Part 3. Submission Processing

Chapter 11. Returns and Documents Analysis

Section 16. Corporate Income Tax Returns

3.11.16 Corporate Income Tax Returns

Manual Transmittal

November 15, 2024

Purpose

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

Material Changes

(1) IRM 3.11.16.1(5) - Changed "Paper Processing Branch" to "Return Processing Branch" . (IPU 24U0151 issued 01-29-2024)

(2) IRM 3.11.16.2.2(2) - Changed "Paper Processing Branch" to "Return Processing Branch" . (IPU 24U0151 issued 01-29-2024)

(3) IRM 3.11.16.2.3(1) - Changed the IRM reference for IRM 1.11.2, Internal Management Documents System, Internal Revenue Manual (IRM) Process, from IRM 1.11.2.2.4 to IRM 1.11.2.2.3. (IPU 24U0568 issued 04-25-2024)

(4) IRM 3.11.16.2.4(1) - Updated the TAS Standard Language for IRS IRMs approved by the TAS Communications Stakeholder Liaison and Online Services Team per Internal Management Documents (IMD) feedback.

(5) IRM 3.11.16.2.4(3) - Added "See IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines" per TAS IRM review and feedback.

(6) IRM 3.11.16.2.4(6) - Reworded and added "IRM 13.1.7.4, Exceptions to Taxpayer Advocate Service Criteria, for information on cases that TAS will no longer accept" per TAS IRM review and feedback.

(7) IRM 3.11.16.2.4.1(1) - Added "or Chiefs" per IRM review and feedback to TAS Service Level Agreements (SLAs).

(8) IRM 3.11.16.2.4.1(1) - Changed "Appeals" to "Independent Office of Appeals" per IRM review and feedback to TAS Service Level Agreements (SLAs).

(9) IRM 3.11.16.3.2 Title - Changed the Title to "Form 1120 Series Returns Worked in Ogden Only" per the request from the campus employees to clarify the information. (IPU 24U0362 issued 03-07-2024)

(10) IRM 3.11.16.3.3(1) - Added "Kansas City Submission Processing Center" and moved the information into a list. (IPU 24U0362 issued 03-07-2024)

(11) IRM 3.11.16.3.7(3) 6th bullet - Updated Statute exception process for BMF per MOU signed by Submission Processing and Accounts Management. (IPU 24U0250 issued 02-12-2024)

(12) IRM 3.11.16.3.11(1) - Reworded sentence regarding Prompt Assessments per Chief Counsel IRM review feedback.

(13) IRM 3.11.16.6.4(2) - Added instruction and a Note for TC 014 input. (IPU 24U0029 issued 01-03-2024)

(14) IRM 3.11.16.6.5(2) - Added a Note about the input of TC 014 to capture both the location and mailing address. (IPU 24U0029 issued 01-03-2024)

(15) IRM 3.11.16.6.5(3) - Added three Notes about the input of TC 014 to capture both the location and mailing address. (IPU 24U0029 issued 01-03-2024)

(16) IRM 3.11.16.7.1(10) - Updated wording in paragraph for Tax Period Ending instruction per Chief Counsel IRM review feedback.

(17) IRM 3.11.16.7.4(2) 1st and 2nd "If" boxes - Added parenthetical after each reference to Rev. Proc. 2006-45 of "clarified and modified by Rev. Proc. 2007-64" for Short Period - Editing Proof of Entitlement instructions per Chief Counsel IRM review feedback.

(18) IRM 3.11.16.7.6(1)a - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Short Period Returns - Editing a Disapproved Application (Form 1128) per IRM feedback.

(19) IRM 3.11.16.9.1.5(1) - Removed reference to edit Computer Condition Code (CCC) "E" on "Form 1120 series" returns. Removed per RICS UWR 980389 which states only Form 1120 is included in RICS BMF IDT pre-refund selection programming. (IPU 24U0250 issued 02-12-2024)

(20) IRM 3.11.16.9.1.5(3) - Added an instruction to edit Computer Condition Code (CCC) E on Form 1120 only. (IPU 24U0311 issued 02-29-2024)

(21) IRM 3.11.16.9.1.6(1) - Added an example for a dissolved corporation that attaches a "Certificate of Dissolution" . (IPU 24U0444 issued 03-25-2024)

(22) IRM 3.11.16.9.1.11(1) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to CCC "K" Form 8697 per IRM review feedback.

(23) IRM 3.11.16.9.1.28(1) - Corrected the Title for Form 8938, Statement of Specified Foreign Financial Assets, in the Computer Condition Code (CCC) "2" instructions. (IPU 24U0464 issued 04-01-2024)

(24) IRM 3.11.16.9.3(8)g Note - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to ABLM Code and Schedule M-3 Checkbox per IRM review feedback.

(25) IRM 3.11.16.9.4(2) - Updated the Initial Return Code Table with a new 24-Month Cutoff Date.

(26) IRM 3.11.16.10.1(11) - Added instruction for Audit Code "W" for Form 1120 per Unified Work Request (UWR) UWR 983232 for processing year 2025.

(27) IRM 3.11.16.10.2(1) - Added an Exception clarifying the editing location for the Penalty and Interest Code. (IPU 24U0311 issued 02-29-2024)

(28) IRM 3.11.16.10.4(1) - Corrected the reference of "installment method" to "installment plan" for Form 1120 Installment Sale Indicator (Form 6252) per feedback from LB&I/Enterprise feedback.

(29) IRM 3.11.16.11.1(1) - Added Form 4255 to the Sequence - Form 1120 instructions. Form 4255 added per UWR 983232 for PY 2025.

(30) IRM 3.11.16.11.4.7(1) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Line 8 - Capital Gain per IRM review feedback.

(31) IRM 3.11.16.11.4.8(2) 1st "Then" box - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Line 9 - Net Gain or Loss from Form 4797 per IRM review feedback.

(32) IRM 3.11.16.11.4.8(2) - Corrected Figure 3.11.16-15, Line 9 - Net Gain or Loss from Form 4797. (IPU 24U0444 issued 03-25-2024)

(33) IRM 3.11.16.11.6.4(2) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Backup Withholding per IRM review feedback.

(34) IRM 3.11.16.11.6.5(2) 1st "Then" box step c - Added a Note if FIRPTA/8288-A credit is disallowed to FIRPTA, Form 1042-S, Form 8805 and Form 8288-A Credits per Chief Counsel IRM review feedback.

(35) IRM 3.11.16.11.6.6(2)b - Reworded paragraph for clarity per Chief Counsel IRM review feedback.

(36) IRM 3.11.16.11.7(1) 6th bullet - Corrected the wording in the bullet regarding efile GRAPHIC prints per Course Development feedback.

(37) IRM 3.11.16.11.7(7) - Extended digital signature exception expiration date per IRA 2023-199. (IPU 23U1101 dated 11-20-2023)

(38) IRM 3.11.16.11.12 - Added a new subsection for Schedule J, Line 1b, Tax from Form 1120-L, per UWR 983232 for PY 2025. Renumbered remaining subsections.

(39) IRM 3.11.16.11.13 - Added a new subsection for Schedule J, Line 1c, Section 1291 Tax from Form 8621, per UWR 983232 for PY 2025.

(40) IRM 3.11.16.11.14 - Added a new subsection for Schedule J, Line 1d, Tax Adjustment from Form 8978, per UWR 983232 for PY 2025.

(41) IRM 3.11.16.11.15 - Added a new subsection for Schedule J, Line 1e, Additional Tax Under Section 197(f), per UWR 983232 for PY 2025

(42) IRM 3.11.16.11.17 - Added a new subsection for Schedule J, Line 1g, Chapter 1 Tax Recapture from Form 4255, per UWR 983232 for PY 2025. Renumbered remaining subsections.

(43) IRM 3.11.16.11.18 - Added a new subsection for Schedule J, Line 1z, Other Chapter 1 Tax, per UWR 983232 for PY 2025.

(44) IRM 3.11.16.11.20(1)a - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule J, Lines 5a and 5b - Credits per IRM review feedback.

(45) IRM 3.11.16.11.21(2) - Updated the Form 3800 prior year line transcription numbers for Schedule J, Line 5c - General Business Credit (202301 and later) per UWR 983232 for PY 2025.

(46) IRM 3.11.16.11.21(4) - Updated the Form 3800 Part I and Part II line transcription for Schedule J, Line 5c - General Business Credit (202301 and later) per UWR 983232 for PY 2025.

(47) IRM 3.11.16.11.21(5) - Updated the Form 3800 Part III column transcription for Schedule J, Line 5c - General Business Credit (202301 and later) per UWR 983232 for PY 2025.

(48) IRM 3.11.16.11.21(5) - Corrected the Title of Form 8936, Clean Vehicle Credits, per Chief Counsel IRM review feedback.

(49) IRM 3.11.16.11.21(6) - Added a reference to see Figure 3.11.16-21 for Schedule J, Line 5c - General Business Credit (202301 and later) per Course Development feedback.

(50) IRM 3.11.16.11.21(7) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule J, Line 5c - General Business Credit (202301 and later) per IRM review feedback.

(51) IRM 3.11.16.11.21(9) - Updated the Correction Procedures for Schedule J, Line 5c - General Business Credit (202301 and later) by removing two Exceptions and adding three new Exceptions per UWR 983232 for PY 2025.

(52) IRM 3.11.16.11.21.1(2) (4) (5) - Rewrote instruction for Form 8844, Empowerment Zone Employment Credit editing per IRM review feedback. Instruction added due to new Form 3800, General Business Credit, revision for 2024.

(53) IRM 3.11.16.11.21.2(2) - Rewrote Form 8941, Credit for Small Employer Health Insurance Premiums editing instructions per IRM review feedback. Instruction added due to new Form 3800, General Business Credit, revision for 2024.

(54) IRM 3.11.16.11.21.3(1) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule J, Line 5d - Form 8827, Credit for Prior Year Minimum Tax - Corporations per IRM review feedback.

(55) IRM 3.11.16.11.23(1) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule J, Line 8 - Personal Holding Company Tax per IRM review feedback.

(56) IRM 3.11.16.11.24.1 Title - Corrected the title of the subsection for Schedule J, Line 9a - Certain Credit Recapture, Excessive Payments, and Penalties (Form 4255). (IPU 24U0029 issued 01-03-2024)

(57) IRM 3.11.16.11.24.6 Title and (1) - Corrected the Title for the subsection and added a Note regarding the form revisions for this line. (IPU 24U0250 issued 02-12-2024)

(58) IRM 3.11.16.11.24.7 - Added a new subsection for Form 1120, Schedule J, Line 9g, Interest/Tax Due Under Section 453(l), for 2023 form revision. (IPU 24U0250 issued 02-12-2024)

(59) IRM 3.11.16.11.24.9 - Added a new subsection for Form 1120, Schedule J, Line 9z, Other, for 2023 form revision. (IPU 24U0250 issued 02-12-2024)

(60) IRM 3.11.16.11.25(1)a - Corrected the line reference for Schedule J, Line 1, Total Tax, per SERP Feedback #16936. (IPU 24U0250 issued 02-12-2024)

(61) IRM 3.11.16.11.26 - Added a new subsection for Schedule J, Line 11a, Total tax Before Deferred Taxes, per UWR 983232 for PY 2025.

(62) IRM 3.11.16.11.27 - Added a new subsection for Schedule J, Line 11b, Deferred Tax on the Corporation's Share of Undistributed Earnings of a Qualified Electing Fund, per UWR 983232 for PY 2025.

(63) IRM 3.11.16.11.28 - Added a new subsection for Schedule J, Line 11c, Deferred LIFO Recapture Tax (Section 1363(d)), per UWR 983232 for PY 2025.

(64) IRM 3.11.16.11.29 - Added a new subsection for Schedule J, Line 12, Total Tax, per UWR 983232 for PY 2025.

(65) IRM 3.11.16.11.31.8(1) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule J, (Part II for 2023) (Part III for 2022-2018) Line 18 - Withholding per IRM review feedback.

(66) IRM 3.11.16.11.31.9(1) - Added a new instruction to edit Line 14 when Line 19, Total Payments, is the only entry on Form 1120, Schedule J, Lines 13 - 19. Added per UWR 983232 for PY 2023.

(67) IRM 3.11.16.11.31.11(1) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule J, (Part II for 2023) (Part III for 2022-2018) Line 20b - Form 4136 per IRM review feedback.

(68) IRM 3.11.16.11.31.12(1) - Added a new paragraph for Form 1120, Schedule J, Line 20c, Credit for Tax Withheld Under Chapter 3 or 4 from Form 1042-S, Form 8805, or Form 8288, per UWR 983232 for PY 2025. Renumbered remaining paragraphs accordingly.

(69) IRM 3.11.16.11.31.13 Title - Reworded the Title for Schedule J, Part III, Line 20d per Chief Counsel IRM review feedback.

(70) IRM 3.11.16.11.31.14 - Added Schedule J, Line 20i reference for tax year 2022 - 2018 per SERP Feedback #21079. (IPU 24U0818 issued 07-02-2024)

(71) IRM 3.11.16.11.31.14 - Added a new subsection and instructions for credits reported on Schedule J, Line 20z. Renumbered remaining subsections. (IPU 24U0710 issued 05-31-2024)

(72) IRM 3.11.16.11.31.17(1) - Added a new instruction to edit Line 14 when Line 23, Total Payments and Credits, is the only entry on Form 1120, Schedule J, Lines 13 - 23. Added per UWR 983232 for PY 2023.

(73) IRM 3.11.16.11.34(1) 1st and 3rd "Then" box step lists- Revised instruction for Form 1120 Schedule K, Question 3 per Course Development feedback.

(74) IRM 3.11.16.11.43(1) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Form 1120 Correction Procedures for Schedule K, Lines 29a, 29b and 29c (Corporate AMT) per IRM review feedback.

(75) IRM 3.11.16.11.43(1) - Added a Note regarding correspondence when Schedule K, Question 29c is marked “No” per SERP Feedback #18600 and #18603. (IPU 24U0464 issued 04-01-2024)

(76) IRM 3.11.16.11.46.1(1) 7th "Then" box - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence to Form 1120 Correction Procedures for Blank or Missing Schedule L per IRM review feedback.

(77) IRM 3.11.16.11.46.1(2) - Corrected the IRM reference to Editing a Balance Sheet with Significant entries and added a reference to see Figure 3.11.16-22 for a Blank or Missing Schedule L per Course Development feedback.

(78) IRM 3.11.16.11.46.1(2) - Corrected the caption for Figure 3.11.16-22 to "Editing Schedule L, Balance Sheet" . (IPU 24U0311 issued 02-29-2024)

(79) IRM 3.11.16.11.47.10(1) - Updated instruction for Schedule N, Line 8 - Form 8938, Statement of Specified Foreign Financial Assets for processing year 2025.

(80) IRM 3.11.16.11.47.10(1) - Corrected the Title for Form 8938, Statement of Specified Foreign Financial Assets, in the Schedule N, Line 8 instructions. (IPU 24U0464 issued 04-01-2024)

(81) IRM 3.11.16.11.47.10(2) a & b - Updated instruction for Schedule N, Line 8 - Form 8938, Statement of Specified Foreign Financial Assets for processing year 2025.

(82) IRM 3.11.16.12(1) second bullet - Corrected the reference of IRM 3.11.16.12.2, to "Part I, Line 2 - Election to Apply the Extraterritorial Income Exclusion Provisions to Certain Transactions Involving a FSC" for Form 8873 - Extraterritorial Income Exclusion, per Chief Counsel IRM review feedback.

(83) IRM 3.11.16.12.2 Title - Corrected the Title to "Part I, Line 2 - Election to Apply the Extraterritorial Income Exclusion Provisions to Certain Transactions Involving a FSC" per Chief Counsel IRM review feedback.

(84) IRM 3.11.16.13(3) - Added (2023 revision and later) to the valid criteria.

(85) IRM 3.11.16.19(1) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Form 4136 - Credit for Federal Tax Paid on Fuels per IRM review feedback.

(86) IRM 3.11.16.19(1) - Corrected the line references for Form 4136, Credit for Federal Tax Paid on Fuels. (IPU 24U0311 issued 02-29-2024 )

(87) IRM 3.11.16.22(2) 2nd and 3rd Then boxes - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Form 8941 - Credit for Small Employer Health Insurance Premiums per IRM review feedback.

(88) IRM 3.11.16.22(3) 3rd and 4th Then boxes - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Form 8941 - Credit for Small Employer Health Insurance Premiums per IRM review feedback.

(89) IRM 3.11.16.24(3) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Form 3800 - General Business Credit per IRM review feedback.

(90) IRM 3.11.16.24(3) - Revised instruction and added three Exceptions for Form 1120 Form 3800 - General Business Credit per UWR 983232 for PY 2025.

(91) IRM 3.11.16.25 - Moved Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments, here to follow Form 3800, General Business Credit, and the proper sequence order. Renumbered remaining subsections.

(92) IRM 3.11.16.26 - Moved Form 6252, Installment Sale Income, here to follow Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments, and the proper sequence order. Renumbered remaining subsections.

(93) IRM 3.11.16.27(3) - Added added a reference to see Figure 3.11.16-26 Form 8936, Schedule A Indicator. per Course Development feedback.

(94) IRM 3.11.16.27(3) - Updated the editing location of the indicator for Form 8936, Schedule A, Clean Vehicle Credit Amount, when more than two Form 8936, Schedule A’s are attached.

(95) IRM 3.11.16.27(4) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Form 8936, Schedule A, Clean Vehicle Credit Amount per IRM review feedback.

(96) IRM 3.11.16.27(4) - Added a caption for Figure 3.11.16-26, Example of editing Form 8936, Schedule A Indicator. (IPU 24U0311 issued 02-29-2024)

(97) IRM 3.11.16.28 - Added a new subsection to Form 1120 for Form 4255, Certain Credit Recapture, Excessive Payments, and Penalties.

(98) IRM 3.11.16.29(3) 1st "Then" box b. - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Consolidated Returns per IRM review feedback.

(99) IRM 3.11.16.29.2(3) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Consolidated Returns - Required Information per IRM review feedback.

(100) IRM 3.11.16.29.3(4) c - Corrected the missing NAICS Code instruction to use code "999999" per SERP Feedback #16930. (IPU 24U0250 issued 02-12-2024)

(101) IRM 3.11.16.29.3(16) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Form 851 - Affiliations Schedule per IRM review feedback.

(102) IRM 3.11.16.33.2(1) - Added Form 4255 to the Sequence - Form 1120-C instructions. Form 4255 added per UWR 983232 for PY 2025.

(103) IRM 3.11.16.33.14(3) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Income - Lines 1a through 10 per IRM review feedback.

(104) IRM 3.11.16.33.14(4) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Income - Lines 1a through 10 per IRM review feedback.

(105) IRM 3.11.16.33.16 - Updated instructions, line numbers, and placed section in line order of Form 1120-C per UWR 983232 for PY 2025.

(106) IRM 3.11.16.33.16(13) - Replaced the reference of "IRC 1383 credit" with "IRC 1383 adjustment" per Chief Counsel IRM feedback review.

(107) IRM 3.11.16.33.16(17) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Tax and Payments - Lines 27 through 35 (2024 revision) per IRM review feedback.

(108) IRM 3.11.16.33.16(18) - Reworded paragraph for clarity per Chief Counsel IRM review feedback.

(109) IRM 3.11.16.33.21(2) - Added new paragraph for Form 1120-C, Schedule J Line 1b, Section 1291 Tax from Form 8621, per UWR 983232 for PY 2025. Renumbered remaining paragraphs.

(110) IRM 3.11.16.33.21(3) - Added new paragraph for Form 1120-C, Schedule J Line 1c, Tax Adjustment from Form 8978, per UWR 983232 for PY 2025.

(111) IRM 3.11.16.33.21(5) - Added new paragraph for Form 1120-C, Schedule J Line 1e, Chapter 1 Tax Recapture from Form 4255, per UWR 983232 for PY 2025.

(112) IRM 3.11.16.33.21(6) - Added new paragraph for Form 1120-C, Schedule J Line 5z, Other Chapter 1 Tax, per UWR 983232 for PY 2025.

(113) IRM 3.11.16.33.21(12) - Added new paragraph for Form 1120-C, Schedule J Line 5e, Bond Credits from Form 8912, per UWR 983232 for PY 2025.

(114) IRM 3.11.16.33.21(13) - Added new paragraph for Form 1120-C, Schedule J Line 5z, Other, per UWR 983232 for PY 2025.

(115) IRM 3.11.16.33.21(18) - Added new paragraph for Form 1120-C, Schedule J Line 10a, Total Tax Before Deferred Taxes, per UWR 983232 for PY 2025.

(116) IRM 3.11.16.33.21(19) - Added new paragraph for Form 1120-C, Schedule J Line 10b, Deferred Tax on the Cooperative’s Share of Undistributed Earnings of a Qualified Electing Fund, per UWR 983232 for PY 2025.

(117) IRM 3.11.16.33.21(20) - Added new paragraph for Form 1120-C, Schedule J Line 10z, Other Deferred Taxes, per UWR 983232 for PY 2025.

(118) IRM 3.11.16.33.21(21) - Added new paragraph for Form 1120-C, Schedule J Line 11, Total Tax, per UWR 983232 for PY 2025.

(119) IRM 3.11.16.33.23(1) 1st "Then" box c and d - Revised instruction for Form 1120-C Schedule K, Question 5 - Is the Cooperative a Subsidiary in an Affiliated Group/Controlled Group per Course Development feedback.

(120) IRM 3.11.16.33.25 - Added a new subsection and editing instructions for Schedule K, Line 19 - Control Group Code. Renumbered remaining subsections accordingly. (IPU 24U0862 issued 07-23-2024)

(121) IRM 3.11.16.33.35(3) - Revised instruction and added three Exceptions for Form 1120-C Form 3800 - General Business Credit per UWR 983232 for PY 2025.

(122) IRM 3.11.16.33.36(4) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Form 8936, Schedule A, Clean Vehicle Credit Amount per IRM review feedback.

(123) IRM 3.11.16.33.37 - Added a new subsection to Form 1120-C for Form 4255, Certain Credit Recapture, Excessive Payments, and Penalties, for Form 1120-C. Form added per UWR 983232 for PY 2025.

(124) IRM 3.11.16.34.2(1) - Added Form 4255 to the Sequence - Form 1120-F instructions. Form 4255 added per UWR 983232 for PY 2025.

(125) IRM 3.11.16.34.14.2(1) - Added Form 8275-R to the Audit Code 1 list per Course Development feedback.

(126) IRM 3.11.16.34.14.2(6) - Added instruction for Audit Code W for Form 1120-F per UWR 983232 for processing year 2025

(127) IRM 3.11.16.34.15(5) - Added new paragraph for Form 1120-F, Line 5a, Preceding Year’s Overpayment Credited to the Current Year, per UWR 983232 for PY 2025. Renumbered remaining paragraphs accordingly.

(128) IRM 3.11.16.34.15(6) - Added new paragraph for Form 1120-F, Line 5b, Current Year’s Estimated Tax Payments, per UWR 983232 for PY 2025.

(129) IRM 3.11.16.34.15(8) - Added new paragraph for Form 1120-F, Line 5d, Reserved For Future Use, per UWR 983232 for PY 2025.

(130) IRM 3.11.16.34.15(11)a - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Lines 1 through 5h - Computation of Tax Due or Overpayment per IRM review feedback.

(131) IRM 3.11.16.34.16(3) 1st, 2nd, 4th, and 6th "Then" boxes Step 1 - Added a Note if FIRPTA/8288-A credit is disallowed to FIRPTA, Form 1042-S, Form 8805 and Form 8288-A Credits per Chief Counsel IRM review feedback..

(132) IRM 3.11.16.34.16(5) - Added a Note regarding misplaced entries reported on Form 1120-F, Line 5i - U.S. Income Tax Paid or Withheld at Source. (IPU 24U0311 issued 02-29-2024)

(133) IRM 3.11.16.34.16(6) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Line 5i - U.S. Income Tax Paid or Withheld at Source per IRM review feedback.

(134) IRM 3.11.16.34.16(6) - Added a Note regarding misplaced entries reported on Form 1120-F, Line 5i - U.S. Income Tax Paid or Withheld at Source. (IPU 24U0311 issued 02-29-2024)

(135) IRM 3.11.16.34.18(1) - Reworded paragraph for clarity per Chief Counsel IRM review feedback.

(136) IRM 3.11.16.34.22 - Corrected Title to Page 2, Question T - Name of Parent Corporation.

(137) IRM 3.11.16.34.22(1) 1st "Then" box c and d - Revised instruction for Form 1120-F Page 2, Question T - Name of Parent Corporation per Course Development feedback.

(138) IRM 3.11.16.34.25(1) - Added a Note regarding correspondence for Form 4626 Question JJ(1), JJ(2), and JJ(3) (Corporate AMT) per Course Development feedback.

(139) IRM 3.11.16.34.26(4) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Section II - Income and Deductions per IRM review and feedback.

(140) IRM 3.11.16.34.26(5) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Section II - Income and Deductions per IRM review and feedback.

(141) IRM 3.11.16.34.27(1) - Added new paragraph for Form 1120-F, Line 2a, Base Erosion Minimum Tax Amount. Renumbered remaining paragraphs.

(142) IRM 3.11.16.34.27(2) - Added new paragraph for Form 1120-F, Line 2b, Chapter 1 Tax from Form 4255, per UWR 983232 for PY 2025.

(143) IRM 3.11.16.34.27(3) - Added new paragraph for Form 1120-F, Line 2c, Other Chapter 1 Tax, per UWR 983232 for PY 2025.

(144) IRM 3.11.16.34.28(2) - Added instruction for Schedule W, Overpayment Resulting from Tax Deducted and Withheld Under Chapter 3.

(145) IRM 3.11.16.34.28(3) - Corrected instruction for Schedule W, Overpayment Resulting from Tax Deducted and Withheld Under Chapter 3.

(146) IRM 3.11.16.34.28(5)b - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule W - Overpayment Resulting from Tax Deducted and Withheld Under Chapter 3 per IRM review feedback.

(147) IRM 3.11.16.34.29(3) - Added (2023 revision and later) to the valid criteria.

(148) IRM 3.11.16.34.37(3) - Revised instruction and added three Exceptions for Form 1120-F Form 3800 - General Business Credit per UWR 983232 for PY 2025.

(149) IRM 3.11.16.34.39 - Added a new subsection to Form 1120-F for Form 4255, Certain Credit Recapture, Excessive Payments, and Penalties, for Form 1120-F. Form added per UWR 983232 for PY 2025.

(150) IRM 3.11.16.35.13(1) 1st "Then" box c and d - Revised instruction for Form 1120-FSC Parent-Subsidiary Controlled Group - Question 2, Page 1 per Course Development feedback.

(151) IRM 3.11.16.35.18(5)a - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Tax Data Perfection, Page 1 - Tax and Payments per IRM review feedback.

(152) IRM 3.11.16.35.21(2) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule J, Page 5, Tax Preference Code and Foreign Tax Credit per IRM review feedback.

(153) IRM 3.11.16.36.1(1) - Added Form 4255 to the Sequence - Form 1120-H instructions. Form 4255 added per UWR 983232 for PY 2025.

(154) IRM 3.11.16.36.10(6) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Gross Income Items - Lines 1 through 8 per IRM review feedback.

(155) IRM 3.11.16.36.10(7) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Gross Income Items - Lines 1 through 8 per IRM review feedback.

(156) IRM 3.11.16.36.12(2)c - Added new instruction for Form 1120-H Chapter 1 Recapture Credits from Form 4255. Added per UWR 983232 for PY 2025.

(157) IRM 3.11.16.36.12(8) 2nd "Then" box - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Tax and Payments - Lines 21 through 26 per IRM review feedback.

(158) IRM 3.11.16.36.12(9)a. - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Tax and Payments - Lines 21 through 26 per IRM review feedback.

(159) IRM 3.11.16.36.12(11) 1st "Then" box - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Tax and Payments - Lines 21 through 26 per IRM review feedback.

(160) IRM 3.11.16.36.17(1) - Updated the fields transcribed for Form 1120-H Form 3800, General Business Credit.

(161) IRM 3.11.16.36.17(2) - Added a new paragraph for Form 1120-H sequencing Form 3800, General Business Credit. Renumbered remaining paragraphs.

(162) IRM 3.11.16.36.17(4) - Added a new paragraph for Form 1120-H to correspond for Form 3800, General Business Credit if missing and required.

(163) IRM 3.11.16.36.18 - Added a new subsection to Form 1120-H for Form 4255, Certain Credit Recapture, Excessive Payments, and Penalties. Added per UWR 983232 for PY 2025.

(164) IRM 3.11.16.37(3) - Reworded instruction in paragraph for Return Processing - Form 1120-L (OSPC only) per Chief Counsel IRM review feedback.

(165) IRM 3.11.16.37.1(1) - Added Form 4255 to the Sequence - Form 1120-L instructions. Form 4255 added per UWR 983232 for PY 2025.

(166) IRM 3.11.16.37.1(1) - Corrected the sequence order of Form 1120-L. (IPU 24U0029 issued 01-03-2024)

(167) IRM 3.11.16.37.12(1) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Income Section per IRM review feedback.

(168) IRM 3.11.16.37.14(3) - Added a new paragraph for Form 1120-L, Line 27a, Preceding Year’s Overpayment Credited to the Current Year, per UWR 983232 for PY 2025.

(169) IRM 3.11.16.37.14(4) - Added a new paragraph for Form 1120-L, Line 27b, Current Year’s Estimated Tax Payments, per UWR 983232 for PY 2025.

(170) IRM 3.11.16.37.14(9)a - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Tax and Payments per IRM review feedback.

(171) IRM 3.11.16.37.14(12) - Added a new paragraph for Form 1120-L, Line 27z, Other Credits and Payments, per UWR 983232 for PY 2025.

(172) IRM 3.11.16.37.14(13) - Reworded paragraph for clarity per Chief Counsel IRM review feedback.

(173) IRM 3.11.16.37.16(2) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule B per IRM review feedback.

(174) IRM 3.11.16.37.18 - Added a new subsection for Form 1120-L, Lines 1a - 2, Income Taxes, per UWR 983232 for PY 2025. Renumbered remaining subsections accordingly.

(175) IRM 3.11.16.37.19(2) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule K, Line 3 - Corporate Alternative Minimum Tax (CAMT) (202301 and later) per IRM review feedback.

(176) IRM 3.11.16.37.19.1(2) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule K, Line 3 - Tax Preference Code (201811 and prior) per IRM review feedback.

(177) IRM 3.11.16.37.20(1) 1st "Then" box - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule K, Lines 5a through 9 per IRM review feedback.

(178) IRM 3.11.16.37.20(2) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule K, Lines 5a through 9 per IRM review feedback.

(179) IRM 3.11.16.37.20(5)- Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule K, Lines 5a through 9 per IRM review feedback.

(180) IRM 3.11.16.37.20(6) - Added a new paragraph for Form 1120-L, Schedule K, Line 5f, Adjustment from Form 8978, per UWR 983232 for PY 2025. Renumbered remaining paragraphs accordingly.

(181) IRM 3.11.16.37.20(7) - Added a new paragraph for Form 1120-L, Schedule K, Line 8a, Foreign Corporations - Tax on Income Not Effectively Connected with a U.S. Business, per UWR 983232 for PY 2025.

(182) IRM 3.11.16.37.20(9) 1st "Then" box - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule K, Lines 5a through 9 per IRM review feedback.

(183) IRM 3.11.16.37.20(10) - Added a new paragraph for Form 1120-L, Schedule K, Line 8z, Other Taxes, per UWR 983232 for PY 2025.

(184) IRM 3.11.16.37.20(11) - Moved old (8) for Form 1120-L, Schedule K, Lines 8a and 8b to the correct paragraph order.

(185) IRM 3.11.16.37.20(12) - Added a new paragraph for Form 1120-L, Schedule K, Lines 10a through 10c per UWR 983232 for PY 2025.

(186) IRM 3.11.16.37.22(1) 1st "Then" box c and d - Revised instruction for Form 1120-PC Schedule M, Question 6, 8 and 8c per Course Development feedback.

(187) IRM 3.11.16.37.24(3) - Added (2023 revision and later) to the valid criteria.

(188) IRM 3.11.16.37.31(3) - Revised instruction and added three Exceptions for Form 1120-L Form 3800 - General Business Credit per UWR 983232 for PY 2025.

(189) IRM 3.11.16.37.32 - Added a new subsection to Form 1120-L for Form 4255, Certain Credit Recapture, Excessive Payments, and Penalties. Form added per UWR 983232 for PY 2025.

(190) IRM 3.11.16.37.33(4) 1st "Then" box - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Annual Statement - Form 1120-L per IRM review feedback.

(191) IRM 3.11.16.37.33(5) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Annual Statement - Form 1120-L per IRM review feedback.

(192) IRM 3.11.16.38.11(1) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Tax Data Perfection - Page 1 per IRM review feedback.

(193) IRM 3.11.16.38.11(8) - Reworded paragraph for clarity per Chief Counsel IRM review feedback.

(194) IRM 3.11.16.39.1(1) - Added Form 4255 to the Sequence - Form 1120-PC instructions. Form 4255 added per UWR 983232 for PY 2025.

(195) IRM 3.11.16.39.1(1) - Corrected the sequence order of Form 1120-PC. (IPU 24U0029 issued 01-03-2024)

(196) IRM 3.11.16.39.14 - Added a new subsection for Form 1120-PC, Lines 3a - 4, Taxes, per UWR 983232 for PY 2025. Renumbered remaining subsections accordingly.

(197) IRM 3.11.16.39.15(2) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Line 6 - Corporate Alternative Minimum Tax (CAMT) (202301 and later) per IRM review feedback.

(198) IRM 3.11.16.39.17(1)- Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Lines 8a through 13z per IRM review feedback.

(199) IRM 3.11.16.39.17(2)- Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Lines 8a through 13z per IRM review feedback.

(200) IRM 3.11.16.39.17(5)- Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Lines 8a through 13z per IRM review feedback.

(201) IRM 3.11.16.39.17(7) - Added a new paragraph for Form 1120-PC, Line 13z, Other, to the instructions for Lines 13a through 13z per UWR 983232 for PY 2025.

(202) IRM 3.11.16.39.17(7) 1st and 2nd "Then " boxes - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Lines 8a through 13z per IRM review feedback.

(203) IRM 3.11.16.39.18(2) - Added a new paragraph for Form 1120-PC, Line 16a, Preceding Year’s Overpayment Credited to the Current Year, per UWR 983232 for PY 2025. Renumbered remaining paragraphs accordingly.

(204) IRM 3.11.16.39.18(3) - Added a new paragraph for Form 1120-PC, Line 16b, Current Year’s Estimated Tax Payments, per UWR 983232 for PY 2025.

