prior year return is found in a current year block, Process the return using the prior year instructions in IRM 3.11.3.64.
    Form not in the 1040 series is found in a Form 1040 block, Refer the return to your work leader.

    Note:

    When editing either Action Code "610" or "611" , attach Form 4227 with an explanation of the action needed.

Misfiled Return
  1. A misfiled return is a Form 1040, Form 1040A or Form 1040EZ filed instead of the correct Business Master File (BMF) Form.

  2. Route Form 1040, Form 1040A or Form 1040EZ with any indication of Limited Liability Corporation (LLC) in the caption or signature areas to Entity for research.

    Note:

    If the return has already been cleared through Entity, the phrase "Cleared by Entity" will appear on the return.

  3. Send Form 1040, Form 1040A or Form 1040EZ back to the taxpayer with box 24 checked on Form 3531, if the return meets any of the following criteria:

    • Business entity with an EIN

    • Business entity missing a TIN

    • Individual Master File (IMF) caption with an EIN

    • Individual and business names in the caption area with an EIN.

Reinput Return
  1. Return the block to Receipt and Control when Form 3893, Re-Entry Document Control, is not attached to a block of reinput returns.

  2. Take the following actions when processing reinput returns:

    1. Delete any unnecessary Action Codes.

    2. Delete any incorrect codes and edit marks.

    3. "X" any purple or blue corrections and re-edit them in red when the marks were made to correct erroneous Code & Edit marks.

    4. Do not delete the original TE number or re-stamp the document with your TE number.

    5. Follow the special editing instructions under "Remarks" on the Form 3893 (See Figure 3.11.3-7).

    6. Move the Form 3893 to the back of the document, except for the first return, on all blocks with duplicate DLNs.

      Reminder:

      Edit a newly issued SSN/ITIN on all attached Form or Schedules when one is required.

      Note:

      Some re-entry returns may be rejected e-file returns coming from Accounts Management. These returns are identified by the presence of Mod e-File printouts (TRPRT- valid for prior year only) in lieu of the actual return. The printout will have "TRPRT PRINT DO NOT PROCESS" or "Efile Graphic Print" present. Do not correspond for missing signatures on these types of returns.

    Figure 3.11.3-7

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  3. Use the following instructions when editing a received date from the DLN on either a current or prior year reinput return.

    If the reinput return was originally numbered as a Then
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    Non-remittance return, Edit the received date by using the calendar date indicated by the original DLN, minus 10 days.

    Note:

    Remittance returns are identified by either a DLN or a branded (i.e., underlined) money amount in the balance due area of the return.

  4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    Also see the received date instructions in IRM 3.11.3.8.2 for additional information on received date editing.

  5. Edit Action Code "640" when required information is missing. Also attach Form 4227 indicating "Void to Originator" and the reason (e.g., "Missing Schedule A" ). Do not correspond.

    Exception:

    Do not input Action Code "640" or route to originator if prior correspondence has been issued and no reply has been received. Follow normal "no reply" procedures.

  6. Edit Unallowable Code "79" when the document is being reinput to release credit.

  7. If Box 15 on Form 3893 directs you to process the return as a non-remit:

    1. Delete all green or blue marks underlining money amounts.

    2. Delete all green or blue written money amounts.

Returns Secured by Collection
  1. A TC59X–XX or notation of Integrated Collection System ("ICS" ) is entered by Collection in the upper-left margin of Form 1040, Form 1040A or Form 1040EZ on secured returns.

    Exception:

    TC59X-18 is not an indication of a secured return.

    Note:

    Do not research for TC150 on Secured Returns.

  2. Do not correspond or research for Forms W-2 on secured returns.

    Note:

    This includes support for EIC when wages are present or excess Social Security Tax (SST) is present. Do not correspond for missing or photocopied signature if "Process as Original" is present on the return.

  3. Do not refer unprocessable returns secured by Collection to the Collection unit, including those returns with CP 515 or CP 518 attached with notation of "For Signature Purposes" present.

  4. Refer to the Examination case information in IRM 3.11.3.6.1.5 for instructions on returns secured by Examination.

  5. Route a secured return with missing or invalid signature back to the originating Collection function unless "Process as Original" or "PAO" is present on the return.

Short Period Return
  1. Taxpayers are allowed to file a return for fewer than 12 months only under one of the following conditions:

    1. An application or authority to file a short period return has been approved by the IRS (Form 1128).

    2. The return is filed under Treas. Reg. Section 1.443-1

    3. The return is filed under Section 1398 (Bankruptcy) Election or Second Short Year after Section 1398 Election.

    4. The taxpayer died during the current processing year and is filing to date of death. (See the decedent return editing instructions in IRM 3.11.3.10).

    5. The return is the final return for the taxpayer.

  2. Correspond for an explanation of the taxpayer's authority to file a short period return when none of the conditions in (1) above apply.

    1. Complete Form 3531/6001, using fill-in "4" , per Exhibit 3.11.3-17.

    2. Edit Action Code "211" when using Form 6001.

  3. Only Form 1040 may be filed as a short period return. Convert Form 1040A or Form 1040EZ to Form 1040. See IRM 3.11.3.63 for instructions on converting returns.

  4. Short Period returns require the following additional editing:

    1. Edit CCC "Y" and an Action Trail.

    2. Edit the ending date of the tax period, using "YYMM" format.

    3. Edit the received date when one is not already present.

  5. Determine the number of quarters covered by the short period return when Schedule SE is attached. The Self Employment (SE) Quarters Covered Code is edited on Schedule SE based on the number of quarters reported on the short period return. Use the following information to determine the number of quarters covered:

    1. A fraction of a quarter counts as a full quarter.

    2. The quarters begin in January, April, July, and October.

  6. Edit the SE Quarters Covered Code in the margin to the right of line 4 in the section used Section A or Section B of Schedule SE. Code the SE quarters covered as follows:

    • Code "1" for one quarter.

    • Code "2" for two quarters.

    • Code "3" for three quarters.

    Note:

    Do not code for four quarters.

Substitute for Return (SFR)
  1. An SFR return is prepared by Examination, Collection, or the Automated SFR (ASFR) function.

  2. Do not correspond with the taxpayer for missing information - including signature - on an SFR return. Instead, prepare Form 4227 to route the SFR return to the originating function when any of the following information is missing:

    • Filing status

    • Name(s)

    • TIN(s)

  3. Edit RPC "L" when there are no significant T-line entries on:

    • Lines 7 through 79 of Form 1040

    • Lines 7 through 51 of Form 1040A

    • Lines 1 through 14 of Form 1040EZ

    Note:

    Do not edit CCC "B" when RPC "L" has been edited.

  4. Take the following actions when an SFR return has the words "Possessor of Certain Cash" written on it:

    1. Edit the tax period if other than 1712.

    2. Process the return with a temporary TIN and route the return to Entity using Form 4227 for the assignment of the TIN.

    3. Edit "Possessor of Certain Cash" as the AIL.

  5. Edit an SFR return that has either "IRP" or "RTF" written on it as follows:

    1. Edit the tax period if other than 1712.

    2. Edit today's date as the received date.

    3. Edit CCC "3" and CCC "B" .

  6. Do not refer SFR returns without significant entries for statute clearing. Instead, edit RPC "L" and RPC "K" .

Automated Substitute for Return (ASFR)
  1. Route ASFR returns to the Collections unit referenced in the attached Letter 2566, Letter 3219, or pink Form 3531, if present. If ASFR is notated at the top of the return or an ASFR date stamp is present as the only indication, route the return to Austin or Fresno Submission Processing Centers (FSPC) at the addresses shown below.

    • AUSPC, 3651 South IH 35, Stop 5501, Austin, TX 78741

    • FSPC, 5045 E. Butler, Stop 81304, Fresno, CA 93727-5136

    Note:

    AUSPC and FSPC route to Collection unless there is an indication Collection has already cleared the return or if process as original is noted.

  2. Do not correspond. Do not send the return back to the taxpayer.

52-53 Week Return
  1. This is the only type of return that may have a tax period ending prior to the last day of a month.

  2. Use the following table to determine the correct tax period for a 52-53 week return.

    If Then
    Within the first half of the month, Edit the previous month as the end of the tax period.
    Within the second half of the month, Edit that month as the end of the tax period.
Blind Trust Returns
  1. Taxpayers who are presidential appointees are permitted to file their individual tax returns through a trustee of a blind trust.

  2. If there is any indication on the return or an attachment, a General Power of Attorney, or Form 2848 attached that indicates "Blind Trust" , see IRM 3.28.3.3.

  3. The POA, Form 2848 must be processed to the CAF to reflect the Blind Trust Indicator on Master File to ensure that no correspondence is generated to the taxpayer.

Tax Period

  1. These instructions for tax period editing include:

    • General instructions

    • Current calendar year returns

    • Fiscal year returns

    • Prior year returns

    • Early filed returns

Tax Period, General Instructions

  1. The tax period is indicated at the top of the form above the name area and/or the TIN blocks.

  2. Consider all returns to be current calendar year (i.e., 1712) returns, unless otherwise indicated.

  3. Edit tax periods other than the current calendar year to the right of the preprinted tax year in "YYMM" format (e.g., "1803" ). (See Figure 3.11.3-8).

  4. Edit a received date if not already present on all returns other than a timely filed current calendar year (1712) return. See the instructions for received date editing in IRM 3.11.3.8.

  5. Current year returns include:

    1. Form 1040 - Tax period cannot end earlier than 1712 (December 2017) or later than current year and month

    2. Form 1040A or Form 1040EZ - 1712 tax period only

    Figure 3.11.3-8

    This is an Image: 33440008.gif
     

    Please click here for the text description of the image.

Current Calendar Year Return

  1. Process the return as a current calendar year return when the tax form is for a prior year, but the Form(s) W-2 is for the current calendar year. Mark out the line numbers on the prior year forms/schedules and edit current year T-line numbers. Edit tax period to current year.

    Exception:

    Convert to a current year form or use a conversion sheet (Form 6114, Prior Year and Conversion Form 1040) if marking out the line numbers would make transcription more difficult.

  2. When the taxpayer attaches prior year forms or schedules to a current year return, re-number T-lines to match the current year form or schedule.

  3. Number T-lines with entries when line numbers are missing.

Fiscal Year Return

  1. A fiscal year is twelve full months ending on the last day of any month other than December.

    1. Edit the tax period in YYMM format.

    2. Edit the received date when one is not already present.

  2. Edit Action Code "355" when the ending date of the tax period is after the current date except for decedent returns.

    Note:

    See IRM 3.11.3.10.6 for information on short-period decedent returns.

Prior Year Return

  1. A prior year tax return is a Form 1040, Form 1040A or Form 1040EZ filed for a tax year prior to the current processing year return.

  2. Refer to 3.11.3.64 for prior year editing instructions.

  3. Refer to 3.11.3.64.2 for the statute of limitations instructions on prior year returns.

  4. Process the return as a prior year return when the tax form is for the current year, but the Form(s) W-2 is for a prior year. Refer to the line-by-line instructions for prior year editing in IRM 3.11.3.64 for additional information.

Early Filed Return

  1. If a return reflects a future tax year, take the following actions:

    • Edit the caption.

    • Edit tax period in YYMM format.

    • Edit the Received Date when one is not present.

    • Edit Action Code "480" .

Received Dates

  1. The received date is the date that a return was received by the IRS.

  2. Information and instructions about received dates included in this subsection of the manual include:

    • General instructions

    • Timely received dates

    • Determining the received date

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • Late-filed returns

    • Extensions

    • Reasonable cause criteria

Received Dates, General Instructions

  1. A received date is always required when the return is:

    • Amended

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

    • Fiscal year, prior year, or short year

    • Early-filed for a decedent (filed before the close of the current year)

    • Processed on June 4, 2018, or later, or the Julian date in the DLN is 155 or later (156 or later in leap years)

      Note:

      Leap years are 2016, 2020, etc. If return is received after the ≡ ≡ ≡ ≡ ≡ ≡ without a received date see IRM 3.11.3.8.2. Do not edit a received date if return is determined to be timely.

    Exception:

    See IRM 3.11.3.8.5(3).

  2. Edit the received date on the front of the return in the following locations:

    1. Form 1040 to the right of line 6d

    2. Form 1040A to the right of line 6d

    3. Form 1040EZ to the left of line 6

  3. Edit the received date in "MMDDYY" format when it is required and not already present. MMDDYY format is Month Month Day Day Year Year. For example, April 23, 2018, when edited in MMDDYY format is "042318" .

  4. Perfect the received date when it is required and not legible or is incomplete. When perfecting, edit in the MMDDYY format.

    Note:

    A dash (-) in front of a single digit is considered incomplete (i.e. Nov -5 2017) and must be perfected.

  5. If a return contains a valid received date on any page other than the front of the return or in the caption area, edit the same received date as instructed in (2).

  6. Circle the received date when it is present on a return that does not need one. See Figure 3.11.3-9.

  7. Circle a received date that has been X-ed.

  8. Circle all but the earliest valid received dates (including Statute or other valid IRS organization's received dates) when there are multiple received dates present and a received date is required. See IRM 3.11.3.8.2.1(2). Taxpayer Advocate Service (TAS) received dates are not valid received dates. If multiple received dates are identical and in the appropriate location on the return, circle all but one received date.

    Exception:

    When the return has been mailed back for missing signature(s) and multiple received dates are present, see IRM 3.11.3.8.2(3).

  9. If a return has been faxed to another area of the service and then sent to Code & Edit for processing, do not edit the Enterprise Electronic Fax (EEFax) date as the IRS Received Date. Edit the received date following normal procedures.

    Caution:

    The EEFax Date cannot legally be used as the IRS Received Date.

    Figure 3.11.3-9

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    Please click here for the text description of the image.

Determining the Received Dates

  1. Determine the received date in the following priority when it is required and there is no valid date stamp or handwritten received date:

    1. Latest postmark on the envelope or latest date from a private delivery service mark. (See Figure 3.11.3-10).

      Note:

      When the envelope certified mail receipt is not attached, use the postmark date stamped or handwritten on the return to determine the received date.

    2. Service Center Automated Mail Processing System (SCAMPS) digital dates.

    3. Latest date by the taxpayer's signature(s). (See Figure 3.11.3-10).

      Exception:

      Use the signature date on prior year returns only when it is signed this year. Do not use the signature date to determine the received date for replies to correspondence.

    4. Julian date minus 10 days in the DLN.

    5. Today's date minus 10 days.

    Exception:

    See the instructions in IRM 3.11.3.6.2.17 when determining the received date for a reinput return.

  2. If the stamped received date on a current year return is three months or more prior to the current date, search the return for an indication the received date is incorrect (e.g., a postmark date or signature date after the received date). If the received date is determined to be incorrect, circle it and edit a new received date following the instructions at IRM 3.11.3.8.2(1).

  3. Always review each return for the words, "Returned for Signature" or similar statement and a date present in the lower left corner of the return. These are returns that were originally received missing a signature and were mailed back to the taxpayer. If a date and the notation "Returned for Signature" or similar statement is present, refer to the following instructions for editing the received date:

    1. If the return is Balance Due and a received date is present showing a date within 30 days after the date present in the lower left corner, use the date sent back for signature as the received date. Use the most recent mail-back date when multiple dates are present. Circle out any other received date(s) that may be present. See Figure 3.11.3-11.

      Note:

      If the return for signature date is missing and it can be determined that the response was received within 30 days, follow instructions in (a).

    2. If the return is Balance Due and a received date is present showing a date more than 30 days after the date present in the lower left corner, honor the latest received date. Circle out any other received date(s) that may be present.

    3. If the return is a Refund, Credit Elect or Zero balance return, honor the latest received date. Circle out any other received date(s) that may be present.

      Exception:

      For Statute Returns only: if a received date is present showing a date within 30 days after the date present in the lower left corner, circle out the latest received date and edit the earlier received date.

      Reminder:

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

    Figure 3.11.3-10

    This is an Image: 33440010.gif
     

    Please click here for the text description of the image.

    Figure 3.11.3-11

    This is an Image: 33440011.gif
     

    Please click here for the text description of the image.