(205) IRM 3.11.16.39.18(9) - Added a new row to the "If/And/Then" chart for Section 1341 Credits reported on Form 1120-PC, Line 15z per SERP Feedback #21103. (IPU 24U0818 issued 07-02-2024)

(206) IRM 3.11.16.39.18(10) - Reworded paragraph for clarity per Chief Counsel IRM review feedback.

(207) IRM 3.11.16.39.20(2) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule A, Page 2 per IRM review feedback.

(208) IRM 3.11.16.39.20(3) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule A, Page 2 per IRM review feedback.

(209) IRM 3.11.16.39.23(1) 1st "Then" box c and d - Revised instruction for Form 1120-PC Schedule I, Page 7, Question 4 - Name and EIN of Common Parent per Course Development feedback.

(210) IRM 3.11.16.39.27(4) 1st "Then" box - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Annual Statement - Form 1120-PC per IRM review feedback.

(211) IRM 3.11.16.39.27(5) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Annual Statement - Form 1120-PC per IRM review feedback.

(212) IRM 3.11.16.39.28(3) - Added (2023 revision and later) to the valid criteria.

(213) IRM 3.11.16.39.35(3) - Revised instruction and added three Exceptions for Form 1120-PC Form 3800 - General Business Credit per UWR 983232 for PY 2025.

(214) IRM 3.11.16.39.36 - Added a new subsection to Form 1120-PC for Form 4255, Certain Credit Recapture, Excessive Payments, and Penalties. Form added per UWR 983232 for PY 2025.

(215) IRM 3.11.16.40.1(1) - Added Form 4255 to the Sequence - Form 1120-REIT instructions. Form 4255 added per UWR 983232 for PY 2025.

(216) IRM 3.11.16.40.9(1)b - Updated the editing location of the Form 1120-REIT ABLM Code per TF&P form revision for PY 2025.

(217) IRM 3.11.16.40.11.2(2) - Added Audit Code W for Form 1120-REIT per UWR 983232 for processing year 2025.

(218) IRM 3.11.16.40.13(6) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Page 1 - Gross Income Items, Lines 1 through 8 per IRM review feedback.

(219) IRM 3.11.16.40.15(2) - Added a new paragraph for Form 1120-REIT, Line 25a, Preceding Year’s Overpayment Credited to the Current Year, per UWR 983232 for PY 2025. Renumbered remaining paragraphs accordingly.

(220) IRM 3.11.16.40.15(3) - Added a new paragraph for Form 1120-REIT, Line 25b, Current Year’s Estimated Tax Payments, per UWR 983232 for PY 2025.

(221) IRM 3.11.16.40.15(6) 1st Then box - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Tax Computation - Lines 24 through 28 per IRM review feedback.

(222) IRM 3.11.16.40.15(8) 1st and 3rd "Then" boxes - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Tax Computation - Lines 24 through 28 per IRM review feedback.

(223) IRM 3.11.16.40.15(9)a - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Tax Computation - Lines 24 through 28 per IRM review feedback.

(224) IRM 3.11.16.40.15(11)a - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Tax Computation - Lines 24 through 28 per IRM review feedback.

(225) IRM 3.11.16.40.15(12) - Added a new paragraph for Form 1120-REIT, Line 25z, Other Payments and Credits, per UWR 983232 for PY 2025.

(226) IRM 3.11.16.40.15(13) - Reworded paragraph for clarity per Chief Counsel IRM review feedback.

(227) IRM 3.11.16.40.15(14)a - Added a new paragraph for Form 1120-REIT Lines 28 and 28 with a Tax Period of 202401 and later per UWR 983232 for PY 2025. Renumbered remaining alpha list accordingly.

(228) IRM 3.11.16.40.15(14)b - Corrected the Form 1120-REIT (202301 and later revisions) Line 25i reference for Total Payments and Credits. (IPU 24U0311 issued 02-29-2024)

(229) IRM 3.11.16.40.15(14)c - Corrected the Form 1120-REIT (2017 and prior revisions) Line 24h reference for Total Payments and Credits. (IPU 24U0311 issued 02-29-2024)

(230) IRM 3.11.16.40.18(6) Note - Reworded the description of "asset tests" to "qualification tests other than the income or asset tests" for Schedule J, Lines 2b through 2g - Taxes, per Chief Counsel IRM review feedback.

(231) IRM 3.11.16.40.18(7)c - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule J, Lines 2b through 2g - Taxes per IRM review feedback.

(232) IRM 3.11.16.40.18(8) - Added a new paragraph for Form 1120-REIT, Line 1h, Section 1291 Tax from Form 8621, per UWR 983232 for PY 2025. Renumbered remaining paragraphs.

(233) IRM 3.11.16.40.18(9) - Added a new paragraph for Form 1120-REIT, Line 1i, Additional Tax Under Section 197(f), per UWR 983232 for PY 2025.

(234) IRM 3.11.16.40.18(10) - Added a new paragraph for Form 1120-REIT, Line 1j, Tax Adjustment from Form 8978, per UWR 983232 for PY 2025.

(235) IRM 3.11.16.40.18(11) - Added a new paragraph for Form 1120-REIT, Line 1k, Chapter 1 Tax Recapture from Form 4255, per UWR 983232 for PY 2025.

(236) IRM 3.11.16.40.18(12) - Added a new paragraph for Form 1120-REIT, Line 1z, Other Chapter 1 Tax, per UWR 983232 for PY 2025.

(237) IRM 3.11.16.40.18(13) - Corrected the Form 1120-REIT Schedule J, Lines 2b through 2g - Taxes, line references. (IPU 24U0311 issued 02-29-2024)

(238) IRM 3.11.16.40.18(13) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule J, Lines 2b through 2g - Taxes per IRM review feedback.

(239) IRM 3.11.16.40.20(1) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule J, Line 3b - Form 8834 Credit per IRM review feedback.

(240) IRM 3.11.16.40.21(1) - Corrected the Form 1120-REIT Schedule J, Line 3c - General Business Credit, line reference. (IPU 24U0311 issued 02-29-2024)

(241) IRM 3.11.16.40.22(1) - Corrected the Form 1120-REIT Schedule J, Line 6a - Schedule PH, line reference.

(242) IRM 3.11.16.40.22(1) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule J, Line 6a - Schedule PH per IRM review feedback.

(243) IRM 3.11.16.40.23 - Corrected the Form 1120-REIT Schedule J, Lines 6b and 6c- Interest on Deferred Tax Liability, line references.

(244) IRM 3.11.16.40.23(3) - Removed paragraph in Schedule J, Lines 6b and 6c- Interest on Deferred Tax Liability because it is no longer applicable.

(245) IRM 3.11.16.40.24 Title - Corrected the Title to Schedule J, Lines 6d and 6e- Form 4255 and Form 8611.

(246) IRM 3.11.16.40.24(1) - Corrected the Form 1120-REIT Schedule J, Lines 6d and 6e- Recapture of Investment Credit, line reference.

(247) IRM 3.11.16.40.25(1) 1st "Then" box c and d - Revised instruction for Form 1120-REIT Schedule K, Question 3 - Name of Common Parent per Course Development feedback.

(248) IRM 3.11.16.40.41(3) - Revised instruction and added three Exceptions for Form 1120-REIT Form 3800 - General Business Credit per UWR 983232 for PY 2025.

(249) IRM 3.11.16.40.43 - Added a new subsection to Form 1120-REIT for Form 4255, Certain Credit Recapture, Excessive Payments, and Penalties. Form added per UWR 983232 for PY 2025.

(250) IRM 3.11.16.41.1(1) - Added Form 4255 to the Sequence - Form 1120-RIC instructions. Form 4255 added per UWR 983232 for PY 2025.

(251) IRM 3.11.16.41.9(1)c - Updated the editing location of the Form 1120-RIC ABLM Code per TF&P form revision for PY 2025.

(252) IRM 3.11.16.41.11.2(2) - Added Audit Code W for Form 1120-RIC per UWR 983232 for processing year 2025.

(253) IRM 3.11.16.41.13(6) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Page 1 - Gross Income Items, Lines 1 through 8 per IRM review feedback.

(254) IRM 3.11.16.41.16(2) - Added a new paragraph for Form 1120-RIC, Line 28a, Preceding Year’s Overpayment Credited to the Current Year, per UWR 983232 for PY 2025. Renumbered remaining paragraphs accordingly.

(255) IRM 3.11.16.41.16(3) - Added a new paragraph for Form 1120-RIC, Line 28b, Current Year’s Estimated Tax Payments, per UWR 983232 for PY 2025.

(256) IRM 3.11.16.41.16(9)a - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Page 2 - Tax and Payments, Lines 27 through 33 per IRM review feedback.

(257) IRM 3.11.16.41.16(10) - Corrected the Form 1120-RIC Line 28g reference for Elective Payment Election. (IPU 24U0311 issued 02-29-2024)

(258) IRM 3.11.16.41.16(11) - Added a new paragraph for Form 1120-RIC, Line 28z, Other Credits and Payments, per UWR 983232 for PY 2025.

(259) IRM 3.11.16.41.16(12)a - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Page 2 - Tax and Payments, Lines 27 through 33 per IRM review feedback.

(260) IRM 3.11.16.41.16(13) - Reworded paragraph for clarity per Chief Counsel IRM review feedback.

(261) IRM 3.11.16.41.17(2) - Added a Note to the instructions for Form 1120-RIC, Schedule J, Line 1 - Controlled Group Code, due to the form change for 2024 revision.

(262) IRM 3.11.16.41.18(4)c - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule J - Lines 1b through 1z per IRM review feedback.

(263) IRM 3.11.16.41.18(5) - Added a new paragraph for Form 1120-RIC, Line 1e, Section 1291 Tax from Form 8621, per UWR 983232 for PY 2025. Renumbered remaining paragraphs accordingly.

(264) IRM 3.11.16.41.18(6) - Added a new paragraph for Form 1120-RIC, Line 1f, Additional Tax Under Section 197(f), per UWR 983232 for PY 2025.

(265) IRM 3.11.16.41.18(7) - Added a new paragraph for Form 1120-RIC, Line 1g, Chapter 1 Tax Recapture, per UWR 983232 for PY 2025.

(266) IRM 3.11.16.41.18(8) - Added a new paragraph for Form 1120-RIC, Line 1z, Other Chapter 1 Tax, per UWR 983232 for PY 2025.

(267) IRM 3.11.16.41.20(1) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule J, Line 3b - Form 8834, Qualified Electric Vehicle Credit per IRM review feedback.

(268) IRM 3.11.16.41.21(1) - Corrected the Form 1120-RIC, Schedule J, Line 3c - General Business Credit, line references. (IPU 24U0311 issued 02-29-2024)

(269) IRM 3.11.16.41.22(1) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule J, Line 3d - Other Credits per IRM review feedback.

(270) IRM 3.11.16.41.23(1) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Schedule J, Line 6a - Schedule PH per IRM review feedback.

(271) IRM 3.11.16.41.24 - Corrected the Form 1120-RIC, Schedule J. Line 6b and 6c - Interest on Deferred Tax Liability, line references.

(272) IRM 3.11.16.41.24(3) - Removed paragraph due to new line changes on Form 1120-RIC for Schedule J. Line 6b and 6c - Interest on Deferred Tax Liability per LB&I/Enterprise feedback.

(273) IRM 3.11.16.41.25 - Corrected the Form 1120-RIC, Schedule J, Line 6d - Form 4255.

(274) IRM 3.11.16.41.26(1) - Added new instruction for Form 1120-RIC, Schedule J, Line 6z, Other, per UWR 983232 for PY 2025. Deleted (2) referencing Form 8611, Low Income Housing Credit, and (3) referencing the Recapture of Indian Employment Credit as they are not applicable.

(275) IRM 3.11.16.41.27 - Added a new subsection for Form 1120-RIC, Line 8b, Deferred Tax on the RIC’s Share of Undistributed Earnings of a Qualified Electing Fund, per UWR 983232 for PY 2025. Renumbered remaining subsections accordingly.

(276) IRM 3.11.16.41.28(1) 1st "Then " box c and d - Revised instruction for Form 1120-RIC Schedule K, Question 3 - Subsidiary Member of a Controlled Group per Course Development feedback.

(277) IRM 3.11.16.41.41(3) - Revised instruction and added three Exceptions for Form 1120-RIC Form 3800 - General Business Credit per UWR 983232 for PY 2025.

(278) IRM 3.11.16.41.42(3) - Added editing instruction for Return Processing Code (RPC) "9" when Form 8997 is attached. (IPU 24U0311 issued 02-29-2024)

(279) IRM 3.11.16.41.43 - Added a new subsection to Form 1120-RIC for Form 4255, Certain Credit Recapture, Excessive Payments, and Penalties. Form added per UWR 983232 for PY 2025.

(280) IRM 3.11.16.42.12(5) - Reworded paragraph for clarity per Chief Counsel IRM review feedback.

(281) IRM 3.11.16.43(2) - Added new paragraph with background information for Form 4876-A, Election to be treated as an Interest Charge DISC. Renumbered remaining paragraphs. (IPU 24U0710 issued 05-31-2024)

(282) IRM 3.11.16.43.3(5) - Reworded final sentence in Document Perfection per Chief Counsel IRM review feedback.

(283) IRM 3.11.16.43.4(1) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Approved Elections per IRM review feedback.

(284) IRM 3.11.16.43.5(1) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Disapproved Elections per IRM review feedback.

(285) IRM 3.11.16.43.6(7) (8) (9) (10) - Rearranged the paragraph order and clarified instructions for Termination of Elections for Form 1120-IC-DISC. (IPU 24U0710 issued 05-31-2024)

(286) IRM 3.11.16.43.6(9)c - Added new statement in Termination of Election instruction per Chief Counsel IRM Review and feedback.

(287) IRM 3.11.16.43.6(12)a - Reworded sentence in Termination of Election instruction per Chief Counsel IRM review feedback.

(288) IRM 3.11.16.43.6(13) (14) - Reworded sentences in Termination of Election instruction per Chief Counsel IRM review feedback.

(289) IRM 3.11.16.43.6(14)c - Removed the Reminder because the information was clarified in the preceding paragraphs. (IPU 24U0710 issued 05-31-2024)

(290) IRM 3.11.16.43.8(1) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Taxpayer Notification of Action Taken on Form 4876-A per IRM review feedback.

(291) IRM 3.11.16.43.8(2) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Taxpayer Notification of Action Taken on Form 4876-A per IRM review feedback.

(292) IRM 3.11.16.43.8(3) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Taxpayer Notification of Action Taken on Form 4876-A per IRM review feedback.

(293) IRM 3.11.16.43.9(2) - Added tables with procedures for Letter 599C Replies and No Replies. (IPU 24U0710 issued 05-31-2024)

(294) IRM 3.11.16.43.9(2) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Form 4876-A File Review per IRM review feedback.

(295) IRM 3.11.16.44(3) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Form 1120-IC-DISC - Interest Charge Domestic International Sales - Corporation Return per IRM review feedback.

(296) IRM 3.11.16.44.1(3) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Due Date per IRM review feedback.

(297) IRM 3.11.16.44.2(2) - Reworded paragraph per Chief Counsel IRM review feedback.

(298) IRM 3.11.16.44.2(3)c - Reworded paragraph and added a cross reference to IRM 20.1.1.2.3 per Chief Counsel IRM review feedback.

(299) IRM 3.11.16.44.2(3)d - Added a cross reference to IRM 20.1.1.2.3 per Chief Counsel IRM review feedback.

(300) IRM 3.11.16.44.2(8) - Reworded paragraph per Chief Counsel IRM review feedback.

(301) IRM 3.11.16.44.2(9) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Eligibility Determination per IRM review feedback.

(302) IRM 3.11.16.44.2(9)a last "If" box - Reworded paragraph per Chief Counsel IRM review feedback.

(303) IRM 3.11.16.44.2(10)d - Reworded paragraph per Chief Counsel IRM review feedback and added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Eligibility Determination per IRM review feedback.

(304) IRM 3.11.16.44.3(1) - Reworded paragraph per Chief Counsel IRM review feedback.

(305) IRM 3.11.16.44.4(3) - Reworded paragraph per Chief Counsel IRM review feedback and added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Document Perfection of Form 4876-A per IRM review feedback.

(306) IRM 3.11.16.44.4(4) - Rewrote paragraph and combined correction procedures found in paragraphs (5) and (6) of Document Perfection of Form 4876-A per IRM review feedback. Deleted paragraphs (5) and (6). Renumbered remaining paragraphs accordingly.

(307) IRM 3.11.16.44.4(8) (9) (10) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Document Perfection per IRM review feedback.

(308) IRM 3.11.16.44.5(1) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Math Verification per IRM review feedback.

(309) IRM 3.11.16.44.5(13) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Math Verification per IRM review feedback, and combined paragraphs (14), (15), and (16) into a step list per Chief Counsel IRM review feedback.

(310) IRM 3.11.16.44.7(4)c - Added a cross reference to IRM 20.1.1.2.3 per Chief Counsel IRM review feedback.

(311) IRM 3.11.16.44.8(1) - Reworded paragraph and added a Note with a reference to Box C of Form 4876-A per Chief Counsel IRM review feedback.

(312) IRM 3.11.16.44.8(4) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Taxable Year of Form 1120-IC-DISC per IRM review feedback.

(313) IRM 3.11.16.45(1) - Added sentence to the paragraph regarding the filing of Form 8404, Interest Charge on DISC-Related Deferred Tax Liability, per Chief Counsel IRM review feedback.

(314) IRM 3.11.16.45(4)a - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Form 8404, Interest Charge on DISC-Related Deferred Tax Liability, per IRM review feedback.

(315) IRM 3.11.16.45(4)c - Updated the Base Period T-Bill Rate for 2023 for Form 8404, Interest Charge on DISC-Related Deferred Tax Liability.

(316) IRM 3.11.16.45(4)d "Then" box - Reworded the computation of Line 9 instructions per Chief Counsel IRM review feedback.

(317) IRM 3.11.16.45(6) - Added a cross reference to 3.11.16.3.4.2, Issuing Correspondence, to Form 8404, Interest Charge on DISC-Related Deferred Tax Liability per IRM review feedback.

(318) Exhibit 3.11.16-1, Due Date Chart - Moved here from Exhibit 3.11.16-2. Renumbered remaining exhibits.

(319) Exhibit 3.11.16-1, Due Date Chart - Updated Return Due Dates.

(320) Exhibit 3.11.16-2, Routing Guide for Attachments - Moved here from Exhibit 3.11.16-17. Renumbered remaining exhibits.

(321) Exhibit 3.11.16-2, Routing Guide for Attachments Table - Updates include:

  • Added a Note defining the "1120 series" returns and updated the table for Form 7208, Form 8023, and Form 8027 attachments. (IPU 24U0250 issued 02-12-2024)

  • Form 2220, Underpayment of Estimated Tax by Corporations, information.

  • Form 3800, General Business Credit, information.

  • Form 4255, Certain Credit Recapture, Excessive Payments, and Penalties, information.

  • Form 4626, Alternative Minimum Tax, information.

  • Form 8613, Return of Excise Tax on Undistributed Income of Regulated Investment Companies, information.

  • Form 8831, Excise Taxes on Excess Inclusions of REMIC Residual Interests, information.

  • Form 8908, Energy Efficient Home Credit, information.

  • Form 8936, Clean Vehicle Credits, corrected form name.

(322) Exhibit 3.11.16-3, Terms/Definitions/Acronyms - Moved here from Exhibit 3.11.16-22. Renumbered remaining exhibits.

(323) Exhibit 3.11.16-3, Terms/Definitions/Acronyms Table - Added Taxpayer Services (TS) and a Note about Wage and Investment (W&I) changing to Taxpayer Services. Removed Wage and Investment information. (IPU 24U0568 issued 04-25-2024)

(324) Exhibit 3.11.16-4, Potential Frivolous Arguments for Examination Review - Moved here from Exhibit 3.11.16-15. Renumbered remaining exhibits.

(325) Exhibit 3.11.16-5, U.S. Possessions ZIP Codes - Moved here from Exhibit 3.11.16-19. Renumbered remaining exhibits.

(326) Exhibit 3.11.16-6, Province, Foreign State and Territory Abbreviations - Moved here from Exhibit 3.11.16-16. Renumbered remaining exhibits.

(327) Exhibit 3.11.16-7, Area Office Codes - Moved here from Exhibit 3.11.16-1. Renumbered remaining exhibits.

(328) Exhibit 3.11.16-8 - Added 2023 to the Form 1120 - Prior Year Conversion Chart per UWR 983232 for PY 2025.

(329) Exhibit 3.11.16-8, Form 1120 Prior Year Conversion Chart - Added a line reference for Schedule J, Line 1 per SERP Feedback #16945. (IPU 24U0250 issued 02-12-2024)

(330) Exhibit 3.11.16-9- Added "2023" to the Form 1120-C - Prior Year Conversion Chart per UWR 983232 for PY 2025.

(331) Exhibit 3.11.16-9, Form 1120-C Prior Year Conversion Chart - Added a line reference for Schedule J, Line 1 per SERP Feedback #16946. (IPU 24U0250 issued 02-12-2024)

(332) Exhibit 3.11.16-10 - Added "2023" to the Form 1120-F - Prior Year Conversion Chart per UWR 983232 for PY 2025.

(333) Exhibit 3.11.16-13 - Added "2023" to the Form 1120-L - Prior Year Conversion Chart per UWR 983232 for PY 2025.

(334) Exhibit 3.11.16-14 - Added "2023" to the Form 1120-PC - Prior Year Conversion Chart per UWR 983232 for PY 2025.

(335) Exhibit 3.11.16-15 - Added "2023" to the Form 1120-REIT - Prior Year Conversion Chart per UWR 983232 for PY 2025.

(336) Exhibit 3.11.16-16 - Added "2023" to the Form 1120-RIC - Prior Year Conversion Chart per UWR 983232 for PY 2025.

(337) Exhibit 3.11.16-19, Form 3800 - Prior Year Conversion Chart - Added 2023 Revision compared to 2024 Revision table per UWR 983232 for PY 2025.

(338) Exhibit 3.11.16-20, Schedule F - Transfer Lines moved here from Exhibit 3.11.16-18. Renumbered remaining exhibits.

(339) Exhibit 3.11.16-22, USPS.com Track and Confirm moved here from Exhibit 3.11.16-20.

(340) Plain Language changes include:

  • Used simpler words

  • Used active tense (instead of passive tense)

  • Removed unnecessary words

  • Changed consistency sections per BMF Consistency template

  • Updated gender neutral language

Editorial changes made throughout the IRM include:

  • IRM 3.11.16 - revised throughout to update organizational title Wage and Investment (W&I) to Taxpayer Services (TS) (IPU 24U0568 issued 04-25-2024)

  • Corrected spelling and grammatical errors

  • Corrected references, citations, and links

  • Corrected "the Service" to "the IRS" per Document 12835, IRM Style Guide under Acronyms

  • Updated Exhibits

  • Updated dates throughout including Tax Periods and Received Dates

  • Updated form titles

  • Deleted old line numbers throughout

  • Updated line numbers for all Form 1120 series throughout due to Tax Forms and Publication (TFP) form changes for PY 2025

  • Updated line titles for 1120 series throughout due to Tax Forms and Publication (TFP) form changes for PY 2025

Effect on Other Documents

IRM 3.11.16 dated November 28, 2023 (effective January 1, 2024) is superseded. The following IRM Procedural Updates (IPUs) issued January 3, 2024 through July 23, 2024, are incorporated into this IRM: 24U0029, 24U0151, 24U0250, 24U0311, 24U0362, 24U0444, 24U0464, 24U0568, 24U0710, 24U0818 and 24U0862.

Audience

This IRM is intended for use by Taxpayer Services (TS) personnel in the Submission Processing Campuses.

Effective Date

(01-01-2025)

James L. Fish
Director, Submission Processing
Taxpayer Services Division

3.11.16.1 (01-29-2024)

Program Scope and Objectives

  1. This IRM section has instructions for Taxpayer Services (TS) Tax Examiners to process the following returns:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

    • Clerks, Lead Clerks, and Supervisory Clerks

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

  4. Policy Owner: Director, Submission Processing.

  5. Program Owner: Business Master File (BMF) Return Processing Branch.

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

    • Accounts Management (AM)

    • Chief Counsel (CC)

    • Compliance

    • Information Technology (IT) Programmers

    • Large Business and International (LB&I)

    • Small Business Self-Employed (SBSE)

    • Statistics of Income (SOI)

    • Submission Processing (SP)

    • Taxpayer Advocate Service (TAS)

    • Tax Exempt and Government Entities (TEGE)

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

3.11.16.1.1 (01-01-2018)

Background

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

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

3.11.16.1.2 (01-01-2018)

Authority

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

    • IRC 6201(a) - Assessment Authority

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

3.11.16.1.3 (01-01-2018)

Responsibilities

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

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

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

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

3.11.16.1.4 (01-01-2018)

Program Management and Reviews

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

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

    • Embedded Quality Submission Processing (EQSP)

    • Balanced Measures

    • Managerial reviews

3.11.16.1.5 (01-01-2018)

Program Controls

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

3.11.16.1.6 (01-01-2018)

Terms/Definitions/Acronyms

  1. For Terms, Definitions and Acronyms, see Exhibit 3.11.16-3, Terms/Definitions/Acronyms.

3.11.16.1.7 (01-01-2018)

Related Resources

  1. The following is a list of related resources:

    • Servicewide Electronic Research Program (SERP)

    • Submission Processing Design Center (SPDC)

    • Integrated Data Retrieval System (IDRS)

3.11.16.2 (01-01-2022)

General Information

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

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

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

3.11.16.2.1 (01-01-2022)

♦IRS Employee Contacts♦

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

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

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

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

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

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

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

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

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

3.11.16.2.2 (01-29-2024)

♦BMF Consistency♦

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

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

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

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

3.11.16.2.3 (04-25-2024)

♦IRM Deviation Procedures♦

  1. Submit IRM deviations in writing following instructions from IRM 1.11.2.2.3, When Procedures Deviate from the IRM, and elevate through proper channels for executive approval.

3.11.16.2.4 (01-01-2025)

♦Taxpayer Advocate Service (TAS)♦

  1. The Taxpayer Advocate Service is an independent organization within the Internal Revenue Service (IRS), led by the National Taxpayer Advocate, that helps taxpayers and protects taxpayer rights. TAS offers free help to taxpayers when a tax problem is causing a financial difficulty, when they’ve tried and been unable to resolve their issue with the IRS, or when they believe an IRS system, process, or procedure just isn't working as it should. TAS strives to ensure that every taxpayer is treated fairly and knows and understands their rights under the Taxpayer Bill of Rights. TAS has at least one taxpayer advocate office located in every state, the District of Columbia, and Puerto Rico.

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

  3. Refer taxpayers to TAS when the contact meets TAS criteria or when Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), is attached and steps cannot be taken to resolve the taxpayer's issue the same day. See IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines.

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

    • The issue can be resolved within 24 hours.

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

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

  6. For more information, see IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria, and IRM 13.1.7.4 , Exceptions to Taxpayer Advocate Service Criteria, for information on cases that TAS will no longer accept.

3.11.16.2.4.1 (01-01-2025)
♦TAS Service Level Agreements (SLAs)♦

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

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

3.11.16.2.5 (01-01-2022)

♦Edit Marks♦

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

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

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

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

    Exception:

    Photocopied Returns.

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

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

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

    Note:

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

    Note:

    Use a double arrow to identify the same figure for transcription in two different places (along with any required transcription data between the two arrows).
    Check Mark Indicates that an entry was manually math verified and is correct.
    Bracket/Parenthesis Indicates a negative numerical amount.

    Note:

    C&E is not required to bracket negative amounts when brackets are preprinted on the form or schedule or when the taxpayer clearly indicates a negative amount with brackets "( )" or "-" sign. Bracket negative amounts when editing negative entries on transcription lines (e.g., computing and entering a line entry, entering a missing line entry).
    Vertical Line or Decimal Point Indicates the separation of dollars and cents.
    Zero, Dash, None, or N/A "ZERO," "DASH," "NONE," or "N/A" are valid entries except when specific instructions require editing of an entry.
    Rocker Indicates the amount paid when drawn under a remittance amount.

3.11.16.2.6 (01-02-2023)

♦Frivolous Arguments♦

  1. Businesses use frivolous arguments for expressing dissatisfaction with the substance, form or administration of the tax laws by trying to illegally avoid or reduce tax liabilities. See IRM 25.25.10, Frivolous Return Program, shown in Exhibit 3.11.16-4, Frivolous Return Program for Examination Review.

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

    If Then
    The return meets any of the conditions shown as a frivolous return, see Exhibit 3.11.16-4, Potential Frivolous Arguments for Examination Review,

    Exception:

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

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

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

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

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

3.11.16.2.7 (01-01-2022)

♦Foreign Currency♦

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

3.11.16.2.8 (01-01-2022)

♦Protective Claims♦

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

    Note:

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

    Exception:

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

3.11.16.2.9 (01-01-2022)

♦Criminal Investigation (CI) Referral♦

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

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

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

    Refund Claim Kansas City and Ogden
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

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

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

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

    6. Continue processing the return.

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

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

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

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

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

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

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

    5. Continue processing the return.

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

3.11.16.2.10 (01-01-2022)

♦Examination (Exam) Funny Box♦

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

3.11.16.2.11 (01-01-2024)

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

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

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

3.11.16.2.12 (01-01-2022)

Section 965 Returns (201712 through 202012)

  1. The instructions in this subsection only apply to Tax Period 201712 through 202012.

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

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

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

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

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

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

      Note:

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

      Form Lines
      Form 1120

      • Schedule C, Line 15

      • Schedule J, Line 12

      • Schedule J, Line 22

      • Page 1, Line 32
      Form 1120-C

      • Schedule C, Line 15

      • Page 2, Line 29

      • Page 2, Line 30i
      Form 1120-L

      • Page 1, Line 27

      • Page 1, Line 28i
      Form 1120-PC

      • Page 1, Line 14

      • Page 1, Line 15d
      Form 1120-REIT

      • Page 2, Line 24

      • Page 2, Line 25h
      Form 1120-RIC

      • Page 1, Line 28

      • Page 1, Line 29i

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

    1. Completely edit the return.

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

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

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

3.11.16.2.13 (04-20-2023)

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

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

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

    • Transfer certain credits to another taxpayer.

    • Claim the credit as a General Business Credit.

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

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

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

    1. Completely edit the return.

    2. Edit RPC "J."

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

      Note:

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

    4. Give the return to the lead.

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

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

    1. Completely edit the return.

    2. Edit RPC "K."

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

      Note:

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

    4. Give the return to the lead.

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

    Note:

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

  5. Treat taxpayers who claim the credit on Form 3800 with no other indication of claiming the "Elective or Deemed Payment Election" or "Credit Transfer" as normal. See IRM 3.11.16.11.21, Schedule J, Line 5c - General Business Credit.

3.11.16.3 (01-01-2012)

Unprocessable Documents - Error Resolution System

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

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

    • Form 1120

    • Form 1120-C

    • Form 1120-F

    • Form 1120-H

    • Form 1120-L

    • Form 1120-PC

    • Form 1120-REIT

    • Form 1120-RIC

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

    • Form 1120-FSC

    • Form 1120-ND

    • Form 1120-SF

3.11.16.3.1 (01-01-2024)

♦Action Codes♦

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

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

    • Form 1120

    • Form 1120-C

    • Form 1120-F

    • Form 1120-H

    • Form 1120-L

    • Form 1120-PC

    • Form 1120-REIT

    • Form 1120-RIC

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

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

  4. Assign Action Codes in the following priority:

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

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

    3. Action Code "4XX"

    4. Action Code "6XX"

    5. Action Code "3XX"

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

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

    If Then
    Action Codes include 211, 215, 225, or 226 and Action Code 341,

    1. Edit the Action Code 211, 215, 225 or 226 on:

      • Form 1120

      • Form 1120-C

      • Form 1120-F

      • Form 1120-H

      • Form 1120-L

      • Form 1120-PC

      • Form 1120-REIT

      • Form 1120-RIC

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

    1. Edit the Action Code with the shorter suspense period on:

      • Form 1120

      • Form 1120-C

      • Form 1120-F

      • Form 1120-H

      • Form 1120-L

      • Form 1120-PC

      • Form 1120-REIT

      • Form 1120-RIC

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

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

    1. Edit the Action Code with the higher priority on:

      • Form 1120

      • Form 1120-C

      • Form 1120-F

      • Form 1120-H

      • Form 1120-L

      • Form 1120-PC

      • Form 1120-REIT

      • Form 1120-RIC

      Exception:

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

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

  6. See Figure 3.11.16-1.

    Figure 3.11.16-1

    This is an Image: 33500105.gif

    Please click here for the text description of the image.

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

    Action Code Description
    "211" (First Correspondence) or "215" (International Correspondence)

    • Return is illegible, incomplete, or contradictory and therefore unprocessable.

    • The taxpayer notates on the tax return or attachment that they are reporting tax for more than one Tax Period or for more than one type of tax.
    "225" (Missing Signature Correspondence)

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

    • Unsigned foreign returns (only issue for correspondence).
    "440" (LB&I, review of Form 1120-F)

    • Foreign Payments Practice (FPP) review of credits for Form 1120-F.
    "460" (Section 965 indicated)

    • Section 965, Treatment of Deferred Foreign Income upon Transition to Participation Exemption System of Taxation, see, IRM 3.11.16.2.12, Section 965 Returns (201712 through 202012).
    "480" (Early Filed - Suspense)

    • The return is an early filed (future) return.
    "610" (Renumbered non-remittance) or
    "611" (Renumbered with-remittance)

    • Mis-batched return (e.g., Form 1065, U.S. Return of Partnership Income, found in a Form 1120, U.S. Corporation Income Tax Return, batch of work).
    "640" (Void)

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

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

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

  9. Valid Action Codes are listed below:

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

    Note:

    Used for "Section 965" identification.

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

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

3.11.16.3.2 (03-07-2024)

Form 1120 Series Returns Worked in Ogden Only

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

    1. The tax return has a foreign address.

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

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

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

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

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

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

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

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

      Note:

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

3.11.16.3.3 (03-07-2024)

Treatment of All Unprocessable Tax Returns

  1. Kansas City Submission Processing Center (KCSPC) - If the tax return is an Ogden Submission Processing Center (OSPC) "only" return:

    1. Discontinue perfection of the return.

    2. Prepare Letter 86C, Referring Taxpayer Inquiry/Forms to Another Office, to inform the taxpayer the return has been sent to Ogden Submission Processing Center.

    3. Edit an Action Trail (e.g., 86C Sent or similar language) in the lower left corner going vertically up the side of the return.

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

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

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

  3. Action to secure perfection:

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

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

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

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

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

3.11.16.3.4 (01-01-2018)

♦Correspondence♦

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

    • Correspondence received from taxpayers, and

    • Correspondence Issued to taxpayers.

3.11.16.3.4.1 (01-01-2025)
♦Definition of Correspondence from Taxpayers♦

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

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

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

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

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

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

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

    3. Is the taxpayer asking a question?

    Note:

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

3.11.16.3.4.2 (01-01-2024)
♦Issuing Correspondence♦

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

    Exception:

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

    Exception:

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

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

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

    • Incomplete returns showing "Payment Only."

    • Incomplete returns showing they have previously e-filed.

    Note:

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

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

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

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

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

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

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

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

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

      Example:

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

      Exception:

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

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

    If And Then
    The return needs correspondence, Requires a response,

    1. Complete an approved Correspondence Action Sheet showing the letter number (118C, 599C, 319C etc.), Master File Tax (MFT) code, and the right paragraphs.

      Note:

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

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

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

      • Form 1120

      • Form 1120-C

      • Form 1120-F

      • Form 1120-H

      • Form 1120-L

      • Form 1120-PC

      • Form 1120-REIT

      • Form 1120-RIC

      Note:

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

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

    5. Finish editing the return and leave in the batch.
    The return needs correspondence, Does not require a response,

    1. Complete an approved Correspondence Action Sheet showing the letter number (86C, 1382-C, etc.), Master File Tax (MFT), and the right paragraphs.

      Note:

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

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

    3. Forward the copy to the Correspondence area.

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

    5. Finish editing the return and leave in batch.

    Note:

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

3.11.16.3.4.3 (01-01-2018)
♦Correspondence Imaging Inventory (CII) Returns♦

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

    Note:

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

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

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

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

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

    If And Then
    The "CII" return has a Form 13596, Reprocessing Returns, attached, The return is incomplete (e.g., missing signature, schedules, or forms),

    1. Do not correspond.

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

    3. If the return comes back from AM with incomplete information, send the return to AM again to secure all the missing information. Indicate "Additional information needed to process incomplete CII return," or similar language on Form 4227 (or other proper routing slip).
    The "CII" return has a Form 13596, Reprocessing Returns, attached and the return is incomplete (e.g., missing signature, schedules, or forms), The return shows correspondence was sent (e.g., CCC "3" is edited on the return), Do not route the return to AM. Continue processing the return.
    The "CII" return does not have a Form 13596, Reprocessing Returns, attached, The return is incomplete (e.g., missing signature, schedules, or forms), Follow normal correspondence procedures.

3.11.16.3.4.4 (01-01-2023)
♦Use of Fax for Taxpayer Submissions♦

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

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

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

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

    • IRM 21.1.3.2.3, Required Taxpayer Authentication

    • IRM 21.1.3.2.4, Additional Taxpayer Authentication

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

    • IRM 10.5.1.6.7.2, Answering Machine or Voice mail

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

3.11.16.3.5 (01-01-2023)

C/SC Letters

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

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

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

    3. Letter 3064C, IDRS Special Letter.

3.11.16.3.6 (01-01-2022)

♦Compliance Secured/Prepared Returns♦

  1. Compliance notates:

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

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

    Note:

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

3.11.16.3.6.1 (01-01-2018)
♦IRC 6020(b) - Prepared by Collections♦

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

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

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

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

      Note:

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

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

      Note:

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

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

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

3.11.16.3.6.2 (01-01-2022)
♦Collection Secured♦

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

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

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

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

    Reminder:

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

3.11.16.3.6.3 (01-01-2017)
♦Examination Prepared Returns♦

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

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

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

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

      Note:

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

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

3.11.16.3.6.4 (03-04-2011)
♦Examination Secured♦

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

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

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

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

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

    Reminder:

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

3.11.16.3.7 (02-12-2024)

♦Statute Returns♦

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

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

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

    • Compliance IRC 6020(b) returns

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

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

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

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

    • Return is a 2020 or prior year original. Due to the COVID-19 pandemic and subsequent Submission Processing (SP) and Accounts Management (AM) site closures, SP and AM developed procedures to bypass AM statute clearance and be processed. In addition, any 2020 or prior year returns previously cleared by AM statute will not be returned by SP to AM to be cleared again if the 90-calendar day statute stamp has expired.

  4. If a return has any of the following computer paragraphs (CPs) or letters attached, do not route to Statute Control Unit for clearance. Edit CCC "W" if the return needs processing. See Exhibit 3.11.16-2, Routing Guide for Attachments, for more information.

    • CP 259, Master File Generated 1st TDI Notice

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

    • CP 518, Final Notice - Return Delinquency

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

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

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

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

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

    Note:

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

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

    If Then
    The return is numbered,

    1. Edit Action Code "310" on:

      • Form 1120

      • Form 1120-C

      • Form 1120-F

      • Form 1120-H

      • Form 1120-L

      • Form 1120-PC

      • Form 1120-REIT

      • Form 1120-RIC

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

    3. Leave the return in the batch and continue processing.
    The return is unnumbered,

    1. Do not continue processing.

    2. Pull the return from the batch.

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

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

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

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

3.11.16.3.8 (01-01-2010)

♦Re-Entry Document Procedures♦

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

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

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

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

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

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

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

    Caution:

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

3.11.16.3.8.1 (01-01-2022)
♦Form 3893 - Re-Entry Document Control♦

  1. Reprocess a return posted to the wrong account or module to post it to the correct account module.

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

  3. Circle the CCC "G" if present.

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

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

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

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

    Form 3893 Action Taken
    Box 14 (Remarks)

    1. Ensure that the information is edited to the return.
    Box 15 (Process as)

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

    2. Do not change any tax due amounts.

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

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

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

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

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

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

3.11.16.3.8.2 (01-01-2022)
♦Form 13596 - Reprocessing Returns♦

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

  2. Circle CCC "G" if present.

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

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

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

    Caution:

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

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

    Form 13596 Action Taken
    Taxpayer Identification Number (TIN) correction, Edit the correct TIN on tax return.
    Tax period correction, Edit the correct Tax Period ended on the tax return.
    Reasonable cause, Edit right Computer Condition Code.

    1. Edit CCC "R" if the "FTF" (Failure to File) box is checked.

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

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

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

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

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

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

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

3.11.16.3.9 (08-31-2021)

♦Amended Returns♦

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

    • The "Amended" box is checked

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

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

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

      Note:

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

  2. Examine the return for attachments:

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

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

    Note:

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

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

    If Then
    Compliance Services entered "TC 59X" or "ICS" on the return,

    1. Do not edit CCC "G."

    2. Process the return as an original.
    Statute Control stamped the return "Delinquent Original Cleared for Processing" ,

    1. Do not edit CCC "G."

    2. Process the return as an original.
    Form 3893 or Form 13596, Reprocessing Returns, is attached,

    1. Do not edit CCC "G."

    2. See IRM 3.11.16.3.8.1, Form 3893 - Re-Entry Document Control, or IRM 3.11.16.3.8.2, Form 13596 - Reprocessing Returns.
    None of the above are present,

    1. Edit CCC "G."

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

    Exception:

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

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

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

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

    3. Tax period, see IRM 3.11.16.7, Tax Period

    4. CCC "G," see Exception above

    5. Received date, see IRM 3.11.16.8, Received Date

    6. Signature, see IRM 3.11.16.11.7, Signature

    Note:

    No further editing is required.

3.11.16.3.10 (01-01-2023)

IRC 847 Deduction

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

    Note:

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

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

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

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

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

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

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

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

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

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

    5. Place the return back in the processing pipeline.

3.11.16.3.11 (01-01-2025)

Prompt Assessment (Form 4810) / Prompt Determination

  1. A "Prompt Assessment" is requested either on Form 4810, Request for Prompt Assessment Under Internal Revenue Code Section 6501(d), or on a request containing the same information. A Prompt Determination is requested under the U.S. Bankruptcy Code (specifically 11 U.S.C. § 505(b)(2))..

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

    Note:

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

3.11.16.4 (01-01-2022)

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

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

    Note:

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

    If Then
    A refund tax return is batched in a non-refund batch,

    1. Completely edit the return.

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

    Note:

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

     

    Note:

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

    1. Edit Action Code "341" for:

      • Form 1120

      • Form 1120-C

      • Form 1120-F

      • Form 1120-H

      • Form 1120-L

      • Form 1120-PC

      • Form 1120-REIT

      • Form 1120-RIC

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

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

    4. Numbered returns: Leave in batch.
    The refund is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡,

     

    Note:

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

    • Unnumbered Returns:

      1. Pull the return from the batch.

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

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

        Note:

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

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

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

      6. Expedite processing.

    • Numbered Returns:

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

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

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

        Note:

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

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

      5. Edit an action trail "Copy to CI" or "CI Referral," or similar language in the lower left corner going vertically up the side of the return.
    The TS Submission Processing TAS Liaison walks a return through C&E, In addition to normal editing, edit the following:

    1. CCC "O," to freeze the refund.

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

3.11.16.5 (01-01-2012)

Examination of Tax Data

  1. This subsection addresses general tax data editing procedures.

3.11.16.5.1 (01-01-2025)

Non-Standard or Prior Year Format

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

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

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

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

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

3.11.16.5.2 (01-02-2018)

Conversion of Form 1120-S to Form 1120

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

    Caution:

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

3.11.16.5.3 (01-01-2009)

Significant Entries

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

    Note:

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

3.11.16.5.4 (01-01-2015)

Incomplete Return

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

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

    Exception:

    See IRM 3.11.16.5.5, Minimum Edit.

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

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

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

    Note:

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

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

3.11.16.5.5 (01-01-2019)

Minimum Edit

  1. If Form 1120 does not require Balance Sheet inspection (see IRM 3.11.16.11.46, Schedule L, Balance Sheet, instructions), perform the least time-consuming edit on the income section and the deductions section through Total Deductions.

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

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

      Exception:

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

    Note:

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

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

3.11.16.5.6 (01-01-2012)

Editing Dollars and Cents

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

    If Then

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

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

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

    		 No editing is required.

3.11.16.5.7 (01-01-2009)

Negative Entries

  1. Edit negative entries as follows:

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

3.11.16.6 (01-01-2014)

♦Entity Perfection - General♦

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

    • Employer Identification Number (EIN)

    • Name

    • "In-care-of" Name

    • Address

3.11.16.6.1 (07-10-2017)

♦Bankruptcy♦

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

    Exception:

    Do not route Amended returns to Entity Control.

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

    Exception:

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

3.11.16.6.2 (07-10-2017)

♦Entity Perfection - Employer Identification Number (EIN)♦

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

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

  3. Determine the EIN as follows:

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

      1. Remove return from batch.

      2. Route to Entity Control following local procedures using Form 13934, Entity Document/C&E Merge Transmittal, for EIN assignment.
      The EIN is either a PTIN or Individual Taxpayer Identification Number (ITIN), or
      Multiple EINs are present,      		 Numbered,

      1. Edit Action Code "320" on

        • Form 1120

        • Form 1120-C

        • Form 1120-F

        • Form 1120-H

        • Form 1120-L

        • Form 1120-PC

        • Form 1120-REIT

        • Form 1120-RIC

        All other returns edit CCC "U."

      2. Leave return in batch.
      The EIN has any of the following conditions and can’t be determined from attachments and/or schedules:

      • Illegible;

      • Missing;

      • Other than 9 digits;

      • All zeros; or,

      • All nines

      		 Unnumbered,

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

      2. Research IDRS.

      3. If found, edit to the proper location.

      4. If not found, route to Entity Control following local procedures using Form 13934, Entity Document/C&E Merge Transmittal.
      The EIN has any of the following conditions and can’t be determined from attachments and/or schedules:

      • Illegible;

      • Missing;

      • Other than 9 digits;

      • All zeros; or,

      • All nines

      		 Numbered,

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

      2. Edit Action Code "320" on

        • Form 1120

        • Form 1120-C

        • Form 1120-F

        • Form 1120-H

        • Form 1120-L

        • Form 1120-PC

        • Form 1120-REIT

        • Form 1120-RIC

        All other returns edit CCC "U."

      3. Leave return in batch.
      "PENDING," "APPLIED FOR," etc., is shown in the EIN area, Unnumbered,

      1. Research IDRS.

      2. If found, edit to the proper location.

      3. If not found, route to Entity Control following local procedures using Form 13934, Entity Document/C&E Merge Transmittal.
      "PENDING," "APPLIED FOR," etc., is shown in the EIN area, Numbered,

      1. Edit Action Code "320" on

        • Form 1120

        • Form 1120-C

        • Form 1120-F

        • Form 1120-H

        • Form 1120-L

        • Form 1120-PC,

        • Form 1120-REIT

        • Form 1120-RIC

        All other returns edit CCC "U."

      2. Leave return in batch.

3.11.16.6.3 (07-10-2017)

♦Entity Perfection - Name Control♦

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

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

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

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

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

    • Form 1120-C - Box D(3)

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

    • Form 1120-FSC - Box F(2)

    • Form 1120-H - Box (2)

    • Form 1120-L - Box E(2)

    • Form 1120-ND - Box D(2)

    • Form 1120-PC - Box E(2)

    • Form 1120-REIT - Box F(2)

    • Form 1120-RIC - Box E(2)

    • Form 1120-SF - Box (2)

  4. Edit the Name Control as follows:

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

      1. Research IDRS.

      2. If found, edit to the proper location.

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

      1. Edit Action Code "352" (Name Research) on:

        • Form 1120

        • Form 1120-C

        • Form 1120-F

        • Form 1120-H

        • Form 1120-L

        • Form 1120-PC

        • Form 1120-REIT

        • Form 1120-RIC

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

      3. Leave return in batch.

    Figure 3.11.16-2

    This is an Image: 33500110.gif

    Please click here for the text description of the image.

3.11.16.6.4 (01-03-2024)

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

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

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

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

    1. Arrow the "in-care-of" street address below the "in-care-of" name or edit the "in-care-of" street address below the "in-care-of" name if included on an attachment.

    2. Circle the corporation street address.

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

    4. Pull the return for research/input of TC 014 by the Code & Edit Research Clerk.

      Note:

      A TC 014 must be input to retain the street address as a location address and the P.O. Box as the mailing address.

    Note:

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

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

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

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

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

      If Then
      An "in-care-of" name is changed but there is no sign of an address change,

      1. Edit the "in-care-of" name as shown above.

      2. Continue editing the return.
      An "in-care-of" name is present and the "Address change" box is checked (or there is a sign of an address change),

      1. Edit the "in-care-of" name as shown above.

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

      3. Continue editing the return.

3.11.16.6.5 (01-03-2024)

♦Entity Perfection - Domestic Addresses♦

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

    Exception:

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

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

    Note:

    BMF ISRP is not programmed for a mailing address and a location address. A TC 014 must be input into IDRS to capture both a location and a mailing address.

  3. Perfect the address as follows:

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

    • Mailing address information is the same,

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

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

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

    • Mailing address information is different,

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

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

    		 Detach Form 8822 or Form 8822-B and route to Entity Control following local procedures using Form 13934, Entity Document/C&E Merge Transmittal.
    Both a P.O. Box and street address are shown, see Figure 3.11.16-3,  

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

    2. Input TC "014."

      Note:

      BMF ISRP is not programmed for a mailing address and a location address. A TC 014 must be input into IDRS to capture both a location and a mailing address.
    Two street addresses are shown,  

    1. Underline the second street address.

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

    3. Input TC "014."

      Note:

      BMF ISRP is not programmed for a mailing address and a location address. A TC 014 must be input into IDRS to capture both a location and a mailing address.
    One street address is shown, The taxpayer changes the address to a P.O. Box,

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

    2. Input TC "014."

      Note:

      BMF ISRP is not programmed for a mailing address and a location address. A TC 014 must be input into IDRS to capture both a location and a mailing address.
    The city and state are not shown on the return, but are shown on an attachment,   Edit the city and state in the entity section of the tax return.
    The ZIP Code is missing or illegible, Is not available from the return or attachments, See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, to determine the ZIP Code.

    Note:

    Edit the 3 digits followed by "01" of the first ZIP Code listed for the applicable state (e.g., "99501" for Alaska).
    Only the first three digits of the ZIP Code can be determined,   Edit "01" for the fourth and fifth digits.
    The "Change of Address" box is checked, An "in-care-of" name is present,

    1. Edit the "%" (percent sign) or "c/o" to the left of the "in-care-of" name (in the first position) followed by the right name.

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

    Note:

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

    Figure 3.11.16-3

    This is an Image: 33500115.gif

    Please click here for the text description of the image.

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

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

3.11.16.6.6 (01-02-2025)

♦Entity Perfection - Foreign Address (OSPC)♦

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

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

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

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

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

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

    2. A ZIP code must be present for U.S. Possessions/Territories. Edit the right ZIP Code if one is not provided, see Exhibit 3.11.16-5, U.S. Possessions ZIP Codes.

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

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

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

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

      Note:

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

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

      Note:

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

      If Then
      A province, state, or territory is present,

      1. Circle the province, state, or territory name.

      2. Edit the right abbreviation, see Exhibit 3.11.16-6, Province, State and Territory Abbreviations.
      A province, state, or territory is shown in abbreviated format, Continue editing the return.
      A province, state, or territory name is not present, Continue editing the return.

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

3.11.16.6.6.1 (07-06-2018)
♦Country Code - Canada♦

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

    If Then
    The foreign address has a Canadian province/territory name, abbreviation, or postal code beginning letter shown in the table below,

    1. See table below to ensure the correct Canadian Province/Territory is present or edited to the return.

    2. Circle the country name.

    3. Edit the right "country" code based on the province/territory preceded by a "/" and followed by a "/$" as the last entry in the address.
    The foreign address does not have a Canadian province/territory name shown on the table below,

    1. Circle the country name.

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

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

3.11.16.7 (01-01-2013)

Tax Period

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

3.11.16.7.1 (01-01-2025)

Tax Period - Ending

  1. All returns must have a Tax Period.

  2. Edit the Tax Period to the right of the form title in YYMM format.

    If Then
    The return is for the current processing calendar year (e.g., 202412), Do not edit the Tax Period.
    The return is for a prior year, Edit the Tax Period.
    The taxpayer has notated a Tax Period other than the preprinted year on the return, Edit the Tax Period based on the taxpayer’s indication, per paragraph (3).
    The Tax Period is missing, incomplete, or illegible,

    1. Review the return or attachments for the correct period.

    2. If found, edit the Tax Period to the right of the form title in YYMM format.

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

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

    Tax Period Ends Tax Period
    Oct. 3, 2024 (52-53 week document) 2409
    Oct. 3, 2024 (Final short period return) 2410
    Oct. 25, 2024 (52-53 week document) 2410
    Oct. 25, 2024 (Final short period return) 2410
    Nov. 30, 2024 2411
    Dec. 31, 202 2412 (No editing required)
    Feb. 28, 2025 2502

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

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

  5. If the Tax Period is for more than 12 months or 53 weeks, correspond.

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

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

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

    Note:

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

    Figure 3.11.16-4

    This is an Image: 33500120.gif

    Please click here for the text description of the image.

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

    Note:

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

  10. The separate short period return of a corporation that joins a "consolidated" group generally ends on the day that the corporation joins the consolidated group, and its items are included on the consolidated group’s return beginning on the following day. See 26 CFR 1.1502-76(b)(1)(ii)(A).

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

3.11.16.7.2 (01-01-2017)

Tax Period Beginning - Initial, Final, or Short Period

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

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

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

    Figure 3.11.16-5

    This is an Image: 33500125.gif

    Please click here for the text description of the image.

3.11.16.7.3 (01-01-2012)

Early Filed Returns - Full Year and Short Period

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

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

    If Then

    • The received date and the Tax Period ending (TPE) are the same month (e.g., the received date and the TPE are both April), or

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

    1. Edit Action Code "480" for:

      • Form 1120

      • Form 1120-C

      • Form 1120-F

      • Form 1120-H

      • Form 1120-L

      • Form 1120-PC

      • Form 1120-REIT

      • Form 1120-RIC

      (Early Filed - Suspense).

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

    3. Leave return in batch.
    The received date is before the TPE by more than four months (e.g., the received date is April but the TPE is August or later),

    1. Edit Action Code "211" or "215" (International Correspondence) for:

      • Form 1120

      • Form 1120-C

      • Form 1120-F

      • Form 1120-H

      • Form 1120-L

      • Form 1120-PC

      • Form 1120-REIT

      • Form 1120-RIC

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

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

    4. Completely edit the return. Edit the future Tax Period shown by the taxpayer.

    Note:

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

3.11.16.7.4 (01-01-2025)

Short Period - Editing Proof of Entitlement

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

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

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

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

    Reminder:

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

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

    Note:

    Research of IDRS using Command Code BMFOLE is for the following chart.

    Proof of Entitlement

    If And Then
    A statement the corporation is changing the Tax Period under:

    1. Headquarters "Grant Letter."

    2. Revenue Procedure 2006-45 (clarified and modified by Rev. Proc. 2007-64) or 2006-46.

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

    Note:

    No CCC "Y" is needed.

    Note:

    Audit Code "3" is also applicable for Form 1120-F, Form 1120-FSC, and Form 1120-SF.
    For Form 1120-F, see IRM 3.11.16.34.14.2, Audit Codes,
    For Form 1120-FSC, see IRM 3.11.16.35.16.1, Audit Codes, and
    For Form 1120-SF, see IRM 3.11.16.42.8.1, Audit Codes.
    A statement the corporation is changing the Tax Period under:

    1. Headquarters "Grant Letter."

    2. Revenue Procedure 2006-45 (clarified and modified by Rev. Proc. 2007-64) or 2006-46.

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

    1. Coming out of consolidation; or

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

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

    		   Do all the following:

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

    2. Edit CCC "Y."


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

    1. Section 898(c)(1)(A); or

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

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

    4. "Second Short Year after Section 1398 Election"

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

    Note:

    No CCC "Y" is needed.
    Form 1128 attached, Command Code BMFOLE shows a TC 059,
    (This is a sign that the Form 1128 has not been approved.)    		 The return is unprocessable. Follow the instructions in IRM 3.11.16.7.6, Short Period Returns - Editing a Disapproved Application (Form 1128).
    Form 1128 attached, Command Code BMFOLE does not show a TC 053, 054 or 059, See IRM 3.11.16.7.7, Short Period Returns - Editing Form 1128 With no Indication of Approval or Disapproval.
    Notation on Form 1120 or Form 1120-F indicates: "Section 444 Election Terminated,"   Edit CCC "Y" if the tax return is for a Personal Service Corporation

    • (e.g., Form 1120, Page 1, Box A, Item 3 is marked or Schedule J, Page 3, Line 2 box (201811 and prior) is marked: or

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

    Figure 3.11.16-6

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    Please click here for the text description of the image.

3.11.16.7.4.1 (01-01-2025)
Short Period Returns - 26 CFR 1.1502-76

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

    Note:

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

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

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

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

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

    Note:

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

    		 Edit CCC "R."

    Reminder:

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

    Figure 3.11.16-7

    This is an Image: 33500135.gif

    Please click here for the text description of the image.

3.11.16.7.5 (01-01-2017)

Short Period Returns - Missing Proof of Entitlement

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

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

    Note:

    No CCC "Y" is needed.
    BMFOLE shows a TC 058 or 059,
    (This is a sign that the Form 1128 or Form 8716 has not been approved.)    		 The return is unprocessable, see IRM 3.11.16.7.6, Short Period Returns - Editing a Disapproved Application (Form 1128).
    BMFOLE does not show a TC 053, 054, 055, 058, or 059, Correspond using Letter 319C, Return Covers Other Than 12-Month Accounting Period.

    Reminder:

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

3.11.16.7.6 (01-01-2025)

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

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

    1. Edit Action Code "211" or "215" (International Correspondence) or CCC "U" and correspond. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

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

    Reminder:

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

3.11.16.7.7 (01-01-2022)

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

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

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

    Note:

    No CCC “Y” is needed.
    BMFOLE shows a TC 059,
    (This is a sign that Form 1128 has not been approved.)    		 The return is unprocessable.
    See IRM 3.11.16.7.6, Short Period Returns - Editing a Disapproved Application (Form 1128).
    BMFOLE does not show TC 053, 054, or 059, Take the actions in (2) below.

    Reminder:

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

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

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

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

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

    Figure 3.11.16-8

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    Please click here for the text description of the image.

3.11.16.7.8 (01-01-2015)

Short Period Returns - Editing Returning Correspondence

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

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

3.11.16.7.9 (01-01-2025)

Short Period Returns - With Prepaid Credits

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

    1. A prepaid credit is claimed.

      Form Type Line Numbers
      Form 1120 Page 3, Schedule J, Line 13, 14, or 17
      (Line 12, 13, or 16 for 2017-2011)
      Form 1120-C Line 30a, 30b, or 30d
      (Line 30a, 30b, or 30e 2023 - 2018)
      (Line 29a, 29b, or 29e for 2017 and prior)
      Form 1120-F Line 5a, 5b, or 5e
      Form 1120-FSC Line 2a, 2b, or 2e
      Form 1120-H Line 23a, 23b, 23c
      (Lines 23a, 23b, 23d for 2022 and prior).
      Form 1120-L Line 27a, 27b, or 27d
      (Line 27a, 27b, or 27e for 2023)
      (Line 28a, 28b, 28c, or 28f for 2022 and prior).
      Form 1120-ND Line 14a, 14b, or 14e
      Form 1120-PC Line 16a, 16b, or 16d
      (Line 15a, 15c, or 15g for 2022 - 2018).
      (Line 14a, 14b, 14c, or 14g for 2017 and prior)
      Form 1120-REIT Line 25a, 25b, or 25d
      (Line 25a, 25b, or 25e for 2023 - 2018)
      (Line 24a, 24b, or 24e for 2017 and prior)
      Form 1120-RIC Line 28a, 28b, or 28d
      (Line 28a, 28b, or 28e for 2023)
      (Line 29a, 29b, or 29e for 2022 through 2018).
      (Line 28a, 28b, or 28e for 2017 and prior)
      Form 1120-SF Line 16a, 16b, or 16e

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

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

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

    2. Continue normal processing.

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

      Reminder:

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

    Figure 3.11.16-9

    This is an Image: 33500145.gif

    Please click here for the text description of the image.

3.11.16.8 (01-01-2025)

♦Received Date♦

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

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

    If Then
    The return is received within ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ the legal or the extended due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡,
    See Exhibit 3.11.16-1, Due Date Chart.    		 The return is considered timely.
    The due date falls on a weekend or legal holiday, The return is timely if postmarked by the first business day following the weekend or legal holiday.
    The IRS received date stamp ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ of the legal or extended due date and the postmark or shipment date is on or before the legal or extended due date, Edit the received date to agree with the postmark or shipment date.

    Note:

    The postmark or shipment date includes returns delivered by:

    • U.S. Postal Service,

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

    • Returns with a Foreign Postmark.

    Caution:

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

    Note:

    For certified mail only - If a postmark is not present, look for a "USPS.com Track & Confirm" record attached to the return (should be in front of the envelope). Use the "Acceptance" date on the record to determine timeliness and follow normal editing procedures, see Exhibit 3.11.16-22, USPS.com Track and Confirm.
    If the "USPS.com Track & Confirm" record is not attached, take no action.

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

    Note:

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

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

    Note:

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

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

    Example:

    Postmark date is 03-22-2025 and first rejection is 03-12-2025. Change Received Date to 031225.
    The postmark date is more than 10 days after the date of the rejection,   Leave the IRS Received Date as is.

    Example:

    Postmark date is 03-25-2025 and first rejection is 03-12-2025. Leave the Received Date as is.

    Exception:

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

    Example:

    Postmark date is 03-22-2025, the second rejection is 03-12-2025. The first rejection is 03-09-2025. Change the Received Date to 030925.
    There are two rejections with the time between the first rejection and the second rejection greater than 10 days, The second rejection is within 10 days of the postmark date, Edit the IRS Received Date to be the date of the second rejection.

    Example:

    Postmark date is 03-22-2025, the second rejection is 03-12-2025. The first rejection is 03-01-2025. Change the Received Date to 031225.
    There are two rejections, Not within 10 days of one another and second rejection not within 10 days of the postmark date, Leave the IRS Received Date as is.

    Example:

    Postmark date is 03-25-2025, the second rejection is 03-12-2025. The first rejection is 03-01-2025. Leave the Received Date as is.

    Exception:

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

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

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

    • The word "Received"

    • Month (alpha or numeric)

    • Day (for example "1" or "01" )

    • Year - four digits

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

    Exception:

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

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

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

      If Then
      An envelope is not attached to the tax return, Use the postmark date stamped on the face of the return.
      A document was returned for insufficient postage, Use the postmark date that coincides with the correct delivery of the return.
      The postmark is missing and the envelope is certified,

      1. Look for the USPS.com Track & Confirm record that was attached to the return (should be in front of the envelope). Use the acceptance date on the record to determine timeliness and follow normal editing procedures, see Exhibit 3.11.16-22, USPS.com Track and Confirm.

      2. If the "USPS.com Track & Confirm" record is not attached, take no action.
      An envelope has a USPS and private metered postmarks, Always use the USPS postmark.
      An envelope has a foreign and private metered postmark, Always use the foreign postmark.
      An envelope has two private metered postmarks, Always use the latest private metered postmark.
      An envelope has only one private metered postmark, Use the private metered postmark.

    2. Service Center Automated Mail Processing System (SCAMPS) digital date.

    3. Revenue Officer's Signature date.

    4. Signature date. (Only if within current year.)

    5. Julian control date minus 10 days.

    6. Current date minus 10 days.

  8. Edit the received date as follows.

    1. If Then
      A timely received date is the only received date stamped on the return, Do not edit.
      Two or more dates are stamped on the return,

      1. Use the earliest IRS received date stamp.

      2. Circle all other dates (handwritten or stamped) not needed for transcription.

      Note:

      Treat Received Dates that are circled out by another function as if they are not present.
      A Federal return is addressed to the IRS and delivered to a state agency, Use the Postmark Date as the received date.
      A Federal return is addressed to a state agency, Use the IRS date stamp as the received date.
      The only received date on the return is a Taxpayer Advocate Service (TAS) received date, Edit the received date according to (6) instructions above.

      Reminder:

      Check any envelope attached to the return for remittance. If found, hand carry remittance to manager.

  9. If a return is faxed to another area of the IRS and then sent to Submission for processing, do not edit the Enterprise Electronic Fax (EEFax) Date as the IRS Received Date. Edit a Received Date according to normal procedures.

    Caution:

    Do not use the EEFax date as the IRS received date.

3.11.16.9 (01-01-2009)

Special Processing Codes

  1. This subsection addresses special processing codes.

3.11.16.9.1 (01-01-2009)

Computer Condition Codes

  1. Computer Condition Codes (CCC) identify special conditions or computation for the computer. Computer Condition Codes post to the Master File.

  2. Computer Condition Codes are edited in the center of Lines 1 and 2 of the tax return.

3.11.16.9.1.1 (01-01-2009)
CCC "A" - Form 2220

  1. No editing is required.

3.11.16.9.1.2 (01-01-2015)
CCC "B" - Schedule M-3

  1. Edit CCC "B" when the corporation checks the Schedule M-3 box on:

    1. Form 1120, Page 1, Box A, 4.

    2. Form 1120-C, Page 1, Box A, 2.

    3. Form 1120-F, Page 1, Schedule M-3 Box.

    4. Form 1120-L, Page 1, Box A, 3.

    5. Form 1120-PC, Page 1, Box A, 3.

  2. Edit CCC "B" if Schedule M-3 is attached to Form 1120, Form 1120-C, Form 1120-L, Form 1120-F or Form 1120-PC.

    Note:

    For Form 1120, edit Audit Code "8" if Schedule M-3 is attached, see IRM 3.11.16.10.1, Audit Codes.

3.11.16.9.1.3 (01-01-2021)
CCC "C" - Qualified Derivatives Dealers (Form 1120-F) or Partner’s Additional Reporting Year Tax (Forms 1120-FSC, 1120-ND or 1120-SF)

  1. Edit CCC "C" when either is present:

    • Form 1120-F, Page 2, Question CC is answered "Yes," or both the "Yes" and "No" boxes are checked.

    • Form 8978, Partner’s Additional Reporting Year Tax, is attached to a Form 1120-FSC, Form 1120-ND, or Form 1120-SF and the Tax Period is 201712 and later.

3.11.16.9.1.4 (01-01-2025)
♦CCC "D" - Reasonable Cause for Failing to Pay Timely♦

  1. Do not edit CCC "D" if the taxpayer requests abatement for "Failing to Pay Timely" when the return is submitted. Send Letter 1382C, Penalty Removal Request Incomplete, to inform the taxpayer of the proper procedure to follow to request penalty abatement when a penalty is assessed, see IRM 3.11.16.3.4.2(4), Issuing Correspondence.

  2. Edit CCC "D" when the return is stamped: "DO NOT ASSESS FAILURE TO PAY PENALTY."

    Note:

    Do not enter CCC "D" if the return was prepared by the IRS under IRC 6020(b) and the return due date (without regard to extensions) is after July 30, 1996.

  3. Edit CCC "D" on a "Final," Balance Due return if the received date is after the short period due date but on or before the regular full Tax Period due date≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  4. CCC "D" must be edited when a return has the special due date for "Co-Op" 1120 returns, see IRM 3.11.16.9.1.18, CCC "R" - Reasonable Cause for Failing to Timely File Return.

  5. Edit CCC "D" if a corporation attaches a statement showing the corporation qualifies for an automatic 2 or 3 - month extension under 26 CFR 1.6081-5 (or regulations under IRC 6081), or the statement or return indicates one of the following:

    • The foreign corporation maintains an office or place of business in the United States.

      Note:

      It is not necessary to edit CCC "D" on Form 1120-F. The "Office or Place of Business Code" establishes the correct due date.

    • The domestic corporation transacts its business and keeps its books and records of account outside the United States and Puerto Rico, or

    • The domestic corporation's principal income is from sources within the possessions of the United States.

    Exception:

    Do not edit CCC "D" if the balance due is paid after the 15th day of the 6th month following the Tax Period ending date.

  6. Do not edit CCC "D" when pre-computed penalty is shown on the return.

3.11.16.9.1.5 (02-29-2024)
CCC "E" - Potential Identity Theft Filing (Form 1120)

  1. Effective January 1, 2017, Computer Condition Code "E" can be edited on Form 1120 (any year) by the BMF ID Theft Liaison to identify a potential identity theft filing if the return is claiming a refund of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ If CCC "E" has been edited, no action is required by C&E.

    Note:

    CCC "E" can be edited by other functions. C&E will continue to follow procedures in Paragraph (2).

  2. If a tax examiner in Submission Processing (SP) Code and Edit (C&E) finds a case with attachments or correspondence showing the taxpayer is a victim of ID Theft and the return is claiming a refund of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, provide the whole case to your senior/lead. Your senior/lead will expedite the case to the Planning and Analysis (P&A) staff for referral to one of the SP BMF ID Theft liaisons. The taxpayer must indicate that they are a victim of "ID Theft" ; do not send cases that are subject to "Criminal Investigation" (CI), "Examination" (Exam) or "Fraud" review.

  3. If the SP ID Theft Liaison says the return is "ID Theft," the tax examiner can (upon request) edit CCC "E" on Form 1120 only.