Types of Received Dates
  1. Accept these three types of received dates:

    • IRS campus date stamp with the word "received" - to include Accounts Management, ACSS, Collections, or other valid IRS organizations

      Note:

      A received date edited or stamped by the Taxpayer Advocate Service (TAS) is not a valid IRS received date.

    • IRS area/territory office date stamp

      Note:

      The city and functional area within the site (CSCO, Exam, ICT, CIS, AM, for instance) should appear in the date stamp.

    • Valid handwritten received date

      Note:

      A handwritten received date edited in the line 6d area of Form 1040 or Form 1040A (line 6 of Form 1040EZ) by an IRS employee in Submission Processing or IVO is valid. A clear indication that a handwritten received date has been edited by IVO will be the presence of SPC "B" , "M" and/or "IVO" noted or stamped in the upper left margin. Generally, the IVO-edited received date will be earlier than the original, stamped received date.

  2. When there is no valid date stamp and the handwritten received date is not valid, determine the received date using the instructions in IRM 3.11.3.8.2.

Post Office Marks
  1. Accept all valid post office marks whether United States Postal Service (USPS), foreign country postmarks, or USPS private meter marks.

  2. Valid Post Office marks are:

    • Postage Validation Imprinter (PVI) labels displaying the USPS eagle

    • Killer bar strips or other cancellation marks with a date, city, and state

    • USPS Metered postmarks

    • Private Metered Marks (identified by the absence of "USPS" in the postmark).

  3. Use the following chart to determine the correct editing when only a private meter postmark is present.

    If the document is Then
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
Private Delivery Service (PDS) Marks
  1. A private delivery service (PDS) is a business which delivers mail or packages within an agreed upon schedule (e.g. overnight or same day delivery). The "timely mailing treated as timely filing" rule now applies to some PDSs. When the rule applies to a PDS, it is referred to as a "designated" PDS.

  2. Do not use marks from a non-designated PDS to determine whether a return is timely filed. The "timely mailing treated as timely filing" rule applies only to the USPS and to designated PDSs.

  3. Accept all designated PDS marks. The only designated delivery services are listed below:

    1. United Parcel Service (UPS)
      • UPS Next Day Air Early A.M.
      • UPS Next Day Air
      • UPS Next Day Air Saver
      • UPS Second Day Air
      • UPS Second Day Air A.M.
      • UPS Worldwide Express
      • UPS Worldwide Express Plus

    2. Federal Express (FedEx)
      • Fed Ex First Overnight
      • Fed Ex Priority Overnight
      • Fed Ex Standard Overnight
      • Fed Ex Two Day
      • Fed Ex International Next Flight Out
      • Fed Ex International Priority
      • Fed Ex International First
      • Fed Ex International Economy

      Note:

      Do not use "FedEx Powership 3" labels for determining the mail date. See Figure 3.11.3-12.

    3. DHL Express
      DHL Express
      DHL Express Worldwide
      DHL Express Envelope
      DHL Import Express
      DHL Import Express Worldwide

  4. Use the instructions in IRM 3.11.3.8.2 for determining the date a return was received whether the mail marks are from a designated or non-designated PDS.

    Figure 3.11.3-12

    This is an Image: 33440012.gif
     

    Please click here for the text description of the image.

Timely Filed Returns

  1. For 2018, a current-year return is a return filed for tax year 2017. A current calendar-year return (1712) is considered to be timely filed when it is mailed on or before the due date of April 17, 2018.

  2. Any return-other than a current calendar-year timely-filed return-always requires a received date.

  3. Generally, a current calendar-year (1712) return received on or before April 17, 2018, does not require a received date.

  4. For current calendar-year (1712) other than full-paid return, received on or before April 17, 2018:

    If the document is Then
    Unnumbered and being processed before June 4, 2018, Circle the received date when present.

    Exception:

    NEVER circle a received date that has been edited in green ink.

    Numbered with a DLN Julian date of 154 or earlier (155 or earlier in leap years), Circle the received date when present.

    Exception:

    NEVER circle a received date that has been edited in green ink.

    Unnumbered and being processed on June 4, 2018, or later, Edit "041718" as the received date if one is not present.
    Numbered with a DLN Julian date of 155 or later (156 or later in leap years), Edit "041718" as the received date if one is not present.

    Note:

    Leap years are 2016, 2020, etc.

"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "

  1. By law, a timely-mailed return is a timely-filed return. This applies to both USPS and designated PDS mail.

  2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡

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

  4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  5. For current calendar-year (1712), other than full paid return, received ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ :

    If the received date is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Then
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Circle the received date.

    Exception:

    Never circle a received date that has been edited in green ink.

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Circle the received date.

    Exception:

    Never circle a received date that has been edited in green ink.

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Circle the received date. Edit a received date of "041718 " .
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Circle the received date. Edit a received date of "041718" .

    Note:

    Leap years are 2016, 2020, etc.

    Exception:

    If penalties or interest are indicated by Examination or Collection and the return is part- or full-paid, then edit a received date of "041718 " and prepare Form 3471. See IRM 3.11.3.3.4.1 for additional information and instructions. Use the instructions in IRM 3.11.3.14.8.5 when penalty and interest amounts are entered by the taxpayer.

Late Filed Returns

  1. A return is delinquent when it is filed after the due date without an approved extension.

  2. ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

  3. When the received date on a current calendar-year (1712) return ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ " or later), examine the envelope and:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    "≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

    ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Exception:

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

    "≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

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

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Exception:

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

    "≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

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

    Exception:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Extensions

  1. Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, may be filed to extend the due date for filing an individual tax return until October 15, 2018.

  2. Extension forms are not required to be attached to the return when filed.

  3. Take one of the following actions when an original Form 4868 is attached to a return:

    If the Form 4868 is Then
    Not for the Form 1040, Form 1040A or Form 1040EZ to which it is attached (e.g., another tax period, another taxpayer), Detach the form and route it to Receipt and Control.
    For the Form 1040, Form 1040A or Form 1040EZ to which it is attached, Leave the form attached to the return.
  4. Edit CCC "R" on returns received after April 17th when Form 4868 or Form 6401 is attached and an ITIN or IRSN is present in the primary Social Security Number (SSN) field. Both Individual Tax Identification Numbers (ITINs) and Internal Revenue Service Numbers (IRSNs) begin with the digit "9" .

    Note:

    Delete CCC "N" if it has been edited. CCC "N" is only valid on returns as outlined at IRM 3.11.3.8.7(3).

  5. Examine the envelope postmark date. If the received date is "≡ ≡ ≡ ≡ " or later, and the postmark date or designated PDS mark date is on or before October 15, 2018, edit the postmark date as the received date.

    Exception:

    Edit a timely received date on the return when the taxpayer explains the return is late due to the rejection of a timely-filed electronic return. Postmark date must be within 10 calendar days of notification from the Service that the electronic portion of the return has been rejected or cannot be accepted for processing. (Rev. Proc. 2007-40 and Publication 1345).

  6. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    Use the instructions in IRM 3.11.3.3.4.1 to prepare Form 3471 when returns are received from Examination or Collection with penalty and interest amounts entered. These amounts will usually be present on Form 4364, Delinquency Computations. Use the instructions in IRM 3.11.3.14.8.5 when penalty and interest amounts are entered by the taxpayer.

Reasonable Cause

  1. Taxpayers are liable for delinquency penalties and interest on the unpaid taxes on returns received after the due date. However, penalties for late filing, or late payment, may be excused when the taxpayer has a reasonable cause for the delay. See Exhibit 3.11.3-8 for examples of reasonable cause.

    Note:

    Reasonable cause does not excuse penalties for failure to make estimated (ES) tax payments properly unless the taxpayer retired after reaching age 62 or became disabled during the tax year or the prior tax year. See Exhibit 3.11.3-8.

  2. Failure to make estimated (ES) tax payments generally cannot be waived due to reasonable cause. See IRM 3.11.3.14.8.5 for waivers of the estimated tax penalty.

  3. Edit CCC "N" on a return that qualifies the taxpayer for a special extension when the received date is later than the ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and there is an indication (on the return or an attachment) of any of the following:

    • The taxpayer lives outside the U.S. and Puerto Rico and main place of work is outside the U.S. and Puerto Rico

    • The taxpayer is on military or naval duty outside of the U.S. and Puerto Rico

    • An APO/FPO/DPO address

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  4. When the taxpayer's reasonable cause statement is not acceptable:

    1. Edit CCC "7" .

    2. Route for correspondence. Letter 854C (Penalty Waiver or Abatement Disallowed/Appeals Procedure Explained), must be issued.

    Note:

    See the correspondence instructions in IRM 3.11.3.5.

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

    If the reasonable cause is for Then
    Late filing, Edit CCC "R" , unless CCC "N" has been edited.
    Late payment or a "Section 6020(b)" notation is present, Edit CCC "M" .

Taxpayer Identification

  1. Instructions and information in this subsection of the manual include:

    • General caption information

    • Caption editing

    • Taxpayer identification number

    • Name and additional information lines

    • Mailing address

Caption, General Information

  1. Some instructions for caption editing refer to "name control" . The first four characters of the primary taxpayer's last name is the name control. Refer to Document 7071 if name control editing is required.

  2. Caption information can be printed, typed, or handwritten directly on the return. (See Figure 3.11.3-13)

  3. References to the Taxpayer Identification Number (TIN) include Social Security Numbers (SSN), Individual Taxpayer Identification Numbers (ITIN), Internal Revenue Service Numbers (IRSN), and Adoption Taxpayer Identification Numbers (ATIN).

    Note:

    An ITIN is a unique nine-digit number assigned by the IRS to individuals who must file a U.S. tax return, or are listed as a spouse or a dependent but do not have and cannot obtain a valid SSN. Taxpayers obtain an ITIN by filing Form W-7.

    Note:

    An IRSN is a temporary number assigned to taxpayers for processing purposes only. They are not valid for subsequent years.

  4. Required caption information includes:

    • Primary taxpayer identification number (P-TIN)

    • Secondary taxpayer identification number (S-TIN)

    • Name

    • Additional information line, when required

    • Mailing address

    • City and State

    • ZIP Code

    Figure 3.11.3-13

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Caption Editing

  1. Ensure the S-TIN and name is present in the caption on FS 2 returns. Also ensure that FS 3 and FS 6 returns have the S-TIN included in the caption.

    Note:

    Edit the S-TIN from attachments when missing.

    Exception:

    For FS 2 returns only, if the secondary taxpayer's name is missing or illegible and the primary taxpayer's name is present and it can be clearly determined from the signature lines or attachments that the last names are the same, accept the primary taxpayer's name for both taxpayers.

  2. Edit to the caption area any change or addition to caption information made by the taxpayer on an attachment or on the return outside of the caption area. (See Figure 3.11.3-14)

    Exception:

    See IRM 3.11.3.9.2.3 for instructions for perfecting a mailing address.

    Figure 3.11.3-14

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  3. Search the return and attachments for any missing caption information and perfect the caption if all missing information is found. See IRM 3.11.3.9.2.3 for instructions on perfecting a mailing address.

  4. Take the following actions if any required caption information is missing and cannot be perfected, see Figure 3.11.3-15:

    1. Edit (or underline, if present) the name control in the caption area.

      Exception:

      Do not underline the name control when the TIN only is missing from the caption.

      Exception:

      Do not underline name control when correspondence is necessary. Perfect caption information from envelope or through research.

    2. Edit the P-TIN (if not present) in the caption area.

    Figure 3.11.3-15

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  5. Do not re-edit green edit markings in the caption area unless the editing is incorrect.

  6. Do not change the name control when it has been edited in red by; Entity Unit, ITIN Operation, or RPS employees. Use the Entity/ITIN/ RPS editing to perfect the:

    1. Name control for caption.

    2. TIN on attachments - Schedule C, Schedule C-EZ, Schedule H, Schedule SE and Form 4137, Form 5405, Form 8853, Form 8919 and Form 8941.

      Note:

      The name control for a newly assigned ITIN or IRSN may have been edited and/or underlined by the ITIN Operation or Entity Unit.

  7. Underline the Additional Information Line (AIL) (See IRM 3.11.3.9.2.2.2) when:

    1. Present on a return.

    2. The taxpayer indicates information which should be added to the additional information line. Edit and underline the appropriate information.

  8. Delete "also known as" and "AKA" notations, as well as the name associated with the "AKA" when the taxpayer notates "also known as" or "AKA" and included an additional name in the caption area of the return.

Taxpayer Identification Number (TIN)
  1. The primary TIN (P-TIN) belongs to the taxpayer whose name appears first on the return. The secondary TIN (S-TIN) belongs to the spouse. The P-TIN must be in the "Your Social Security Number" block.

  2. Search the return for separate numbers when the P-TIN and S-TIN are the same. Delete the S-TIN if separate numbers are not found.

  3. There are different types of valid TINs:

    • Individual Taxpayer Identification Number (ITIN)Format always begins with the digit "9" and follows the same format as a typical SSN. The valid ranges for the fourth and fifth digits are:
      - 50 through 65
      - 70 through 88
      - 90 through 92
      - 94 through 99
      - Example of an ITIN: 9XX-71-XXXX.

    • Adoption Taxpayer Identification Number (ATIN)Format always begins with the digit "9" and follows the same format as a typical SSN. The fourth and fifth digits will be 93. Example of an ATIN: 9XX-93-XXXX.

    • Internal Revenue Service Number (IRSN)Format always begin with the digit "9" and follows the same format as a typical SSN. The fourth and fifth digits signify the Internal Revenue Service Campus (IRSC) Code where the IRSN was originally assigned or the new expansion range assigned to that campus. Shown below are the numbers allocated to IMF campuses:

    IRSC 4th and 5th Digit Ranges for IRSNs Expansion Ranges
    Austin 18 06
    Fresno 89 10
    Kansas City 09 39

    Note:

    Example of an IRSN assigned from Austin: 9XX-18-XXXX.

  4. Circle any invalid (e.g., "999-99-9999" , "111-11-1111" ) or incomplete TIN that cannot be perfected, including all notations, (e.g., "NRA" , "SSA 205(c)" , "applied for" , "ITIN Rejected" , "No W-7" ).

    Exception:

    It is not necessary to circle the invalid TIN for dependents when the name has been "X" ’d (e.g., line 6c).

  5. Perfect the TIN, if necessary, on any attached Schedule C, Schedule C-EZ, Schedule H, Schedule SE, Form 4137, Form 5405, Form 8853, Form 8919 and/or Form 8941.

  6. Stop editing the return and take the following actions when Form W-7 or Form W-7(SP) is attached to the Form 1040, Form 1040A or Form 1040EZ:

    1. Unnumbered:
      • Pull the return from the batch. Attach Form W-7 to the front of the return.
      • Edit the received date on Form W-7/W-7(SP) in "MMDDYY" format and route the entire return to Receipt and Control for transshipment to AUSPC.

    2. Complete Form 3696-A to generate Letter 86C. If the ITIN application (Form W-7 or Form W-7(SP)) is for the primary taxpayer, enter an asterisk (*) for the SSN on Form 3696-A. If the ITIN application is for a spouse or dependent, enter the primary TIN on Form 3696–A.

      Exception:

      AUSPC Only: Do not send Letter 86C. Follow local procedures to route both to the ITIN unit.

      Note:

      For numbered returns, edit Action Code "651" .

Primary TIN (P-TIN)
  1. The P-TIN must be in the "Your Social Security Number" block.

  2. Arrow or edit the P-TIN in the proper block if it appears in the "Spouse's Social Security Number" block or elsewhere.

    Exception:

    It is not necessary to arrow or edit the P-TIN to the P-TIN area if the words "applied for" or similar statement is present in the P-TIN area and an ITIN has been edited to the left of the P-TIN area.

    Note:

    If the P-TIN is an edited ITIN on a photocopied return, underline the ITIN.

  3. If "ITIN Rejected" is present in the P-TIN field, route the return to Receipt and Control for rebatching.

  4. If the P-TIN is missing, illegible or incomplete, examine the return and its attachments and edit the P-TIN, if found. Circle an incomplete P-TIN.