3.11.16.9.1.6 (03-25-2024)
CCC "F" - Final Return

  1. Edit CCC "F" when the "Final Return" box is checked or there is another indication the corporation is not liable for filing future returns. Notations may include (but are not limited to):

    • Final

    • Deceased

    • Out of Business

    • Liquidation

    • Exempt under IRC 501(c)(3)

    • Dissolved (e.g., Certificate of Dissolution attached)

      Note:

      The presence of Form 966, Corporate Dissolution or Liquidation, is a sign of a possible dissolution. If Form 966 is attached, compare Tax Period in Box 7A to the Form 1120 being edited. If the same and the entity section of Form 966 is for the parent corporation, edit CCC "F."

    • Cites IRC 708(b)(1)(B)

    • Notates "Filed per Rev. Proc. 2003-84"

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

  3. If a prepaid credit* is claimed on a short period "Final" return, enter Action Code "342" or CCC "U" on the return, see IRM 3.11.16.7.9, Short Period Returns - With Prepaid Credits.

    • *(Form 1120, Page 3, Schedule J, Line 13, 14 or 17 (Lines 12, 13 or 16 for 2017-2011)

3.11.16.9.1.7 (01-01-2009)
♦CCC "G" - Amended Return♦

  1. See IRM 3.11.16.3.9, Amended Returns.

3.11.16.9.1.8 (08-27-2019)
CCC "H" - Form 1042-S Attached to Form 1120-F

  1. Editing CCC "H" is no longer required.

3.11.16.9.1.9 (01-01-2010)
CCC "I" - Form 6781, Gains and Losses from Section 1256 Contracts and Straddles

  1. CCC "I" is valid for Form 1120, Form 1120-C, Form 1120-F, Form 1120-L, and Form 1120-PC.

  2. Edit CCC "I" when Form 6781, Gains and Losses from Section 1256 Contracts and Straddles, is present.

    Note:

    CCC "I" must be edited as a capital in block style to distinguish it from CCC "1."

3.11.16.9.1.10 (01-01-2022)
CCC "J" - Section 965

  1. The instructions in this subsection only apply to Tax Period 201712 through 202012.

  2. Edit CCC "J" and Action Code "460" when any of the following conditions apply:

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

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

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

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

      Note:

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

      Form Lines
      Form 1120

      • Schedule C, Line 15

      • Schedule J, Line 12

      • Schedule J, Line 22

      • Page 1, Line 32
      Form 1120-C

      • Schedule C, Line 15

      • Page 2, Line 29

      • Page 2, Line 30i
      Form 1120-L

      • Page 1, Line 27

      • Page 1, Line 28i
      Form 1120-PC

      • Page 1, Line 14

      • Page 1, Line 15d
      Form 1120-REIT

      • Page 2, Line 24

      • Page 2, Line 25h
      Form 1120-RIC

      • Page 2, Line 28

      • Page 2, Line 29i

  3. Do not issue correspondence on the return. ERS will correspond for any missing information, see IRM 3.11.16.2.12, Section 965 Returns.

3.11.16.9.1.11 (01-01-2025)
CCC "K" - Form 8697

  1. Edit CCC "K" when Form 8697, Interest Computation Under the Look-Back Method for Completed Long-Term Contracts, is attached and shows a balance due in Part I, Line 10 and/or Part II, Line 11. The tax will be claimed on Form 1120, Schedule J, Line 9c. If Form 8697 is missing, correspond for the missing form. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

3.11.16.9.1.12 (03-02-2017)
CCC "L" - Treaty Based Positions

  1. Edit CCC "L" when taxpayer writes "Section 6114 Election" on the return or Form 8833, Treaty-Based Return Position Disclosure Under IRC 6114 or 7701(b), is attached.

    Note:

    Edit Audit Code "2" if Form 8833 is attached to Form 1120, Form 1120-L, Form 1120-PC, Form 1120-REIT, or Form 1120-RIC, see IRM 3.11.16.10.1, Audit Codes.

3.11.16.9.1.13 (01-01-2020)
CCC "M" - Opportunity Zones

  1. Edit CCC "M" when:

    • Tax period ending is 201712 and later, and

    • Form 8949, Sales and Other Dispositions of Capital Assets, is attached and Form 8949, Column (f) has a code "Z" or "Y," see Figure 3.11.16-23.

    Note:

    Tax Cuts and Jobs Act of 2017, P.L. 115-97 (H.R. 1), Section 13823, Opportunity Zones. Taxpayers who elect to defer gain on the sale of an asset by investing in an Opportunity Zone Fund will indicate that they are deferring the gain by entering code "Z" or "Y" in Column (f).

3.11.16.9.1.14 (04-01-2020)
CCC "N" - Joint Committee Case

  1. Edit CCC "N," Joint Committee Case, when an unusual credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is claimed on:

    • Form 1120, Page 3, Schedule J, Lines 13 through 22 (Lines 12 through 19 for 2017-2011)

    • Form 1120-L, Page 6, Schedule K, Lines 5a through 5e

    • Form 1120-PC, Page 1, Lines 8a through 8e

    • Form 1120-FSC, Page 1, Lines 2a through 2g

    • Form 1120-SF, Page 1, Lines 16a through 16e

  2. Unusual credits are defined as follows:

    • Form 1120-PC, Line 15h states: By reciprocal for tax paid by Attorney in Fact under Section 835(d).

    • A credit claimed under IRC 1341 or a "Claim of Right" for refund of excessive prior year taxes.

    • Credits claimed under IRC 1383 in a later year for a refund of excessive prior year taxes.

  3. Usual credits are defined as follows:

    • A refundable credit normally found on Form 1120, Page 3, Schedule J, Lines 13 through 22 (Lines 12 through 19 for 2017-2011).

    • Form 7004 payment.

    • Estimated tax payments.

    • Credit from Regulated Investment Company.

    • Fuel Tax Credit present on Schedule J, Line 20b (Line 19b 2017-2011).

    • A refundable credit claimed with or without Form 8288-A, Statement of Withholding on Certain Dispositions by Foreign Persons, Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, or Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, are attached.

      Note:

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

3.11.16.9.1.15 (01-01-2025)
CCC "O" - Module Freeze

  1. CCC "O" is entered when a Pre-Settlement Manual Refund will be made and a Form 3753, Form 5792, or Form 12857 is attached. Verify that the name control, EIN, and Tax Period on the return are the same as the data on the form.

    1. Research to determine if "TC 840" (Manual Refund Transaction) has posted:

      If Then
      "TC 840" has posted, Edit CCC "O" and continue processing.
      "TC 840" has not posted,

      1. Enter Action Code "341" for:

        • Form 1120

        • Form 1120-C

        • Form 1120-F

        • Form 1120-H

        • Form 1120-L

        • Form 1120-PC

        • Form 1120-REIT

        • Form 1120-RIC

        to issue Manual Refund.

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

  2. Edit CCC "O" if there is an entry on:

    1. Form 1120, Schedule J, Part II, Line 15 (Line 14 for 2017-2011).

    2. Form 1120-C, Line 30c (Line 29c for 2017 and prior).

    3. Form 1120-F, Line 5c.

    4. Form 1120-FSC, Line 2c.

    5. Form 1120-L, Line 27c (Line 28d for 2022 through 2018) (Line 29e for 2017 and prior).

    6. Form 1120-ND, Line 14c.

    7. Form 1120-PC, Line 15c (Line 15e for 2022 through 2018) (Line 14e for 2017 and prior).

    8. Form 1120-REIT, Line 25c (Line 24c for 2017 and prior).

    9. Form 1120-RIC, Line 28c (Line 29c for 2022 through 2018) (Line 28c for 2017 and prior).

    10. Form 1120-SF, Line 16c.

  3. Edit CCC "O" when the Taxpayer Services (TS), Submission Processing (SP), Taxpayer Advocate Service (TAS) Liaison walks a return through C&E.

3.11.16.9.1.16 (01-01-2019)
CCC "P" - Form 1118 - Foreign Tax Credit (Corporations)

  1. Edit CCC "P" when ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on any of the following lines:

    • Form 1120, Schedule J, Line 5a.

    • Form 1120-C, Schedule J, Line 5a.

    • Form 1120-REIT, Schedule J, Line 3a.

    • Form 1120-RIC, Schedule J, Line 3a.

3.11.16.9.1.17 (03-08-2010)
♦CCC "Q" ♦

  1. No editing required.

3.11.16.9.1.18 (01-01-2018)
♦CCC "R" - Reasonable Cause for Failing to File a Timely Return♦

  1. Do not edit CCC "R" when a reason is given for the delay in filing a return. Send Letter 1382C, Penalty Removal Request Incomplete, and continue editing the return, see IRM 3.11.16.3.4.2(4), Issuing Correspondence.

  2. Special Rules for Form 1120 Cooperatives: Certain non-farm Cooperative ("Co-Op" ) returns are filed on Form 1120 instead of the usual Cooperative Form 1120-C. These filers are entitled to a return due date on the 15th day of the ninth month following the close of the taxable year. Both CCC "R" and CCC "D" must be edited to returns identified as 1120 Cooperatives. Indication of this status is made by the taxpayer and may include the word "Cooperative" in the name, along with notations such as:

    • IRC 6072 (d) (2),

    • References to "Subchapter T" of the Internal Revenue Code ("IRC" ),

    • IRC 1381-1388 referenced,

    • IRS Regulations Section 1.6072-2(d) referenced.

      Note:

      If the word "Cooperative" is the only indicator, do not edit CCC "R." It must be used in addition to one or more of the other indicators named above.

  3. Edit CCC "R" if a corporation attaches a statement showing the corporation qualifies for an automatic 2 or 3 - month extension under 26 CFR 1.6081-5 (or regulations under IRC 6081), or the statement or return indicates one of the following:

    • The foreign corporation maintains an office or place of business in the United States.

      Note:

      It is not necessary to edit CCC "R" on Form 1120-F. The "Office or Place of Business Code" establishes the correct due date.

    • The domestic corporation transacts its business and keeps its books and records of account outside the United States and Puerto Rico, or

    • The domestic corporation's principal income is from sources within the possessions of the United States.

    Exception:

    Do not edit CCC "R" if the return is filed after the 15th day of the 6th month following the Tax Period ending date.

  4. Edit CCC "R" on a "Final" return if the received date is after the short period due date but on or before the regular full Tax Period due date≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  5. Edit CCC "R" on the return when any of the following conditions are present:

    • There is a sign such as "DO NOT ASSESS FAILURE TO FILE PENALTY" on a secured return annotated with "599."

    • If an internal use form or routing slip is attached and indicates do not assess failure to file penalty.

      Note:

      All "R" coded returns must have an IRS Received Date. If one is not present, edit the IRS Received Date in the middle of the return.

      Note:

      CCC "R" cannot be used with CCC "4."

3.11.16.9.1.19 (01-01-2014)
CCC "S" - Form 8883, Asset Allocation Statement

  1. Edit CCC "S" when Form 8883 is attached to:

    • Form 1120

    • Form 1120-C

    • Form 1120-F

    • Form 1120-FSC

    • Form 1120-L

    • Form 1120-PC

    • Form 1120-REIT

    • Form 1120-RIC

    Reminder:

    Audit Code "3" will also apply when a Form 8883 is attached ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, see IRM 3.11.16.10.1, Audit Codes.

3.11.16.9.1.20 (01-01-2015)
CCC "T" - Form 8886, Reportable Transaction Disclosure Statement

  1. Edit CCC "T" when Form 8886 is attached to:

    • Form 1120

    • Form 1120-C

    • Form 1120-F

    • Form 1120-FSC

    • Form 1120-H

    • Form 1120-L

    • Form 1120-ND

    • Form 1120-PC

    • Form 1120-REIT

    • Form 1120-RIC

    • Form 1120-SF

    Note:

    Edit Audit Code "1" if Form 8886 is attached, see IRM 3.11.16.10.1, Audit Codes.

3.11.16.9.1.21 (01-01-2014)
CCC "U" - Unprocessable Document

  1. Edit CCC "U" on any of the following forms with an unprocessable condition:

    • Form 1120-FSC

    • Form 1120-ND

    • Form 1120-SF

    Note:

    Action Codes are used for unprocessable conditions on Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC.

3.11.16.9.1.22 (01-01-2023)
CCC "V" - Qualifying Therapeutic Discovery Project Credit

  1. No editing required.

3.11.16.9.1.23 (01-01-2009)
♦CCC "W" - Return Cleared by Statute Control♦

  1. Edit CCC "W" when Statute Control cleared the return, see IRM 3.11.16.3.7, Statute Returns.

3.11.16.9.1.24 (01-01-2010)
CCC "X" - Refund/Settlement Freeze

  1. Edit CCC "X" when the taxpayer indicates on the tax return a request that any balance left over after paying tax and/or penalties to be applied to another account. Take the following action to route the request to Accounts Management.

    1. Prepare Form 3465, Adjustment Request, and indicate in the "Routing" box "Adjustments."

    2. Notate the requested action in the "Remarks" box.

    3. Attach a photocopy of Page 1 of the tax return to Form 3465.

    Reminder:

    Subtract the tax, penalties and interest amounts from the remittance amount if available.

3.11.16.9.1.25 (01-01-2024)
CCC "Y" - Short Period Return for Change of Accounting Period

  1. CCC "Y" is edited for Change of Accounting Period. Enter only for short period returns due to change of accounting period (not due to initial or final filing), see IRM 3.11.16.7.4, Short Period - Editing Proof of Entitlement, through IRM 3.11.16.7.9, Short Period Returns - With Prepaid Credits.

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

  3. If a prepaid credit* is claimed on a short period return, enter Action Code "342" or CCC "U" on the return, see IRM 3.11.16.7.9, Short Period Returns - With Prepaid Credit.

    • Form 1120, Page 3, Schedule J, Line 13, 14 or 17 (Line 12, 13, or 16 for 2017-2011) or applicable line on other Form 1120 series.

  4. Edit CCC "Y" when the Taxpayer Services (), Submission Processing (SP), Taxpayer Advocate Service (TAS) Liaison walks a return through C&E.

3.11.16.9.1.26 (05-07-2019)
CCC "Z" - Schedule UTP (Form 1120 ), Uncertain Tax Position Statement

  1. Schedule UTP (Form 1120), Uncertain Tax Position Statement, is a high priority form.

  2. Edit CCC "Z" if Schedule UTP is attached to a Form 1120, Form 1120-F, Form 1120-L, or Form 1120-PC.

    Note:

    Do not edit CCC "Z" if Schedule UTP has no entries.

3.11.16.9.1.27 (02-24-2022)
CCC "1" - Like-Kind Exchanges (and section 1043 conflict-of-Interest sales)

  1. Edit CCC "1" if Form 8824 is attached. CCC "1" is valid on:

    • Form 1120

    • Form 1120-FSC

    • Form 1120-ND

    • Form 1120-REIT

    • Form 1120-SF

3.11.16.9.1.28 (04-01-2024)
CCC "2" - Statement of Specified Foreign Financial Assets

  1. Edit CCC "2" if Form 8938, Statement of Specified Foreign Financial Assets, is attached. (Form 1120 only), see IRM 3.11.16.11.47.10, Schedule N, Line 8 - Form 8938, Statement of Specified Foreign Financial Assets.

3.11.16.9.1.29 (01-01-2018)
♦CCC "3" - "No Reply" to Correspondence♦

  1. Edit CCC "3" when the tax return is unprocessable and there is a sign that correspondence was sent and no reply received.

3.11.16.9.1.30 (01-01-2014)
CCC "4" - IRC 6020(b) Return

  1. CCC "4" is not valid for Form 1120 series at this time.

3.11.16.9.1.31 (01-01-2015)
CCC "5" - Bank Holding Company Tax Act

  1. Edit CCC "5" when there is a statement electing to make installment payments for a portion of the total tax attributable to the Bank Holding Company Tax Act, see Figure 3.11.16-10.

    Figure 3.11.16-10

    This is an Image: 33500150.gif

    Please click here for the text description of the image.

3.11.16.9.1.32 (08-05-2021)
CCC "6" - Section 847 Deductions

  1. The instructions for CCC "6" only apply to Tax Period 201812 and prior. For Tax Period 201901 and later, no action is needed.

  2. Edit CCC "6" when any of the following is present:

    • Form 1120, Form 1120-L, or Form 1120-PC indicates a "Section 847 Deduction." Form 8816, also, indicates a "Section 847 Deduction," see IRM 3.11.16.3.10, IRC 847 Deduction.

    • Form 1120 includes a notation stating "Form 8816" with a corresponding entry for the amount of the deduction on Schedule J, Part III, Line 14 (Part II, Line 13 for 2017-2011).

    • Form 1120-L includes an entry on Line 28b for 2018 (Line 29b and/or 29d for 2017-2011).

    • Form 1120-PC includes an entry on Line 15b for 2018 (Line 14b and/or 14d for 2017-2011).

3.11.16.9.1.33 (01-01-2021)
CCC "8" - Waiver of Estimated Tax Penalty

  1. Edit CCC "8" when any of the following is present:

    • Form 2220 is attached and Part II, Box 6 or Box 7 is checked, see Figure 3.11.16-11.

    • Form 2220 is attached and any column on Form 2220, Schedule A, page 4, Line 38 has entries.

    Figure 3.11.16-11

    This is an Image: 33500155.gif

    Please click here for the text description of the image.

3.11.16.9.1.34 (01-01-2024)
CCC "9" - Low-Income Housing Credit

  1. Edit CCC "9" when any of the following conditions exist:

    • Form 1120, Schedule J, Line 9b has a significant entry.

    • Form 1120-C, Schedule J, Line 8 has a significant entry.

    • Form 1120-REIT or Form 1120-RIC, Schedule J, Line 9 (Line 7 for 2021 and 2022; Line 6 for 2020 and prior) has a significant entry.

    • Form 8611 is attached.

    • Form 8609 is attached.

    • Form 8609-A is attached.

    • Form 8586 with entries on Line 1 or 3.

3.11.16.9.2 (04-20-2023)

Return Processing Code (RPC)

  1. Return Processing Code (RPC) is an alpha or numeric character used to alert the computer to a special condition or computation.

  2. RPCs are edited on Page 1, in the right margin next to Line 1c of Form 1120.

  3. More than one RPC can be edited and in any order.

  4. Refer to the table below for an explanation of when to edit each RPC.

    RPC Explanation
    A Form 5471, Schedule E, Income, War Profits, and Excess Profits Taxes Paid or Accrued, is attached.
    B Form 5471, Schedule H, Current Earnings and Profits, is attached.
    C Form 5471, Schedule I-1, Information for Global Intangible Low-Taxed Income, is attached.
    D Form 5471, Schedule P, Previously Taxed Earnings and Profits of U.S. Shareholder of Certain Foreign Corporations, is attached.
    E Form 8865, Schedule G, Statement of Application for the Gain Deferral Method Under Section 721(c), is attached.
    F Form 8865, Schedule H, Acceleration Events and Exceptions Reporting Relating to Gain Deferral Method Under Section 721(c), is attached.
    G Form 5471, Schedule G-1, Cost Sharing Arrangement is attached.
    H Form 5472. Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business, Part VIII, Cost Sharing Agreement, has an entry (e.g., description, checkbox marked, percent, or an amount).
    J For Tax Period 202201 - 202212, taxpayer writes IRA22DPE on Form 3800, Form 1120, Schedule J, Line 20d or on an attachment.

    1. Completely edit the return.

    2. Edit RPC "J."

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

      Note:

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

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "DPE" in the batch ID.
    K For Tax Period 202201 - 202212, taxpayer writes IRA22TRE on Form 3800, on an attachment or at the top of the return.

    1. Completely edit the return.

    2. Edit RPC "K."

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

      Note:

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

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "TRE" in the batch ID.
    L Form 7204, Consent to Extend the Time to Assess Tax Related to Contested Foreign Income Taxes - Provisional Foreign Tax Credit Agreement, is attached.
    M Form 7205, Energy Efficient Commercial Buildings Deduction, is attached.
    N Form 4626, Alternative Minimum Tax (2023 Revision and later) is attached or Form 1120, Schedule J, Line 3 shows a significant amount.
    1 Form 8991, Tax on Base Erosion Payments of Taxpayers with Substantial Gross Receipts, is attached.
    2 Form 8992, U.S. Shareholder Calculation of Global Intangible Low-Taxed Income (GILTI), is attached.
    3 Form 8993, Section 250 Deduction for Foreign-Derived Intangible Income (FDII) and Global Intangible Low-Taxed Income (GILTI), is attached.
    4 Form 8994, Employer Credit for Paid Family and Medical Leave, is attached.
    6 Form 8996, Qualified Opportunity Fund, is attached.
    7 Form 8990, Limitation on Business Interest Expense IRC 163(j), is attached.
    9 Form 8997, Initial and Annual Statement of Opportunity Fund (QOF) Investments, is attached.

3.11.16.9.3 (01-01-2025)

ABLM Code and Schedule M-3 Checkbox

  1. ABLM is not an acronym. The letters are a carryover from when Form 1120 was generic. The ABLM Code identifies a specific type of tax return. The ABLM letters are defined as follows:

    • A - Consolidated Tax Return

    • B - Personal Service Corporation

    • L - Life Insurance Tax Return

    • M - Mutual Fund Tax Return

  2. ABLM Codes are valid for Form 1120, Form 1120-REIT, and Form 1120-RIC.

  3. Edit an ABLM code in the margin by Boxes A - 1, A - 2, and A - 3 to the left of the name line as instructed in paragraphs (4) through (7) below.

  4. There is no need to edit the ABLM Code on Form 1120-C, Form 1120-L or Form 1120-PC because it is computer-generated.

    Note:

    For Form 1120-REIT, and Form 1120-RIC, if no code applies, leave the area blank.

  5. If ABLM Code "010" is entered on Form 1120, the return must be batched as a "Consolidated Return." If not, reject for proper batching. Enter Action Code "610" if the return is numbered.

  6. Only one ABLM Code will be entered; edit in the following priority:

    • 400 - Box A - 3

    • 010 - Box A - 1a or A - 1b

    • 001 - Box A - 2

    Note:

    If ABLM Code "400" is edited on a Consolidated Return, Form 851 processing procedures must also be followed, see IRM 3.11.16.29.3, Form 851 - Affiliations Schedule.

  7. Code ""010" " when any of the following apply (Form 1120 only):

    1. Box A - 1a or Box A - 1b is checked, see Figure 3.11.16-12 a.

    2. Subsidiaries are listed on Form 851 or Form 1122 is attached.

  8. Code "001" when any of the following apply:

    1. Box A - 2, Page 1, Form 1120 is checked, see Figure 3.11.16-12 b.

    2. Box B - 2, Page 1, Form 1120-REIT is checked.

    3. Box F, Page 1, Form 1120-RIC is checked.

    4. Schedule PH (Form 1120) is attached to Form 1120, Form 1120-REIT, or Form 1120-RIC.

    5. Form 1120, Page 3, Schedule J, Line 8 has an entry.

    6. Form 1120-REIT, Page 3, Schedule J, Line 5 has an entry.

    7. Form 1120-RIC, Page 3, Schedule J, Line 5 has an entry.

    Note:

    If Form 1120, Schedule J, Line 8 has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, correspond. for Schedule PH if not attached, see IRM 3.11.16.11.23, Schedule J, Line 8 - Personal Holding Company Tax. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.
    (Form 1120-REIT or Form 1120-RIC, Schedule J, Line 5.)

  9. Code "400" when any of the following apply:

    1. Box A - 3, Page 1, Form 1120 is checked.

    2. The box on Form 1120, Page 3, Schedule J, Line 2 is checked (2017 and prior).

    Note:

    Also edit Personal Service Corporation Code "2" if the box on Form 1120, Page 3, Schedule J, Line 2 is checked (201811 and prior).

3.11.16.9.3.1 (01-12-2023)
Schedule M-3 Checkbox

  1. Edit Computer Condition Code "B" when the box for Schedule M-3 is marked, see Figure 3.11.16-12 c.

    1. Form 1120, Page 1, Box A, 4.

    2. Form 1120-C, Page 1, Box A, 2.

    3. Form 1120-F, Page 1, Schedule M-3 box.

    4. Form 1120-L, Page 1, Box A, 3.

    5. Form 1120-PC, Page 1, Box A, 3.

  2. Edit Computer Condition Code "B" when Schedule M-3 is attached to Form 1120, Form 1120-C, Form 1120-F, Form 1120-L, or Form 1120-PC.

    Note:

    Audit Codes 2, "7" and "8" may also be required for Form 1120. Audit Code "2" may be required for Form 1120-PC, see IRM 3.11.16.10.1, Audit Codes.

    Figure 3.11.16-12

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    Please click here for the text description of the image.

3.11.16.9.4 (01-01-2025)

Initial Return Code

  1. Initial Return Code is valid for Form 1120, Form 1120-REIT, and Form 1120-RIC.

  2. Edit an Initial Return Code "2" in the margin to the right of the Date Incorporated if any of the following conditions are met:

    1. The "Initial return" box under the entity area is checked.

    2. Page 1, Box B (1120-RIC), Box C (1120), Box D (1120-REIT) has a date incorporated which is within 12 months from the Tax Period ending date, see Figure 3.11.16-13a.

    3. There is a taxpayer notation of initial filing, such as, "New Corporation," etc.

    4. The incorporation date is within 24 months from the Tax Period ending date (or is not shown) and the taxpayer's Balance Sheet, "Beginning of tax year" is blank or zeros, see Figure 3.11.16-13"First Return" b.

      Reminder:

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

      Note:

      Do not edit Initial Return Code "2" if the balance sheet is missing or the balance sheet has been dummied.

    Initial Return/ Tax Period Ending 24 Month Rule/24 Month Cutoff Date
    2503 04/01/2023
    2502 03/01/2023
    2501 02/01/2023
    2412 01/01/2023
    2411 12/01/2022
    2410 11/01/2022
    2409 10/01/2022
    2408 09/01/2022
    2407 08/01/2022
    2406 07/01/2022
    2405 06/01/2022
    2404 05/01/2022
    2403 04/01/2022
    2402 03/01/2022
    2401 02/01/2022
    2312 01/01/2022
    2311 12/01/2021
    2310 11/01/2021
    2309 10/01/2021
    2308 09/01/2021
    2307 08/01/2021
    2306 07/01/2021
    2305 06/01/2021
    2304 05/01/2021
    2303 04/01/2021
    2302 03/01/2021
    2301 02/01/2021
    2212 01/01/2021
    2211 12/01/2020
    2210 11/01/2020
    2209 10/01/2020
    2208 09/01/2020

    Figure 3.11.16-13

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    Please click here for the text description of the image.

3.11.16.10 (01-01-2018)

Additional Return Perfection

  1. Elements will be edited in the left margin near Line 12 (Line 2 for Form 1120-F, Form 1120-FSC and Line 5 for Form 1120-ND) preceded by the applicable number as follows:

    Element Edit
    1 - Form 8844 Indicator "1 - 1."
    See IRM 3.11.16.11.21.1, Form 8844 - Empowerment Zone Employment Credit.
    2 - Audit Code "2 -" followed by the right Audit Code (e.g., "2 - 1" ).
    See IRM 3.11.16.10.1, Audit Codes.
    3 - Missing Schedule Code Normal correspondence procedures will replace Missing Schedule Codes. Do not edit Missing Schedule Codes.
    See IRM 3.11.16.3.4.2, Issuing Correspondence.
    4 - Penalty and Interest Code "4 - 1."
    See IRM 3.11.16.10.2, Penalty and Interest Code.
    5 - Reserve Code "5 - 4."
    See IRM 3.11.16.10.3, Reserve Code.
    6 - Installment Sale Indicator "6 -" followed by the right Installment Sale Indicator (e.g., "6 - 3" ).
    See IRM 3.11.16.10.4, Installment Sale Indicator (Form 6252).
    7 - Form 1120-F Indicator "7 - 1" if Form 1120-F has both Non-Effectively (Section I) and Effectively (Section II) Connected Income.

    Note:

    Check for proper blocking of returns and re-block as required.
    See IRM 3.11.16.34.14.6, Form 1120-F Indicator.

3.11.16.10.1 (01-01-2025)

Audit Codes

  1. Up to 15 Audit Codes can be used. Do not use an Audit Code more than once.

    Note:

    Audit Codes do not need to be edited in a specific order.

  2. Edit a "2 -" followed by the right Audit Code(s) in the left margin near Line 12 (e.g., "2 - 1" ).

    • (Line 2 for Form 1120-F, Form 1120-FSC and Line 5 for Form 1120-ND)

  3. Audit Code "1" - Disclosure Statement or Inconsistent Treatment. Edit Audit Code "1" if any of the following conditions are present:

    1. Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR) is attached.

    2. Form 8275, Disclosure Statement, or Form 8275-R, Regulated Disclosure Statement, is attached, or a statement referring specifically to IRC 6662 (Disclosure).

    3. Form 8886, Reportable Transaction Disclosure Statement, is attached.

      Note:

      Edit CCC "T" if Form 8886 is attached, see IRM 3.11.16.9.1.20, CCC "T" - Form 8886, Reportable Transaction Disclosure Statement.

  4. Audit Code "2" - International. Edit Audit Code "2" when any of the following conditions are present:

    1. An entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ appears on Page 2, Schedule C, for any of the following Lines: 3, 6, 7, 8, 12, 13, 14, 15 16a, 16b, 16c, 17, 18, and/or 19 (Lines 3, 6, 7, 8, 12, 13, 14, 15, and/or 16 for 2017 and prior). (Form 1120-PC, Page 4, Schedule C, Lines 3, 6, 7, 8, 10, 11, 12a, 12b, 12c, 13, and/or 14. (Lines 3, 6, 7, 8, 10, 11, and/or 12 for 2017 and prior).

    2. Form 926, Return by a U.S. Transferor of Property to a Foreign Corporation, is attached.

    3. Form 1116, Foreign Tax Credit (Individual, Fiduciary or Nonresident Alien Individual) is attached and reflects ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ foreign tax credit (Part IV, Line 29).

    4. Form 1118, Foreign Tax Credit - Corporations, is attached and reflects ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ foreign tax credit on Form 1120, Schedule J, Line 5a (or applicable line on Form 1120-L, Form 1120-PC, Form 1120-REIT, or Form 1120-RIC).

    5. Schedule M-3 (Form 1120), Net Income (Loss) Reconciliation for Corporations with Total Assets of $10 Million or More, is attached and any of the following are present:
      - Any entry on Part II, Column (c), Lines 2 through 5 or 10 is a negative amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or
      - Any entry on Part III, Column (c), Lines 5 through 7 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or
      - The sum of Part III, Columns (b) plus (c) of any of Lines 9 or 23 - 25 (Lines 8, 23, 24 or 25 for Form 1120-PC) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    6. Schedule N (Form 1120), Foreign Operations of U.S. Corporations, is attached and Questions 1a, 3, 5, or 7a are answered "Yes" (Questions 1a, 3, 4a, 5, or 7a for 2019 and prior).

    7. Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts, is attached.

    8. Form 3520-A, Annual Information Return of Foreign Trust with a U.S. Owner (under IRC 6048(b)), is attached.

    9. Form 5471, Information Return of U.S. Persons with Respect to a Foreign Corporation, is attached, or Schedule N (Form 1120), Foreign Operations of a U.S. Corporations, Line 4a (2019 and prior) is marked "Yes."

    10. Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business (Under Sections 6038A and 6038C of the Internal Revenue Code), is attached.

    11. Form 5713, International Boycott Report, is attached and both questions in 7(f) are answered "Yes."

    12. Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualifying Electing Fund, is attached and any line in Part V, Lines 15a though 16f* has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

    13. Form 8832, Entity Classification Election, is attached and either Box 6(d), (e), or (f) is checked.

    14. Form 8833, Treaty-Based Return Position Disclosure Under IRC 6114 or 7701(b), is attached.

    15. Form 8858, Information Return of U.S. Persons With Respect to Foreign Disregarded Entities (FDEs) and Foreign Branches (FBs), is attached or Schedule N (Form 1120), Foreign Operations of U.S. Corporations, Question 1a is marked "Yes."

    16. Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships, is attached.

    17. Form 8902, Alternative Tax on Qualifying Shipping Activities, is attached.

  5. Audit Code "3" - Non-Cash Charitable Contributions and Asset Transfers. Edit Audit Code "3" when any of the following conditions are present:

    1. Form 8883, Asset Allocation statement under section 338, is attached ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

    2. Form 8594, Asset Acquisition Statement, is attached ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

      Note:

      It is not necessary to compute the total if more than one Form 8594 is present. If any ONE of the Form 8594 has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, edit Audit Code "3."

  6. Audit Code "4" - Invalid S Election. Edit Audit Code "4" when a Form 1120-S without a valid election is reprocessed as Form 1120 and Form 13596, Reprocessing Returns, is attached.

    Caution:

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

  7. Audit Code"6" - Form 3115 (Form 1120 only). Edit Audit Code "6" when Form 3115, Application for Change in Accounting Method, is attached.

  8. Audit Code"7" - International (Form 1120 only). Edit Audit Code "7" when any of the following conditions are present:

    1. An entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Form 1120, Page 2, Schedule C for any of the following lines: 3, 6, 7, 8, 12, 13, 14, 15, 16a, 16b, 16c, 17, 18, and/or 19 (Lines 3, 6, 7, 8, 12, 13, 14, 15, or 16 for 2017 and prior).

    2. Form 1116, Foreign Tax Credit, (Individual, Fiduciary or Nonresident Alien Individual) is attached and reflects ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ foreign tax credit on Part IV, Line 33.

    3. Form 1118, Foreign Tax Credit - Corporations, is attached and reflects ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ foreign tax credit on Form 1120, Schedule J, Line 5a.

    4. Form 1120, Schedule M-3, Net Income (Loss) Reconciliation for Corporations with Total Assets of $10 Million or More, is attached and any of the following apply:
      - Any entry on Part II, Column (c), Lines 2 through 5 or Line 10 is a negative amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or
      - Any entry on Part III, Column (c), Lines 5 through 7 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or
      - The sum of Part III, Columns (b) plus (c) of any of Lines 9, 23, 24, or 25 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

    5. Form 5713, International Boycott Report, is attached and both questions in 7(f) are not answered "Yes."

    6. Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualifying Electing Fund, is attached and Part V, Lines 15a through 16f has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  9. Audit Code"8" - Schedule M-3 (Form 1120 only). Edit Audit Code "8" when Schedule M-3 is attached.

  10. Audit Code "C" - Edit Audit Code "C" when Form 8283 is attached and:

    1. Box 2b is checked, or

    2. Box 2b1 is checked, or

    3. Line 3, Column (h) has an entry.

  11. Audit Code "W" . - Edit Audit Code W if any of the following conditions are present:

    1. Form 3800, General Business Credit, Line 1p has an entry and Form 8908, Energy Efficient Home Credit, is not attached.

    2. Form 3800, General Business Credit, Line 1p has an entry and Form 8908 is attached but Part II is missing.

    3. Form 3800, General Business Credit, Line 1p has an entry and Form 8908 is attached but Part II, Column A, is incomplete or missing.

    Note:

    Audit Code "W" is valid for Form 1120, Form 1120-F, Form 1120-REIT, and Form 1120-RIC.

3.11.16.10.2 (02-29-2024)

Penalty and Interest Code

  1. Edit "4 - 1" in the left margin near Line 12 when precomputed delinquency penalty and/or interest is shown on a return with a received date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

    Exception:

    The editing location of the Penalty and Interest Code for Form 1120-F and Form 1120-FSC is in the left margin near Line 2. The editing location for Form 1120-ND is in the left margin near Line 5. For all other Form 1120 series returns, edit the Penalty and Interest Code in the left margin near Line 12, as stated in (1).

  2. This code is valid only within the unextended ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ some other situation, such as an estimated tax penalty, do not Code "4 - 1" and do not edit Condition Code "R."

    Note:

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

3.11.16.10.3 (08-10-2015)

Reserve Code

  1. The Reserve Code is "4."

  2. Edit "5 - 4" in the left margin near Line 12 if Form 2220 is attached and Part II, Box 8 is checked for Large Corporation.

3.11.16.10.4 (01-01-2025)

Installment Sale Indicator (Form 6252)

  1. Form 6252, Installment Sale Income, is used to report the sale of property on the installment method.

  2. Codes are based solely on taxpayer response to Form 6252, Question 3.

  3. Edit "6 -" followed by the right Installment Sale Indicator code in the left margin near Line 12 when Form 6252 is present (e.g., "6 - 1" ).

    • (Line 2 for Form 1120-F and Form 1120-FSC.)

  4. Valid Installment Sale Indicator codes are as follows:

    Code One Form 6252 More Than One Form 6252
    1 "Yes" response to Question 3 At least one form has a "Yes" response.
    2 "No" response to Question 3 All "No" responses, or a combination of "No" and/or blank responses.
    3 "Yes" and "No" are checked or Question 3 is blank Question 3 is blank on all forms.

    Note:

    See IRM 3.11.16.26, Form 6252 - Installment Sale Income (Form 1120 Only) for sequencing and transcription instructions.

3.11.16.10.5 (01-01-2012)

Form 1120-F Indicator

  1. Edit "7 - 1" in the left margin near Line 2 if Form 1120-F has both Non-Effectively (Section I) and Effectively (Section II) Connected Income.

  2. Check for proper blocking of returns and re-block as required, see IRM 3.11.16.34.14.6, Form 1120-F Indicator Code.

3.11.16.11 (01-14-2021)

Return Processing - Form 1120

  1. This subsection addresses the editing of specific areas on Form 1120.

  2. If a Form 5472 is attached to a blank (no tax data), Form 1120, do not process. Send the Form 1120 and Form 5472 to SOI at the following address:

    Internal Revenue Service
    1973 N Rulon White Blvd.
    PIN Unit, Stop 6112
    Ogden, UT 84201-0012

    Note:

    Consider a return blank if the only money amount is Box D, Total Assets.

    Note:

    Foreign-owned domestic disregarded entities are instructed to attach the Form 5472 to a pro forma Form 1120. These entities are not required to file a Form 1120 and the return must not be processed.

  3. A Form 1120 series with a notation such as "Pro Forma," "Pro Forma Form 1120," "Pro Forma Form 1120 for New York State," or similar statement, the "Pro Forma" return must not be processed.

    If Then
    A "Pro Forma" return is attached to a Form 1120 series, Do not detach. Move the "Pro Forma" return to the back of the document.
    A "Pro Forma" return is not attached to a Form 1120 series,

    1. DO NOT edit the return.

    2. Route to Correspondence to be returned to the taxpayer.

    3. Use Letter 3064C, IDRS Special Letter and include the following in the open paragraph:
      "The attached form appears to have been sent to us in error. Please keep it for your tax records."

  4. To convert prior year tax returns, see Exhibit 3.11.16-8, Form 1120 - Prior Year Conversion Chart.

3.11.16.11.1 (01-01-2025)

Sequence - Form 1120

  1. Document Perfection is responsible for arranging Form 1120 in the following order when transcription line entries are present:

    • Pages 1, 2, 3, 4, 5, 6

    • Schedule N (Form 1120)

    • Schedule D (Form 1120)

    • Form 4797

    • Form 8949

    • Form 8996

    • Schedule O (Form 1120) (Tax period 201811 and prior only)

    • Form 4626 (Tax period 201811 and prior only (Revision 2017))

    • Form 4626 (Tax period 2022 and later (2023 Revision and later)

    • Form 8050

    • Form 1125-A

    • Form 4136

    • Form 8978

    • Form 965-B

    • Form 8941

    • Form 3800

    • Form 8997

    • Form 6252

    • Form 8936 Schedule A(Tax period 2023 and later)

    • Form 4255 (Tax period 2024 and later)

  2. It is not necessary to sequence the forms or schedules listed above if there are no transcription line entries.

  3. It is not necessary to sequence an Amended return. See IRM 3.11.16.3.9, Amended Returns, for more information.”

3.11.16.11.2 (01-01-2019)

Negative Figures

  1. On Page 1 of the Form 1120:

    1. Do not bracket or "X" the amount on Line 1b if negative.

    2. If editing a negative entry on Lines 1b, 2, 9, 10, 11, 15, 26, and 27, bracket the negative amount.

  2. Line 8 will NEVER be bracketed. "X" any negative entry on Line 8, see IRM 3.11.16.11.4.7, Line 8 - Capital Gain.

  3. Do not bracket Lines 29a and 29b.

  4. "X" any negative transcription entries on Pages 2 and 3 of the Form 1120.

  5. Page 6 (Page 5 for 2017 and prior), "Schedule L, Balance Sheet," see IRM 3.11.16.11.46, Schedule L, Balance Sheet.

  6. Form 4626, Alternative Minimum Tax, (201811 and prior), see IRM 3.11.16.13, Form 4626 - Alternative Minimum Tax.

  7. Form 4136, Credit for Federal Tax Paid on Fuels - "X" any negative entries, see IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.

3.11.16.11.3 (01-11-2022)

Total Assets - Box D

  1. Total Assets is shown in Box D of Form 1120.

  2. If Total Assets, Box D is blank, check the Balance Sheet and edit Total Assets Ending from Schedule L, Line 15, Column (d) to Total Assets, Box D, Page 1. Bracket if negative, see Figure 3.11.16-14.

    Note:

    It is not necessary to edit a "1" in Box D even if it is edited on Schedule L, Line 15, Column (d). The "1" is needed on Schedule L, Line 15, Column (d) to prevent Error Code 150 from generating in ERS.

    Figure 3.11.16-14

    This is an Image: 33500170.gif

    Please click here for the text description of the image.

3.11.16.11.4 (01-01-2009)

Form 1120, Total Income - Lines 1 through 11

  1. The following subsection provides editing instructions for Form 1120, Lines 1 through 11. Edit Lines 1 through 11 in dollars only.

  2. If Line 11 is the only entry in the income section or the income section is blank and there is a sign the income items are included on an attachment (e.g., a notation such as "See attached," "See Schedule F," "Statement attached" ), examine the return for more detailed schedules.

    If And Then
    Additional income is found The income is not reflected elsewhere on the return,

    • Edit the income to the right transcription line(s).

    • For Schedule F transfer lines, see Exhibit 3.11.16-20, Schedule F - Transfer Lines.

3.11.16.11.4.1 (07-02-2015)
Line 1 - Gross Receipts or Sales

  1. Line 1a is Gross Receipts or Sales, and Line 1b is Returns and allowances (Do not bracket or "X" amount on Line 1b if negative).

  2. If Lines 1a, 1b and 1c are all blank but the taxpayer indicates Gross Profit on Line 3, add Line 2 and Line 3 and enter on Line 1a. Bracket if negative.

    Exception:

    If Line 2 is blank, see IRM 3.11.16.11.4.2, Line 2 - Cost of Goods Sold, before computing Line 1a.

  3. If Line 1a is blank and an amount is present on Lines 1b and 1c, add Line 1b and Line 1c and enter the total amount on Line 1a. Bracket if negative.

  4. If Line 1b is blank, check attachments.

    1. If found, enter the amount to Line 1b.

    2. If not found and Line 1a is greater than Line 1c, compute and enter Line 1b (Line 1a minus 1c).

3.11.16.11.4.2 (01-01-2012)
Line 2 - Cost of Goods Sold

  1. If Line 2 is blank, edit from Form 1125-A, Line 8. Bracket if negative.

    If Then
    Form 1125-A, Line 8 is blank and Line 6 has an entry, Edit the amount from Line 6, minus any amount on Line 7.
    Form 1125-A, Line 6 is blank and there are entries on Lines 1 through 5, Edit the total of Lines 1 through 5 minus any amount on Line 7.

3.11.16.11.4.3 (01-01-2019)
Line 4 - Dividends and Inclusions

  1. Accept taxpayer's entry.

3.11.16.11.4.4 (01-01-2009)
Line 5 - Interest

  1. Accept taxpayer's entry.

3.11.16.11.4.5 (01-01-2009)
Line 6 - Gross Rents

  1. Accept taxpayer's entry.

3.11.16.11.4.6 (01-01-2009)
Line 7 - Gross Royalties

  1. Accept taxpayer's entry.

3.11.16.11.4.7 (01-01-2025)
Line 8 - Capital Gain

  1. If there is a significant entry on Line 8, and Schedule D (Form 1120) is not attached, correspond. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

  2. When Schedule D is attached, compare Form 1120, Line 8 to Schedule D, Line 18:

    If And Then
    The comparison shows the entries are the same, Both entries are positive, Continue processing.
    The comparison shows the entries are different, Both entries are positive, Edit the Schedule D, Line 18 amount to Form 1120, Page 1, Line 8.
    Form 1120, Line 8 is blank, zero or illegible, Schedule D, Line 18 is positive, Edit the Schedule D, Line 18 amount to Form 1120, Page 1, Line 8.

  3. If the comparison shows a negative entry:

    1. "X" the Line 8 amount.

    2. Math verify and perfect Schedule D to ensure the negative figure is correct and intended.

    3. If the negative amount is due to a loss under IRC 582 for worthlessness of bonds, move the amount to Bad Debts (Form 1120, Page 1, Line 15) as a positive figure. Adjust Total Income and Total Deductions as required.

    4. If the negative amount is due to a loss under IRC 582 for the sale or exchange of securities by a bank, etc., move the amount to Other Deductions (Form 1120, Page 1, Line 26) as a positive figure. Adjust Total Income and Total Deductions as required.

      Note:

      All other losses on Schedule D will not be allowed.

3.11.16.11.4.8 (01-01-2025)
Line 9 - Net Gain or Loss from Form 4797

  1. Edit Line 9 as follows:

    Reminder:

    Form 4797 is a transcribed form. Place in sequence order if attached to a Form 1120 and Line 1b and/or 1c is present. See IRM 3.11.16.15, Form 4797 - Sales of Business Property (Form 1120 Only).

    If Then
    Form 1120, Page 1, Line 9, has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 4797 is not attached and the taxpayer has not attached Form 4684, Correspond.
    Form 4797 is attached, compare Form 1120, Page 1, Line 9 with Form 4797, Line 17, If different, edit Form 4797 amount to Form 1120, Page 1, Line 9. Bracket if negative.
    Form 4797, Line 17 is blank (has not been computed by the taxpayer) and there are entries in Parts II or III of Form 4797, Correspond for completed Form 4797.

  2. Check for taxpayer errors in the transfer of entries from Form 4797 to Page 1, Form 1120. Also check the transfer of data from Line 9, Form 4797 to Line 11, Schedule D.

    If And Then
    Form 1120, Page 1, Line 8 is blank, There is a positive entry on Form 1120, Page 1, Line 9 and Form 4797, Line 9 has a significant positive entry, Arrow Form 1120, Line 9 entry to Line 8 and correspond for Schedule D. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.
    See Figure 3.11.16-15.
    There is a notation on Form 1120, Page 1, Line 9 that Form 4684 is attached,   Do not correspond. Compare Form 1120, Page 1, Line 9 with Form 4684, Line 31 plus 38a. If different, edit Form 4684 amount to Line 9, Form 1120.

    Figure 3.11.16-15

    This is an Image: 33500175.gif

    Please click here for the text description of the image.

3.11.16.11.4.9 (01-01-2009)
Line 10 - Other Income

  1. Other income or loss not shown on Lines 1a through 9 is reported on Line 10 of Form 1120.

  2. Edit Line 10 as follows:

    If Then
    "Other Income" items are included on Lines 1 through 9,

    • Add all the "Other Income" items and include in Line 10.

    • Bracket if negative.

3.11.16.11.4.10 (01-01-2013)
Line 11 - Total Income

  1. The total income or loss (sum of Lines 3 through 10) is reported on Line 11 of Form 1120.

  2. Edit Line 11 as follows:

    If Then
    Line 11 is blank or illegible, but there are entries on Lines 1a through 10,

    • Compute and edit Line 11.

    • Bracket if negative.
    Line 11 is the only entry in the income section,

    • Examine attachments and edit the information to the right transcription lines.

    • Bracket if negative.

    • See Exhibit 3.11.16-20, Schedule F - Transfer Lines.
    The income section is blank and there is a sign the income items are included on an attachment (e.g., "See attached," "See Schedule F," "Statement attached" ),

    • Examine attachments and edit the information to the right transcription lines.

    • Bracket if negative.

    • See Exhibit 3.11.16-20, Schedule F - Transfer Lines.
    There is an amount present for "Total Income" on Line 11, but the amount is not identified on Lines 1a through 10 or from attachments,

    • Edit the Line 11 amount to Line 10.

    • Bracket if negative.

3.11.16.11.5 (01-01-2015)

Form 1120, Deduction Items - Lines 12 through 29

  1. Edit Lines 12 through 29 in dollars only.

  2. If Line 27 is the only entry in the deduction section or the deduction section is blank and there is a sign the deduction items are included on an attachment (e.g., "See attached," "See Schedule F," "Statement attached" ), examine the return for more detailed schedules.

    If And Then
    Additional deductions are found The deductions are not reflected elsewhere on the return,

    • Edit the deductions to the right transcription lines (Lines 12 through 26).

    • See Schedule F - Transfer Lines, Figure 3.11.16-16.

    Figure 3.11.16-16

    This is an Image: 33500180.gif

    Please click here for the text description of the image.

3.11.16.11.5.1 (01-01-2009)
Line 12 - Compensation of Officers

  1. Accept taxpayer's entry.

3.11.16.11.5.2 (01-01-2009)
Line 13 - Salaries and Wages (less employment credits)

  1. Accept taxpayer's entry.

3.11.16.11.5.3 (01-01-2009)
Line 14 - Repairs and Maintenance

  1. Accept taxpayer's entry.

3.11.16.11.5.4 (01-01-2009)
Line 15 - Bad Debts

  1. Accept taxpayer's entry.

3.11.16.11.5.5 (01-01-2009)
Line 16 - Rents

  1. Accept taxpayer's entry.

3.11.16.11.5.6 (01-01-2009)
Line 17 - Taxes and Licenses

  1. Accept taxpayer's entry.

3.11.16.11.5.7 (01-01-2009)
Line 18 - Interest

  1. Accept taxpayer's entry.

3.11.16.11.5.8 (01-01-2009)
Line 19 - Charitable Contributions

  1. Accept taxpayer's entry.

3.11.16.11.5.9 (01-01-2020)
Line 20 - Depreciation

  1. Accept taxpayer's entry.

3.11.16.11.5.10 (01-01-2009)
Line 21 - Depletion

  1. Accept taxpayer's entry.

3.11.16.11.5.11 (01-01-2009)
Line 22 - Advertising

  1. Accept taxpayer's entry.

3.11.16.11.5.12 (01-01-2009)
Line 23 - Pension, Profit-sharing, etc. Plans

  1. Accept taxpayer's entry.

3.11.16.11.5.13 (01-01-2009)
Line 24 - Employee Benefit Programs

  1. Accept taxpayer's entry.

3.11.16.11.5.14 (01-01-2024)
Line 25 - Energy Efficient Commercial Buildings Deduction (Form 7205) (202301 and later)

  1. Accept taxpayer entry.

  2. Edit RPC "M" if Form 7205 is attached.

  3. For prior years, Line 25 was used for the domestic production activities deduction. The deduction has been repealed under IRC 199.

  4. The Domestic Production Activities Deduction is valid for Tax Period beginning 01/01/2005 through 01/01/2018. The Energy Efficiency Commercial Buildings Deduction is valid for Tax Period beginning after 01/01/2023. If the Tax Period beginning date is not between 01/01/2005 and 01/01/2018 nor after 01/01/2023, or 202301 and later (Energy Efficient Commercial Building Deduction), delete Line 25 if a significant entry is present.

3.11.16.11.5.15 (01-01-2009)
Line 26 - Other Deductions

  1. Other deductions not shown on Lines 12 through 25 are reported on Line 26 of Form 1120.

  2. Edit Line 26 as follows:

    If Then
    "Other Deductions" items are included on Lines 12 through 25,

    1. Add the "Other Deductions" entries and edit the total to Line 26. Bracket if negative.

    2. "X" the "Other Deductions" items from Lines 12 through 25.

3.11.16.11.5.16 (01-01-2009)
Line 27 - Total Deductions

  1. The total deductions (sum of Lines 12 through 26) is reported on Line 27 of Form 1120.

  2. Edit Line 27 as follows:

    If Then
    Line 27 is blank or illegible but there are entries on Lines 12 through 26, Add Lines 12 through 26 and enter the total on Line 27 of Form 1120. Bracket if negative.
    Line 27 is the only entry in the deduction section,

    • Examine attachments and edit the information to the right transcription lines.

    • Bracket if negative.

    • See Exhibit 3.11.16-20, Schedule F - Transfer Lines.
    The deduction section is blank and there is a sign the deduction items are included on an attachment (e.g., "See attached," "See Schedule F," "Statement attached" ),

    • Examine attachments and edit the information to the right transcription lines.

    • Bracket if negative.

    • See Exhibit 3.11.16-20, Schedule F - Transfer Lines.
    There is an amount present for "Total Deductions" on Line 27, but the amount is not identified on Lines 12 through 26 or from attachments,

    • Edit the Line 27 amount to Line 26 of Form 1120.

    • Bracket if negative.

3.11.16.11.5.17 (01-01-2019)
Lines 29a and 29b - Net Operating Loss and Special Deductions

  1. Never bracket Line 29a or 29b amounts as they are negative fields. Do not "X" these lines if they are bracketed by taxpayer.

  2. If it is obvious from a notation on Line 29b that it includes patronage dividends, edit patronage dividends from Line 29b to Line 26, "Other Deductions," and adjust Line 27, "Total Deductions," see Figure 3.11.16-17.

  3. If Line 29c has an entry and Lines 29a and 29b are blank, look for an entry on Schedule C, Line 24, Column (c) (Schedule C, Line 20 for 2017 and prior). If present, enter the amount on Line 29b and edit any difference to Line 29a. If blank or zero, edit the entire Line 29c amount to Line 29a.

    Figure 3.11.16-17

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    Please click here for the text description of the image.

3.11.16.11.6 (01-01-2009)

Tax Computation and Settlement - Lines 31 through 37

  1. Following are instructions for Lines 31 through 37. Edit in dollars only.

3.11.16.11.6.1 (04-11-2018)
Line 31 - Total Tax

  1. If blank, enter amount from Page 3, Schedule J, Line 11 if present.

  2. If pre-computed interest or delinquency penalty or an additional charge is evident, ensure that it has not been included in Line 31.

    If Then
    The amount on Line 31 has pre-computed interest or penalty or additional charge,

    1. "X" the Line 31 amount.

    2. Delete the interest, penalty or additional charge from the total.

    3. Edit the correct total tax to the left of the original entry.

3.11.16.11.6.2 (01-01-2022)
Line 32 - Reserved

  1. Line 32 - Net Tax Liability for the Reporting Year (revisions 2018 through 2020),

  2. The instructions in this subsection only apply to Tax Period 201712 through 202012.

  3. If blank, enter amount from Schedule J, Part II, Line 12 or from the following lines from Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts:

    Reporting Tax Year Form 965-B
    2017 Part II, Column (k), Line 1
    2018 Part II, Column (k), Line 2
    2019 Part II, Column (k), Line 3
    2020 Part II, Column (k), Line 4

  4. Edit CCC "J" and Action Code "460."

3.11.16.11.6.3 (01-11-2022)
Line 33 - Total Payments and Credits (Schedule J, Part III, Line 23)

  1. If blank, enter amount from Page 3, Schedule J, Line 23 (Line 21 for 2017-2011) if present.

3.11.16.11.6.4 (01-01-2025)
Backup Withholding

  1. "X" any entry identified by the taxpayer as "Backup Withholding" and edit it to Part III, Schedule J, Line 18 (Part II, Line 17 for 2017-2011).

  2. If the taxpayer has claimed backup withholding ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 1099 is not attached, correspond using Letter 118C, Corporate Return Incomplete for Processing: Form 1120, Form 1120 Series, Form 1120-S. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

3.11.16.11.6.5 (01-01-2025)
FIRPTA, Form 1042-S, Form 8805 and Form 8288-A Credits

  1. If Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, Form 8805, Foreign Partners Information Statement of IRC 1446 Withholding Tax, or Form 8288-A, Statement of Withholding on Certain Dispositions by Foreign Persons, credit is claimed, route to OSPC.

  2. If Form 8288-A withholding is claimed, OSPC will:

    If Then
    Form 8288-A or substantial evidence is attached,

    Example:

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

    1. Use Form 13698, International Credit(s) Verification Slip, to request verification of credit from the Foreign Team.

    2. If the credits are verified from the FIRPTA database by the Foreign Team, "X" the amount entered by the taxpayer and edit the verified FIRPTA/8288-A credit from Form 13698 to the bottom center of Form 1120, Page 1. See Figure 3.11.16-18, FIRPTA and Form 1042-S Credit.

    3. If FIRPTA/8288-A credits are not verified, disallow.

      Note:

      See 1.1445-1(f)(3)(i). The transferor may establish amount of tax withheld by attaching to its return substantial evidence of such amount. See also CCA 201028040, when the buyer failed to remit the withheld funds to the IRS.

    4. If another credit is claimed on the same line with the Form 8288-A credit, adjust the line total to only reflect the other credit.
    Form 8288-A or substantial evidence is not attached,

    Example:

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

    		 Correspond.

  3. If Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, withholding is claimed, OSPC will:

    If Then
    The Form 1042-S credit is claimed on any other credit line, "X" the credit and add to Schedule J, Line 20a (Line 19a for 2017-2011).
    See Figure 3.11.16-19.
    The taxpayer's name is not listed as the recipient in Box 13a of the Form 1042-S,

    Note:

    Box 13a cannot be a withholding rate pool,

    		 "X" the amount.
    The withholding amounts on Form 1042-S do not equal the amount of the credit, "X" the amount.
    Form 1042-S is not attached, Correspond.

    Exception:

    If a letter is attached, signed by the Competent Authority, accept the letter as proof of Form 1042-S withholding and do not correspond for the missing Form 1042-S.

  4. If Form 8805 withholding is claimed, OSPC will:

    If Then
    The Form 8805 credit is claimed on any other credit line, Edit the credit to Schedule J, Line 20a (Line 19a for 2017-2011).
    Form 8805 is not attached, Correspond.

    Figure 3.11.16-18

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    Please click here for the text description of the image.

    Figure 3.11.16-19

    This is an Image: 33500195.gif

    Please click here for the text description of the image.

3.11.16.11.6.6 (01-01-2025)
Line 34 - Estimated Tax Penalty

  1. Estimated tax penalty must be edited when either:

    1. An additional penalty is precomputed on the return, or

    2. Form 2220, Underpayment of Estimated Income Tax by Corporations, is attached to the return, and shows liability for estimated tax penalty.

  2. To edit Line 34 (Line 33 for 2017 and prior), do the following:

    1. If the taxpayer follows the instructions on Form 2220, the applicable amount must be shown on Form 2220, Page 2, Line 38, and on Form 1120, Line 34 (Line 33 for 2017 and prior) or equivalent lines on other forms. The taxpayer may also have increased Form 1120, Line 35 (Line 34 for 2017 and prior) or decreased Line 36 (Line 35 for 2017 and prior). Do not adjust this amount.

    2. If Form 1120, Line 34 (Line 33 for 2017 and prior) is blank, and Form 2220 is attached with a significant entry on Page 2, Line 38, then edit the amount from Form 2220, Page 2, Line 38 to Form 1120, Line 34 (Line 33 for 2017 and prior).

    3. If Form 2220, Page 2, Line 38 is blank and Form 1120, Line 34 (Line 33 for 2017 and prior) is also blank, review the Form 2220 to determine the taxpayer's method of computation. If there are entries on Form 2220, Line 37, Columns (a) through (d), compute the total amount and enter on Form 1120, Line 34 (Line 33 for 2017 and prior), see Figure 3.11.16-20.

      Note:

      If Form 2220 is attached some conditions may require CCC "8" and/or Reserve Code "4."

    Figure 3.11.16-20

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    Please click here for the text description of the image.

3.11.16.11.6.7 (01-01-2019)
Lines 35 and 36 - Amount Owed/Overpayment

  1. Lines 35 and 36 (Lines 34 and 35, for 2017 and prior) are edited as positive only. If the taxpayer enters a negative amount, do not bracket.

  2. If both lines 35 or 36 (Lines 34 and 35 for 2017 and prior) are blank, edit as follows:

    Form 1120 Revision Action
    2021 and later

    1. Add Lines 31 and 34.

    2. Subtract Line 33.

    3. Edit the positive result on Line 35 or the negative result (do not bracket) on Line 36.
    2020 through 2018

    1. Add Lines 31, 32 and 34.

    2. Subtract Line 33.

    3. Edit the positive result on Line 35 or the negative result (do not bracket) on Line 36.
    2017 and prior

    1. Add Lines 31 and 32.

    2. Subtract Line 33.

    3. Edit the positive result on Line 34 or the negative result (do not bracket) on Line 35.

  3. If pre-computed interest or delinquency penalty or an additional charge is evident, ensure that it has not been included in Line 35 or reduced Line 36 (Lines 34 and 35 for 2017 and prior).

    If Then
    The amount on Line 35 (Line 34 for 2017 and prior) has pre-computed interest or penalty or additional charge,

    1. "X" Line 35 amount.

    2. Delete the interest, penalty or additional charge from the amount owed.

    3. Edit the correct amount owed to the left of the original entry.
    The amount on Line 36 (Line 35 for 2017 and prior) is reduced by pre-computed interest or penalty or additional charge,

    1. "X" Line 36 (Line 35 for 2017 and prior) amount.

    2. Compute the Overpayment amount without the interest, penalty or additional charge.

    3. Edit the correct Overpayment to the left of the original entry.

3.11.16.11.6.8 (01-01-2019)
Line 37 - Credit to Estimated Tax

  1. Line 37 (Line 36 for 2017 and prior) - (Center) Overpayment Credit to Estimated Tax.

3.11.16.11.7 (01-01-2025)

♦Signature♦

  1. A signature and jurat are required on all returns except the following:

    • Returns prepared under IRC 6020(b). These returns must be signed by a Compliance Function representative, see IRM 3.11.16.3.6.1, IRC 6020(b) Prepared by Collections.

      Note:

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

    • Returns prepared by Examination, for example Substitute for Return.(SFR) or "SUBSTITUTE RETURN," see IRM 3.11.16.3.6.3, Examination Prepared Returns - SFR or Substitute for Return.

    • Dummy returns prepared by the IRS.

    • Returns filed under IRC 501(d) (Religious or Apostolic Organization).

    • Returns attached to taxpayer response to IRS correspondence containing a jurat and the taxpayer’s signature. (See paragraph (5) below.)

    • Re-entry returns originally filed electronically ("E-File" ). These returns may be identified by the presence of Mod E-file printouts or efile GRAPHIC print - Do Not Process or Tax Return Print (TRPRT) Do Not Process in lieu of an actual return.

      Note:

      If the efile GRAPHIC print states "efile GRAPHIC print - Do Not Process" or the TRPRT print states TRPRT Print Do Not Process in the top margin, circle the words "Do Not Process."

    • Form 1120-X, with a signature on the line designated for the taxpayer's signature is attached to Form 1120. Form 1120-X must be for the same Tax Period as Form 1120.

  2. Do not correspond for a signature on "CII" tax returns with a Form 13596, Reprocessing Returns, attached. For processing instructions, see IRM 3.11.16.3.4.3, Correspondence Imaging Inventory (CII) Returns.

  3. If a signature is missing, correspond:

    Note:

    See IRM 3.11.16.3.4.2, Issuing Correspondence, for returns that are incomplete and appear to be duplicate filings.

    If Then

    • The return is not signed on the line designated for the taxpayer's signature,

    or

    • The jurat is not present on the line designated for the taxpayer's signature (a non-standard tax return),

    or

    • Only the Entity information is present and there are no attachments having tax data,

    1. Edit:

      • Action Code "225" (Correspondence for Signature only) or "226" (International Correspondence for Signature only) for Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT and Form 1120-RIC.

      • CCC "U" for all other 1120 series. Attach Form 4227, Intra-SC Reject or Routing Slip, notating "Signature missing."

    2. Leave in batch and continue editing.

    Note:

    Paper returns stating the return was rejected through the E-file system require a signature. Form 8879-CORP, E-file Authorization for Corporations, is not an acceptable signature substitute for a paper return (Form 8879-C/ Form 8879-I for 2021 and prior).

  4. If the jurat is altered or stricken (crossed out), see IRM 3.11.16.2.6, Frivolous Arguments.

  5. Accept a "signature declaration" (a signature with jurat obtained through IRS correspondence) if attached to the tax return.

    1. If the "signature declaration" is altered or stricken (crossed out), see IRM 3.11.16.2.6, Frivolous Arguments.

    2. If the taxpayer responds with a self-prepared "signature declaration," it must have the same language as the jurat on the tax return: e.g., "UNDER PENALTIES OF PERJURY, I DECLARE THAT I HAVE EXAMINED THIS RETURN INCLUDING ACCOMPANYING SCHEDULES AND STATEMENTS, AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, IT IS TRUE, CORRECT, AND COMPLETE."

    3. Form 8879-CORP, E-file Authorization for Corporations, is not an acceptable signature substitute for a paper return ( Form 8879-C/Form 8879-I for 2021 and prior).

  6. Tax examiners are not handwriting experts. 26 CFR 301.6064-1 allows the Service to presume that the signature on the tax return, statement or other document is the true signature of the person who actually signed the document.

    Note:

    Do not accept a “✓” or “X” on the signature line as a valid taxpayer signature.

  7. The following types of signatures are not valid for corporate returns:

    • Faxed signatures

      Exception:

      Tax return information can be received via fax as part of return perfection even if a taxpayer signature is required. In circumstances where contact with the taxpayer has been made and documented, faxed signatures are acceptable.

    • Electronic signatures

    • Docusign digital signatures

    • Typed font Signature

    Exception:

    If one of the following returns are mailed between August 28, 2020 through October 31, 2025, accept a digital signature.

    • Form 1120-C

    • Form 1120-H

    • Form 1120-IC-DISC

    • Form 1120-FSC

    • Form 1120-L

    • Form 1120-ND

    • Form 1120-PC

    • Form 1120-RIC

    • Form 1120-REIT

    • Form 1120-SF

  8. Correspond one time for the signature.

3.11.16.11.8 (01-01-2011)

♦Paid Preparer Checkbox Indicator♦

  1. The Paid Preparer Checkbox is located next to the taxpayer signature area. It indicates whether the taxpayer has elected to allow the Paid Preparer to answer questions about the return as it is processed.

  2. No action is required on amended returns.

  3. Take the following actions when an entry is present in the Paid Preparer Checkbox:

    If Then
    Only the "Yes" box is checked, Take no action.

    • The "No" box is checked,

    • Neither box is checked; or

    • Both boxes are checked,

    		 Circle the Paid Preparer's Phone Number if present.

3.11.16.11.9 (01-01-2009)

♦Paid Preparer Section♦

  1. The Paid Preparer section is located below the Signature area at the bottom of Form 1120.

3.11.16.11.9.1 (01-01-2018)
♦Paid Preparer Tax Identification Number (PTIN)♦

  1. The Paid Preparer's Social Security Number (SSN) or Preparer's Tax Identification Number (PTIN) is located to the right of the Preparer's Signature in the PTIN box at the bottom-right corner of Form 1120.

  2. No action is required on amended returns.

  3. A valid PTIN begins with a "P," followed by an eight digit number (e.g., PXXXXXXXX). Circle the SSN/PTIN if it is invalid, all zeros or all nines.

3.11.16.11.9.2 (01-01-2011)
♦Paid Preparer EIN♦

  1. The Preparer's EIN is located below the PTIN box at the bottom-right corner of Form 1120.

  2. No action is required on amended returns.

  3. The Preparer's EIN is a nine digit number. Circle the EIN if all zeros or all nines.

3.11.16.11.9.3 (01-01-2011)
♦Paid Preparer Phone Number♦

  1. The Paid Preparer's Phone Number is located below the Paid Preparer's EIN at the bottom right hand corner of Form 1120.

  2. If the return is amended, no action is required.

  3. If the Preparer's Phone Number is more than 10 digits, no action is required.

  4. If the Preparer's Phone Number is illegible or less than 10 digits, circle the Phone Number.

3.11.16.11.10 (01-01-2019)

Schedule C, Page 2 - Dividends, Inclusions and Special Deductions

  1. If an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present on any of Lines 3, 6, 7, 8, 12, 13, 14, 15, 16a, 16b, 16c, 17, 18, and/or 19, edit Audit Code "2."

    Note:

    For 2017 and prior, Schedule C, Lines 3, 6, 7, 8, 12, 13, 14, 15, and/or 16.

  2. If an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present on any of Lines 3, 6, 7, 8, 12, 13, 14,15, 16a, 16b, 16c, 17, 18, and/or 19, edit Audit Code "7."

    Note:

    For 2017 and prior, Schedule C, Lines 3, 6, 7, 8, 12, 13,14, 15, and/or 16.

3.11.16.11.11 (01-01-2022)

Schedule J, Page 3 - Controlled Group Code / Personal Service Corporation Code / Tax Computation (201811 and prior)

  1. The instructions in this subsection only apply to Tax Period 201811 and prior.

  2. Edit Personal Service Corporation Code "2" above the checkbox on Line 1, Page 3, Schedule J if the Qualified Personal Service Corporation box located on Page 3, Schedule J, Line 2 is checked.

    Note:

    If the box on Schedule J, Line 2 is checked, edit ABLM Code "400" on Form 1120, Page 1, see IRM 3.11.16.9.3, ABLM Code and Schedule M-3 Checkbox.

  3. Personal Service Corporation Code "2" takes priority over Controlled Group Codes "4" and "1" (described below).

  4. If both the Schedule J, Line 2 box and the Schedule J, Line 1 box are checked, edit Personal Service Corporation Code "2" and delete Schedule O (Form 1120) if significant entries are present.