    Note:

    If there is an indication the taxpayer used a TIN that is not her/his own, take no action, (e.g., the taxpayer shows an ITIN on the return and an SSN on attached Form W-2).

  5. Correspond for a missing P-TIN when corresponding for other missing return items. If using Form 3531, check box 2, or Form 6001, check box B.

    Exception:

    Do not correspond if the taxpayer indicates "Amish" , "Mennonite" , "none" , "SSN Applied For" , "NRA" , "SSA 205(c)" , or all nines or zeroes.

Secondary TIN (S-TIN)
  1. Circle an S-TIN if it is present and the FS is "1" , "4" , "5" or "7" .

  2. Arrow or edit the S-TIN in the proper block if it appears in the caption area or elsewhere.

    Exception:

    It is not necessary to arrow or edit the S-TIN to the S-TIN area if the words "applied for" or similar statement is present in the S-TIN area and an ITIN has been edited to the left of the S-TIN area.

  3. Edit the S-TIN from the return or attachments if it is missing, illegible, or incomplete, and the FS is "2" , "3" , or "6" . Edit the S-TIN in the correct block if it is blank and the taxpayer entered a TIN on the line to the right of FS box 3.

    Note:

    If there is an indication the taxpayer used a TIN that is not her/his own, take no action, (e.g., the taxpayer shows an ITIN on the return and an SSN on attached Form W-2).

  4. Correspond for a missing S-TIN when corresponding for other missing return items, unless there is an indication of Amish or Mennonite, ITIN Rejected or Non-resident Alien (NRA). If using Form 3531, check box 2, or Form 6001, check box B.

  5. Edit CCC "J" when the S-TIN is missing, the filing status is 2, 3, or 6 and there is an indication of Amish or Mennonite or "Form 4029" is notated.

Name Line and Additional Information Line
  1. Each return processed must have a legible last name. Research following local procedures when the name is illegible and cannot be perfected.

  2. There are two lines available for taxpayer identification.

    1. The name line is for the first name, middle initial, and last name(s) of the primary and secondary (if present) taxpayer(s). This includes any suffix.

    2. The additional information line (AIL) is used to further identify the taxpayer. For example, additional name, address, or representative information may be shown.

Name Line
  1. Refer to Document 7071, Name Control Job Aid for Individual Master File (IMF) Taxpayers.

  2. Circle the spouse's name when there are two names in the name line, the FS is "1" , "3" , or "4" , and there is only one signature. Perfect the name line to agree with the signature. (e.g., If John signs the return, delete Mary's name from the caption).

  3. Edit the spouse's name from the signature line when all of the following conditions apply:

    • Only one name appears in the first name line.

    • The FS is "2" .

    • Both taxpayers have signed the return.

  4. Do not delete "DECD" or "MINOR" from the name line:

    If the return indicates that Then
    At least one of the taxpayers is deceased, Refer to IRM 3.11.3.10 for complete editing instructions for decedent returns.
    The taxpayer is a minor child, Refer to IRM 3.11.3.11.2.
  5. Circle the brackets and prior last name when a taxpayer places it in brackets and shows a new last name. (See Figure 3.11.3-16).

    Figure 3.11.3-16

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  6. The primary taxpayer's name will appear on the first line. The secondary taxpayer's name may appear on the first or second line.

  7. Do not separate the primary and secondary taxpayers' names onto different lines if they are both on the same line.

  8. Edit the name line as follows:

    If the taxpayer Then
    Uses a first initial but signs the return with a name,* Edit the name from the signature line to the name line. (See Figure 3.11.3-17)
    Uses a middle initial and no first name,* Edit the name for the middle initial, if present. (See Figure 3.11.3-17)
    Writes his/her last name first, Edit it to appear last. (See Figure 3.11.3-18)
    Enters his/her last name twice and the FS is other than "2" , Circle either name and edit the last name to appear last, if necessary.

    Note:

    *Do not verify the name line with the signature area unless one of these two conditions apply.

    Figure 3.11.3-17

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    Figure 3.11.3-18

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Additional Information Line (AIL)
  1. The additional information line may be found anywhere in the caption area.

  2. Edit and underline the AIL in the following priority:

    1. A fiduciary or taxpayer's representative's name with a title (See IRM 3.11.3.11). Taxpayer's representatives include:
      • Administrator (ADM)
      • Commissioner (COMM)
      • Conservator (CONS)
      • Custodian (CUST)
      • Executor/Executrix (EXEC)
      • Guardian (GDN)
      • Personal Representative (PER REP)
      • Trustee (TR)

    2. Name of a parent signing for their minor child.

  3. Underline the AIL (see Figure 3.11.3-19), when present in the caption area, in the following priority:

    1. A fiduciary or taxpayer representative name with a title (See IRM 3.11.3.11). Taxpayer representatives include:
      • Administrator (ADM)
      • Commissioner (COMM)
      • Conservator (CONS)
      • Custodian (CUST)
      • Executor/Executrix (EXEC)
      • Guardian (GDN)
      • Personal Representative (PER REP)
      • Trustee (TR)

    2. Name of a parent signing for their minor child.

    3. Name of a Power of Attorney (POA) (See Figure 3.11.3-20.)

    4. Name of a person not meeting the criteria listed in a, b, or c above (e.g., "in-care-of" information.) Also underline in care of (c/o) with a name as part of the AIL.

    5. Street address, if not used as the mailing address.

      Note:

      Never underline or edit a P.O. Box as an AIL.

    6. Location other than a street address (e.g., bank, company name, university, or building name) not used as the mailing address. (See Figure 3.11.3-21.)

      Note:

      If a university and a building name are present, underline both as the AIL.

  4. Delete any condition or notation not found in (3) above.

    Figure 3.11.3-19

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    Figure 3.11.3-20

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    Figure 3.11.3-21

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Mailing Address
  1. Edit military addresses to include organization, Postal Service Center, mobile unit designation, or name of ship.

  2. Underline or edit the name control when there is no street address (for example, 4116 Grant Ave) or P.O. Box present in the caption. (See Figure 3.11.3-15 and Figure 3.11.3-22.)

    Exception:

    If Form 8822 is attached, follow the instructions at IRM 3.11.3.9.2.3.1. If the address still cannot be perfected, underline the name control.

    Exception:

    If correspondence is required, perfect address from an attached envelope. If unable to perfect from an attached envelope, research for the address.

  3. When a street address in the caption is incomplete (such as a number without a street name or a street name without a number), and a complete address that matches the caption is found on an attachment, perfect the street address. If the street address cannot be perfected, underline or edit the name control. (See Figure 3.11.3-22.)

  4. Search the attachments when a complete street address is present in the caption, but the city/state/ZIP is missing or incomplete. If the street address in the caption matches one found on an attachment, use the attachment to perfect the city/state/ZIP. (See Figure 3.11.3-23.)

  5. If you are unable to perfect a missing or partial city/state/ZIP Code, underline the name control.

    Note:

    If only the ZIP Code is missing, refer to IRM 3.11.3.9.2.5.

    Exception:

    If correspondence is required, perfect address from an attached envelope. If unable to perfect from an attached envelope, research for the address.

  6. Refer to the international return instructions in IRM 3.11.3.6.2.13 when the return has a foreign address.

    Exception:

    If both a domestic and foreign address are present, circle out the foreign address.

    Figure 3.11.3-22

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    Figure 3.11.3-23

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Change of Address (Form 8822)
  1. Edit the taxpayer's new address from Form 8822, Change of Address, if it is attached to the return. (See Figure 3.11.3-24.)

  2. If Form 8822 is attached to the return:

    If Then
    Box 1 is marked or no box is marked, Leave Form 8822 attached to the return.
    Box 2 is marked,
    1. Detach Form 8822.

    2. Route Form 8822 to Entity Control using Form 4227.

    3. Edit Action Trails on both the return and on Form 8822.

      Note:

      If Form 56 is attached, detach and route with Form 8822.

  3. Route loose Forms 8822 to Entity Control. Refer to the Attachment Guide in Exhibit 3.11.3-1 for more information.

    Figure 3.11.3-24

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Multiple Addresses
  1. Use the permanent address when more than one address is indicated and one is permanent and one is temporary. (See Figure 3.11.3-25.)

    Exception:

    When the taxpayer identifies him/herself as a victim of a natural disaster and requests that a refund be sent to a temporary address, edit Action Code "341" .

    Note:

    Refer temporary foreign addresses to your work leader for possible manual refund.

    Figure 3.11.3-25

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  2. Use the following chart to decide what action to take when multiple addresses are present and there is no indication of which address is permanent.

    If there are And Then
    Both a PO box and a street address present, An AIL is present, Circle the street address. (See Figure 3.11.3-26.)
    Both a PO box and a street address present and the city/state/ZIP codes are the same, An AIL is not present, Underline the street address. (See Figure 3.11.3-27.)
    Both a PO box and a street address present and the city/state/ZIP code are different, An AIL is not present, Circle the street address, including the city/state/ZIP code.
    Two street addresses and the city/state/ZIP Code are the same, An AIL is not present, Underline the first street address.
    Two street addresses and the city/state/ZIP Code are different, An AIL may or may not be present, Circle the first street address, including the city/state/ZIP Code.

    Figure 3.11.3-26

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    Figure 3.11.3-27

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  3. For addresses containing a rural route or route number with a box number, and a street address: (See Figure 3.11.3-28.)

    If a street number is Then
    Present, Underline the rural route or route number with a box number.

    Note:

    Never separate a rural route or route number with a box number.

    Not present, Underline the street address.

    Exception:

    Do not underline any part of the address when an AIL is already present.

    Figure 3.11.3-28

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  4. Underline any other address as the AIL if the street address is present with a notation of Private Mail Box or "PMB" . Do not separate the address from the PMB number. (See Figure 3.11.3-29)

    Exception:

    Do not underline a P.O. Box as the AIL. The P.O. Box will always take precedence over the PMB when determining the correct address.

    Figure 3.11.3-29

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City/State
  1. The city and the state must be present. If missing, search the return and other attachments.

    If the missing information is Then
    Found, Perfect the city/state line.

    Exception:

    Do not perfect city/state information if the street address is not present on the return.

    Not found, Underline or edit the name control.
  2. Do not abbreviate city names except those which have standard abbreviations. Examples include No. Hollywood or St. Louis. A list of the standard city abbreviations will be made available at local management's option.

  3. Use the standard abbreviations when editing the state. Refer to Exhibit 3.11.3-9 for a list of the standard state abbreviations.

  4. Route to Receipt & Control for transshipment to AUSPC when International Return conditions are present. See IRM 3.11.3.6.2.13.

    Exception:

    AUSPC only: Route to Receipt & Control for rebatching.

ZIP Code
  1. The ZIP code may be five or more digits. Take no action when there are more than five digits.

  2. Search attachments if the ZIP code is missing or incomplete and take one of the following actions:

    1. Perfect the ZIP code from the attachment(s) if a complete ZIP code is found for exactly the same address (including apartment number, if present). See Figure 3.11.3-30

    2. Perfect the ZIP code using the chart in Exhibit 3.11.3-9 when a complete ZIP code is not found.

    Figure 3.11.3-30

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APO/FPO/DPO Addresses
  1. Edit an APO, FPO, or DPO address so that "APO" , "FPO" , or "DPO" appears with the following (see Figure 3.11.3-31:

    • The appropriate two-letter state code, and

    • The corresponding unique five-digit ZIP code

    Figure 3.11.3-31

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  2. Circle a city name or a foreign city or country if present, and edit the appropriate state/ZIP code based on the table in paragraph (4) below.

  3. Edit the ZIP code from the table in paragraph (4) below that applies to the state code when the ZIP code is missing or incomplete.

  4. Refer to the following APO/FPO address conversion chart:

    Old Address New Address
    APO or FPO Miami, FL APO or FPO AA 34001
    APO or FPO New York, NY APO or FPO AE 09001
    APO or FPO San Francisco, CA APO or FPO AP 96201
    APO or FPO Seattle, WA APO or FPO AP 96201

Decedent Return

  1. Indications of a deceased taxpayer may include any of the following:

    1. Date of death is present

    2. "Deceased" written on the top of Form 1040, Form 1040A or Form 1040EZ

    3. "Deceased" , "Filing as surviving spouse " , or similar notation in the signature area

    4. Death certificate, Form 1310, or other documentation is attached

    5. "Estate of" is present

    6. "DEC"

  2. Instructions in this subsection of the IRM include the following:

    • General Decedent Return instructions

    • Decedent name line editing

    • Documentation requirements

    • Additional information line editing

    • Applicable Computer Condition Codes

    • Allowable short-period decedent return editing

Decedent Return, General Instructions

  1. Edit the caption information from a signed Form 1310. If a signed Form 1310 is not present, edit the information from the court certificate. (See Figure 3.11.3-32). Edit the caption address before corresponding.

    Reminder:

    Do not edit caption information when corresponding for Documentary Evidence.

    Figure 3.11.3-32

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  2. Check the "Estate of" box on Form 6001. Do not edit the AIL when corresponding for documentary evidence. If an AIL is present, circle out the AIL before corresponding for the documentary evidence.

  3. If corresponding for information other than documentary evidence, edit the AIL. If an AIL cannot be determined, check the "Estate of" box on Form 6001.

  4. If the signature is missing on a decedent return, correspond using Form 3531, check box 21. Edit "Estate of" in the caption area. Missing documentary evidence is not treated as an unsigned return. Do not use Form 3531 to mail back a signed decedent return missing documentary evidence.

  5. Decedent returns require a date of death. Correspond when the date of death cannot be determined through research. For Form 3531, check box 19, or Form 6001, check box C.

    Note:

    Do not research for a date of death when other correspondence conditions are present, instead include in the correspondence.

  6. If a return is filed for a single deceased taxpayer or two deceased taxpayers on a joint return and the return covers a tax period after the one in which the taxpayer(s) died, refer the return to your work leader.

  7. Work Leaders - follow the instructions below:

    1. Verify conversion to Form 1041 is necessary.

    2. Verify taxpayer is deceased. If a surviving spouse's signature is present on the return or if the taxpayer signed the return, do not transship to BMF SPC.

    3. For a numbered return, Insert a replacement page and edit the following information:
      • DLN in the upper-right margin.
      • AC 640
      • Action Trail, "Return transshipped to BMF SPC for conversion to Form 1041" .

    4. Pull the return from the batch and route to Receipt and Control, Media Transport Unit for transshipment to a BMF SPC.

  8. Take the following actions when a request for a prompt assessment or audit (e.g., "Section 6501(d)" noted) is present:

    1. Detach the request.

    2. Route the request to Examination using Form 4227.

    Note:

    Remember to edit Action Trails on the return and the request.

  9. If the FS is "1" , "4" , or "5" , the taxpayer is filing as a surviving spouse, and the decedent’s date of death is within the tax period or the subsequent tax period, take the following actions:

    If there is And Then
    One name in the name line, FS box 1 or 4 is marked,
    1. Edit the FS as 2 and the spouse's name to the caption.

    2. Correspond, if the spouse's name cannot be found.
      - If using Form 3531, check box 20.
      - If using Form 6001, use fill-in 35, per Exhibit 3.11.3-17.

    One name in the name line, FS box 5 is marked, Correspond , if the spouse's name cannot be found.
    - If using Form 3531, check box 20.
    - If using Form 6001, use fill-in 35, per Exhibit 3.11.3-17.
    Two names in the name line,   Edit the FS as "2" . (See Figure 3.11.3-33).

    Figure 3.11.3-33

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  10. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Name Line on a Decedent Return

  1. Use these name line instructions in addition to the regular caption editing procedures in IRM 3.11.3.9.2.

  2. If there is a notation of "deceased" , "decedent" , "Decd" , "Dec" , or "Dec'd" in or above the caption area, arrow or edit the notation to indicate the deceased taxpayer. (See Figure 3.11.3-34).

    If And Then
    Other than joint return,   Arrow or edit the notation to after the taxpayer's last name (behind any suffix)*
    Joint Return, Both taxpayers have same last name, Arrow or edit the notation to after the deceased taxpayer's first name (and middle initial, if present). (See Figure 3.11.3-34).