  5. Edit Controlled Group Code "4" above the checkbox on Line 1, Page 3, Schedule J when ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ at least one of the following is present:

    1. The box on Page 3, Schedule J, Line 1 is checked.

    2. There is a sign that the taxpayer is a member of a controlled group as defined in IRC 1561 or IRC 1563.

    3. Schedule O (Form 1120), Box 3a, 3b, 3d, or 5b is checked.

    4. An allocation/apportionment schedule is attached. Some examples of the title of these schedules may be "apportionment plan," "apportionment consent plan," "consent to apportionment," "controlled group tax apportionment plan," "surtax apportionment plan," or "allocation schedule." Any attachment labeled as "controlled group tax calculation statement" is not an apportionment plan and not used to edit tax bracket amounts on Schedule O.

      Note:

      If there is any doubt whether an attachment is a "Surtax Apportionment Plan," refer the document to the lead tax examiner.

  6. Edit Controlled Group Code "1" above the checkbox on Line 1, Page 3, Schedule J when ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ any of Code "4" conditions in paragraph (5)a through (5)d are present.

  7. If Controlled Group Code "4" or "1" is edited, process Schedule O (Form 1120), see IRM 3.11.16.11.48, Schedule O (Form 1120) - Consent Plan and Apportionment Schedule for a Controlled Group.

  8. If neither Controlled Group Code "4" or "1" is edited, delete Schedule O (Form 1120) if significant entries are present.

3.11.16.11.12 (01-01-2025)

Schedule J, Line 1b - Tax from Form 1120-L (2024 revision)

  1. No editing required.

3.11.16.11.13 (01-01-2025)

Schedule J, Line 1c - Section 1291 Tax from Form 8621 (2024 revision)

  1. No editing required.

3.11.16.11.14 (01-01-2025)

Schedule J, Line 1d - Tax Adjustment from Form 8978 (2024 revision)

  1. No editing required.

3.11.16.11.15 (01-01-2025)

Schedule J, Line 1e - Additional Tax Under Section 197(f) (2024 revision)

  1. No editing required.

3.11.16.11.16 (01-01-2025)

Schedule J, Line 1f - Base Erosion Minimum Tax from Form 8991

  1. Follow the instructions below for Schedule J, Line 1f (Line 2 for 2023 and Line 3 for 2022 and prior):

    If And Then
    Tax period is 201811 and prior, Schedule J, Line 3 is blank and Form 4626 (revision 2017 and prior) is attached with an amount on Line 14, Edit the amount from Line 14, Form 4626 to Schedule J, Line 2 (Line 3 for 2022 and prior).
    Tax period is 201811 and prior, Schedule J, Line 3 has a significant entry and Form 4626 (revision 2017 and prior) is not attached, Correspond.
    Tax period is 201812 and later, Schedule J, Line 1f (Line 2 for 2023 and Line 3 for 2022 and prior) is blank and Form 8991, Tax on Base Erosion Payments of Taxpayers with Substantial Gross Receipts, is attached, Do the following:

    1. Edit RPC "1"

    2. Edit the amount from Form 8991, Line 5e to Schedule J, Line 1f (Line 2 for 2023 and Line 3 for 2022 and prior).
    Tax period is 201812 and later, Schedule J, Line 1f (Line 2 for 2023 and Line 3 for 2022 and prior) has a significant entry and Form 8991 is not attached, Correspond.
3.11.16.11.17 (01-01-2025)

Schedule J, Line 1g - Amount from Form 4255, Part I, Line 3, Column (q) (2024 revision)

  1. Follow the instructions below for Schedule J, Line 1g, Amount from Form 4255 Part I, Line 3, Column (q):

    If And Then
    Tax period is 202401 and later, Schedule J, Line 1g has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, and Form 4255 is not attached, Correspond.
    Tax period is 202401 and later, Schedule J, Line 1g has a significant line entry and Form 4255 is attached, Accept taxpayers entry.

3.11.16.11.18 (01-01-2025)

Schedule J, Line 1z - Other Chapter 1 Tax (2024 revision)

  1. Follow the instructions below for Schedule J, Line 1z, Other Chapter 1 Tax:

    If And Then
    Tax period is 202401 and later, Schedule J, Line 1z has a significant line entry, Accept taxpayers entry.

3.11.16.11.19 (01-01-2024)

Schedule J, Line 3 - Corporate Alternative Minimum Tax (CAMT) (Tax Period 202301 and later)

  1. Edit RPC "N " if there is a significant amount on Schedule J, Line 3 or Form 4626 (revision 2023 and later) is attached.

  2. Correspond If a significant amount is present on Schedule J, Line 3, and Form 4626 (revision 2023 and later) is not attached.

3.11.16.11.20 (01-01-2025)

Schedule J, Lines 5a and 5b - Credits

  1. The following general instructions apply to Schedule J, Lines 5a and 5b only:

    1. If supporting documentation is missing for one or more credits ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, correspond. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

3.11.16.11.20.1 (01-01-2019)
Schedule J, Line 5a - Form 1118, Foreign Tax Credit

  1. If Schedule J, Line 5a, Foreign Tax Credit has an entry, check for Form 1118 or similar statement:

    If Then
    The entry on Line 5a is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 1118 is missing, Correspond.
    The entry on Line 5a is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Edit CCC "P."
    There is an entry on Line 5a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Edit Audit Code "2."
    There is an entry on Line 5a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Edit Audit Code "7."

3.11.16.11.20.2 (01-01-2021)
Schedule J, Line 5b - Form 8834 Credit and Form 5735

  1. Schedule J, Line 5b, includes credits from Form 8834, Qualified Electric Vehicle Credit, and/or a write-in credit from Form 5735, American Samoa Economic Development Credit. If the Line 5b entry or the write-in entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present, take the following action:

    If And Then
    The entry is for Form 8834
    (Form 5735 is not shown)    		 Form 8834 is missing, Correspond.
    The entry is for Form 5735
    (Form 5735 is shown)    		 Form 5735 is missing, Correspond.

3.11.16.11.21 (01-01-2025)

Schedule J, Line 5c - General Business Credit (202301 and later)

  1. Per the Inflation Reduction Act of 2022 and the CHIPS and Science Act of 2022, the Form 3800 has changed significantly.

  2. For prior year returns, transcription of some credits is no longer needed. If a prior year return has significant amounts on Lines 1d, 1g, 1o, 1q, 1u, 1v, 1z, 1aa, 1bb or 1gg, no editing is required. See Exhibit 3.11.16-19 for complete conversion instructions.

  3. Question A - Corporate Alternative Minimum Tax (CAMT) and Base Erosion Anti-Abuse Tax (Beat) - No editing required, Data will enter:

    • "0" if no box is checked.

    • "1" if "Yes" box checked.

    • "2" if "No" box checked.

    • "3" if "Both" boxes checked.

  4. The following lines are transcribed from Parts I and II. No editing is required.

    • Part I, Checkbox LIne A

    • Part I, Line 1

    • Part I, Line 2

    • Part I, Line 3

    • Part I, Line 4

    • Part I, Line 5

    • Part II, Line 10b

    • Part II, Line 22

    • Part II, Line 24

    • Part II, Line 28

    • Part II, Line 30

    • Part II, Line 31

    • Part II, Line 32

    • Part II, Line 33

    • Part II, Line 34

    • Part II, Line 35

  5. Certain credits require additional transcription from Form 3800, Part III, Columns b, f, g, h, j.
    (For 2023 Columns b, g, h, i and j were transcribed).

    Form 3800, Part III, Line Credit Form Form Title Form 3800 (2024 revision) Column(s) transcribed
    1a Form 3468, Part II Investment Credit g
    1b Form 7207 Advanced Manufacturing Production Credit b, f, g, h, j
    1c Form 6765 Credit for Increasing Research Activities g
    1d Form 3468, Part III Investment Credit b, f, g, h, j
    1e Form 8826 Disabled Access Credit g
    1f Form 8835, Part II Renewable Electricity Production Credit b, f, g
    1g Form 7210 Clean Hydrogen Production Credit b, f, g, h, j
    1h Form 8820 Orphan Drug Credit g
    1i Form 8874 New Markets Credit g
    1j Form 8881. Part I Credit for Small Employer Pension Plan Startup Costs g
    1k Form 8882 Credit for Employer-Provided Childcare Facilities and Services g
    1l Form 8864 (diesel) Biodiesel and Renewable Diesel Fuels Credit g
    1m Form 8896, Low Sulfur Diesel Fuel Production Credit g
    1n Form 8906 Distilled Spirits Credit g
    1o Form 3468, Part IV Investment Credit b, g, h, j
    1p Form 8908 Energy Efficient Home Credit g
    1q Form 7218
    (Valid for Tax Period 202501 and later)    		 Clean Fuel Production Credit b, f, g, h, j
    1r Reserved Previously used for Form 8910 Alternative Motor Vehicle Credit

    Note:

    This credit expired in 202411.

    		 g
    1s Form 8911, Part II Alternative Fuel Vehicle Refueling Property Credit b, f, g, h, j
    1t Form 8830 Enhanced Oil Recovery Credit g
    1u Form 7213, Part II Nuclear Power Production Credit b, f, g, h, j
    1v Form 3468, Part V
    (Valid for Tax Period 202401 and later)    		 Investment Credit b, f, g, h, j
    1w Form 8932 Credit for Employer Differential Wage Payments g
    1x Form 8933 Carbon Oxide Sequestration Credit b, f, g, h, j
    1y Form 8936, Part II Clean Vehicle Credits g
    1aa Form 8936, Part V Clean Vehicle Credits b, g, h, j
    1bb Form 8904 Credit for Oil and Gas Production from Marginal Wells g
    1cc Form 7213, Part I Nuclear Power Production Credit g
    1dd Form 8881, Part II Credit for Small Employer Pension Plan Startup Costs g
    1ee Form 8881, Part III Credit for Small Employer Pension Plan Startup Costs g
    1ff Form 8864, Line 8 Biodiesel and Renewable Diesel Fuels Credit g
    1gg Form 7211
    (Valid for Tax Period 202401 and later)    		 Clean Electricity Production Credit b, f, g, h, j
    1zz Other Other g
    4a Form 3468, Part VI Investment Credit b, f, g, h, j
    4b Form 5884 Work Opportunity Credit g
    4c Form 6478 Biofuel Producer Credit g
    4d Form 8586 Low Income Housing Credit
    See IRM 3.11.16.9.1.34 CCC "9" - Low-Income Housing Credit    		 g
    4e Form 8835, Part II Renewable Electricity Production Credit b, f, g, h, j
    4f Form 8846 Credit for Employer Social Security and Medicare Taxes Paid on Certain Employee Tips g
    4g Form 8900 Qualified Railroad Track Maintenance Credit g
    4h Form 8941 Credit for Small Employer Health Insurance Premiums
    See IRM 3.11.16.11.21.2, Form 8941, Credit for Small Employer Health Insurance Premiums, for more instructions.    		 g
    4i Form 6765, Eligible Small Business only Credit for Increasing Research Activities g
    4j Form 8994 Employer Credit for Paid Family and Medical Leave
    See IRM 3.11.16.9.2, Return Processing Code (RPC)    		 g
    4k Form 3468, Part VII Rehabilitation Credit g
    4z Other   g

  6. Edit a “1” in the bottom right margin of Form 3800, Page 4, Part III, when Form 3800, Part V, Column b has significant data. See Figure 3.11.16-21, Form 3800 Indicator.

    Figure 3.11.16-21

    This is an Image: 33500205.gif

    Please click here for the text description of the image.

  7. If Form 3800, General Business Credit, is required but missing, correspond. Form 3800 is required when a 2008 or later tax return has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Schedule J, Line 5c. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

  8. Review the Schedule J, Line 5c for the following conditions:

    If And Then
    Schedule J, Line 5c is blank, Form 3800 has an entry on Line 38, Edit the Line 38 amount to Schedule J, Line 5c.
    Schedule J, Line 5c has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 3800 is not attached, Correspond.
    Schedule J, Line 5c and Form 3800, Line 38 do not match The difference is not supported by another credit, Edit the lesser of Schedule J, Line 5c and Line 38 to Schedule J, Line 5c.

  9. Correspond when a business credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is not supported by the applicable form or if supporting documentation is missing for an unidentified amount on Schedule J, Line 5c.

    Exception:

    For Tax Year 2022 and prior - If Form 3800, Part III, Box C, D, or G are checked and Line 1a, 1b, 1c, 1e, 1f, 1h, 1i, 1j, 1k, 1l, 1m, 1n, 1p, 1s, 1t, 1w, 1x, 1y, 1aa, 1bb, 1zz, 3, 4b, 4c, 4d, 4e, 4f, 4g, 4h, 4i, or 4j Column (b) has an EIN, do not correspond and continue to process the return.

    Exception:

    Tax Year 2023 - Tax Year 2023 - If Form 3800, Part III, Line 1b, 1c, 1e, 1f, 1g, 1h, 1i, 1j, 1k, 1m, 1n, 1p, 1s, 1t, 1u, 1w, 1x, 1y, 1aa, 1bb, 1cc, 1dd, 1ee, 1ff, 1zz, 3, 4a, 4b, 4c, 4d, 4e, 4f, 4g, 4h, 4i, or 4j Column (d) has an EIN, do not correspond and continue to process the return.

    Exception:

    Tax Year 2024 and later - If Form 3800, Part III, Line 1b, 1c, 1e, 1f, 1g, 1h, 1i, 1j, 1k, 1m, 1n, 1p, 1q, 1s, 1t, 1u, 1v, 1w, 1x, 1y, 1aa, 1bb, 1cc, 1dd, 1ee, 1ff, 1gg, 1zz, 3, 4a, 4b, 4c, 4d, 4e, 4f, 4g, 4h, 4i, or 4j Column (c) has an EIN, do not correspond and continue to process the return.

3.11.16.11.21.1 (01-01-2025)
Form 8844, Empowerment Zone Employment Credit

  1. Form 8844 is a high priority form.

  2. Form 8844 is required to be filed with the return when claiming the credit.

  3. Edit "1 - 1" in the left margin of Form 1120, near Line 12 when the Form 8844 is shown on:

    1. Form 1120, Page 3, Schedule J, Line 5c.

    2. Form 1120-C, Page 3, Schedule J, Line 5c.

    3. Form 1120-F, Page 6, Schedule J, Line 5b.

    4. Form 1120-L, Page 4, Schedule K, Line 5c.

    5. Form 1120-PC, Page 1, Line 8c.

    6. Form 1120-REIT, Page 3, Schedule J, Line 3c.

    7. Form 1120-RIC, Page 2, Schedule J, Line 3c.

    8. Form 3800, Part III, Line 3 has an entry.

    9. Form 3800, Part II Line 22 has an entry.

  4. Edit a "1 - 1" in the left margin of Form 1120, near Line 12 if Form 8844 is attached even if dollar amounts are not present.

    • (Line 2 for Form 1120-F.)

    Note:

    Editing "1 - 1" in the left margin of Form 1120, Line 12 allows Statistics of Income (SOI) a means of monitoring this credit. (HIGH PRIORITY)
    (Line 2 for Form 1120-F)

  5. If an amount is present on Form 3800, Line 3 Column (g) (Column (j) for 2023) (Column (c) for 2022 and prior) or Form 1120, Schedule J, Line 5c for Form 8844, take the following actions:

    If Then
    Empowerment Zone Employment credit is≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ but Form 8844 is not attached, Correspond.

    Exception:

    For TY 2022 and prior - If Form 3800, Part III, Box C, D, or G are checked and Line 3, Column (b) has an EIN, do not correspond and continue to process the return.

    Exception:

    Tax Year 2023 - If Form 3800, Part III, Line 3, Column (d) has an EIN, do not correspond and continue to process the return.

    Exception:

    Tax Year 2024 and later - If Form 3800, Part III, Line 3, Column (c) has an EIN, do not correspond and continue to process the return.

3.11.16.11.21.2 (01-01-2025)
Form 8941, Credit for Small Employer Health Insurance Premiums

  1. Form 8941, Credit for Small Employer Health Insurance Premiums, must be filed with corporate tax returns when claiming Small Employer Health Insurance Premiums credit.

  2. If an amount is present on Form 3800, Part III, Line 4h Column (g) (Column (j) for 2023) (Column (c) for 2022 - 2011) or Form 1120, Schedule J, Line 5c for Form 8941:

    If Then
    Form 8941 is not attached, Correspond.
    Form 8941 is present, Place in sequence order if significant entries are present.
    See IRM 3.11.16.22, Form 8941 - Credit for Small Employer Health Insurance Premiums, for Form 8941 editing instructions.

    Exception:

    For TY 2022 and prior - If Form 3800, Part III, Box C, D, or G are checked and Line 4h, Column (b) has an EIN, do not correspond and continue to process the return.

    Exception:

    Tax Year 2023 - If Form 3800, Part III, Line 4h, Column (d) has an EIN, do not correspond and continue to process the return.

    Exception:

    Tax Year 2024 and later - If Form 3800, Part III, Line 4h, Column (c) has an EIN, do not correspond and continue to process the return.

3.11.16.11.21.3 (01-01-2025)
Schedule J, Line 5d - Form 8827, Credit for Prior Year Minimum Tax - Corporations

  1. If Schedule J, Line 5d has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8827 is not attached, correspond. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

3.11.16.11.21.4 (01-01-2022)
Schedule J, Line 5e - Form 8912, Credit to Holders of Tax Credit Bonds

  1. When Schedule J, Line 5e has an entry for Form 8912, take the following action:

    If Then
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 8912is not attached, Correspond.

3.11.16.11.21.5 (01-01-2025)
Schedule J, Line 5f - Adjustment from Form 8978 (2024 revision)

  1. No editing required.

3.11.16.11.22 (01-01-2025)

Schedule J, Line 6 - Total Credits

  1. When editing Line 6, take the following action:

    If Then
    Line 6 is blank and there are entries on any of Lines 5a through 5f, Add Lines 5a through 5f and enter on Line 6.
    There is no tax on Schedule J, Line 2, "X" the Line 6 entry and "X" Lines 5a through 5f.
    Line 6 has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Lines 5a through 5f are blank, Correspond for documentation to support the entry on Line 6.

3.11.16.11.23 (01-01-2025)

Schedule J, Line 8 - Personal Holding Company Tax

  1. If Schedule J, Line 8, Personal Holding Company Tax, has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Schedule 1120-PH is not attached, correspond. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

    Note:

    A significant entry on Schedule J, Line 8 would also require editing an ABLM Code, see IRM 3.11.16.9.3, ABLM Code and Schedule M-3 Checkbox.

3.11.16.11.24 (01-01-2013)

Schedule J, Line 9a through 9z - Other Taxes

  1. This subsection has instructions for Schedule J, Lines 9a through 9z.

3.11.16.11.24.1 (01-01-2025)
Schedule J, Line 9a - Amount from Form 4255, Part I, Line 3 Column (r)

  1. If an amount is present on Schedule J, Line 9a, Amount from Form 4255, Part I, Line 3 Column (r) or Form 4255 is attached:

    If Then
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 4255 is not attached, Correspond.
    Form 1120, Line 9a is blank and Form 4255 is attached, Edit the amount from Form 4255 Line 3, Column (r), to Form 1120 Schedule J, Line 9a.

3.11.16.11.24.2 (01-01-2024)
Schedule J, Line 9b - Recapture of Low-Income Housing Credit (Form 8611)

  1. If an amount is present on Schedule J, Line 9b, Recapture of Low-Income Housing Credit, or Form 8611 is attached:

    If Then
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 8611 is not attached, Correspond.
    Form 8611 is attached and Line 9b is blank, Edit the amount from Line 14, Form 8611 to Schedule J, Line 9b. (Dotted portion of Schedule J, Line 7 of Form 1120-REIT.)
    More than one Form 8611 is attached,

    1. Combine Form 8611, Line 14.

    2. Edit the total to Schedule J, Line 9b. (Dotted portion of Schedule J, Line 7 of Form 1120-REIT.)

  2. Edit CCC "9" to Page 1 of Form 1120 in the income section when at least one of the following conditions exists:

    1. Schedule J, Line 9b has an amount; or

    2. Form 8611 is attached; or

3.11.16.11.24.3 (01-01-2025)
Schedule J, Line 9c - Completed Long-Term Contract Look-Back Interest Due (Form 8697)

  1. If an amount is present on Schedule J, Line 9c, Completed Long-Term Contract Look-Back Interest Due, or Form 8697 is attached:

    If Then
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 8697 is not attached, Correspond for missing Form 8697.
    Form 8697 is attached and the tax from Part I, Line 10 or Part II, Line 11 is shown on Schedule J, Line 9c, Edit CCC "K."
    Form 8697 is attached and Schedule J, Line 9c is blank,

    • Edit the amount from Form 8697, Part I, Line 10 or Part II, Line 11 to Schedule J, Line 9c.

    • Edit CCC "K."

3.11.16.11.24.4 (01-01-2025)
Schedule J, Line 9d - Interest Due Under the Look-Back Method - Income Forecast Method (Form 8866)

  1. Form 8866, Interest Due Under the Look-Back Method - Income Forecast Method, is attached.

    If Then
    Form 8866, Line 9 has an entry, Edit Tax Period and EIN on Form 8866. Detach Form 8866 and route to AM.
    Form 8866, Line 10 has an entry, Edit the Line 10, amount to Schedule J, Line 9d.
3.11.16.11.24.5 (01-01-2022)
Schedule J, Line 9e - Alternative Tax on Qualifying Shipping Activities (Form 8902)

  1. If an amount is present on Schedule J, Line 9e, Alternative Tax on Qualifying Shipping Activities, or Form 8902 is attached:

    If Then
    Form 8902 is attached, Edit Audit Code "2."
    Form 8902 is attached and Schedule J, Line 9e is blank, Edit the amount from Line 30, Form 8902 to Schedule J, Line 9e.

3.11.16.11.24.6 (01-01-2025)
Schedule J, Line 9f - Interest/Tax Due Under Section 453A(c) (2023 and later revisions)

  1. No editing required.

    Note:

    Form 1120, Schedule J, Line 9f on 2022 - 2020 revisions read "Interest/Tax Due Under Section 453A(c) and/or Section 453(l)" . No editing required.

3.11.16.11.24.7 (02-12-2024)
Schedule J, Line 9g - Interest/Tax Due Under Section 453(l) (2023 and later revisions)

  1. No editing required.

3.11.16.11.24.8 (01-01-2025)
Schedule J, Line 9g - Other (2022 - 2020 revisions

  1. For Tax Period 202201-202212, if a significant amount is present on Line 9g and the taxpayer writes CAMT or IRA AMT or indicates the amount is for Corporate AMT, completely edit the return and give to the lead. The lead will:

    1. Notify P&A that a return has been found (P&A will scan the Form 1120, pages 1 through 6 and any attachment with the new AMT calculation and email a copy to an LB&I Point of Contact (POC)).

    2. Edit an action trail on the return.

    3. Rebatch the return with "CAMT" in the batch ID.

    4. Continue processing.

  2. For Tax Period other than 202201-202212, no editing is required.

3.11.16.11.24.9 (01-01-2025)
Schedule J, Line 9z - Other (2024 revision)

  1. No editing required.

3.11.16.11.25 (01-01-2025)

Schedule J, Line 11 - Total Tax (2023 and prior revisions)

  1. Form 1120, Schedule J, Part I, Line 11 may have "add on" taxes that will be identified by an explanation in the dotted portion to the left of Line 11.

    1. If the only entry on Form 1120, Schedule J, Part I, is Line 11, edit the amount to Schedule J, Line 1.

    2. If any identifiable "add on" taxes are misplaced on Lines 3, 8, or 9, "X" them ensure that they have been included in Line 31, Total Tax on Page 1 of the Form 1120.

3.11.16.11.26 (01-01-2025)

Schedule J, Line 11a - Total Tax Before Deferred Taxes (2024 revision)

  1. Line 11a, Total Tax Before Deferred Taxes, is the sum of Form 1120, Schedule J, Line 7, Line 8, and Line 10.

  2. If Line 11a is blank and there are entries on Line 7, Line 8 and/or Line 10 edit the sum of those lines on Line 11a.

3.11.16.11.27 (01-01-2025)

Schedule J, Line 11b - Deferred Tax on the Corporation’s Share of Undistributed Earnings of a Qualified Electing Fund (2024 revision)

  1. No editing required.

3.11.16.11.28 (01-01-2025)

Schedule J, Line 11c - Deferred LIFO Recapture Tax (Section 1363(d)) (2024 revision)

  1. No editing required.

3.11.16.11.29 (01-01-2025)

Schedule J, Line 12 - Total Tax (2024 revision)

  1. Form 1120, Schedule J, Line 12 is computed by subtracting the sum of Line 11b and Line 11c from Line 11a. This total is transferred to Form 1120, page 1, Line 31.

  2. If the only entry on Form 1120, Schedule J, is Line 12, edit the amount to Line 11a and Line 31, Total Tax on Page 1 of the Form 1120.

3.11.16.11.30 (01-01-2022)

Schedule J, Line 12 - Reserved

  1. Line 12- Schedule J, Part II, Line 12 - Net 965 Tax Liability Paid for the Reporting Year (revisions 2018 through 2020),

  2. The instructions in this subsection only apply to Tax Period 201712 through 202012.

  3. If blank, enter from the following lines from Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts:

    Reporting Tax Year Form 965-B
    2017 Part II, Column (k), Line 1
    2018 Part II, Column (k), Line 2
    2019 Part II, Column (k), Line 3
    2020 Part II, Column (k), Line 4

  4. Edit CCC "J" and Action Code "460."

3.11.16.11.31 (01-01-2025)

Schedule J, (Part II for 2023) (Part III for 2022-2018) Lines 13 - 23

  1. This subsection has instructions for Schedule J, (Part II for 2023) (Part III for 2022-2018) Lines 13 through 23 (Line 22 for 2017-2011).

3.11.16.11.31.1 (01-01-2025)
Schedule J, Line 13 - Preceding Year’s Overpayment Credited to the Current Year (2024 revision)

  1. No editing required.

3.11.16.11.31.2 (01-01-2025)
Schedule J, Line 14 - Current Year’s Estimated Tax Payments (2024 revision)

  1. No editing required.

3.11.16.11.31.3 (01-01-2025)
Schedule J, (Part II for 2023) (Part III for 2022-2018) Line 14 - Estimated Tax Payments

  1. IRC 847 Deduction - The instructions in this subsection only apply to Tax Period 201812 and prior. For Tax Period 201901 and later, no action is needed.

  2. If the Tax Period is 201812 and prior and the taxpayer notates "Section 847" or reports SETP on Schedule J, Part II (Part III for 2022-2018), Line 14 (Line 13 for 2017 - 2011) or "Form 8816" is attached, see IRM 3.11.16.3.10, IRC 847 Deduction.

3.11.16.11.31.4 (01-01-2025)
Schedule J, Line 15 - Current Year’s Refund Applied for on Form 4466 (2024 revision)

  1. If there is an entry on Line 15, see IRM 3.11.16.9.1.15, CCC "O" - Module Freeze.

3.11.16.11.31.5 (01-01-2025)
Schedule J, Line 16 - Reserved for Future Use (2024 revision)

  1. No editing required.

3.11.16.11.31.6 (01-01-2025)
Schedule J, (Part II for 2023) (Part III for 2022-2018) Line 16 - Payments (2023 and prior revisions)

  1. If Schedule J, (Part II for 2023) (Part III for 2022-2018) Line 16 (Line 15 for 2017-2011) is blank, add Lines 13 (Line 12 for 2017-2011) and 14 (Line 13 for 2017-2011). Subtract Line 15 (Line 14 for 2017-2011) and enter the total amount on Line 16 (Line 15 for 2017-2011). If there is an entry on Line 15 (Line 14 for 2017-2011), see IRM 3.11.16.9.1.15, CCC "O" - Module Freeze.

3.11.16.11.31.7 (01-01-2025)
Schedule J, (Part II for 2023) (Part III for 2022-2018) Line 17 - Tax Deposited with Form 7004

  1. Accept taxpayer's entry.

  2. If the taxpayer indicates a Form 1138, Extension of Time for Payment of Taxes by a Corporation Expecting a Net Operating Loss Carryback, credit on Line 17 (Line 16 for 2017-2011), disallow and delete amount of credit from Line 17 (Line 16 for 2017-2011).

3.11.16.11.31.8 (01-01-2025)
Schedule J, (Part II for 2023) (Part III for 2022-2018) Line 18 - Withholding

  1. If the taxpayer has claimed backup withholding ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Schedule J, (Part II for 2023) (Part III for 2022-2018) Line 18 (Line 17 for 2017-2011) and Form 1099 is not attached, correspond using Letter 118C, Corporate Return Incomplete for Processing: Form 1120, Form 1120 Series, Form 1120-S. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

3.11.16.11.31.9 (01-01-2025)
Schedule J, (Part II for 2023) (Part III for 2022-2018) Line 19 - Total Payments

  1. If Line 19 (Line 18 for 2017-2011) is the only entry for Lines 13 through 19 (Lines 12 through 18 for 2017-2011), arrow the amount to Line 14 (Line 16 for 2023 - 2018) (Line 15 for 2017 - 2011).

3.11.16.11.31.10 (01-01-2025)
Schedule J, (Part II for 2023) (Part III for 2022-2018) Line 20a - Form 2439

  1. Compare Form 1120, Schedule J, Line 20a (Line 19a for 2017-2011) to Form 2439, Line 2:

    If Then
    The Undistributed Capital Gain Credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 2439 is missing, Correspond.
    Form 2439 shows a lesser amount, Place an "X" to the left of the entry on Schedule J, Part II, (Part III for 2022-2018) Line 20a (Line 19a for 2017 - 2011) Edit the lesser amount to the left of the "X."
    Form 2439 shows a larger amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, Correspond.

3.11.16.11.31.11 (01-01-2025)
Schedule J, (Part II for 2023) (Part III for 2022-2018) Line 20b - Form 4136

  1. If Line 20b (Line 19b for 2017 - 2011) has a significant entry and Form 4136 is not present, correspond for the missing Form 4136. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

  2. For processing instructions, see IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.

3.11.16.11.31.12 (01-01-2025)
Schedule J, (Part II for 2023) (Part III for 2022-2018) Line 20c - Reserved for Future Use

  1. Schedule J, Line 20c- Credit for Tax Withheld Under Chapter 3 or 4 from Form 1042-S, Form 8805, or Form 8288.

  2. Schedule J, Line 20c - Reserved for future use on the 2020 - 2023 revisions of Form 1120.

  3. For 2019 through 2012 revisions, if ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 8827 must be attached to substantiate the credit. Correspond for missing forms to substantiate the credit.

  4. For 2011 and prior, if ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ either Form 3800 or Form 8827 must be attached to substantiate the credit. Correspond for missing forms to substantiate the credit.

3.11.16.11.31.13 (01-01-2025)
Schedule J, Part III, Line 20d - Other (2022 - 2018 revisions)

  1. For 202201 - 202212, if a significant amount is present and "IRA22DPE" is notated, edit RPC "J" and give the return to the lead. Otherwise, accept taxpayer’s entry.

3.11.16.11.31.14 (01-01-2025)
Schedule J, Line 20z - Other (2023 and later revisions)

  1. The taxpayer may report the following credits on Schedule J, Part II, Line 20z (Line 20i for 2022 - 2018):

    1. Credit for Tax on ozone-depleting chemicals. The taxpayer may also notate "Section 4682(g)(2)" .

    2. Credit under section 960(c) (section 960(b) for pre-2018 tax years of foreign corporations).

    3. Section 1341 Credit for Repayments of Amounts Included in Income from Earlier Years. Accept the taxpayers amount.

      Note:

      The Section 1341 credit amount may be credit elect. If there is a credit elect amount present in the "Credited to estimated tax" line, then accept the credit elect amount for Section 1341.

3.11.16.11.31.15 (01-01-2024)
Schedule J, Part II Line 22 - Elective Payment Election (2023)

  1. Accept taxpayer entry.

3.11.16.11.31.16 (01-01-2024)
Schedule J, Part III (202012 - 201712) Line 22 - Net 965 Tax Liability.

  1. The instructions in this subsection apply only to Tax Period 201712 through 202012.

  2. The amount on Schedule J, Part III, Line 22 is edited from Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts, as follows:

    Reporting Tax Year Form 965-B
    2017 Part II, Column (d), Line 1
    2018 Part II, Column (d), Line 2
    2019 Part II, Column (d), Line 3
    2020 Part II, Column (d), Line 4

  3. Edit CCC "J" and Action Code "460."

3.11.16.11.31.17 (01-01-2025)
Schedule J, (Part II for 2023) (Part III for 2022-2018) Line 23 - Total Payments and Credits

  1. If Line 23 (Line 21 for 2017 - 2011) is the only entry for Lines 13 through 23 (Lines 12 through 21 for 2017 - 2011), arrow the amount to Line 14 (Line 16 for 2023 - 2018) (Line 15 for 2017 - 2011).

3.11.16.11.32 (01-01-2020)

Accounting Method Code

  1. The Accounting Method Code is transcribed from the taxpayer’s response to the boxes on Form 1120, Schedule K, Line 1.

  2. No editing is required for Code and Edit

3.11.16.11.33 (01-01-2024)

Schedule K, Line 2a - NAICS Code

  1. The Principal Business Activity (PBA) Code is based on the North American Industry Classification System Code (NAICS). These codes are a high priority to the Service. It is critical data for Statistics of Income, Examination, Research and other Service organizations.

  2. The NAICS Code is a four or six- digit code on Schedule K, Line 2a of Form 1120.

  3. A NAICS Code is required on all Forms 1120 (Form 1120-C, Form 1120-F, and Form 1120-FSC).

    Exception:

    Do not edit a NAICS Code on "G" coded returns (amended returns).

  4. Only one NAICS Code can be used on the return. Edit the NAICS Code as follows:

    If Then
    A legible six digit NAICS Code is shown on Schedule K, Line 2a, No editing is required.
    A legible four digit NAICS Code is shown on Schedule K, Line 2a, No editing is required.
    There is more than one NAICS Code on Schedule K, Line 2a, Circle all but the first NAICS Code listed.
    Schedule K, Line 2a is blank, illegible, or other than four or six digits, Edit NAICS Code "999999."

3.11.16.11.34 (01-01-2025)

Schedule K, Question 3

  1. If Schedule K, Question 3 meets one of the following conditions, a Name Control and EIN must be edited.

    If And Then
    Question 3 is checked "Yes," or both the "Yes" and "No" boxes are checked, The name and EIN is the same as the return name and/or EIN,

    1. Circle out the name and EIN,

    2. Check the attachments for another name control and/or EIN,

    3. Underline the Name Control of the parent corporation shown on Question 3. If Name Control is missing, search the return and attachments for the parent corporation Name Control and edit on Question 3. If unable to find a Name Control, edit "XXXX."