    Note:

    No special editing is needed if a suffix is present.

    Joint Return, Taxpayers have different last names, Arrow or edit the notation to after the deceased taxpayer's last name (behind any suffix.)*

    Note:

    * If the deceased taxpayer's last name is hyphenated, edit DECD after the second surname.

    Figure 3.11.3-34

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  3. If there is not a notation of "deceased" , "decedent" , "dec" , "Decd" , or "Dec'd" in or above the caption area, edit "DECD" as follows:

    If And Then
    Other than joint return,   Edit "DECD" after the taxpayer's last name (behind any suffix) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .
    Joint Return, Both taxpayers have same last name, Edit "DECD" after the deceased taxpayer's first name (and middle initial, if present).
    Joint Return, Taxpayers have different last names, Edit "DECD" after the deceased taxpayer's last name (behind any suffix.) (See Figure 3.11.3-36).*

    Note:

    * If the deceased taxpayer's last name is hyphenated, edit DECD after the second surname.

  4. On a joint return, when one taxpayer died prior to the tax period of the return, delete the following from the caption:

    1. The deceased taxpayer's name and TIN

    2. "DECD" if it is included in the caption

  5. If deleting the primary taxpayer from the caption, edit the secondary taxpayer as the new primary. (See Figure 3.11.3-37). See IRM 3.11.3.12.2.2 (1) for possible filing status editing.

    Figure 3.11.3-35

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    Figure 3.11.3-36

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    Figure 3.11.3-37

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Documentary Evidence

  1. Accept any court papers naming the claimant as a court-appointed or court-certified personal representative for the estate of the deceased taxpayer. A will validated through the court is acceptable documentary evidence. Acceptable documentary evidence also includes a properly completed Form 1310, Statement of Person Claiming Refund Due a Deceased Taxpayer. See IRM 3.11.3.10.3(7).

    Note:

    The signature name and the documentary evidence name must be the same person. Otherwise, correspond.

    Reminder:

    A will that has not been validated through a court is not acceptable as proof of appointment. A power of attorney (POA) is not valid after the death of the taxpayer.

  2. Do not require documentary evidence for the authority to sign the return on a:

    1. Balance due return

    2. Zero/even balance return

    3. Joint (FS "2" ) return signed by the surviving spouse

    4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    5. Credit elect return when the taxpayer's date of death is after the tax year (on a joint return this applies to either taxpayer).

    6. Return signed by a representative of a bank or fiduciary institution.

  3. Unless one of the exceptions in (2) above applies, require documentary evidence for all decedent returns that meet any of the following conditions:

    1. Uncomputed return

    2. Refund of ≡ ≡ ≡ ≡ ≡ ≡

    3. Credit elect of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Exception:

    If the refund is barred due to the expiration of the statute of limitations, no documentary evidence is required.

    Figure 3.11.3-38

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  4. Require documentary evidence on a joint return only in the following two situations, unless one of the conditions in (2) above applies:

    If Then
    Both taxpayers are deceased, Require documentary evidence for the person signing the return for at least one of the taxpayers.
    See IRM 3.11.3.10.3(2) for exceptions.

    Note:

    The signature name and the documentary evidence name must be the same person. Otherwise, correspond

    .
    Only one taxpayer died and the return has a single signature of someone other than the surviving spouse, Documentary evidence is required to support the authority to sign for both the decedent and the surviving spouse. (i.e., fiduciary relationship or POA per IRM 3.11.3.11 and IRM 3.11.3.11.3).
  5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Figure 3.11.3-39

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  6. Correspond when the refund payee is a claimant other than a legal representative, and a completed Form 1310 is not present. Correspond using Form 6001, paragraph D, or Form 3531, box 23.

  7. Accept Form 1310 as documentary evidence when all of the following are present:

    1. An original signature. Correspond if missing or invalid. See IRM 3.11.3.14.10 for signature requirements.

    2. Part II, questions 2a and 2b must be answered "No" . Correspond for a court certificate if either is answered "Yes" or is blank. (See Figure 3.11.3-40).

    3. Part II, question 3 must be answered "Yes" unless a court certificate is attached. (See Figure 3.11.3-41). Correspond when the question is answered "No" or is blank and a court certificate is not attached.

    Note:

    Correspond for a court certificate even when there is an indication a court certification was previously submitted.

    Figure 3.11.3-40

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    Figure 3.11.3-41

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Additional Information Line on a Decedent Return

  1. An AIL is required on all refund and uncomputed returns. On all other returns, edit the AIL if available. (See Figure 3.11.3-42). Correspond when an AIL is required and you are not able to determine the AIL from the signature line or attachments. For Form 3531, use box 22 and for Form 6001, fill in #3, per IRM Exhibit 3.11.3-17.

    Note:

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

  2. Edit the name of the surviving spouse as the AIL on a FS 2 return. Include the representative's name and title on the AIL when a court-appointed or personal representative's signature is on the return.

    Exception:

    Do not include a title on the AIL when the surviving spouse is also the court-appointed personal representative.

  3. Edit the title of the representative from these sources in the following priority:

    1. Court certificate

    2. Form 1310

    3. Signature area of the return

    Note:

    Edit only the first representative's name and title on the AIL when more than one is present.

  4. Use the following abbreviations for these titles (See Figure 3.11.3-42):

    • Administrator - ADM

    • Commissioner - COMM

    • Conservator - CONS

    • Custodian - CUST

    • Executor(Executrix) - EXEC

    • Guardian - GDN

    • Personal Representative - PER REP

    • Trustee - TR

    Note:

    Edit only the first representative's name and title on the AIL when more than one is present.

  5. Delete personal relationship suffixes (e.g., "surviving spouse" , "mother" , "father" , "daughter" , "son" , etc.) from the AIL.

    Figure 3.11.3-42

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Computer Condition Codes for Decedent Returns

  1. Edit one of the following CCCs on all returns where the taxpayer(s) died during the tax period of the return:

    1. Edit CCC "F" if a single taxpayer, or only the primary taxpayer on a joint return, is deceased. (See Figure 3.11.3-43)

    2. Edit CCC "9" if only the secondary taxpayer died during the tax period. (See Figure 3.11.3-43)

    3. Edit CCC "A" if both taxpayers died during the tax period. (See Figure 3.11.3-43)

    Note:

    Do not edit CCC "F" , "9" or "A" when the taxpayer died after the end of the tax period. (See Figure 3.11.3-44)

  2. Edit one of the following CCCs on a refund or uncomputed return:

    1. Edit CCC "W" if the payee is the surviving spouse alone, or a payee other than a legal representative or place of business. (See Figure 3.11.3-44)

    2. Edit CCC "L" if the payee is a legal representative (i.e., court-appointed), place of business, or a surviving spouse and a legal representative or place of business. (See Figure 3.11.3-44)

      Note:

      Do not edit CCC "L" or CCC "W" if corresponding.

    Figure 3.11.3-43

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    Figure 3.11.3-44

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Short Period Decedent Return

  1. If a single taxpayer or two taxpayers on a joint return died after the currently processed calendar year (2017), a short period return may be filed. In addition to regular editing, edit the following (see Figure 3.11.3-45):

    1. The date of death in YYMM format as the tax period.

      Note:

      Use the most recent date of death on a joint return when both taxpayers are deceased.

    2. CCC "Y" and an Action Trail

    3. CCC "A" for a joint return or CCC "F" for a single taxpayer

    4. Received date or today's date if no date stamp is present

    5. CCC "R" if the return is received more than 3 months and 15 days from the end of the short period.

      Exception:

      Do not edit CCC "R" if CCC "Z" criteria apply.

  2. If on a joint return only one taxpayer died after the currently processed calendar year, a return for the surviving spouse must be filed for the entire year. If a short period return was filed instead, take one of the following actions:

    1. If the return is unnumbered, correspond, informing the taxpayer that a return for the entire year must be filed.

    2. If the return is numbered, edit Action Code "480" and do not correspond.

  3. Only Form 1040 may be filed as a short-period return. Convert Form 1040A or Form 1040EZ to Form 1040. See IRM 3.11.3.63 for instructions on converting returns.

    Figure 3.11.3-45

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Fiduciary Relationships

  1. Fiduciary returns are those which are signed for the taxpayer by a representative, who is often court-appointed.

  2. Edit the fiduciary institution's name or the taxpayer's representative's name, when no institution name is present, as the Additional Information Line (AIL) in the caption. (See IRM 3.11.3.9.2.2.2).

  3. Use the abbreviations in the following chart as suffixes to the representative's name or fiduciary’s relationship.

    Fiduciary Relationships/Taxpayer Representatives Abbreviation
    Administrator ADM
    Commissioner COMM
    Conservator CONS
    Custodian CUST
    Executor/Executrix EXEC
    Guardian GDN
    Personal Representative PER REP
    Trustee TR

    Note:

    Do not add a Power of Attorney (POA) name as an Additional Information Line.

  4. Delete the word "Incompetent" from the caption when it is present.

Documentary Evidence Requirements

  1. Documentary evidence is never required for any of the following relationships:

    • The parent or spouse of an incompetent taxpayer

    • A parent signing for their minor child

    • An attorney or Certified Public Accountant (CPA)

    • A representative of a bank or other fiduciary institution, to include credit unions, pension funds, etc.

    • A Military spouse out of the country on combat duty or located in a qualified hazardous duty area. See IRM 3.11.3.6.1.1 for additional information regarding Combat Zone returns.

    Note:

    See IRM 3.11.3.10.3 for Documentary Evidence requirements for decedent returns.

  2. Documentary evidence is required only if the taxpayer ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    1. The parent for a child that is not a minor.

    2. Any of the representatives listed in the table at IRM 3.11.3.11.

  3. Documentary evidence is always required, regardless of the dollar amount, for all other relationships. This includes, but is not limited to, the following:

    • Son

    • Daughter

    • Uncle

    • Aunt

    • Cousin

    • Nephew

    • Niece

    • POA

    • Attorney-In-Fact

  4. Correspond when documentary evidence is required but not attached. If using Form 3531, check box 1, or Form 6001, paragraph i/s.

    Note:

    Do not edit AIL or underline, circle out if already present in the caption, when corresponding for documentary evidence.

Minor Child

  1. A minor child is defined by any of the following

    • "Minor" is notated anywhere on the return

    • Any indication the child is under age 18

  2. Edit "MINOR" as a suffix to the child's name in the caption if the return is for a minor child. See Figure 3.11.3-46.

  3. Edit the parent, other fiduciary representative or guardian's name as an additional information line in the caption if that person signs for the child (See Figure 3.11.3-46 and IRM 3.11.3.9.2.2.2). Use the following priority to determine the name or relationship of the person(s) signing the return:

    1. Use information from the signature area.

    2. Use information from Form 8615.

    3. Correspond for documentary evidence if a relationship cannot be determined.

  4. Correspond for missing required documentary evidence. Documentary evidence requirements are:

    1. A minor child's return signed by their parent never requires documentary evidence.

    2. A minor child's return signed by their guardian or other fiduciary representative (as shown in IRM 3.11.3.11) requires documentary evidence ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    3. All other relationships always require documentary evidence.

    Figure 3.11.3-46

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Power of Attorney (POA)

  1. If a POA relationship is indicated, Form 2848, Power of Attorney and Declaration of Representative, or a general or durable Power of Attorney must be attached. Correspond when missing, unless there is a notation of either of the following:

    • "POA on file" .

    • A Centralized Authorization File (CAF) number is provided on the return or an attachment. See paragraph (2) below.

    Note:

    A Form 2848 authorizes the holder to represent the taxpayer before the Service. The power to sign a tax return is not a power generally authorized by the form; the power must be specified. A Form 8821, Tax Information Authorization, only allows the holder to receive the taxpayer's tax information.

  2. Research the POA when either of the notations in (1) above are present. Correspond, when research does not provide a valid (current) POA. If using Form 3531, check box 1, or Form 6001, paragraph i/s.

  3. Never edit a POA name as an additional information line in the caption, unless otherwise instructed.

  4. See IRM 3.11.3.9.2.2.2 for further information on editing additional information lines.

Filing Status (FS)

  1. The filing status (FS) is used to determine the taxpayer's standard deduction amount, eligibility for the earned income tax credit, and to compute his/her tax.

  2. The instructions in this manual subsection are for determining and editing the correct FS.

Filing Status, General Instructions

  1. Edit the FS by either checking the appropriate box or by editing the FS Code to the left of the Filing Status 3 box.

  2. The meaning of the Filing Status Codes are:

    • FS "1" - single taxpayer

    • FS "2" - married taxpayers filing joint return

    • FS "3" - married taxpayer filing a separate return (spouse exemption is not claimed)

    • FS "4" - head of household

    • FS "5" - qualifying widow(er)

    • FS "6" - married taxpayer filing a separate return (spouse exemption is claimed)

    • FS "7" - head of household (dependent is not claimed)

Determining the Filing Status

  1. On an uncomputed return, when all FS boxes are blank or multiple boxes are marked:

    1. Edit FS "2" when there are two names in the caption and two signatures are present. Circle all boxes except FS "2" when multiple boxes are marked.

    2. Take no action for all other cases.

    Note:

    See IRM 3.11.3.6.2.5 for information on identifying uncomputed returns. See IRM 3.11.3.13.2 for further information on exemption editing.

  2. On a computed return, when the taxpayer does not mark a box:

    If there And Then
    Is one name in the caption and one signature A spouse's exemption is claimed on line 6b or 6c, Edit FS "6" and delete the spouse's exemption from positions 2 - 7.
    Is one name in the caption and one signature An S-TIN or spouse's name is entered on line 3 or an S-TIN is present in the caption area. Check FS box 3 unless FS 6 criteria (above) applies.
    Is one name in the caption and one signature Neither of the above apply, Check FS box 1.
    Are two names in the caption and two signatures,   Check FS box 2.
    Is any other condition,   Take no action.
  3. On a computed return when more than one FS box is marked, circle all boxes but the largest number unless both FS boxes 1 and 4 are marked. (See Figure 3.11.3-47).

    If FS boxes 1 and 4 are both marked and Then
    A dependent with a TIN or an indication of a dependent who was born during the tax period and died during the same or next consecutive tax period is claimed in exemption positions 2, 4, 5, or 6. (See IRM 3.11.3.13). Circle FS box 1. (See Figure 3.11.3-47)
    A name or "see attached" is noted on line 4 or Schedule EIC with qualifying child (see IRM 3.11.3.40.2) is attached, AND no exemptions are entered or edited in exemption positions 2, 4, 5, or 6 Circle FS boxes 1 and 4, and edit FS "7" .
    None of the conditions listed above are present, Circle FS box 4.

    Note:

    Refer to the FS "4" instructions (IRM 3.11.3.12.2.4) if a spouse's exemption is claimed on line 6b or 6c.

    Figure 3.11.3-47

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FS Box 1 Marked
  1. When the taxpayer marks FS box 1 only:

    If there is one name in the caption and one signature and Then
    A spouse's exemption is claimed on line 6b or 6c,
    1. Circle FS box 1 and edit FS "6" .

    2. Delete the spouse's exemption from positions 2-7 and edit an "X" to the left of the spouse's name on line 6c, if present.

    A spouse's date of death is within the tax period of the return,
    1. Circle FS box 1 and check FS box 2.

    2. Edit the spouse's name to the caption or correspond if missing.
      - If using Form 3531, check box "20" .
      - If using Form 6001, use fill-in "35" , per Exhibit 3.11.3-17.

    Note: Also see the decedent return editing information in IRM 3.11.3.10.
    None of the conditions above apply, Take no action.
FS Box 2 Marked
  1. When the taxpayer marks FS box 2 only:

    If there And Then
    Is only one signature and a spouse's exemption is claimed on line 6b or 6c, There is no S-TIN present, Correspond for the spouse's missing signature and TIN. Use Form 3531 and check boxes 1 and 2.
    Are two signatures and a spouse's exemption is claimed on line 6c, There is no S-TIN present,
    1. Edit spouse's name to the caption.

    2. Edit an "X" to the left of spouse's name on line 6c.

    3. Delete the spouse's exemption when claimed in exemption positions 2 through 7. Do not code the spouse as an exemption.

    Are two names in the caption and the spouse's date of death is 2015 or 2016, An exemption is present in positions 2, 5, or 6,
    1. Circle FS box 2 and check FS box 5.

    2. Circle the deceased spouse's name and TIN in the caption. (See Figure 3.11.3-48)

    Are no conditions above that apply,   Take no action.

    Figure 3.11.3-48

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FS Box 3 Marked
  1. When the taxpayer marks FS box 3 only and spouse's exemption is claimed on line 6b or 6c:

    If there And Then
    Is only one name in the caption, The spouse has no income,
    1. Circle FS box 3 and edit FS "6" .

    2. Edit an "X" to the left of the spouse's name if entered on line 6c. (See Figure 3.11.3-49)

    3. Delete the spouse's exemption when claimed in exemption positions 2 through 7. Do not code the spouse as an exemption.

    Is only one name in the caption, The spouse has income, Correspond for the correct FS. If using Form 3531, use fill-in 54, per Exhibit 3.11.3-17. If using Form 6001, check box F.
    Are two names in the caption, two signatures,  
    1. Circle FS box 3 and check FS box 2.

    2. Edit an "X" to the left of the spouse's name if entered on line 6c.

    3. Delete the spouse's exemption when claimed in exemption positions 2 through 7. Do not code the spouse as an exemption.

    Figure 3.11.3-49

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FS Box 4 Marked
  1. When the taxpayer marks FS box 4 only:

    If Then
    A spouse's exemption is claimed on line 6b or 6c andno other dependents are listed or claimed on line 6c,
    1. Circle FS box 4 and edit FS "6" .

    2. Edit an "X" to the left of the spouse's name if entered on line 6c and delete the spouse's name if in the caption. (See Figure 3.11.3-50)

    3. Delete the spouse's exemption when claimed in exemption positions 2 through 7. Do not code the spouse as an exemption.

    A spouse's exemption is claimed on line 6b or 6c andother dependents are listed or claimed on line 6c,
    1. Edit an X to the left of the spouse's name if entered on line 6c.

    2. Delete the spouse's exemption when claimed in exemption positions 2 through 7. Do not code the spouse as an exemption.

    • Position 2, 4, 5 or 6 does not contain a dependent with a TIN or a dependent who was born during the tax period and died during the same or next consecutive tax period, and

    • No name or "see attached" noted on line 4 and

    • No Schedule EIC with a qualifying child attached,

    Circle FS box 4 and check FS box 1. (See Figure 3.11.3-51)
    • A name or "see attached" is notated on line 4 or Schedule EIC with qualifying child is attached and

    • No exemptions are entered/edited in positions 2, 4, 5, or 6

    Circle FS box 4 and edit FS "7." (See Figure 3.11.3-52)
    A spouse's date of death is within the tax period of the return or the subsequent tax period,
    1. Circle FS box 4 and check FS box 2.

    2. Edit the spouse's name to the caption or correspond if missing.
      - If using Form 3531, check box 20.
      - If using Form 6001, use fill-in "35" , per Exhibit 3.11.3-17.

    Note:

    See the decedent return editing information in IRM 3.11.3.10.

    Figure 3.11.3-50

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    Figure 3.11.3-51

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    Figure 3.11.3-52

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FS Box 5 Marked
  1. Refer to the decedent editing instructions in IRM 3.11.3.10 if the spouse died during the tax period of the return.

  2. When the taxpayer marks FS box 5 only:

    If the And Then
    Spouse's date of death is not 2015 or 2016,

    Note:

    For PY returns - Spouse's date of death is not within 2 years prior to the tax period of the return.

    There is at least one exemption in positions 2, 4, 5, or 6 with a TIN or a dependent who was born during the tax period and died during the same or next consecutive tax period or a qualifying child on Schedule EIC, or a name or see attached noted on line 4 Circle FS 5 and check FS box 4. (See Figure 3.11.3-53)
    Spouse's date of death is not 2015 or 2016,

    Note:

    For PY returns - Spouse's date of death is not within 2 years prior to the tax period of the return.

    There are no exemptions in positions 2, 4, 5, or 6 with a TIN nor a dependent who was born during the tax period and died during the same or next consecutive tax period, nor a qualifying child on Schedule EIC or a name or see attached noted on line 4. Circle FS 5 and check FS box 1.
    Spouse's date of death is not present,   Take no action.

    Figure 3.11.3-53

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Exemptions

  1. There are two types of exemptions:

    • Personal exemptions

    • Dependency exemptions

  2. A taxpayer is allowed one personal exemption for him/herself (two on a joint return), as long as he/she cannot be claimed as a dependent by another taxpayer.

  3. Taxpayers are also allowed one dependency exemption for each person they can claim as a dependent.

  4. The exemption instructions in this subsection of the manual are for:

    • Taxpayer claimed as a dependent by another person

    • General instructions about exemption coding

    • Coding each of the exemption positions

Dependency Status Indicator (DSI)

  1. Edit the DSI on Form 1040 or Form 1040A in the blank area, directly above line 6c, column (4) or to the right of the text.

  2. Edit a DSI Code of "1" when the taxpayer indicates on the return or attachment that he/she is claimed on another person's return.

  3. Take one of the following actions for editing the DSI (Figure 3.11.3-54):

    If And Then
    The "Yourself" box on line 6a is not marked, FS is 1, 3, 4, 5 or 7, Exemption position 1 is "0" , dash or blank and the "total number of exemptions claimed" box on line 6d is "0" , dash or blank, Edit DSI "1" .
    The "Yourself" box on line 6a is not marked, FS is 2 or 6, Exemption position 1 is "1," Edit DSI "1" .
    The "Yourself" box on line 6a is marked, FS is 2 or 6, Exemption position 1 is "1" , and the Spouse box on line 6b is not marked, Edit DSI "1" .

    Reminder:

    When applicable, the DSI is still required if RPC "L" has been edited.

    Figure 3.11.3-54

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Exemption Coding, General Instructions

  1. Exemptions are entered by the taxpayer on Form 1040 or Form 1040A on the four lines and one box located directly to the right of line 6c in the exemption area of the return.

  2. There are seven exemption positions. The seven positions are used to identify different relationships between the exemption and the taxpayer. (See Figure 3.11.3-55)

  3. Exemption positions 1, 2, and 3 are located on the first, second, and third lines.

    • Exemption position 1 - first line-"Yourself and Spouse"

    • Exemption position 2 - second line-"Children who lived with you"

    • Exemption position 3 - third line-"Children who did not live with you due to divorce or separation"

  4. Additional exemptions-either entered by the taxpayer on the fourth line or listed on line 6c- must be edited when the taxpayer is claiming exemptions other than for him/herself, spouse, or his/her children. These exemptions are edited in the right margin. Begin editing to the right of the second line (the line labeled "lived with you" ). The additional positions are as follows:

    • Exemption position 4 - Parents, Grandparents

    • Exemption position 5 - Qualifying children

    • Exemption position 6 - Other dependents

    • Exemption position 7 - Overflow from position 2

    Figure 3.11.3-55

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  5. "X" the taxpayer's entry and edit all exemptions to the correct position when the taxpayer enters totals on the second or third line of the exemption area.

  6. Do not code an exemption when the taxpayer states the exemption is not being claimed. Edit an "X" to the left of the unclaimed dependent’s name on line 6c. (See Figure 3.11.3-56)

    Figure 3.11.3-56

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  7. Edit any exemption claimed by the taxpayer as if it were claimed on the fourth line when the second, third, and fourth lines are blank.

  8. If a fractional exemption is found, "X" it.

  9. Edit to position 6 any dependent, other than a parent, when there is an indication on the return or attachments that the dependent did not live in the United States (see Figure 3.11.3-57). Indications that the dependent did not live in the U.S. include, but are not limited to, the following notations:

    • "CN" or "Canada"

    • "F" for foreign dependent

    • "MX" or "Mexico"

    Figure 3.11.3-57

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  10. Take the following actions for line 6c:

    If Then
    The taxpayer indicates a relationship of:
    • "Self"

    • "Me"

    • "Spouse"

    • "Husband"

    • "Wife"

    • "Common law" spouse

    1. Delete the exemption from the exemption position.

    2. Edit an "X" to the left of the name on line 6c.

    3. Delete the spouse's exemption when claimed in exemption position 2 through 7. Do not code the spouse as an exemption.

    The taxpayer entered any dependents in an incorrect position, Edit the exemptions to the correct positions.

    Exception:

    Do not move a child from exemption position 3 to position 2.

    Note:

    It is not necessary to "X" any entry on line 4 because it is not transcribed.

    The taxpayer states that a listed dependent is not being claimed as an exemption,
    1. Do not code as an exemption.

    2. Edit an "X" to the left of the name on line 6c.

    The number of names listed by the taxpayer on the return or an attached statement is not equal to the number of exemptions claimed on the exemption lines, Edit exemption positions based on dependent information on line 6c. (See Figure 3.11.3-58)

    Note:

    Do not use Schedule EIC to determine exemption positions.

    Figure 3.11.3-58

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Exemption Relationships
  1. Much of exemption coding is based upon the relationship of the dependent to the taxpayer(s).

  2. The relationships of parent and grandparent are not changed by the suffix "in-law" or the prefix "step" .

  3. While the relationship of child is not changed by the addition of the prefix "step" it is changed by addition of the suffix "in-law" .

    1. A stepchild is treated as a child and is entered in either position 2 or position 3, depending on if the taxpayer indicates the child lived with them or did not live with them.

    2. Exemptions in Position 5 are labeled "Qualifying Children" because they may "qualify" the taxpayer for EIC or the Child Tax Credit.

    3. A son-in-law or daughter-in-law is treated as an "other" relationship and is edited in position 6.

Blank Relationship
  1. Edit exemptions to position 6 when the relationship of the dependent is not listed on line 6c. (See Figure 3.11.3-62).

    Exception:

    Edit an "X" to the left of the dependents name and do not code the exemption if the relationship on line 6c is blank and there is a statement on line 6c that the exemption is not being claimed.

    Note:

    Do not move a dependent from exemption position 2 or 3 when the relationship is blank unless the dependent did not live in the United States.

Determining the Exemption's Relationship
  1. The child relationship (position 2 or 3) includes notations of the following:

    • "Child" , "son" , or "daughter"

    • "Adopted child" , "adopted son" , or "adopted daughter"

    • "Grandchild" , "grandson" , or "granddaughter"

    • "Great-grandchild" , "great-great-grandchild" , "great-grandson" , "great-great-grandson" , "great-granddaughter" , "great-great-granddaughter"

    • "Stepchild" , "stepson" , or "stepdaughter"

  2. The parent relationship (position 4) includes notations of the following:

    • "Parent" , "father" , or "mother"

    • "Stepparent" , "stepfather" , or "stepmother"

    • "Parent-in-law" , "father-in-law" , or "mother-in-law"

    • "Grandparent" , "grandfather" , or "grandmother"

    • "Great-grandparent" , "great-great-grandparent" , "great-grandfather" , "great-great-grandfather" , "great-grandmother" , "great-great-grandmother"

  3. The "qualifying child" relationship (position 5) includes notations of the following:

    • "Foster child" , "foster son" , or "foster daughter"

    • "Ward"

    • Any child placed by an authorized agency

    • "Brother" , "sister" , "brother-in-law" , "sister-in-law" , "step-brother" , "step-sister" , "half brother" or "half sister"

    • "Nephew" or "niece"

  4. Include in "other" relationships (position 6) any dependent not identified in (1), (2) or (3) above. "Other" relationships include the following:

    • "Uncle" or "aunt"

    • "Son-in-law" or "daughter-in-law"

    • "Friend" , "boyfriend" , or "girlfriend"

    • All dependents who did not live in the US except for parent relationships

    • "Cousin"

    • "Godchild" , "godson" , "goddaughter"

    • "Boyfriend's/girlfriend's child" , "boyfriend's/girlfriend's son" , "boyfriend's/girlfriend's daughter" , "mother of child" , "father of child"

    Note:

    This list is not all inclusive.

Exemption Positions
  1. Edit a "0" (zero) in any prior position for which an exemption has not been coded when editing exemption positions 5 through 7. Do not edit trailing zeros. (See Figure 3.11.3-59)

    Exception:

    Do not edit a zero in position 2 or 3.

    Figure 3.11.3-59

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  2. If the number of exemptions belonging in positions 3 through 7 exceeds nine, edit "9" in the position.

  3. Look for misplaced exemptions. Move dependent exemptions to the correct position.

    Exception:

    Do not move a child from exemption position 3 to position 2.

Exemption Position 1 -"Yourself and Spouse" (Not Transcribed)
  1. Position 1 is computer generated based on the taxpayer's filing status. No editing is required.

  2. See IRM 3.11.3.12.2 for instructions about the filing status and the exemption when an exemption is claimed for a spouse on:

    • Line 6c when the FS is 2

    • Line 6b when the FS is other than 2

Exemption Position 2 -"Number of Children on Line 6c Who Lived With You"
  1. Code exemption position 2 on the second line ("No. of children on line 6c who lived with you" ) in the exemption area.

  2. Up to nine exemptions can be edited in position 2. If more than nine exemptions are claimed:

    1. Edit "9" in exemption position 2.

    2. Edit the excess exemptions to position 7.

  3. Edit to position 2 all dependents with a child relationship. (See Figure 3.11.3-60)

    Exception:

    Do not move a child from exemption position 3 to position 2.

  4. Move misplaced exemptions from position 2 to the correct position.

    Exception:

    Do not move a child from exemption position 3 to position 2.

    Figure 3.11.3-60

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Exemption Position 3 - Number of Children on Line 6c Who Did Not Live With You Due to Divorce or Separation
  1. Code exemption position 3 on the third line ("No. of children on line 6c who did not live with you due to divorce or separation" ) in the exemption area.

  2. Look for misplaced exemptions in position 3.

    If on the third line the taxpayer includes his/her Then
    Parent, including those who did not live in the United States, Move the exemption to position 4.
    Qualifying child, Move the exemption to position 5.
    Foreign or other dependent, Move the exemption to position 6.

    Note:

    Do not move a child from exemption position 3 to position 2. See IRM 3.11.3.13.2.1.2 for child exemption relationships.

  3. If an entry is present in exemption position 3, Form 8332, Form 2120, or copy of divorce decree must be attached.

    1. If attached, edit SPC "A" . (See Figure 3.11.3-61)

      Note:

      Form 8332 or Form 2120 must show entries.

    2. If not attached or the form is blank, "X" exemption position 3 and correspond with Form 3531, box 8, or Form 6001, box G.

      Exception:

      Do not correspond if rejected ITIN condition is present for all dependents in exemption position 3.

    Figure 3.11.3-61

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Exemption Position 4 - Parents
  1. Code exemption position 4 in the margin to the right of the "lived with you" line.

  2. Edit to position 4 any dependent listed with a parent relationship. (See Figure 3.11.3-62).

    Note:

    This includes parent exemptions even when there is an indication the dependent did not live in the United States.

    Figure 3.11.3-62

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Exemption Position 5 - Qualifying Children
  1. Code exemption position 5 directly under exemption position 4.

  2. Edit to exemption position 5 any "qualifying child." (See Figure 3.11.3-63)

    Note:

    Do not use Schedule EIC or column (4), line 6c, to determine these conditions.

    Figure 3.11.3-63

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Exemption Position 6 - Other Dependents
  1. Code exemption position 6 directly under exemption position 5.

  2. Edit to exemption position 6 all exemptions with other relationships. (See Figure 3.11.3-64)

    Figure 3.11.3-64

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Exemption Position 7 - Overflow Exemption Position
  1. Code exemption position 7 directly under exemption position 6.

  2. Edit to exemption position 7 all the excess exemptions from exemption position 2. When the number of exemptions in position 2 is more than nine:

    1. Edit "9" to exemption position 2.

    2. Edit the number of exemptions greater than nine to position 7. (See Figure 3.11.3-65)

    Figure 3.11.3-65

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Dependent's Name Control and TIN

  1. For Form 1040 or Form 1040A, up to four dependents' name controls and TINs can be transcribed.

Dependent's TIN
  1. Every dependent claimed as an exemption must have a valid TIN. Search attachments, including Schedule EIC, Form 8965, and Form 2441, for any dependent exemption TIN not listed or invalid on line 6c.