    4. Underline the EIN of the parent corporation shown on Question 3. If the EIN is missing, search the return and attachments for the parent corporation EIN and edit on Question 3. If unable to find the EIN, edit "12-9999999."
    Question 3 is checked "Yes" or both the "Yes" and "No" boxes are checked, The name and/or EIN is different from the return name and/or EIN, Underline the Name Control and TIN on Line 3.

    Note:

    If something other than a corporation name and/or EIN is present on Line 3, circle that information.
    Question 3 is checked "Yes" or both the "Yes" and "No" boxes are checked, There is no Name and/or EIN present on Line 3,

    1. Check attachments for name control and/or EIN.

    2. Underline the Name Control of the parent corporation shown on Question 3. If Name Control is missing, search the return and attachments for the parent corporation Name Control and edit on Question 3. If unable to find a Name Control, edit "XXXX" .

    3. Underline the EIN of the parent corporation shown on Question 3. If the EIN is missing, search the return and attachments for the parent corporation EIN and edit on Question 3. If unable to find the EIN, edit 12-9999999.

    Note:

    If something other than a corporation name and/or EIN is present on Line 3, circle that information.
    Question 3 is checked "No" or neither box is checked, A corporation name and/or EIN is present (must be different than that on the return),

    1. Underline the Name Control on Line 3.

    2. Underline the TIN on Line 3.

    Note:

    If something other than a corporation name and/or EIN is present on Line 3, circle that information.
    Question 3 is answered "No" or neither box is checked, A corporation name and EIN are not present, No editing is required.
    Question 3 is answered "No" or neither box is checked, A corporation name and EIN are the same as the return name and/or EIN, Circle the name and/or EIN.

3.11.16.11.35 (01-01-2025)

Schedule K, Line 7c - Number of Form 5472

  1. No entry is required for Schedule K, Line 7c unless Form 5472 is present.

  2. Edit Line 7c as follows:

    If And Then
    A number is present for Schedule K, Line 7c,   No editing required.
    Schedule K, Line 7c is blank, Form(s) 5472 is attached, Edit the number of Forms 5472 in the dotted line area of Line 7c.
    Form 5472 is attached, Schedule K is not present, Dummy a Schedule K and edit the number of Forms 5472 to Schedule K, Line 7c.

    Note:

    If a Form 5472 is attached to a blank (no tax data), Form 1120, do not process the Form 1120. Send the Form 1120 and Form 5472 to SOI at the following address:

    Internal Revenue Service
    1973 N Rulon White Blvd.
    PIN Unit, Stop 6112
    Ogden, UT 84201-0012

    Note:

    Foreign-owned domestic disregarded entities are instructed to attach the Form 5472 to a pro forma Form 1120. These entities are not required to file a Form 1120 and the return will not be processed.

3.11.16.11.36 (01-01-2009)

Schedule K, Line 12 - NOL Carryover

  1. Accept taxpayer's entry.

3.11.16.11.37 (01-01-2009)

Schedule K, Question 13

  1. This is not a transcription line and does not require editing. If the "Yes" box is checked for this question it is a sign that the taxpayer is not required to complete Schedule L, Balance Sheet entries.

3.11.16.11.38 (01-01-2020)

Schedule K, Question 16

  1. Data will enter a "1" if the "Yes" box is checked.

  2. No editing is required.

3.11.16.11.39 (01-01-2020)

Schedule K, Question 17

  1. Data will enter a "1" if the "Yes" box is checked.

  2. No editing is required.

3.11.16.11.40 (01-01-2020)

Schedule K, Question 18

  1. Data will enter a "1" if the "Yes" box is checked.

  2. No editing is required.

3.11.16.11.41 (01-01-2024)

Schedule K, Question 25 (Form 8996 - Qualified Opportunity Fund)

  1. If Form 1120, Schedule K, Question 25, "Is the corporation attaching Form 8996 to certify as a Qualified Opportunity Fund" is answered "Yes," search attachments for Form 8996. If Form 8996 is attached with an amount in Part III, Line 15, edit the amount to Schedule K, Question 25.

    Form 8996 Revisions

    Prior Year Revision Line
    2020 and later Part III, Line 15
    2019 Part III, Line 14
    2018 and 2017 Part III, Line 13
     

  2. See IRM 3.11.16.17, Form 8996 - Qualified Opportunity Fund, for transcription lines.

  3. If Form 8996, Qualified Opportunity Fund, is attached, edit Return Processing Code (RPC) "6," see IRM 3.11.16.9.2, Return Processing Code (RPC), for more information.

3.11.16.11.42 (01-01-2024)

Schedule K, Question 27 (Digital Assets)

  1. No editing is required.

  2. Data will enter:

    • "0" if no box is checked.

    • "1" if "Yes" box checked.

    • "2" if "No" box checked.

    • "3" if "Both" boxes checked.

3.11.16.11.43 (01-01-2025)

Schedule K, Lines 29a, 29b and 29c (Corporate AMT)

  1. If Question 29b is marked "Yes" or Question 29c is marked "No" , Form 4626 must be attached. Correspond if Form 4626 is not attached. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

    Note:

    Do not correspond for Form 4626 if the entire return is non-taxable (e.g., the return is zeros, blank, shows no tax data etc.).Continue processing the return.

  2. Data will enter:

    • "0" if no box is checked.

    • "1" if "Yes" box checked.

    • "2" if "No" box checked.

    • "3" if "Both" boxes checked.

3.11.16.11.44 (01-01-2024)

Schedule K, Lines 30a, 30b and 30c (Stock Buy Back)

  1. No editing is required.

  2. Data will enter:

    • "0" if no box is checked.

    • "1" if "Yes" box checked.

    • "2" if "No" box checked.

    • "3" if "Both" boxes checked.

3.11.16.11.45 (01-01-2024)

Schedule K, Line 31 (Parent of Consolidated Group)

  1. No editing is required.

  2. Data will enter:

    • "0" if no box is checked.

    • "1" if "Yes" box checked.

    • "2" if "No" box checked.

    • "3" if "Both" boxes checked.

    .

3.11.16.11.46 (01-01-2022)

Schedule L, Balance Sheet

  1. This subsection provides instructions for processing the Balance Sheet. The Balance Sheet is found on Form 1120, Page 6 (Page 5 for 2017 and prior).

3.11.16.11.46.1 (01-01-2025)
Blank or Missing Schedule L

  1. Use the following chart for a Balance sheet that is blank, no significant entries (e.g., zeros) or missing and there is no attachment present with Balance Sheet entries.

    Note:

    The following chart is listed in "Priority" order.

    If And Then
    The return is "Amended,"   Do not correspond.
    The return is "Final,"   Do not correspond.
    There are no "significant entries" on Form 1120, Page 1, Lines 1 through 27,   Do not correspond.
    Form 1120, Page 1, Box D is less than $250,000, and Total Receipts (Line 1a plus Lines 4 through 10) are less than $250,000,   Do not correspond.
    The "Yes" box is checked on Form 1120, Schedule K, Question 13, Form 1120, Page 1, Box D is $250,000 or more, or Total Receipts (Line 1a plus Lines 4 through 10) are $250,000 or more, Do not correspond. Edit a "1" to Schedule L, Line 15(d).

    Note:

    Dummy a Schedule L if necessary.
    The "cash" box on Schedule K is checked or the taxpayer has notated "Single Entry" , "See Books," "Balance Sheet not available," or similar entry, Form 1120, Page 1, Box D is $250,000 or more, or Total Receipts (Line 1a plus Lines 4 through 10) are $250,000 or more, Do Not correspond. Edit a "1" to Schedule L, Line 15(d).

    Note:

    Dummy a Schedule L if necessary.
    Form 1120, Page 1, Box D is $250,000 or more, or Total Receipts (Line 1a plus Lines 4 through 10) are $250,000 or more,   Correspond for Schedule L. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

  2. If Schedule L is required and blank or missing, but an attachment is present with significant Schedule L amounts, edit the applicable line entries from the attachment. If necessary insert a blank Schedule L to edit the applicable entries. Then follow the instructions in IRM 3.11.16.11.46.2, Editing a Balance Sheet with Significant Entries. See Figure 3.11.16-22, Schedule L Balance Sheet.

    Figure 3.11.16-22

    This is an Image: 33500210.gif

    Please click here for the text description of the image.

3.11.16.11.46.2 (01-01-2024)
Editing a Balance Sheet with Significant Entries

  1. To determine if editing a Balance Sheet that has significant entries is necessary follow the chart below:

    Note:

    The following chart is listed in "Priority" order.

    If And Then
    The return is "Amended,"   No action is required. The Balance sheet will not be transcribed.
    The return is "Final,"   Delete the Balance Sheet.
    There are no "significant entries" on Form 1120, Page 1, Lines 1 through 27,   Delete the Balance Sheet.
    The "Yes" box is checked on Form 1120, Schedule K, Question 13, Form 1120, Page 1, Box D is less than $250,000, and Total Receipts (Line 1a plus Lines 4 through 10) are less than $250,000, Delete the Balance Sheet.
    None of these conditions exist,   Continue editing the Balance Sheet.

  2. Place Page 6 (Page 5 for 2017 and prior), Schedule L in sequence order when the Balance Sheet is required.

  3. Edit Balance Sheet amounts in dollars only.

  4. The following lines are transcribed fields:

    Note:

    Letters in brackets "( )" designate columns.

    • Trade Notes and Accounts Receivable - Ending Schedule L, Line 2a(c) (positive/negative)

    • Loans to Shareholders - Ending Schedule L, Line 7(d) (positive/negative)

    • Less Accumulated Depreciation - Ending Schedule L, Line 10b(d) (positive)

    • Total Assets - Beginning Schedule L, Line 15(b) (positive/negative)

    • Total Assets - Ending Schedule L, Line 15(d) (positive/negative)

    • Other Current Liabilities - Ending Schedule L, Line 18(d) (positive/negative)

    • Loans from Shareholders - Ending Schedule L, Line 19(d) (positive/negative)

    • Other Liabilities - Ending Schedule L, Line 21(d) (positive/negative)

    • Preferred Stock - Schedule L, Line 22a(a) (positive)

    • Preferred Stock - Schedule L, Line 22a(c) (positive)

    • Common Stock - Schedule L, Line 22b(a) (positive)

    • Common Stock - Schedule L, Line 22b(b) (positive)

    • Common Stock - Schedule L, Line 22b(c) (positive)

    • Capital Stock - Ending Schedule L, Line 22b(d) (positive)

    • Retained Earnings - Unappropriated - Beginning Schedule L, Line 25(b) (positive/negative)

    • Loss cost of treasury stock - Beginning Schedule L, Line 27(b) (positive/negative)

    • Loss cost of treasury stock - Ending Schedule L, Line 27(d) (positive/negative)

    • Total Liabilities - Ending Schedule L, Line 28(d) (positive)

  5. When it is necessary to edit Schedule L, Balance Sheet entries, follow the instructions below:

    1. "X" negative entries on Lines 10b(d), 22a(a), 22a(c), 22b(a), 22b (c), 22b(d), and 28(d). Accept negative entries on Lines 2a(c), 7(d), 15(b), 15(d), 18(d), 19(d), 21(d), 25(b), 27(b) and 27(d) only.

    2. If line titles on Schedule L have been changed, edit the items which are to be perfected to their proper location on the return.

    3. Edit lines as follows:

    If And Then
    There is no entry on Line 2a, Column (c), Line 2b, Column (c) has an entry,

    • Add Line 2b(c) to Line 2b(d) and edit the total to Line 2a, Column (c).

    • Bracket if negative.
    There is no entry on Line 2a, Column (c), Line 2b, Column (c) is blank,

    • Edit the Line 2b(d) amount to Line 2a(c) if present.

    • Bracket if negative.
    There is no entry on Line 10b, Column (d),  

    • Compute and enter Line 10b, Column (d) by subtracting the Line 10b, Column (c) amount from Line 10a, Column (c).

    • Positive only.
    There is no entry on Line 15, Column (b), Lines 2b, 10b, 11b, and 13b, Column (b) are blank, Use right Column (a) entries (if present) to compute Column (b) entries.
    There is no entry on Line 15, Column (b), Entries are present on Lines 1 through 14, Column (b),

    • Add Lines 1 through 14, Column (b) and edit the total to Line 15, Column (b).

    • Bracket if negative.
    There is no entry on Line 15, Column (d), Lines 2b, 10b, 11b, and 13b, Column (d) are blank, Use right Column (c) entries (if present) to compute Column (d) entries.
    There is no entry on Line 15, Column (d), Entries are present on Lines 1 through 14, Column (d),

    • Add Lines 1 through 14, Column (d) and edit the total to Line 15, Column (d).

    • Bracket if negative.
    After computing Balance Sheet, Line 15, Column (d) is still blank, zero, dash, "none" or "N/A," Form 1120, Page 1, Box D is $250,000 or more, or Total Receipts (Line 1a plus Lines 4 through 10) are $250,000 or more, Edit a "1" on Line 15(d).
    If Line 22b, Column (d) is blank,  

    • Add Line 22a, Column (c) and Line 22b, Column (c) and edit the total to Line 22b, Column (d).

    • Positive only.
    There is no entry on Line 28, Column (d),  

    • Compute and enter Line 28, Column (d) by adding Lines 16 through 27, Column (d).

    • Positive only.

3.11.16.11.47 (01-01-2010)

Schedule N (Form 1120) - Foreign Operations of U.S. Corporations

  1. Schedule N (Form 1120), Foreign Operations of U.S. Corporations is valid for Tax Period beginning 01-01-2000. Delete Schedule N if the Tax Period begins before 01-01-2000.

  2. Corporations that, at any time during the tax year, have assets in or operate a business in a Foreign Country or U.S. possession may have to file Schedule N (Form 1120) with Form 1120, Form 1120-C, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC.

  3. Do not correspond if Schedule N is missing. Dummy a Schedule N and edit the applicable entries when Form 5471, Form 8865, or Form 8873 are attached to the tax return.

  4. If Schedule N is present and has no entries, do not correspond.

  5. If more than one Schedule N is attached, combine the information from all Schedules N, including all subsidiaries and:

    1. Edit to the first Schedule N that has the EIN of the return being processed. "Staple up" any remaining Schedules N, or

    2. Dummy and edit a Schedule N, for the parent return if one is not present on a consolidated return.

3.11.16.11.47.1 (01-01-2009)
Schedule N, Line 1 - Form 8858, Foreign Disregarded Entities

  1. Beginning Tax Period 2004 Form 8858, Information Return of U.S. Persons With Respect to Foreign Disregarded Entities (FDEs) and Foreign Branches (FBs), will be required to be filed by U.S. persons that are tax owners of Foreign Disregarded Entities.

  2. Edit Audit Code "2" if:

    1. Schedule N, Question 1a is answered "Yes."

    2. Form 8858 is present.

3.11.16.11.47.2 (01-01-2012)
Schedule N, Line 2 - Number of Forms 8865

  1. No entry is required for Schedule N, Line 2 unless Form 8865 is present.

  2. If Form 8865, Schedule G is attached, edit RPC "E."

  3. If Form 8865, Schedule H is attached, edit RPC "F."

  4. Edit Line 2 as follows:

    If And Then
    A number is present for Schedule N, Question 2,   Take no further action.
    Schedule N, Line 2 is blank, Form(s) 8865 is attached, Edit the number of Forms 8865 in the dotted line area of Question 2.
    Form 8865 is attached, Schedule N is not present, Dummy a Schedule N and edit the number of Forms 8865 to Schedule N, Line 2.

  5. For Form 1120, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC, edit Audit Code "2" if Form 8865 is attached, see IRM 3.11.16.10.1, Audit Codes.

3.11.16.11.47.3 (01-01-2012)
Schedule N, Line 3 - Form 8865 Question

  1. For Form 1120, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC, edit Audit Code "2" if Schedule N, Question 3 is answered "Yes" or Form 8865 is attached, see IRM 3.11.16.10.1, Audit Codes.

3.11.16.11.47.4 (01-01-2023)
Schedule N, Lines 4a and 4b- Form 5471, Controlled Foreign Corporation

  1. Line 4a - Reserved for future use.

    1. For prior year returns (2019 and prior revisions), edit Audit Code "2" if Schedule N, Question 4a is answered "Yes."

  2. Line 4b - Edit Audit Code "2" if Form 5471 is attached, see IRM 3.11.16.10.1, Audit Codes.

  3. Edit Return Processing Codes as follows:

    If Then
    Form 5471, Schedule E, Income, War Profits, and Excess Profits Taxes Paid or Accrued, is attached, Edit RPC "A."
    Form 5471, Schedule H, Current Earnings and Profits, is attached, Edit RPC "B."
    Form 5471, Schedule I-1, Information for Global Intangible Low-Taxed Income, is attached, Edit RPC "C."
    Form 5471, Schedule P, Previously Taxed Earnings and Profits of U.S. Shareholder of Certain Foreign Corporations, is attached, Edit RPC "D."
    Form 5471, Schedule G-1, Cost Sharing Arrangement is attached, Edit RPC "G."

  4. No entry is required for Schedule N, Line 4b unless Form 5471 is present.

  5. Edit Schedule N, Line 4b as follows:

    If And Then
    A number is present for Schedule N, Line 4b,   Take no further action.
    Schedule N, Line 4b is blank, Form(s) 5471 is attached, Edit the number of Forms 5471 in the dotted line area of Question 4b.

    Note:

    Document Perfection is responsible for determining the number of any and all Form(s) 5471 received, whether attached to a parent return in a consolidated group, or found as an attachment to a subsidiary return.
    Form 5471 is attached, Schedule N is not present, Dummy a Schedule N and edit the number of Forms 5471 to Schedule N, Line 4b.

3.11.16.11.47.5 (01-01-2012)
Schedule N, Line 5 - Form 3520 Question

  1. For Form 1120, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC, edit Audit Code "2" if Schedule N, Question 5 is answered "Yes" or Form 3520 is attached, see IRM 3.11.16.10.1, Audit Codes.

3.11.16.11.47.6 (01-01-2019)
Schedule N, Line 6b - Foreign Country Code

  1. Edit Schedule N, Line 6b as follows:

    If Then
    The taxpayer has entered the name of a Foreign Country in Question 6b, Edit the two letter "Country Code" to the left of Question 6b. See Acceptable Foreign Countries in Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes, and Countries.

    Exception:

    Edit Country Code "OC" if the foreign country is not listed in Document 7475 or a U.S. Possession is listed on Box A.
    No Foreign Country is present or "US," "USA," "America" or similar reference to the United States is present, and Box 6a is checked "Yes," Edit Country Code, "OC."
    More than one Foreign Country is present, Edit the Country Code of the first Foreign Country shown.

    Note:

    Use "UK" for England, Northern Ireland, Scotland, and Wales. Also, "Holland" is not an official country name, but is part of The Netherlands, "NL."

3.11.16.11.47.7 (01-01-2023)
Schedule N, Line 7a - Form 8873 Question

  1. For Form 1120, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC, edit Audit Code "2" if Schedule N, Question 7a is answered "Yes," see IRM 3.11.16.10.1, Audit Codes.

3.11.16.11.47.8 (01-01-2013)
Schedule N, Line 7b - Number of Forms 8873

  1. No entry is required for Schedule N, Line 7b unless Form 8873 is present.

    Note:

    Input of Command Code (CC) REQ77 with IDRS Transaction Code TC 971 and right IDRS Action Code (depending on which election has been made) may be needed when Form 8873 is present, see IRM 3.11.16.12, Form 8873 - Extraterritorial Income Exclusion.

  2. Edit Schedule N, Line 7b as follows:

    If And Then
    A number is present for Schedule N, Question 7b, Form(s) 8873 is attached, Process Form 8873.

    • See IRM 3.11.16.12, Form 8873 - Extraterritorial Income Exclusion.
    A number is present for Schedule N, Question 7b, Form(s) 8873 are not attached, Take no further action.
    Schedule N, Line 7b is blank, Form(s) 8873 is attached,

    1. Edit the number of Forms 8873 in the dotted line area of Question 7b.

    2. Process Form 8873.

      • See IRM 3.11.16.12, Form 8873 - Extraterritorial Income Exclusion.
    Form 8873 is attached, Schedule N is not present,

    1. Dummy a Schedule N and edit the number of Forms 8873 to Line 7b of Schedule N.

    2. Process Form 8873.

      • See IRM 3.11.16.12Form 8873 - Extraterritorial Income Exclusion.

3.11.16.11.47.9 (01-01-2009)
Schedule N, Line 7c - Total Extraterritorial Income Exclusion

  1. No entry is required for Schedule N, Line 7c unless Form 8873 is present.

  2. Edit Schedule N, Line 7c as follows:

    If And Then
    An amount is present for Schedule N, Question 7c, Form 8873 is attached, Process Form 8873.

    • See IRM 3.11.16.12, Form 8873 - Extraterritorial Income Exclusion.
    An amount is present for Schedule N, Question 7c, Form 8873 is not attached, Take no further action.
    Schedule N, Line 7c is blank, Form(s) 8873 is attached,

    1. Compute the total amount of extraterritorial income exclusion from Line 52 and edit to the area provided on Line 7c.

    2. Process Form 8873.

      • See IRM 3.11.16.12, Form 8873 - Extraterritorial Income Exclusion.
    Form 8873 is present with a significant entry on Line 52, Schedule N is not attached,

    1. Dummy a Schedule N and compute the total amount of extraterritorial income exclusion from all attached Forms 8873. Edit the total to the area provided on Schedule N, Line 7c.

    2. Process Form 8873.

      • See IRM 3.11.16.12, Form 8873 -Extraterritorial Income Exclusion.

    Reminder:

    Form 8873, Extraterritorial Income Exclusion, requires TC "971" input, see IRM 3.11.16.12, Form 8873 - Extraterritorial Income Exclusion.

3.11.16.11.47.10 (01-01-2025)
Schedule N, Line 8 - Form 8938, Statement of Specified Foreign Financial Assets

  1. For Tax Year (TY) 202201 and later, Form 8938, Statement of Specified Foreign Financial Assets, will be transcribed into the General Purpose Program (GPP) database.

    Note:

    These instructions only apply to Form 1120.

  2. Process Form 8938 with the following criteria:

    1. The Tax Period Beginning on Form 1120 is 202201 or later and,

    2. Form 8938 is a November 2021 revision and,

    3. Form 8938 has significant entries.

  3. If Form 8938 is attached, but does not meet the above criteria, edit CCC "2" and continue normal processing of the Form 1120. Do not sequence the form to the back of the return, or place the form in a designated basket.

  4. If Form 8938 is attached and meets the criteria in paragraph (2), process Form 8938 per the instructions below:

    1. Completely edit Form 1120.

    2. Edit CCC "2."

    3. Pull the Form 8938 from the return and sequence to the back of the last page of Form 1120 (after schedules and attachment pages), attaching the Form 8938 so that it is back- to- back with the parent return.

    4. Place the Form 1120 in a designated basket.

    5. Only one Form 8938, Pages 1 and 2, can be processed. If multiple Forms 8938 are attached, select the form that has the highest account value in Part V, Line 23 (Line 4 for revision 2020 and prior) or highest asset value in Part VI, Line 32 (Line 4 for revision 2020 and prior) and delete the others.

      Note:

      The Form 8938 can have multiple "Additional or Continuation Statements." Do not confuse the multiple additional or continuation statements with multiple Forms 8938.

  5. Form 1120 with Form 8938 attached must be batched separately. The transcription of Form 8938 will occur under Program Code 43300 after the parent Form 1120 has been transcribed using normal procedures.

3.11.16.11.48 (01-01-2020)

Schedule O (Form 1120) - Consent Plan and Apportionment Schedule for a Controlled Group

  1. The instructions in this subsection (paragraphs 2 through 4) only apply to Tax Period 201811 and prior. If a Schedule O is attached to a Form 1120 for Tax Period 201812 and later, do the following:

    If Then
    Schedule O is in sequence order, Line through Schedule O, Parts II and III (old revision), Part II (new revision).
    Schedule O is not in sequence order, No action needed.

  2. This subsection includes instructions for processing Schedule O (Form 1120).

  3. Schedule O (Form 1120) replaces the Controlled Group tax computation previously included on Schedule J, Lines 2a(1) through 2b(2) for 2005 and prior tax returns.

  4. If Controlled Group Code "1" or "4" is edited on a prior year return, dummy a Schedule O and edit significant positive amounts as follows:

    1. Schedule J, Line 2a(1) to Schedule O, Part II, Line 1, Column (c).

    2. Schedule J, Line 2a(2) to Schedule O, Part II, Line 1, Column (d).

    3. Schedule J, Line 2a(3) to Schedule O, Part II, Line 1, Column (e).

    4. Schedule J, Line 2b(1) to Schedule O, Part III, Line 1, Column (f).

    5. Schedule J, Line 2b(2) to Schedule O, Part III, Line 1, Column (g).

3.11.16.11.48.1 (01-01-2019)
Schedule O, Part II, Line 1 - Taxable Income Apportionment

  1. The instructions in this subsection only apply to Tax Period 201811 and prior.

  2. Edit Schedule O, Part II, Line 1 as follows:

    If And Then
    Schedule O is attached and the parent corporation's taxable income apportionment amounts are present in Part II, The amounts are entered on Line 1, "X" any negative entries on Line 1, Columns (c), (d), or (e).
    Schedule O is attached and the parent corporation's taxable income apportionment amounts are present in Part II, The amounts are entered on a line other than Line 1,

    1. Line out Line 1 and renumber the parent corporation taxable income apportionment amounts as Line "1."

    2. "X" any negative entries on Line 1, Columns (c), (d), or (e).
    A Controlled Group Code was edited; there are no entries on any of Schedule O, Part II, Line 1, Columns (c), (d), and (e), or Schedule O is missing,

    Note:

    A taxpayer may be a member of a controlled group with an allocation of zero ("0" ) in each of the three taxable income brackets. In this case no entry will be necessary on Line 1, Part II, Columns (c), (d), and (e);

    		 Taxable income brackets are found on an attachment,
    (See Note below for examples.)    		 Edit the positive taxable income bracket amounts to Schedule O, Line 1, Columns (c), (d), and (e).

    Note:

    Dummy a Schedule O if needed.
    A Controlled Group Code was edited; there are no entries on any of Schedule O, Part II, Line 1, Columns (c), (d), and (e), or Schedule O is missing,

    Note:

    A taxpayer may be a member of a controlled group with an allocation of zero ("0" ) in each of the three taxable income brackets. In this case no entry will be necessary on Line 1, Part II, Columns (c), (d), and (e);

    		 No taxable income brackets are found, Correspond for taxable income bracket amounts.

    • Exception: Do not correspond if:

      1. There is no indication of an income tax liability on Form 1120, Schedule J, Line 2, or

      2. The taxable income on Form 1120, Page 1, Line 30 is zero (0), or a negative amount, or

      3. Schedule O (Form 1120), Page 1, Box 3c or Box 4a is checked.
    No Controlled Group Code was edited, see IRM 3.11.16.11.11(4), Schedule J, Page 3 - Controlled Group Code / Personal Service Corporation Code / Tax Computation,   Delete Schedule O.

  3. Entries may be shown on an attached allocation/apportionment schedule. Some examples of the title of these schedules may be:

    • "apportionment plan"

    • "apportionment consent plan"

    • "consent to apportionment"

    • "controlled group tax apportionment plan"

    • "surtax apportionment plan"

    • "allocation schedule"

  4. The attachment may identify the amounts by the tax rate and/or taxable income bracket. Column (c) is the $50,000 taxable income bracket taxed at 15 percent, Column (d) is the $25,000 taxable income bracket taxed at 25 percent and Column (e) is the $9,925,000 taxable income bracket taxed at 34 percent.

  5. Any attachment labeled as "controlled group tax calculation statement" is not an apportionment plan and not used to edit tax bracket amounts on Schedule O.

3.11.16.11.48.2 (01-01-2019)
Schedule O, Part III, Line 1 - Income Tax Apportionment

  1. The instructions in this subsection only apply to Tax Period 201811 and prior.

  2. Edit Part III, Line 1 as follows:

    If And Then
    The parent corporation's income tax apportionment amounts are present in Part III, The amounts are entered on Line 1, "X" any negative entries on Line 1, Columns (f) and (g).
    The parent corporation's income tax apportionment amounts are present in Part III, The amounts are entered on a line other than Line 1,

    1. Line out Line 1 and renumber the parent corporation income tax apportionment amounts as Line "1" .

    2. "X" any negative entries on Line 1, Columns (f) and (g).
    A Controlled Group was edited, Part III, Line 1, Column (f) is blank, Check attachments for possible entry (additional 5 percent tax):

    1. If found, edit the positive amount to Line 1, Column (f).

    2. If not found, continue processing.
    A Controlled Group was edited, Part III, Line 1, Column (g) is blank, Check attachments for possible entry (additional 3 percent tax):

    1. If found, edit the positive amount to Line 1, Column (g).

    2. If not found, continue processing.

3.11.16.12 (01-01-2025)

Form 8873 - Extraterritorial Income Exclusion

  1. Document Perfection is responsible for processing Part I of Form 8873, "Elections and Other Information." Elections are identified by inputting Command Code FRM77 with Transaction Code "971" and IDRS Action Code "361," "362," or "363" depending on which election has been made. See the following subsections for specific instructions:

    • IRM 3.11.16.12.1, Part I, Line 1 - IRC 942(a) (3) Election.

    • IRM 3.11.16.12.2, Part I, Line 2 - Election to Apply the Extraterritorial Income Exclusion Provisions to Certain Transactions Involving a FSC.

    • IRM 3.11.16.12.3, Part I, Line 3 - Domestication Election.

    Note:

    "Action Codes" referenced in the Form 8873 instructions are IDRS Action Codes, not to be confused with ERS Action Codes. IDRS Action Codes will be edited as part of the Action Trail (e.g., TC 971-361).

  2. It is necessary to process all Forms 8873 attached to a return, including those attached to subsidiary returns on a consolidated return.

  3. If Part I, Lines 1 - 3 of the Form 8873 are not checked, then no TC "971" needs to be edited.

3.11.16.12.1 (01-01-2014)

Part I, Line 1 - IRC 942(a)(3) Election

  1. If the box is marked for Part I, Line 1 of Form 8873, enter TC "971" with IDRS Action Code "361." Use the current date for the Effective Date.

    Note:

    Edit Action Trail (e.g., "TC 971-361" ) in the lower left margin going vertically up the side of the return.

3.11.16.12.2 (01-01-2025)

Part I, Line 2 - Election to Apply the Extraterritorial Income Exclusion Provisions to Certain Transactions Involving a FSC

  1. If the box is marked for Part I, Line 2 of Form 8873 enter TC "971" with IDRS Action Code "362." Use the current date for the Effective Date.

    Note:

    Edit Action Trail (e.g., "TC 971-362" ) in the lower left margin going vertically up the side of the return.

3.11.16.12.3 (01-01-2013)

Part I, Line 3 - Domestication Election

  1. If the box is marked for Part I, Line 3 of Form 8873 enter TC "971" with IDRS Action Code "363." Use the current date for the Effective Date.

    Note:

    Edit Action Trail (e.g., "TC 971-363" ) in the lower left margin going vertically up the side of the return.

3.11.16.13 (01-01-2025)

Form 4626 - Corporate Alternative Minimum Tax (CAMT) (Tax Period 202301 and later)

  1. The instructions in this subsection apply to Tax Period 202301 and later.

  2. Place Form 4626 in sequence order if significant entries are present on any of the following lines:

    1. Question A is checked

    2. Question B is checked

    3. Part I, Line 1a, Column a

    4. Part I, Line 1a, Column b

    5. Part I, Line 1a, Column c

    6. Part I, Line 1f, Column a

    7. Part I, Line 1f, Column b

    8. Part I, Line 1f, Column c

    9. Part I, Line 5, Column a

    10. Part I, Line 5, Column b

    11. Part I, Line 5, Column c

    12. Part I, Line 13, Column a

    13. Part I, Line 13, Column b

    14. Part I, Line 13, Column c

    15. Part I, Line 15

    16. Part II, Line 1a

    17. Part II, Line 1f

    18. Part II, Line 4

    19. Part II, Line 5

    20. Part II, Line 8

    21. Part II, Line 9

    22. Part II, Line 13

  3. Edit RPC "N" if Form 4626 (2023 Revision and later) is attached. See IRM 3.11.16.9.2, Return Processing Code.

3.11.16.13.1 (01-01-2024)

Form 4626 - Alternative Minimum Tax (Tax Period 201811 and prior)

  1. The instructions in this subsection only apply to Tax Period 201811 and prior.

  2. Taxpayers may sometimes include more than one Form 4626 with the return. If more than one Form 4626 is present, compute the totals and edit the right transcription lines.

  3. If Form 4626 is attached, perfect the following lines, as necessary:

    1. Line 3 - Pre-adjustment Alternative Minimum Taxable Income (AMTI). If there is no entry on Line 3, but any of Lines 1 or Lines 2a through 2o have an entry, compute Line 3. Bracket if negative.

    2. Line 4e - Adjusted current earning (ACE) adjustment. Accept taxpayer's entry.

    3. Line 6 - Alternative tax net operating loss deduction. Accept positive taxpayer's entry. "X" negative entry.

    4. Line 11 - Alternative minimum tax foreign tax credit. Accept positive taxpayer's entry. "X" negative entry.

3.11.16.14 (01-14-2021)

Schedule D - Capital Gains and Losses

  1. Edit the Schedule D as follows:

    If Then
    All the following conditions apply:

    1. Form 1120 is for 201212 tax year or later and

    2. The Schedule D is a 2012 or later revision and

    3. Significant entries are present on one or more of the transcription lines or checkbox is marked.

      • Transcription lines for 2019 and subsequent:

        • Checkbox above Part I,

        • Part I, Line 1a, Columns (d) and (e), Lines 1b - 3, Columns (d), (e), and (g),

        • Part II, Lines 8a, Columns (d) and (e), Lines 8b - 10, Columns (d), (e), and (g),

        • Line 14,

      • Transcription lines for 2013 through 2018:

        • Part I, Line 1a, Columns (d) and (e), Lines 1b -3, Columns (d), (e), and (g),

        • Part II, Lines 8a, Columns (d) and (e), Lines 8b - 10, Columns (d), (e), and (g),

        • Line 14,

      • Transcription lines for 2012:

        • Lines 1-3 Columns (d) and (e),

        • Lines 8-10 Columns (d) and (e),

        • Line 14,

    1. Place Schedule D in sequence order

    2. Edit Schedule D in dollars only.

    3. For 2013 revisions and later: "X" any negative transcription entries, except Lines 1b(g), 2(g), 3(g), 8b(g), 9(g) and 10(g). These lines can be positive or negative.

    4. For 2012 revisions: "X" any negative transcription entries and change Line 1 to 1b and Line 8 to 8b.
    Criteria above is not met, Cross out or slash the Schedule D.