    Note:

    If a Form W-7A is attached, see IRM 3.11.3.13.3.1.1.

  2. If the TIN is found, and:

    Four TINs are Then
    Already listed, "X" the name of the dependent(s) without a listed TIN.
    Not already listed, Edit up to four TINs to line 6c. (See Figure 3.11.3-66)

    Figure 3.11.3-66

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  3. If the TIN is invalid or not found on the return or attachments, take one of the following actions:

    If the taxpayer And Then
    Provides no TIN, less than four TINs are present for other dependents, "X" the dependents name on line 6c. (See Figure 3.11.3-67)
    Provides no TIN, at least four TINs are present for other dependents, "X" exemption positions 2-7. (See Figure 3.11.3-68)

    Note:

    Also "X" the dependents name if present on line 6c.

    Notes "Died" , (child born during the tax period and died during the same or next consecutive tax period), birth or death certificate, or copies of hospital medical record(s) are not attached, Correspond for the missing birth certificate. For Form 3531, use box 18 and for Form 6001, use box E.
  4. Correspond for missing TINs of all dependents when corresponding for other missing return items. For Form 3531, use box 3 and for Form 6001, use box F.

    Exception:

    Do not correspond for a missing dependent TIN when any of the following apply:
    • there is an indication the dependent was born during the tax period and died during the same or next consecutive tax period.
    • the taxpayer notates "Amish" , "Mennonite" , "Form 4029" , or if Form 4029 is attached.
    • there is an indication of "ITIN Rejected" .

    Figure 3.11.3-67

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    Figure 3.11.3-68

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Adoption TIN
  1. A taxpayer who does not know the TIN of the child he/she is adopting may still claim an exemption for the dependent by obtaining a temporary adoption taxpayer identification number (ATIN). ATINs are used for tax purposes only and are obtained by filing Form W-7A. ATINs are processed at the AUSPC only. ATINs appear in the following format: 9XX-93-XXXX.

  2. When Form W-7A is attached to the return, verify the child listed on the Form W-7A is being claimed as a dependent on the return.

    1. If the child is listed as a dependent in Exemption Position 2 and already has an ATIN, "X" the photocopy of the Form W-7A and continue processing the return.

    2. If the child is not claimed as a dependent, detach the Form W-7A and related documentation, and route to AUSPC. Edit an action trail on the return and continue processing. (Austin - follow local routing instructions.)

    3. If the child is listed as a dependent on the return and the TIN is missing, edit the received date on Form W-7A in MMDDYY format and detach it from the return. Route the Form W-7A and all related documentation to AUSPC. Edit an action trail on the return and continue processing.

      Note:

      Documentation attached to the Form W-7A should be at least one of the following:
      • Placement agreement between the parent(s) and the agency.
      • Document signed by the hospital authorizing the release of a newborn.
      • Court Order ordering or approving the placement of a child for legal adoption.
      • Affidavit signed by the adoption attorney or government official who placed the child with the parent(s) for legal adoption.

    4. Complete Form 3210 and mail Forms W-7A and documentation to AUSPC at:
      Internal Revenue Service
      3651 S. IH 35
      Stop: 6182
      Austin, TX 78741-7855

    Exception:

    AUSPC only: Do not detach Form W-7A from the return. Follow local routing procedures. When the ATIN unit sends the return back through processing after assigning the ATIN, they will edit the ATIN assignment date on the left side margin of refund returns only. For example, 02 RPD 05-14-2018. Edit this date on line 4 of Form 3471, Edit Sheet, if current date is after April 17, 2018.

Dependent's Name Control
  1. The name control(s) must be present for the first four dependents with TINs listed on line 6c. If missing, edit the name control(s) to the dependents name area.

    Note:

    When the dependent name control is the same for each dependent, ditto marks are acceptable after editing the first dependent name control.

  2. Determine the missing name control(s) in the following priority:

    1. From Schedule EIC or other supporting attachments. (See Figure 3.11.3-69)

      Caution:

      Form 8965 is not valid for determining Dependent’s Name Control.

      Note:

      If editing from attachments and the taxpayer indicates dependent children are eligible for the Child Tax Credit, ensure the correlating checkboxes are marked on line 6c, column (4).

      Note:

      Honor taxpayer’s ditto (“) marks when used to duplicate dependent last names.

    2. From the primary taxpayer's name control. (See Figure 3.11.3-70)

    Figure 3.11.3-69

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    Figure 3.11.3-70

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Form 1040

  1. The instructions provided in this subsection of the manual are for editing pages 1 and 2 of the Form 1040. These instructions include:

    • General editing procedures

    • Income (lines 7 through 22)

    • Adjustments to income (lines 23 through 36)

    • Adjusted gross income (line 37)

    • Tax computation (lines 38 through 47)

    • Credits (lines 48 through 56)

    • Other taxes (lines 57 through 62)

    • Total tax (line 63)

    • Payments (lines 64 through 74)

    • Refund or amount owed (lines 75 through 78)

    • Estimated Tax Penalty (line 79)

    • Third Party Designee

    • Signature

    • Preparer information

  2. All lines on Form 1040 are T-lines, except for the following lines located on page 2.:

    • Line 38

    • Lines 40 through 42

    • Line 47

    • Line 56

    • Line 75

  3. There are also nine T-Compute lines on Form 1040. These are:

    • Line 22 - Total income

    • Line 36 - Total adjustments to income

    • Line 37 - Adjusted gross income

    • Line 43 - Taxable income

    • Line 55 - Total credits

    • Line 63 - Total tax

    • Line 74 - Total payments

    • Line 76a - Refund amount

    • Line 78 - Balance due amount

    Note:

    Refer to Job Aid 2431-009 for an illustration of all Form 1040 T-lines and T-Compute lines for all related transcribed forms and schedules, and dollars and cents editing requirements.

Form 1040, General Editing Instructions

  1. Edit RPC "L" if there are no significant T-line entries present or edited from attachments on lines 7 through 79.

    Reminder:

    When applicable, the DSI is required even if RPC "L" is edited.

  2. Edit RPC "V" when the tax form is computer generated. Computer-generated forms are identified by a three-alpha character software code in the bottom margin of page 1 or 2. (See Figure 3.11.3-71.)

    Exception:

    Do not edit RPC "V" on computer-generated returns when there is an indication the return was prepared by Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) (e.g., the presence of an "S" within the PTIN field). See IRM 3.11.3.14.13.2.

    Figure 3.11.3-71

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  3. Some special conditions on returns will require special editing procedures. Taxpayers are instructed to note certain conditions on the return which you must identify. Edit these returns using instructions in the "Special Situations and Returns" subsection. These special situations are:

    Special Situations IRM Reference
    Combat Zone and other Military Operations IRM 3.11.3.6.1.1
    Killed in Terrorist Action (KITA) IRM 3.11.3.6.1.2
    National Disaster/Emergency Relief Program IRM 3.11.3.6.1.3
    Hardship IRM 3.11.3.6.1.4
    Examination case IRM 3.11.3.6.1.5
    Frivolous Filer/Non-Filer Returns IRM 3.11.3.6.1.6
    Refund Schemes IRM 3.11.3.6.1.7
    Identity Theft IRM 3.11.3.6.1.8
  4. Some types of returns will require special editing procedures. Edit the returns using the instructions in the "Special Situations and Returns" subsection. These special returns are:

    Special Returns IRM Reference
    Amended IRM 3.11.3.6.2.1
    Unprocessable IRM 3.11.3.6.2.2
    Blank IRM 3.11.3.6.2.3
    Incomplete IRM 3.11.3.6.2.4
    Uncomputed IRM 3.11.3.6.2.5
    Blocked or Deferred Income IRM 3.11.3.6.2.6
    Correspondence Imaging System (CIS) IRM 3.11.3.6.2.7
    Combined Tax Liabilities IRM 3.11.3.6.2.8
    Community Property IRM 3.11.3.6.2.9
    Form 8938, Statement of Foreign Financial Assets IRM 3.11.3.6.2.10
    Injured Spouse IRM 3.11.3.6.2.11
    Innocent Spouse IRM 3.11.3.6.2.12
    International IRM 3.11.3.6.2.13
    Joint Committee IRM 3.11.3.6.2.14
    Misblocked IRM 3.11.3.6.2.15
    Misfiled IRM 3.11.3.6.2.16
    Reinput IRM 3.11.3.6.2.17
    Returns Secured by Collections IRM 3.11.3.6.2.18
    Short Period IRM 3.11.3.6.2.19
    Substitute for Return IRM 3.11.3.6.2.20
    52-53 Week IRM 3.11.3.6.2.21
    Blind Trust IRM 3.11.3.6.2.22
  5. Refer to the decedent return instructions in IRM 3.11.3.10 when any of the following are present:

    • "Deceased" is written on the return

    • A date of death is present on the return

    • "Surviving spouse" is written in the caption or the signature area

    • There is any other indication the taxpayer is deceased

    • "Estate of" is present in the caption.

  6. Other notations and conditions may also require special editing. These are included in the line-by-line instructions.

Income - Lines 7 through 22

  1. Edit amounts on lines 7 through 22 in dollars only.

Line 7 - Wages
  1. Use the table below for editing conditions on line 7, Form 1040:

    Condition on Line 7 Action
    Entry on line 7, no Form W-2 attached. Take no action. Form W-2 is not required for line 7. (May be required as support for earned income when EIC is claimed.)
    See IRM 3.11.3.14.7.3.
    Line 7 is blank. Edit amounts from Wages, tips and other compensation box on Forms W-2.

    Exception:

    Do not edit to line 7 if Form W-2 income is for a minister, insurance salesman, or statutory employee and the income is reported elsewhere on the return.

    Amount deducted from line 7. If the same adjustment amount is also deducted on lines 23 - 36, adjust line 7 to include the amount.
    Self Employment Income (See Exhibit 3.11.3-10 for an extensive listing of types of self-employment.)
    1. Subtract from line 7 and add to line 21.

    2. If amount is $434 or more and Schedule SE is not attached or reported, also edit RPC "N" .

    3. If Form 1099-MISC is attached with or without a notation and an amount is present in box 7, Form 1099-MISC, edit RPC "N" unless the amount is less than $434 or Schedule SE is present.

      Note:

      Do not edit RPC "N" if any of the following conditions exist:
      - DSI return and taxpayer notes wages from parent or newspaper route.
      - Self-Employment and non self-employment cannot be broken down.
      - Taxpayer reported self-employment income on line 7 and included the amount on Form 8919.

  2. Use the table below for editing taxpayer notations on line 7, Form 1040:

    Noted by Taxpayer on Line 7 Action
    Adoption Benefit (AB) Take no action.
    Combat Pay Excluded Edit CCC "Y" and an Action Trail.
    Dependent Care Benefits (DCB) Take no action.
    Deferred Compensation (DFC) Edit RPC "B" .
    Disability Pension
    1. Delete from line 7 if indicated to be nontaxable.

    2. If statement indicates treatment as retirement pension, delete from line 7 and add to line 16b.

      Note:

      If Disability Pension is identified on line 16a or 16b, take no action.

    3. If Form 1099-R, box 7, contains Distribution Code 3, take no action.

    Foreign Employer Compensation (FEC) Take no action.
    Fringe Benefits (FB) Take no action.
    Gambling (Gross: losses not subtracted)
    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. If Schedule A is attached, see IRM 3.11.3.15.11.

    Gambling (Net: winnings minus losses)
    1. No indication of a professional gambler:

      1. If a gain or a loss, "X" line 7.

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

      3. If net amount is zero, and no gross amount is indicated on the dotted portion of line 7, and:
        • Form W-2G is attached, edit CCC "Y" and an Action Trail.
        • Form W-2G is not attached, correspond for gross winnings
        with Form 3531/6001, using fill-in "9" , per Exhibit 3.11.3-17.

    2. Indication of professional gambler:

      1. Subtract gambling amount from line 7 and add to line 12.

      2. Correspond for Schedule C, if not attached.

      3. If Schedule SE is not attached or reported, also correspond for SE tax liability when the amount is $434 or more. For Form 6001, use box "W" . For Form 3531, check box 10, SE liability box.

    Household Employee Income (HSH) Edit SPC "E" .

    Note:

    "HSH" may appear to the left of line 7, or on line 7 with a dollar amount present.

    Note:

    HSH is an acceptable source for EIC.

    Non-Disability Pension Move the amount to line 16b.
    See Figure 3.11.3-72
    Non-Employee Compensation Process using the instructions for Self-Employment income provided above in (1).
    Non-Taxable Income:
    • Accident and health insurance proceeds

    • "Black lung" benefits

    • Casualty insurance and other reimbursements

    • Child support

    • Damages awarded for physical injury or sickness

    • Federal Employees' Compensation Act (FECA) payments

    • Interest on state or local government obligations

    • Public Aid

    • Supplemental Security Income (SSI)/SSI Disability

    • Tax-Sheltered Annuities

    • Temporary Assistance for Needy Families (TANF)

    • VA Benefits

    • Welfare Benefits/Payments

    • Workforce Payments

    • Worker's Compensation

    Subtract all income identified as nontaxable from line 7.
    Pension See Disability or Non-Disability Pension.
    Prisoner Income (PRI) Edit RPC "B" .
    See IRM 3.11.3.6.1.6(6).
    Railroad Retirement Benefits
    1. If gross and taxable amounts with a difference of $1 or more can be determined, move to lines 16a and 16b.
      See IRM 3.11.3.14.2.10.

    2. Otherwise, edit the amount to line 16b.

    Scholarship (SCH), Fellowship, Grant, or Stipend
    1. Edit RPC "B" .

    2. If indicated to be nontaxable, subtract from line 7 and correct any other taxpayer adjustments and edit RPC "G" .

    Sick Pay Take no action.
    Social Security Benefits
    1. If gross and taxable amounts can be determined, move to lines 20a and 20b.

    2. Otherwise, move the amount to line 20b.

    Strike Pay/Benefits Take no action.
    Sub-Pay TRA (Repayment of Supplemental Unemployment Benefits (SUB)) If repayment is indicated on dotted portion of line 36 and it is for SUB amounts received in:
    • Tax period of return - delete the repayment amount and adjust line 7 to exclude it.

    • Prior tax period - do not adjust line 7.

      Note:

      If the year of payments is not noted, assume they were made in the tax period of the return.

    Unemployment Compensation Subtract from line 7 and add to line 19.
  3. Use the table below for editing taxpayer notations on other than line 7, Form 1040:

    Noted by Taxpayer on other than Line 7 Action
    Dependent Care Benefits (DCB) Move to line 7.
    Deferred Compensation (DFC)
    1. Move to line 7.

    2. Edit RPC "B" .

    Disability Pension (not on lines 16a or 16b) identified from:
    • Form 1099-R with Code 3 in Box 7.

    • Disability indicated on Form 1099-R.

    • Other indication that Disability Pension is included on the return.

    Move to line 7.
    Scholarship (SCH), Fellowship, Grant, or Stipend
    1. Move the taxable amount to line 7.

    2. Edit RPC "B" .

    Sick Pay Move to line 7.
    Strike Pay/Benefits Move to line 7.
    W-2 Income Move to line 7.

    Exception:

    Leave where found and edit RPC"S" if taxpayer is a minister, insurance salesman, or if statutory employee is indicated.

    Figure 3.11.3-72

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Line 8a -Taxable Interest Income
  1. If Schedule B is attached, perfect line 8a when it is blank or amount differs from interest amount on Schedule B, line 4 by more than $1.

Line 8b -Tax-Exempt Interest (TEI)
  1. If Schedule B is attached, perfect line 8b when it is blank or amount differs from tax-exempt interest amount on Schedule B, Part I by more than $1.

  2. Tax-exempt interest indications include:

    • "Tax-Exempt Interest" ("TEI" ) or "Tax Exempt" ("TE" )

    • "Tax-Exempt Municipal Bonds"

    • "Exempt," "Exempt Interest," "EI," "E" or "I"

    • "Tax Free" or "Tax-Free Interest"

    • "Nontaxable" or "Nontaxable Interest"

Line 9a - Ordinary Dividends
  1. If Schedule B is attached, perfect line 9a when it is blank or amount differs from ordinary dividends amount on Schedule B, line 6 by more than $1.

  2. If the amount on line 9a matches the entry on line 7, Form 1040, "X" the amount on line 9a.

  3. If line 9a is blank, dash or zero, and line 9b has an entry:

    • arrow the entry on line 9b to line 9a, or

    • edit the entry on line 9b to line 9a and "X" line 9b.

  4. If line 9a is less than 9b, "X" line 9a.

  5. If an amount identified as "Alaska Permanent Fund" is present on line 9a:

    1. "X" line 9a.

    2. Edit the amount to line 21.

Line 11 - Alimony Received
  1. Take no action when the word "received" is crossed out and the word "recaptured" has been added in its place.

Line 12 - Business Income or Loss
  1. If an amount is present on line 12 and Schedule C or Schedule C-EZ is not attached:

    If And Then
    A document from which a Schedule C can be dummied is attached, the amount on line 12 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Dummy a Schedule C.
    1. Edit the income to lines 1 and 3.

    2. Edit the expenses to line 28.

    3. Edit other T-lines as appropriate.

    Note:

    See Exception below.

    There are no documents attached from which a Schedule C can be dummied. the amount on line 12 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Dummy a Schedule C.
    1. Edit a positive amount to lines 1 and 3.

    2. Edit a negative amount to line 28.

    Note:

    See Exception below.

    There are no documents attached from which a Schedule C can be dummied. the amount on line 12 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Correspond for the missing Schedule C. Note: If Schedule SE is not attached or reported, also correspond for SE tax liability when the amount on line 12 is $434 or more. For Form 6001, use box "W" . For Form 3531, check box 10, SE liability box.

    Exception:

    Do not dummy Schedule C if corresponding for other missing return items. Instead, include the request for Schedule C in the correspondence to the taxpayer.

Line 13 - Capital Gain or Loss
  1. Edit RPC "T" when all of the following apply (see Figure 3.11.3-73):

    • There is a positive amount of $1 or more on line 13.

    • Schedule D is not attached.

    • The line 13 box is marked.

    Figure 3.11.3-73

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  2. When the line 13 box is marked and a negative entry is present on line 13 and no Schedule D is attached, follow the instructions for IRM 3.11.3.14.2.7(3) below (i.e., treat a negative amount on line 13 as if the line 13 checkbox is not marked).

  3. When an amount is present on line 13, Schedule D is not attached, and the line 13 checkbox is not marked:

    If And Then
    A document from which a Schedule D can be dummied is attached, Column (h) can be determined, Dummy a Schedule D. Edit total short term gains/losses to line 7 and total long term gains/losses to line 15, Schedule D (See Figure 3.11.3-74)

    Note:

    See Exception below.

    There are no documents attached from which a Schedule D can be dummied, The amount on line 13 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Dummy the amount to line 7, Schedule D. (See Figure 3.11.3-75)

    Note:

    See Exception below.

    There are no documents attached from which a Schedule D can be dummied, The amount on line 13 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Correspond for the missing Schedule D.

    Exception:

    Do not dummy Schedule D if corresponding for other missing return items. Instead, include the request for Schedule D in the correspondence to the taxpayer.

  4. If income reported from Insurance Companies Demutualization is present (reported by the taxpayer on Form 1099-B), but entered on a line other than 13, edit that amount to line 13 and dummy a Schedule D.

    Figure 3.11.3-74

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    Figure 3.11.3-75

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Line 14 - Other Gains and Losses
  1. If an amount is present on line 14 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , Form 4797, Form 4684, or a statement must be attached. If missing, correspond for Form 4797.

    Exception:

    Correspond for Form 4684 instead of Form 4797, if the taxpayer notated "Form 4684" .

    Note:

    Do not"X" line 14 when the taxpayer has notated "Form 4684" .

Lines 15a and 15b -Total IRA Distributions
  1. Delete the amount on line 15a when lines 15a and 15b are the same or there is a difference of less than $1. (See Figure 3.11.3-76).

  2. Do not edit the amount from line 15a on line 15b when line 15b is blank.

    Figure 3.11.3-76

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Lines 16a and 16b -Total Pensions and Annuities
  1. Delete the amount on line 16a when lines 16a and 16b are the same or there is a difference of less than $1.

  2. Do not edit the amount from 16a on line 16b when line 16b is blank.

  3. Do not move pension income from line 16b to line 7.

  4. Move the gross and taxable amounts of Railroad Retirement Benefits (RRB) to lines 16a and 16b when claimed elsewhere on the return.

Line 17- Rents, Royalties, Partnerships, Estates, Trusts, or S Corporations
  1. If an amount is present on line 17 and Schedule E is not attached, but Form 4835 is attached, "dummy" a Schedule E as follows:

    If Form 4835, Then
    Line 32, is a positive amount, Edit that amount to line 40 on Schedule E.
    Line 34c, is a negative amount, Edit that amount to line 40 on Schedule E. *
    Line 34c, is blank, Edit the loss from line 32 on Form 4835 to line 40 on Schedule E.*
    Line 7, is a positive amount, Edit that amount to line 42 on Schedule E.

    Note:

    * If a taxpayer notates PAL, do not move the negative amount to line 40.

  2. If an amount is present on line 17, but neither Schedule E nor Form 4835 is attached, dummy a Schedule E (if possible) using supporting statements and the table below:

    If there is a clear indication the income is from: Edit a positive amount to: OR Edit a negative amount to:
    Rents or royalties, Line 24, Schedule E. Line 25, Schedule E.
    A partnership or S-Corporation, Line 30, Schedule E. Line 31, Schedule E.
    An Estate or Trust, Line 35, Schedule E. Line 36, Schedule E.

    Note:

    Supporting statements include Schedule K-1, Form 1065, Form 4835, Form 1099-MISC, or source of income indicated on line 17.

  3. If no supporting documents are attached to dummy a Schedule E and the amount on line 17 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , dummy a required Schedule E by editing a positive amount to line 24 or a negative amount on line 25.

    Exception:

    Do not dummy a Schedule E if corresponding for other missing return items. Instead, include the request for Schedule E in the correspondence to the taxpayer.

  4. Correspond for the missing Schedule E when the amount on line 17 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and a dummy Schedule E cannot be prepared from attachments.

    Note:

    Correspond for Schedule E, if an attached Schedule E is blank.

Line 18 - Farm Income or Loss
  1. If an amount is present on line 18 and Schedule F is not attached:

    If And Then
    A document from which a Schedule F can be dummied is attached, the amount on line 18 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Dummy a Schedule F.
    1. Edit the income to line 9 (bracket if negative).

    2. Edit the expenses to line 33.

    3. Edit other T-lines as appropriate.

    Note:

    See Exception below.

    There are no documents attached from which a Schedule F can be dummied. the amount on line 18 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Dummy a Schedule F.
    1. Edit a positive amount to line 9.

    2. Edit a negative amount to line 33.

    Note:

    See Exception below.

    There are no documents attached from which a Schedule F can be dummied. the amount on line 18 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Correspond for the missing Schedule F. Note: If Schedule SE is not attached or reported, also correspond for SE tax liability when the amount on line 18 is $434 or more. For Form 6001, use box "W" . For Form 3531, check box 10, SE liability box.

    Exception:

    Do not dummy Schedule F if corresponding for other missing return items. Instead, include the request for Schedule F in the correspondence to the taxpayer.

Line 19 - Unemployment Compensation (UEC)
  1. If Form 1099-G is attached, perfect line 19 when it is blank or amount differs from the gross amount of Unemployment Compensation (UEC) on Form 1099-G.

  2. Delete any amount identified as supplemental benefits received from a company-financed supplemental unemployment benefits (SUB) fund. Include the amount of SUB pay on line 7.

  3. Take no action when a statement is present indicating an adjustment to unemployment compensation was made such as "repaid" , "pay back" or "repayment."

Lines 20a and 20b - Social Security Benefits
  1. If an amount is present on line 20b and the amount on line 20a is the same or line 20a is blank:

    1. If Form SSA-1099 is attached, edit the gross Social Security amount in box 5 to line 20a.

    2. Take no action when the gross amount of Social Security payments cannot be determined.

  2. "X" a negative amount on line 20a or 20b.

  3. Take no action when the taxpayer writes:

    • "D" on line 20a or 20b

    • "Lump-Sum Exclusion" or "LSE" to the left of line 20a

Line 21 - Other Income
  1. The taxpayer may include a variety of income types on line 21. Instructions for the following types of income are included in this subsection of the manual:

    • Self-Employment Income

    • Gambling

    • Nontaxable Income

    • Scholarships, Grants, Stipends and Fellowships

  2. Use the table below for editing taxpayer notations on line 21, Form 1040:

    Noted by Taxpayer on Line 21 Action
    Alaska Permanent Fund (APFD) or a similar statement Edit RPC "G" if withholding is present on line 64.
    Airline payments (negative amount) Take no action
    Dependent Care Benefits (DCB) Move to line 7.
    Deferred Compensation (DFC)
    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Disability Pension Move Disability Pension to line 7 if Form 1099-R, box 7, contains Distribution Code 3.
    Form 2555 or Form 2555-EZ (Indication of Foreign Income Exclusion) Treat as an International Return. (See IRM 3.11.3.6.2.13 and paragraph (8) below).
    Form 8814, Parent's Election to Report Child's Interest and Dividends Take no action.
    Gambling, Gross (losses not subtracted) If Schedule A is attached, see IRM 3.11.3.15.11.
    Gambling, Net (winnings minus losses) See IRM 3.11.3.14.2.15(5).
    Indian Gaming Proceeds (IGP), Indian Tribal Distribution, Indian Tribal Earnings, Native American, or similar statement Edit RPC "G" if withholding is present on line 64.
    Long-Term Care (LTC) Take no action.
    Medical Savings Account (MSA) Take no action.
    Non-Employee Compensation See Self-Employment Income in paragraph (3) below.
    Nontaxable Income
    See IRM 3.11.3.14.2.15(6) for a complete list.
    Adjust line 21 to exclude nontaxable amount.
    Notice 2014-7 Take no action.
    Restitution of The Holocaust, Nazi Regime, or a similar statement "X" line 21.
    Scholarship (SCH), Fellowship, Grant, or Stipend See IRM 3.11.3.14.2.15(7).
    Self-employment types of income See IRM 3.11.3.14.2.15(3).
    Sick Pay Move to line 7.
    U.S. Treasury Rebate, Federal Tax Refund, Rate Reduction Rebate, or a similar statement "X" line 21.
  3. If self-employment income is present on line 21, take the following actions:

    1. If the amount is $434 or more and Schedule SE is not attached or reported and cannot be dummied, edit RPC "N" . (See Figure 3.11.3-77)

    2. If Form 1099-MISC is present with or without a notation on the dotted portion of line 21 and an amount is present in box 7, Form 1099-MISC, edit RPC "N" unless the amount is less than $434 or Schedule SE is present.

      Note:

      Do not edit RPC "N" if any of the following conditions exist:
      - DSI return and taxpayer notes: wages from parent or newspaper route
      - Self-Employment and non self-employment cannot be broken down. (See Figure 3.11.3-78)
      - Taxpayer reported self-employment income on line 21 and included the amount on Form 8919.

    Figure 3.11.3-77

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    Figure 3.11.3-78

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  4. Edit an amount from Form 1099-MISC only when there is a clear indication the amount was not included on the return. Do not include the Form 1099-MISC amount on line 21 when any of the following are attached by the taxpayer:

    • Schedule C

    • Schedule C-EZ

    • Schedule E (Part II)

    • Schedule F

    • Form 2106

  5. Use the following table to determine the correct action when the taxpayer includes gambling amounts on line 21:

    If the taxpayer includes And Then
    Gross winnings (does not subtract losses), Schedule A is attached, Refer to the Schedule A editing instructions in IRM 3.11.3.15.11.
    Net winnings (subtracts losses from winnings), There is an indication the taxpayer is a professional gambler,
    1. Delete amount from line 21.

    2. Include amount on line 12.

    3. Correspond for Schedule C.

    Note:

    Also correspond for Schedule SE when the amount on line 12 is $434 or more. If using Form 6001, check paragraph "W" . If using Form 3531, check box 10, SE liability box.

    Net winnings, The netted amount is not zero, "X" line 21.
    Net winnings to zero, The gross amount is on the dotted portion of line 21, Edit the gross amount to line 21.
    Net winnings to zero and the gross amount is not on the dotted portion of line 21, Form W-2G is not attached, Correspond for the gross winnings amount
    with Form 3531/6001, using fill-in "9" , per Exhibit 3.11.3-17.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    (See Figure 3.11.3-79).

    Figure 3.11.3-79

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  6. Adjust line 21 to exclude nontaxable income. Nontaxable income includes:

    • Accident and health insurance proceeds

    • "Black lung" benefits

    • Casualty insurance and other reimbursements

    • Child support

    • Damages awarded for physical injury or sickness

    • Federal Employees' Compensation Act (FECA) payments

    • Interest on state or local government obligations

    • Public aid

    • Supplemental Security Income (SSI)/SSI Disability

    • Tax-Sheltered Annuities

    • Temporary Assistance for Needy Families (TANF)

    • VA Benefits/Payments

    • Worker's compensation

  7. Use the following table to determine the correct action when "scholarship" , "SCH" , "fellowship" , "grant" , or "stipend" is written on the dotted portion of line 21.

    If the taxpayer indicates any of the above income is on line 21 and And Then
    There is no other income included on line 21,  
    1. Delete the amount from line 21.

    2. Include the taxable amount on line 7.

    3. Edit RPC "B" .

    There is also other income included on line 21, No breakdown is provided, Take no action.
    There is also other income included on line 21, A clear breakdown is provided,
    1. Delete the amount from line 21.

    2. Include the taxable amount on line 7.

    3. Edit RPC "B" . (See Figure 3.11.3-80)

    There is an indication the amount is not taxable,  
    1. Delete the amount from line 21.

    2. Correct any adjustment made by the taxpayer elsewhere on the return.

    3. Edit RPC "G" .

    Figure 3.11.3-80

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  8. Refer to the international return instructions in IRM 3.11.3.6.2.13 if foreign income has been excluded on line 21 or if "Form 2555" , "Form 2555-EZ" , or an indication of "treaty" or "treaty article" is present on the dotted portion of line 21.

  9. Foreign income (usually reported on line 7 or line 21) does not automatically indicate an international return. Do not route returns to Austin, unless one of the forms/conditions at IRM 3.11.3.6.2.13(1) is present or if the taxpayer excludes income. (See Figure 3.11.3-81)

    Figure 3.11.3-81

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Line 22 - Total Income
  1. Use the chart below to determine editing instructions when there is an amount on line 22, and lines 7 through 21 are blank, and there is no Schedule C, C-EZ, D, E, or F attached.

    If the amount on line 22 is Then
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , Correspond for an explanation of income, if not present. For Form 6001, check box P. For Form 3531, check box 12.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , Edit the amount to line 21.
  2. Compute and edit line 22 when it is blank, dash or zero and there are entries on lines 7 through 21. Do not include amounts from the following:

    • Line 8b

    • Line 9b

    • Line 15a

    • Line 16a

    • Line 20a

Adjustments to Income - Lines 23 through 37

  1. Edit amounts on lines 23 through 37 in dollars only.

Line 23 - Educator Expenses
  1. Reserved.

Line 24 - Certain Business Expenses of Reservists, Performing Artists, and Fee Basis Government Officials (Form 2106 or Form 2106-EZ)
  1. If an amount is present on line 24 ≡ ≡ ≡ ≡ ≡ ≡ ≡ , Form 2106 or 2106-EZ must be attached. If missing, correspond for Form 2106.

Line 25 - Health Savings Account Deduction (Form 8889)
  1. If an amount is present on line 25, Form 8889 must be attached. If missing, correspond for Form 8889.

Line 26 - Moving Expenses (Form 3903)
  1. If an amount is present on line 26 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , Form 3903 (or a similar statement) must be attached. If missing, correspond for Form 3903.

Line 27 - Deduction for Self-Employment Tax
  1. Reserved.

Line 28 - Self-Employed SEP, SIMPLE
  1. "X" the amount on line 28 if none of the following are attached to the return:

    • Schedule C

    • Schedule C-EZ

    • Schedule E (Part II present)

    • Schedule F

Line 29 - Self-Employed Health Insurance Deduction
  1. Edit a misplaced amount from line 29 to line 27 when both of the following conditions are present:

    • Schedule SE is attached to the return.

    • Line 27 is blank.

Line 31a and 31b - Alimony Paid and Alimony Recipient's TIN
  1. Take the following actions when any amount is present on line 31a:

    If And Then
    A valid recipient TIN is present Is not the primary or secondary TIN Take no action.
    The taxpayer indicates:
    • "unable to obtain"

    • "NRA"

    • "SSA-205(c)"

    • "Unknown"

    • "Applied for" or

    • "None"

      Circle the notation
    The recipient TIN is any of the following:
    • illegible

    • same as the P-TIN or S-TIN or

    • Has fewer or more than 9 digits

    • is made up of repeating digits, such as 111-11- 1111, 111-22-3333 or 888-77-6666

    • Is a sequential series such as 123-45-6789, 098-76-5432, or 456-78-9012

      Circle the TIN
    Multiple TINs are present, at least one TIN is valid Circle all but the first valid TIN
  2. If line 31a is zero or blank and the recipient TIN is present on line 31b, and the sum of deductions from line 23 through the dotted portion of line 36 is equal to the amount on line 36, circle the recipient TIN.

Line 32 - IRA Deduction
  1. "X" the line 32 amount when the taxpayer writes "rollover" to the left of line 32. Delete the rollover amount if included as income on lines 15b or 16b.

  2. "X" the amount on line 32 when it is other than $5,500 or $6,500 ($11,000, $12,000 or $13,000 for FS 2), and one of the following indicators and an equal deferred compensation amount appear on Form W-2. (See Figure 3.11.3-82 )

    • "D" or Section 401(k)

    • "E" or Section 403(b)

    • "F" or Section 408(k)(6)

    • "G" or Section 457(b)

    • "Q" or "Housing/Subsistence" or "Combat Pay"

    • "S" or "SIMPLE" plan

    • "T" or employer-paid "qualified adoption expenses"

    • Section 125, Cafeteria Plan (CAF)

    • Section 414(h), Mandatory Salary Deferral ("PERS" Public Employees Retirement System)

    • Thrift Savings Plan or "TSP"

    Figure 3.11.3-82

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Line 34 - Tuition and Fees (Form 8917)
  1. Reserved until further notice. TAKE NO ACTION.

  2. If an amount is present on line 34, Form 8917 must be attached. Correspond if missing.

    Exception:

    If Form 1098-T is attached with the student's name identified with an amount present in box 1, prepare a "dummy" Form 8917.

  3. Dummy Form 8917 using the following student information on Form 1098-T:

    1. Edit the student's name control on line 1a and student's SSN on line 1b.

    2. Edit the amount from Form 1098-T, box 1, on line 2, Form 8917.

  4. Taxpayers are not allowed to claim both the Tuition and Fees Deduction (Form 8917) and the Education Credits (Form 8863) for the same person.

    1. If both Forms 8917 and 8863 are present, compare each student’s SSN on the two forms.

    2. If the same SSN is found, "X" the amount on line 34.

Line 35 - Domestic Production Activities Deduction (Form 8903)
  1. If an amount is present on line 35 and an amount is present on either line 12 or line 18, Form 8903 must be attached. If missing correspond for Form 8903.

  2. When the taxpayer uses line 35 as a subtotal line for lines 23 through 34, delete the line 35 amount. (See Figure 3.11.3-83)

    Figure 3.11.3-83

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Line 36 - Dotted Portion (Total Adjustments)
  1. Delete the following adjustments from lines 23 through 35 and edit the amount to the dotted portion of line 36.

    Note:

    Include these amounts in the line 36 total.

    • 403(b) - Contributions by certain chaplains to section 403(b) plans

    • "501(c)(18)(D)"

    • "UDC"

    • "WBF"

    • Jury Pay - Jury Duty Pay

    • Deduction for Clean Fuel Vehicles

    • "PPR" - Personal Property Rental

    • "Reforestation," "RFST" - Forestation/reforestation amortization

    • "Sub-Pay TRA" - Repayment of Supplemental Unemployment Benefit (SUB) payments received in a prior year under the Trade Act of 1974 (TRA).

      Exception:

      "X" the SUB pay amount where found and subtract the amount from line 7 when there is no indication the adjustment is for benefits received in a prior year.

  2. Delete these adjustments where found and edit the amount to the dotted portion of line 36 when any of the adjustments in (1) are claimed elsewhere on the return.

  3. "X" the amount if a taxpayer claims an adjustment to income on the dotted portion of line 36 for anything other than the items listed in (1) above.

  4. "X" the amount when there is no explanation present for an adjustment amount.

  5. Edit Unallowable Code"99" when there is an indication of "Clean Air Fuel" and the taxpayer is claiming ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

  6. Delete any amount claimed on lines 23 through 36 identified as "MSA" or "Archer MSA Deduction" . Edit the amount in dollars only to the blank area between lines 22 and 36 with the label "MSA" to the left of the amount. (See Figure 3.11.3-84).

    Figure 3.11.3-84

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Line 36 - Total Adjustments
  1. Compute and edit line 36 when it is blank, dash or zero and there are entries leading to a total.

  2. When an amount is present on line 36 and lines 23 through the dotted portion of line 36 are blank, perfect line 36 in the following priority:

    1. If line 36 is one-half of the amount on line 57, Form 1040, edit the line 36 amount on line 27 as an SE tax deduction.

    2. Perfect lines 23 through 31a and lines 34 and 35 from attachments, if available.

    3. If lines 23 through 31a and lines 34 and 35 are still blank after steps a and b above, follow the instructions for perfecting the dotted portion of line 36 in IRM 3.11.3.14.3.12. (See Figure 3.11.3-85).

    4. If the amount on line 36 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and you are unable to perfect lines 23 through the dotted portion of line 36 using the steps above and no explanation is present, correspond for an explanation of line 36 amount. For Form 6001, check box P. For Form 3531, check box 12.

    Figure 3.11.3-85

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Line 37 - Adjusted Gross Income (AGI)
  1. Perfect line 37 in the following priority when it is blank, dash, zero, or illegible:

    1. Edit the amount from line 22 when there are no amounts on lines 23 through 36.

    2. Compute by subtracting line 36 from line 22.

    3. Edit the amount from line 38 (page 2 of Form 1040).

Tax Computation - Lines 38 through 47

  1. Edit amounts on lines 43 and 44 in dollars only.

    Note:

    The only T-lines on lines 38 - 42 are the Age/Blind Indicator boxes on line 39.

Line 39a - Age/Blind Indicator (ABI)
  1. (Reserved.)

Line 39b - Married Filing Separate (MFS) (Not Transcribed)
  1. (Reserved.)

Line 40 - Standard Deduction or Itemized Deductions (Not Transcribed)
  1. Schedule A with entries present must be attached if any of the following conditions exist. Correspond if missing.

    Exception:

    Do not correspond for Schedule A if the taxpayer computed line 37 to zero or a negative dollar amount.

    1. "IE" is noted to the left of line 40, and the amount claimed is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. The amount on line 40 is not any of the standard deduction amounts listed below and a DSI "1" condition is not present. (See Figure 3.11.3-86).

      Note:

      Do not factor in filing status or ABI when making determinations on standard deduction.

    Filing Status Line 39a Boxes marked Appropriate Amount
    1 - Single 0 $6,350
    1 - Single 1 $7,900
    1 - Single 2 $9,450
    2 - Married Filing Jointly or 5 - Widow(er) with Dependent 0 $12,700
    2 - Married Filing Jointly or 5 - Widow(er) with Dependent 1 $13,950
    2 - Married Filing Jointly or 5 - Widow(er) with Dependent 2 $15,200
    2 - Married Filing Jointly or 5 - Widow(er) with Dependent 3 $16,450
    2 - Married Filing Jointly or 5 - Widow(er) with Dependent 4 $17,700
    3 or 6- Married Filing Separately 0 $6,350
    3 or 6- Married Filing Separately 1 $7,600
    3 or 6- Married Filing Separately 2 $8,850
    3 or 6- Married Filing Separately 3 $10,100
    3 or 6- Married Filing Separately 4 $11,350
    4 or 7- Head of Household 0 $9,350
    4 or 7- Head of Household 1 $10,900
    4 or 7- Head of Household 2 $12,450

    Figure 3.11.3-86

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Line 43 - Taxable Income
  1. Compute and edit line 43 only when it is blank or illegible, and there are entries leading to a positive total.

Line 44 – Tax
  1. If box "a" and/or "b" on line 44 is marked, the indicated form (i.e., Form 8814 or Form 4972) must be attached. If missing, correspond for the applicable missing form.

Line 45 - Alternative Minimum Tax (Form 6251)
  1. If an amount is present on line 45, Form 6251 must be attached. If missing, correspond for Form 6251..

Line 46 - Excess Advance Premium Tax Credit Repayment (Form 8962)
  1. If an amount is present on line 46, Form 8962 must be attached. If missing, correspond for Form 8962.

  2. If using Form 6001 to correspond for missing Form 8962, also:

    1. Request Form 1095–A, if not attached, using paragraph (g).

    2. Edit Action Code "224" .

  3. If using Form 3531 to correspond for missing Form 8962, include fill-in "41" if Form 1095-A is not attached, per Exhibit 3.11.3-17.

Credits - Lines 48 through 55

  1. Edit amounts on lines 48 through 55 in dollars only.

  2. Do not correspond for missing schedules or forms to support entries on lines 48 through 54 when line 43 of Form 1040 is (or can be determined to be) zero or a negative amount. Instead, "X" the unsupported credit amount and adjust the total on line 55.

Line 48- Foreign Tax Credit (Form 1116)
  1. If an amount is claimed on line 48 of more than $300 (more than $600 for FS 2), Form 1116 or similar statement must be attached. If missing, correspond for Form 1116, or if Form 1116 has no significant entries present or edited on line 7, 8, 22 or 30.

Line 49 - Credit for Child and Dependent Care Expenses (Form 2441)
  1. If an amount is claimed on line 49, Form 2441 or a statement must be attached.

    1. Prepare a dummy Form 2441 when it is missing and a statement is present.

    2. Correspond when Form 2441 cannot be dummied.

Line 50 - Education Credits (Form 8863)
  1. If an amount is claimed on line 50, Form 8863 must be attached. If missing correspond for Form 8863.

    Note:

    If the taxpayer has an entry on both lines 50 and 68, Form 1040, correspond for only one missing Form 8863. Use the first entry amount and line number on the return.

Line 51 - Retirement Savings Contribution Credit (Form 8880)
  1. If an amount is claimed on line 51, Form 8880 must be attached. If missing, correspond for Form 8880.

  2. If the amount on line 51 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the return has been hand-written/hand-prepared, "X" the amount.

Line 52 - Child Tax Credit (Schedule 8812)
  1. If an amount is claimed on line 52 and ITINs are shown (line 6c of Form 1040) for children claiming eligibility for Child Tax Credit, Schedule 8812 must be present. If missing, correspond for Schedule 8812.

    Note:

    ITINs begin with "9" and the valid range for the fourth and fifth digits are:
    - 50 through 65
    - 70 through 88
    - 90 through 92
    - 94 through 99
    For example - 9XX-94-XXXX

    Caution:

    Do not confuse ITINs with ATINs which also begin with 9, but the fourth and fifth digits are 93 (9XX-93-XXXX).

Line 53 - Residential Energy Credit (Form 5695)
  1. If an amount is claimed on line 53 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , Form 5695 must be attached. If missing, correspond for Form 5695.

  2. Edit SPC "C" when line 53 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

Line 54 - Other Credits
  1. If an amount is claimed on line 54, take the following actions: (See Figure 3.11.3-87, Figure 3.11.3-88 and Figure 3.11.3-89)

    If Then
    Form 3800 is attached, Edit "54A" and the dollar amount from Form 3800, line 38, in the blank area above line 55.
    Form 8801 is attached, Edit "54B" and the dollar amount from Form 8801, line 25, in the blank area above line 55.

    Note:

    Form 8801 is not a transcribed form.

    Schedule R is attached, Edit "54C" and the dollar amount from Schedule R, line 22, in the blank area above line 55.
    No supporting documentation is attached and line 54 shows any dollar amount,
    • If box a is marked, correspond for Form 3800.

    • If box b is marked, correspond for Form 8801.

    • If box c is marked, correspond for the indicated form, or an explanation if form not identified.

    • If no boxes are marked, correspond for an explanation. For Form 6001, check box P. For Form 3531, check box 12.

    .

    Note:

    Do not split out dollar amounts on line 54 if corresponding for support for line 54.

    Figure 3.11.3-87

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    Figure 3.11.3-88

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    Figure 3.11.3-89

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  2. If "CFE" is notated and Schedule R is not attached, correspond with Form 3531/6001 using fill-in "38" , per Exhibit 3.11.3-17.

  3. "X" the line 54 amount when the taxpayer used line 54 as a subtotal line for lines 48 through 53.

  4. Take no additional action when the taxpayer has written DFAS-705 in the line 54 area.

Line 55 - Dotted Portion (Not Transcribed)
  1. Take no action when the taxpayer indicates "FNS" (credit for fuel from a non-conventional source, including "tight sands" ) or "Section 29" .

Line 55 - Total Credits
  1. Compute and edit line 55 when it is blank, dash, zero, or illegible, and there are entries leading to a total.

    Note:

    Delete the entry on line 55 if it can be determined the taxpayer carried the line 44 or line 47 amount down in error.

  2. If an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present on line 55 and lines 48 through 54 are blank, correspond for an explanation, unless the taxpayer indicated "FNS" . For Form 6001, check box P. For Form 3531, check box 12.

    Exception:

    Do not correspond and delete the entry on line 55, when line 43 is (or can be determined to be) zero or a negative amount, or when it can be determined the taxpayer carried the line 43 or 44 amount forward in error.

Other Taxes - Lines 57 through 63

  1. Edit amounts on lines 57 through 62 in dollars only. Line 63 must be edited in dollars and cents when adjusting or computing and editing amounts.

Line 57 - Self-Employment Tax (Schedule SE)
  1. If an amount is present on line 57, Schedule SE is required. If not attached, dummy Schedule SE from Schedule C, Schedule C-EZ, Schedule E (Part II present), or Schedule F, or attachments, if possible. Otherwise, correspond.

    Exception:

    Do not dummy Schedule SE if corresponding for other missing attachments. Instead, include the request for Schedule SE in the correspondence to the taxpayer.

  2. Edit RPC "S" and RPC "B" when there is no significant entry present or edited on line 57 and there is an indication of any of the following:

    1. The taxpayer is not liable for SE tax.

    2. Form 4361 or Form 4029 was filed.

    3. "Exempt-Notary," "Amish," or "Mennonite" is noted in the line 57 area.

    Exception:

    Do not edit RPC "S" if FS 2 and the spouse has self-employment income of $434 or more and is liable for SE tax.

Line 58 - Unreported Social Security and Medicare Tax (Form 4137 or Form 8919)
  1. If an amount is present on line 58, Form 4137 or Form 8919 must be attached. If Form 4137 or Form 8919 is missing, take the following actions:

    If Then
    Attachments are present, Dummy Form 4137 or Form 8919.
    "RRTA" is noted, Take no action.
    "Uncollected SST/Medicare" is noted or the line 58 amount matches one or any combination of amounts with indicators "A" , "B" , "M" and/or "N" on attached Forms W-2,
    1. "X" the line 58 amount.

    2. Edit the amount to line 62.

    Box "a" is checked, Correspond for Form 4137.
    Box "b" is checked, Correspond for Form 8919.