3.11.16.15 (01-01-2022)

Form 4797 - Sales of Business Property (Form 1120 Only)

  1. Line 1b - No editing necessary.

  2. Line 1c - No editing necessary.

3.11.16.16 (01-01-2021)

Form 8949 - Sales and Other Dispositions of Capital Assets

  1. Form 8949, Sales and Other Dispositions of Capital Assets, is valid for Tax Period ending 201712 and later. See Figure 3.11.16-23.

  2. If the taxpayer entered a "Z" or "Y" in any of the rows in either Part I, Line 1, Column (f), or Part II, Line 1, Column (f), of Form 8949, do the following:

    1. Place the form in sequence order. If there is more than one Form 8949 attached, sequence the Form 8949 with the edited data.

    2. Edit CCC "M."

    3. If the taxpayer entered a "Z" in any of the rows in either Part I, Line 1, Column (f), or Part II, Line 1, Column (f), of Form 8949, edit as follows:

      If Then
      EIN is present in Column (a), Underline the EIN.
      No EIN is present in Column (a) or is illegible, No action is needed.
      A Date Acquired is present in Column (b) and the day, month, and year are present, Underline the Date Acquired.
      A Date Acquired is present in Column (b) and the day, month, and year are not present, No action is needed.
      A dollar amount is present in Column (g), Underline the dollar amount.
      No dollar amount is present in Column (g), No action is needed.
      If more than one row has a "Z" in Column (f), Edit "Z-1" to the right margin of Part I, Line 1, Row 1.

    4. If the taxpayer entered a "Y" in any of the rows in either Part I, Line 1, Column (f), or Part II, Line 1, Column (f), of Form 8949, edit as follows:

      If Then
      EIN is present in Column (a), Underline the EIN.
      No EIN is present in Column (a) or is illegible, No action is needed.
      Date Sold or Disposed of is present in Column (c) and the day, month, and year are present, Underline the Date Sold or Disposed of.
      Date Sold or Disposed of is present in Column (c) and the day, month, and year are not present, No action is needed.
      A dollar amount is present in Column (g), Underline the dollar amount.
      No dollar amount is present in Column (g), No action is needed.
      If more than one row has a "Y" in Column (f), Edit "Y-1" to the right margin of Part I, Line 1, Row 1.
      If "Z-1" is edited, Edit "Y-1" under "Z-1."

    Figure 3.11.16-23

    This is an Image: 33500215.gif

    Please click here for the text description of the image.

3.11.16.17 (01-01-2022)

Form 8996 - Qualified Opportunity Fund

  1. Form 8996 is valid for Tax Period ending 201712 and later. See Exhibit 3.11.16-17, Form 8996 - Prior Year Conversion Chart.

  2. The table below shows Form 8996 revision line numbers:

    Form 8996 Revisions

    2021 and later 2020 2019 2018 and 2017
    Line 5 Line 5 Line 5 N/A
    Line 6 N/A N/A N/A
    Line 7 Line 7 Line 6 Line 5
    Line 8 Line 8 Line 7 Line 6
    Line 10 Line 10 Line 9 Line 8
    Line 11 Line 11 Line 10 Line 9
    Line 14 Line 14 Line 13 Line 12
    Line 15 Line 15 Line 14 Line 13

  3. Place Form 8996 in sequence order if significant entries are present on any of the lines in paragraphs (4) through (10) below:

    Note:

    Only Part III, Lines 14 and 15 require editing.

  4. Part I, Line 5 - checkbox is checked.

  5. Part I, Line 6 - Reserved for Future Use.

  6. Part II, Line 7 - Total qualified opportunity zone property held by the taxpayer on the last day of the first 6-month period of the taxpayer’s tax year.

  7. Part II, Line 8 - Total assets held by the taxpayer on the last day of the first 6-month period of the taxpayer’s tax year.

  8. Part II, Line 10 - Total qualified opportunity zone property held by the taxpayer on the last day of the taxpayer’s tax year.

  9. Part II, Line 11 - Total assets held by the taxpayer on the last day of the taxpayer’s tax year.

  10. Part III, Line 14 - Perfect line 14 as follows:

    1. Edit the percent on Line 14 in 0.00 format. For example, edit 50 percent as 0.50.

    2. If the entry is greater than 1.00, "X" the entry on Line 14. For example, the entry is 1.23 or 1.23 percent.

  11. Part III, Line 15 - Perfect Line 15 as follows:

    1. If Form 8996, Part III, Line 15 is blank and Part IV, Line 8 has an amount, edit Part IV, Line 8 to Part III, Line 15 in dollars and cents.

  12. Edit Return Processing Code (RPC) "6," see IRM 3.11.16.9.2, Return Processing Code (RPC), for more information.

  13. See the following IRM references:

    • Form 1120 - IRM 3.11.16.11.41, Schedule K, Question 25 (Form 8996 - Qualified Opportunity Fund)

    • Form 1120-F - IRM 3.11.16.34.24, Page 3, Question II (Form 8996 - Qualified Opportunity Fund)

    • Form 1120-REIT - IRM 3.11.16.40.29, Schedule K, Question 12 (Qualified Opportunity Fund - Form 8996)

3.11.16.18 (01-01-2022)

Form 1125-A - Cost of Goods Sold

  1. Place Form 1125-A in sequence order if significant entries are present on Lines 1, 6, or 7.

  2. Edit Form 1125-A in dollars only.

  3. Line 1 is "Inventory at Beginning of Year." If Line 1 is blank, edit from the taxpayer's attachment, see Figure 3.11.16-24.

  4. Line 6 is "Total Cost of Goods." If Line 6 is blank, do one of the following:

    1. Add Lines 1 through 5 and edit the total to Line 6, or

    2. Perfect from attachments if possible for a Line 6 total, see Figure 3.11.16-24, or

    3. Edit the positive amount from line 2, page 1 of Form 1120 to line 6 of Form 1125-A.

  5. Line 7 is "Inventory at End of Year." If Line 7 is negative "X" the amount. If Line 7 is blank, enter from taxpayer's attachment, see Figure 3.11.16-24.

  6. Forms 1125-A must be dummied if missing and if Lines 1, 6, and/or 7 can be edited. Use instruction in 2-5 above to edit lines. Place Form 1125-A in sequence order.

    Figure 3.11.16-24

    This is an Image: 33500220.gif

    Please click here for the text description of the image.

3.11.16.19 (01-01-2025)

Form 4136 - Credit for Federal Tax Paid on Fuels

  1. If Form 4136 is missing and a significant entry is present on any of the lines below, correspond for the missing Form 4136. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

    • Form 1120 - Schedule J, Part II, Line 20b
      (Part III, Line 20b for 2022 - 2018)
      (Part II, Line 19b for 2017 - 2011)

    • Form 1120-C - Line 30f
      (Line 30g for 2023)
      (Line 30f for 2022 - 2018)
      (Line 29f for 2017 and prior)

    • Form 1120-F - Page 1. Line 5g

    • Form 1120-FSC - Page 1, Line 2f

    • Form 1120-H - Page 1, Line 23e
      (Line 23f for 2022 and prior)

    • Form 1120-L - Page 1 Line 27f
      (Line 27g for 2023)
      (Line 28g for 2022 - 2018)
      (Line 27g for 2017 and prior)

    • Form 1120-PC - N/A

    • Form 1120-REIT - Page 2, Line 25f
      (Line 25g for 2023)
      (Line 25f for 2022 - 2018)
      (Line 24f for 2017 and prior)

    • Form 1120-RIC - Page 2, Line 28f
      (Line 28g for 2023)
      (Line 29g for 2022-2018)
      (Line 28g for 2017 and prior)

  2. If a fuel credit claim is found on other than the right line on the return, and Form 4136 is attached, adjust incorrect entry before editing fuel tax credits.

  3. If fuel tax credit is claimed and Form 4136 is attached, compute as follows:

    If And Then
    Form 4136, Column (d) is blank, There is an entry in Column (c), Multiply the entry in Column (c) by the rate in Column (b)
    Column (d) must equal Line 17 of Form 4136. See Figure 3.11.16-25.
    Perfection is not possible,   Correspond.

    Figure 3.11.16-25

    This is an Image: 33500225.gif

    Please click here for the text description of the image.

  4. C&E is no longer required to renumber the lines on prior year Form 4136 to current year format. Column (d) credit amounts are transcribed using the corresponding Credit Reference Number (CRN) in Column (e).

3.11.16.20 (01-01-2023)

Form 8978 and Form 8978, Schedule A

  1. Form 8978 is valid for Tax Period ending 201712 and later.

  2. The "Source of review Year adjustments" checkboxes on Form 8978, Partner’s Additional Reporting Year Tax and Form 8978, Schedule A, Partners Additional Reporting Year Tax (Schedule of Adjustments), are valid for Tax Period 202112 and later.

  3. Place Form 8978 in sequence order if any of the following apply:

    • The "Source of review year adjustments" checkboxes are checked on Form 8978.

    • The "Source of review year adjustments" checkboxes are checked on Form 8978, Schedule A.

    • Significant entries are present on Form 8978, Part I, Line 14, Part II, Line 16, or Part III, Line 18.

    Note: Any information from the checkboxes on Form 8978, Schedule A will be transcribed on Form 8978.

  4. Edit the digit to the right margin of Form 8978, Part I row as follows:

    If And Then
    Only Form 8978 is attached, One or more of the boxes are checked, Edit:

    1. "1" - BBA Audit is checked.

    2. "2" - AAR Filing is checked.

    3. "3" - Both boxes are checked.
    Form 8978 and Form 8978, Schedule A, are attached, The boxes are marked the same on both forms, Use the Form 8978 data and edit as shown above.
    Form 8978 and Form 8978, Schedule A, are attached, The boxes are marked differently, Use the Form 8978, Schedule A, data and edit as shown above.
    Only Form 8978, Schedule A, is attached,   No editing is required.

    Note:

    No editing is required on Lines 14, 16 and 18.

  5. Part I, Line 14 - Total additional reporting year tax.

  6. Part II, Line 16 - Total penalties.

  7. Part III, Line 18 - Total interest.

3.11.16.21 (01-02-2020)

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

  1. Form 965-B is valid for Tax Period ending 201712 and later.

  2. Place Form 965-B in sequence order if a significant amount (other than the pre-printed year) is present on any of the following lines:

    1. Part I, Lines 1 through 5, col (a), Year of Section 965(a) Inclusion or Liability Assumed.

    2. Part I, Lines 1 through 5, col (h), Net 965 Tax Liability Transferred (Out) Transferred (In), or Subsequent Adjustments, if any.

    3. Part I, Lines 1 through 5, col (i), Tax Identification Number of buyer/transferee or Seller/transferor.

  3. Edit "1" in the right margin of Part I if more than five lines of entries are present.

3.11.16.22 (01-01-2025)

Form 8941 - Credit for Small Employer Health Insurance Premiums

  1. Place Form 8941 in sequence order if significant entries are present.

  2. Line A: To determine if correspondence is needed for the SHOP (Small Business Health Options Program) checkbox (Line A, Form 8941) for 2014 and later, follow the table below:

    Note:

    This chart is only applicable for the Form 1120.

    If Then
    Line A, Only "Yes" box or"No" box is checked, No correspondence is needed.
    Line A, Neither the "Yes" box or the "No" box is checked, Correspond using Letter 118C. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.
    Line A, Both the "Yes" box and the "No" box is checked, Correspond using Letter 118C. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

  3. Line C: To determine if correspondence is needed for the checkboxes on Line C (2016 and later), follow the table below:

    Note:

    This chart is only applicable for the Form 1120.

    If Then
    Line C, Only "No" box is checked, No correspondence is needed.
    Line C, Only "Yes" box is checked, Correspond using Letter 118C.
    Line C, Neither the "Yes" box or the "No" box is checked, Correspond using Letter 118C. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.
    Line C, Both the "Yes" box and the "No" box is checked, Correspond using Letter 118C. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

  4. For prior year conversion instructions, see Exhibit 3.11.16-18, Form 8941 - Prior Year Conversion Chart.

3.11.16.23 (01-02-2023)

Form 5884-B - New Hire Retention Credit

  1. Form 5884-B, New Hire Retention Credit is historical (2010 through 2011).

3.11.16.24 (01-01-2025)

Form 3800 - General Business Credit

  1. Form 3800, General Business Credit, must be filed with corporate tax returns when an amount is present on Schedule J, Line 5c - General Business Credit.

  2. Place Form 3800 in sequence order if significant entries are present.

  3. If an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present on any line of Form 3800 , Part III, Column (g) (Column (j) for 2023 and prior) correspond for the supporting credit form. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

    Exception:

    For TY 2022 and prior - If Form 3800, Part III, Box C, D, or G are checked and Line 1a, 1b, 1c, 1e, 1f, 1h, 1i, 1j, 1k, 1l, 1m, 1n, 1p, 1s, 1t, 1w, 1x, 1y, 1aa, 1bb, 1zz, 3, 4b, 4c, 4d, 4e, 4f, 4g, 4h, 4i, or 4j Column (b) has an EIN, do not correspond and continue to process the return.

    Exception:

    Tax Year 2023 - If Form 3800, Part III, Line 1b, 1c, 1e, 1f, 1g, 1h, 1i, 1j, 1k, 1m, 1n, 1p, 1s, 1t, 1u, 1w, 1x, 1y, 1aa, 1bb, 1cc, 1dd, 1ee, 1ff, 1zz, 3, 4a, 4b, 4c, 4d, 4e, 4f, 4g, 4h, 4i, or 4j Column (d) has an EIN, do not correspond and continue to process the return.

    Exception:

    Tax Year 2024 and later - If Form 3800, Part III, Line 1b, 1c, 1e, 1f, 1g, 1h, 1i, 1j, 1k, 1m, 1n, 1p, 1q, 1s, 1t, 1u, 1v, 1w, 1x, 1y, 1aa, 1bb, 1cc, 1dd, 1ee, 1ff, 1gg, 1zz, 3, 4a, 4b, 4c, 4d, 4e, 4f, 4g, 4h, 4i, or 4j Column (c) has an EIN, do not correspond and continue to process the return.

  4. See IRM 3.11.16.11.21, Line 5c - General Business Credit and Exhibit 3.11.16-19, Form 3800 - Prior Year Conversion Chart.

3.11.16.25 (01-01-2025)

Form 8997 - Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments

  1. Form 8997 is valid for Tax Period ending 201901 and later.

  2. Place Form 8997 in sequence order if the form is attached and significant entries are present in any of Parts I, II, III or IV.

  3. No editing is required except for the indicator in Parts I, II, III or IV. Transcription is from Row 1 of each part.

  4. Part I - Total QOF Investment Holdings Due to Deferrals before Beginning of Tax Year (Row 1).

    1. Column a - EIN

    2. Column b - Date

    3. Column d - Special Gain Code

    4. Column e - Amount of short-term deferred gain remaining in QOF

    5. Column f - Amount of long-term deferred gain remaining in QOF

    6. Part I Indicator - If more than one row of tax data is present in Part I, edit a "1" in the right margin of Part I, Row 1.

    7. Line 2, Column e - Total amount

    8. Line 2, Column f - Total amount

  5. Part II - Current Tax Year Capital Gains Deferred by Investing in QOF (Row 1)

    1. Column a - EIN

    2. Column b - Date

    3. Column d - Special Gain Code

    4. Column e - Amount of short-term deferred gain remaining in QOF

    5. Column f - Amount of long-term deferred gain remaining in QOF

    6. Part II Indicator - If more than one row of tax data is present in Part II, edit a "1" in the right margin of Part II, Row 1.

    7. Line 2, Column e - Total amount

    8. Line 2, Column f - Total amount

  6. Part III - Inclusion Events and Certain Other Transfers During the Current Tax Year (Row 1)

    1. Column a - EIN

    2. Column b - Date

    3. Column d - Special Gain Code

    4. Column e - Amount of previously deferred short-term gain now included in taxable income

    5. Column f - Amount of previously deferred long-term gain now included in taxable income

    6. Part III Indicator - If more than one row of tax data is present in Part III, edit a "1" in the right margin of Part III, Row 1.

    7. Line 2, Column e - Total amount

    8. Line 2, Column f - Total amount

  7. Part IV - Total QOF Investments Due to Deferrals at Year End (Row 1)

    1. Column a - EIN

    2. Column b - Date

    3. Column d - Special Gain Code

    4. Column e - Amount of short-term deferred gain invested in QOF

    5. Column f - Amount of long-term deferred gain invested in QOF

    6. Part IV Indicator - If more than one row of tax data is present in Part IV, edit a "1" in the right margin of Part IV, Row 1.

    7. Line 2, Column e - Total amount

    8. Line 2, Column f - Total amount

  8. If Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments, is attached, edit Return Processing Code (RPC) "9." See IRM 3.11.16.9.2, Return Processing Code (RPC), for more information.

3.11.16.26 (01-01-2025)

Form 6252 - Installment Sale Income (Form 1120 Only)

  1. The transcription of Form 6252 is valid for Tax Period ending 201712 and later.

  2. Place Form 6252 in sequence order if the form is attached to a Form 1120 and significant entries are present on any of Lines 1, 2a, 2b, 7, 19, 21 or 23.

    Note:

    Part II, Line 19 is the only line that requires editing, however, an Installment Sale Indicator must be determined from Line 3, see IRM 3.11.16.10.4, Installment Sale Indicator (Form 6252).

  3. Only one Form 6252 can be processed. If multiple forms are attached, process the first one with significant transcription entries and delete the others.

    Caution:

    Multiple Forms 6252 must be used to determine the Installment Sale Indicator.

  4. Line 1 - Description of Property - Taxpayer may enter a code and a description of installment sale property as described below: (No editing necessary)

    Code Description of property
    1 Sale property is timeshare or residential lot
    2 Sale by an individual of personal use property (within the meaning of section 1275(b)(3))
    3 Sale of any property used or produced in the trade or business of farming (within the meaning of section 2032A(e)(4) or (5))
    4 All other installment sales not listed

  5. Line 2a - Date acquired.

  6. Line 2b - Date sold.

  7. Line 3 - Information is used to determine the Installment Sale Indicator - Edit "6 -" followed by the right Installment Sale Indicator code in the left margin of Form 1120, Page 1, near Line 12 when Form 6252 is present (e.g., "6 - 1" ).

    1. Valid Installment Sale Indicator codes are as follows:

      Code One Form 6252 More Than One Form 6252
      1 "Yes" response to Question 3 At least one form has a "Yes" response.
      2 "No" response to Question 3 All "No" responses, or a combination of "No" and/or blank responses.
      3 "Yes" and "No" are checked or Question 3 is blank Question 3 is blank on all forms.

  8. Part I, Line 7 - Taxpayer subtracts Line 6 from Line 5.

  9. Part II, Line 19 - Gross Profit Percentage.

    1. If Line 19 is not in 0.0000 format, edit the percentage as follows:

      Taxpayer’s Entry Edit
      50 percent 0.5000
      .123 0.1230
      .12345 0.1234

      Note:

      Data will only transcribe four digits after the decimal, If the percentage is in the correct format e.g., 0.0000, but more than four digits are present after the decimal e.g., 0.123456, no editing is needed.

    2. If the percent is greater than 1.00, "X" the percentage amount on Line 19. For example, the percentage is 1.2300 or 1.23 percent.

  10. Part II, Line 21 - Payments received during year.

  11. Part II, Line 23 - Payments received in prior years.

3.11.16.27 (01-01-2025)

Form 8936, Schedule A, Clean Vehicle Credit Amount

  1. Sequence up to two Form 8936 Schedule A.

  2. The following lines will be transcribed from the first two attached Form 8936 Schedule A.

    1. Part I, Line 2

    2. Part I, Line 3

    3. Part II, Line 9

    4. Part II, Line 11

    5. Part IV, Line 17

    6. Part V, Line 26

  3. If more than two Form 8936 Schedule A are attached, edit an indicator of "1" on the second Form 8936 Schedule A, in the bottom right margin of Page 3. See Figure 3.11.16-26, Schedule A Indicator.

  4. If there is an amount of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Schedule J, Line 5c for the Clean Vehicle credit (Form 3800, Part III, Lines 1y or 1aa) correspond for a Form 8936 or Form 8936 Schedule A if either is missing. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

    Figure 3.11.16-26

    This is an Image: 33500230.gif

    Please click here for the text description of the image.

3.11.16.28 (01-01-2025)

Form 4255, Certain Credit Recapture, Excessive Payments, and Penalties

  1. Form 4255, Certain Credit Recapture, Excessive Payments, and Penalties, is valid for Tax Period ending 202401 and later.

  2. Place Form 4255 in sequence order if the form is attached and significant entries are present in Part I, Columns (s) or (t). See IRM 3.11.16.11.1, Sequence - Form 1120.

  3. If the Tax Period is 202312 and prior, do not sequence the Form 4255.

  4. The following lines will be transcribed on Form 4255.

    Form 4255, Part I Credit From Column
    Line 1a Form 7207 (s)
    Line 1a Form 7207 (t)
    Line 1b Form 3468, Part III (s)
    Line 1b Form 3468, Part III (t)
    Line 1c Form 7210 (s)
    Line 1c Form 7210 (t)
    Line 1d Form 3468, Part IV (s)
    Line 1d Form 3468, Part IV (t)
    Line 1e

    Caution:

    If the Tax Period is 202412 and prior and a significant amount is present, edit an "X" to the left of the amount. This line is valid for Tax Period 202501 and later.

    		 Form 7218 (s)
    Line 1e

    Caution:

    If the Tax Period is 202412 and prior and a significant amount is present, edit an "X" to the left of the amount. This line is valid for Tax Period 202501 and later.

    		 Form 7218 (t)
    Line 1f

    Caution:

    If the Tax Period is 202312 and prior and a significant amount is present, edit an "X" to the left of the amount. This line is valid for Tax Period 202501 and later.

    		 Form 7213, Part II (s)
    Line 1f

    Caution:

    If the Tax Period is 202312 and prior and a significant amount is present, edit an "X" to the left of the amount. This line is valid for Tax Period 202501 and later.

    		 Form 7213, Part II (t)
    Line 1g

    Caution:

    If the Tax Period is 202412 and prior and a significant amount is present, edit an "X" to the left of the amount. This line is valid for Tax Period 202501 and later.

    		 Form 3468, Part V (s)
    Line 1g

    Caution:

    If the Tax Period is 202412 and prior and a significant amount is present, edit an "X" to the left of the amount. This line is valid for Tax Period 202501 and later.

    		 Form 3468, Part V (t)
    Line 1h Form 8936, Part V (s)
    Line 1h Form 8936, Part V (t)
    Line 1i

    Caution:

    If the Tax Period is 202412 and prior and a significant amount is present, edit an "X" to the left of the amount. This line is valid for Tax Period 202501 and later.

    		 Form 7211 (s)
    Line 1i

    Caution:

    If the Tax Period is 202412 and prior and a significant amount is present, edit an "X" to the left of the amount. This line is valid for Tax Period 202501 and later.

    		 Form 7211 (t)
    Line 1j Form 3468, Part VI (s)
    Line 1j Form 3468, Part VI (t)
    Line 1k Form 8835 (s)
    Line 1k Form 8835 (t)
    Line 2a Form 8933 (s)
    Line 2a Form 8933 (t)
    Line 2b Form 8911, Part I (s)
    Line 2b Form 8911, Part I (t)

  5. If there is an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Form 1120, Schedule J, Line 1g (Amount from Form 4255, Part I, Line 3, Column (q)), correspond for a Form 4255 if missing. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

3.11.16.29 (01-01-2025)

Consolidated Returns

  1. A consolidated return is defined as a single income tax return having combined financial data for a parent corporation and one or more subsidiary or affiliated corporations.

  2. The parent corporation files the return, and its name, which appears on the return, including the words, "and subsidiaries" , "and affiliated companies" , or similar notation.

  3. The parent corporation must submit Form 851, with Form 1120, on an annual basis.

    If And Then
    Form 851 is missing or Form 851, Part I is not completed, After inspecting the return for possible attachments that may be a "substitute" Form 851,

    1. If a "substitute" Form 851 is found, do not correspond.

    2. If a "substitute" Form 851 is not found, correspond for missing Form 851 or completion of Form 851, Part I. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

      Caution:

      Before corresponding for missing Form 851, research the parent corporation using Command Code INOLE. Do not correspond if subsidiaries are not shown.

  4. Form 1122 may also be attached to a consolidated return. See IRM 3.11.16.29.4, Form 1122 - Authorization and Consent of Subsidiary Corporation to be Included in a Consolidated Income Tax Return.

  5. If there is a sign a subsidiary return has been detached from the parent corporation return (e.g., "Included in a Consolidated Return" or similar notation is on the tax return), research INOLES to determine if the tax return has an 1120-14 filing requirement.

    1. Route the tax return to AM if INOLES shows an 1120-14 filing requirement.

    2. Continue processing the tax return if INOLES does not show an 1120-14 filing requirement.

3.11.16.29.1 (01-01-2009)

Consolidated Return - Mixed Components

  1. A Mixed Component is a consolidated return with a combination of Form 1120 and/or Form 1120-L (Life Insurance) and/or 1120-PC (Property and Casualty (Non-Life Insurance)) processed as either the parent or subsidiary return. There may also be a sign the return is for a "Life" and/or "Non-Life" insurance company.

  2. Do not search attachments for missing money amounts for pages 1, 2, and 4.

  3. Do not correspond for missing schedules for pages 1, 2, and 4.

  4. Do not correspond for income or deduction amounts if "see attached" is notated in the Income Section or Deduction Section of the return.

  5. Do not correspond for a missing Balance Sheet on a mixed component return that includes a Form 1120-L.

  6. Do not correspond for a missing Form 1120-L or 1120-PC Annual Statement if a re-entry mixed component return, Form 1120 was originally filed electronically.

  7. All other processing instructions will be followed.

3.11.16.29.2 (01-01-2025)

Consolidated Returns - Required Information

  1. Supporting schedules showing in detail for each corporation included in the consolidation: income, deductions, and computations of taxable income; reconciliation of earned surplus; and assets and liabilities at the beginning and ending of the taxable year will be attached.

  2. If the supporting information for each corporation is in the form of separate returns for the parent corporation and the subsidiaries, do not detach or separate these documents from the consolidated return.

  3. If the Balance Sheets are included only for the parent corporation and subsidiaries, and the Consolidated Balance Sheet is not included, correspond. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

  4. If a Consolidated Balance Sheet is not received, all Balance Sheet items will be input from the Balance Sheet of the parent Corporation; if the parent corporation cannot be found, Balance Sheet items will be input from the subsidiary with greatest Ending Assets.

3.11.16.29.3 (01-01-2025)

Form 851 - Affiliations Schedule

  1. Consolidated returns may be filed on Form 1120, Form 1120-C, Form 1120-L, and Form 1120-PC only.

    Note:

    For Form 1120, see IRM 3.11.16.9.3, ABLM Code and Schedule M-3 Checkbox.

  2. If a Form 851 is attached to any other return, do not input Transaction Code (TC) "590" for the subsidiaries.

  3. A TC "590" with Closing Code "014" MUST be input for all subsidiaries shown on the Form(s) 851. This applies to both numbered and unnumbered returns.

  4. Subsidiaries NAICS Code information:

    1. Six digit codes are located on Page(s) 1, Part II, Lines 2 through 10 on the Form 851.

    2. If more than one Form 851 is present, enter the code in each subsidiaries individual transaction record.

    3. If any NAICS Codes are missing, use code "999999."

  5. Form 851 is unprocessable, if the total amount of Form 851, Line 1 does not agree with the sum of Form 1120, Schedule J, Lines 13,14 and 17 (Lines 12, 13 and 16 for 2017- 2011) or credits are claimed on Form 851, Lines 2 through 10.

    If Then
    Form 851, Line 1 "Portion of overpayment credits and estimated tax payments" does not agree with the total of Form 1120, Schedule J, Lines 13 and 14 (Lines 12 and 13 for 2017-2011)
    See Figure 3.11.16-27,

    1. Edit Action Code "342."

    2. Attach Form 4227, Intra-SC Reject or Routing Slip. Check the Accounting box on Form 4227.

    3. "X" the parent corporation if included on Form 851 Part 1, and Prepayment Credits if on any line other than one (1).
    Form 851, Line 1 "Portion of tax deposited with Form 7004," does not agree with the amount on Form 1120, Schedule J, Line 17 (Line 16 for 2017-2011),

    1. Edit Action Code "342."

    2. Attach Form 4227. Check the Accounting box on Form 4227.

    3. "X" the parent corporation if included on Form 851 Part 1, and Prepayment Credits if on any line other than one (1).
    Form 851, Lines 2 through 10 include credits for "Portion of overpayment credits and estimated tax payments" or "Portion of tax deposited with Form 7004,"

    1. Edit Action Code "342."

    2. Attach Form 4227. Check the Accounting box on Form 4227.

    3. "X" the parent corporation if included on Form 851 Part 1, and Prepayment Credits if on any line other than one (1).

    Note:

    For Form 1120-C, use the sum of Line 30(a) "Preceding year’s overpayment credited to current year" , Line 30(b) "Current year’s estimated tax payments" , and Line 30(d) "Tax deposited with Form 7004" . (Lines 30(a), 30(b) and 30(e) for 2023 - 2018) (Lines 29(a), 29(b), and 29(e) for 2017 and prior).
    For Form 1120-L, use the sum of Line 27(a) Preceding year’s overpayment credited to current year, Line 27(b) "Current year’s estimated tax payments" , and Line 27(d) Tax deposited with Form 7004. (Lines 27(a), (b), and (e) for 2023) (Lines 28 (a), (c), and (f) for 2022 - 2018) (Lines 29 (a), (b), (c), (d), and (g) for 2017 and prior).
    For Form 1120-PC, use the sum of Line 16(a) Preceding year’s overpayment credited to current year, Line 16(b) Current year’s estimated tax payments, and Line 16(d) "Tax deposited with Form 7004" . (Lines 15(a), (b), and (e) for 2023) (Lines 15(a), (c), and (g) for 2022 - 2019) (Lines 15(a), (b), (c), (g) for 2018) (Lines 14(a), (b), (c), (d), and (g) for 2017 and prior).

    Figure 3.11.16-27

    This is an Image: 33500235.gif

    Please click here for the text description of the image.

  6. (Clerical) An action trail must be notated on the return "TC-590-014 INPUT." See Figure 3.11.16-28.

  7. (Clerical) TC "590" - Closing Code "014" requires that:

    1. The parent corporations EIN and Name Control match the Master File (MF).

    2. The parent corporations BMF filing requirements are 01 for Form 1120, 20 for Form 1120-C, 03 for Form 1120-L, or 04 for Form 1120-PC.

    3. The subsidiary corporation's FYM must match the parent corporation's FYM.

    4. The subsidiary corporations EIN and Name Control match the MF.

    5. The subsidiary NAICS Code must be part of the transaction, see IRM 3.11.16.11.33, Schedule K, Line 2a - NAICS Code.

    Figure 3.11.16-28

    This is an Image: 33500240.gif

    Please click here for the text description of the image.

  8. (Clerical) For each subsidiary listed on the Form 851 or attached input the following under Command Code FRM49:

    1. Subsidiary EIN

    2. MFT

    3. Tax Period

    4. Subsidiary Corporate Name Control

    5. NAICS Code

  9. (Clerical) If the return is Numbered -

    1. Reject the document using Action Code "355."

    2. Prepare Form 4227 for Rejects.

    3. Use Command Code INOLE to verify the parent corporate name line and the filing requirement is 01 for a Form 1120, 20 for Form 1120-C, 03 for Form 1120-L, or 04 for Form 1120-PC, before inputting the TC 590-014.

    4. In the reason area of the Form 4227 write "Verify the Parent Corporations EIN, Name and filing requirement with MF, then input TC 590-014 for all subsidiaries listed on the Form(s) 851 and its attachments."

  10. (Clerical) If the return is Unnumbered -

    1. Verify the parent corporations EIN, Name, and filing requirement are correct on the Master File.

    2. Use Command Code INOLE to verify the parent corporate name line and the filing requirement is 01 for a Form 1120, filing requirement is 20 for Form 1120-C, filing requirement is 03 for Form 1120-L, or filing requirement is 04 for Form 1120-PC, before inputting TC 590-014.

  11. (Clerical) If the INOLE first name line and the parent consolidated return’s first name line do not agree (disregard subsidiaries) or if the parent is not established on the MF or its filing requirement is other than 01, 20, 03, or 04 (1120 / 1120-C / 1120-L / 1120-PC) or the parent corporation and the subsidiaries corporation FYM do not match:

    1. Route the return to Entity Control for a first name line change,

    2. Or route to Entity to establish it on the MF,

    3. And/or route to Entity to make a filing requirement change.

    4. Or route to Entity Control to have the subsidiary's FYM change to match the parent corporation's FYM.

  12. (Clerical) If the returns are received back from Entity Control for processing before the changes have posted to the MF, hold the returns and check IDRS after 2 cycles.

    1. Input TC 590-014 for the subsidiaries.

    2. If unable to input TC 590-014, continue processing the return.

  13. (Clerical) If any or all EINs are missing or are the same as the parent follow the steps in (a) through (e) below. When EINs are missing, check attachments and/or research IDRS to obtain them.

  14. (Clerical) If unable to obtain the EINs from IDRS research, route the return to Entity Control to have EINs assigned.

  15. (Clerical) Follow the steps in 5 and 6 above:

    1. If the subsidiary corporate name and EIN are the same as the common parent corporation, circle the name and EIN.

    2. If the EIN is the same as the common parent, circle the EIN.

    3. If there is a sign that the EINs are pending or applied for.

    4. If all the EINs are missing.

  16. (Clerical) If all the EINs are not obtained, correspond with the parent corporation to obtain the missing numbers. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information. Upon receipt of a reply, input TC 590-014 for all EINs are furnished. There will be no further follow-up.

  17. (Clerical) When all EINs are obtained, input TC 590-014 for all the subsidiaries.

  18. (Clerical) If the subsidiaries EIN and Name Control do not match, an error message will appear on the screen when the TC 590-014 is input. When error message appears follow the procedures below:

    1. Research IDRS through Command Code EINAD or NAMEE to see if there is a different EIN listed for the corporation.

    2. If EINAD or NAMEE shows a different EIN than the one listed on the Form 851, use the one on EINAD or NAMEE.

  19. (Clerical) If EINAD or NAMEE does not provide a different EIN, research IDRS using Command Code INOLE to see what the entity is for the listed EIN. If the INOLE entity can be matched to the Form 851 subsidiary in some way (such as by a prior Name Control or a cross reference to the parent corporation EIN) use the INOLE Name Control for the TC 590-014 input.

3.11.16.29.4 (01-01-2025)

Form 1122 - Authorization and Consent of Subsidiary Corporation to be Included in a Consolidated Income Tax Return

  1. The presence of Form 1122 indicates a Consolidated Income Tax Return which is being filed for the first time as a consolidated return. Do not correspond for Form 1122 if it appears to be missing.

  2. If Form 1122 is present, Form 851 must be present. Correspond for missing Form 851. Process Form 851 if present, see IRM 3.11.16.29.3, Form 851 - Affiliations Schedule.

    Note:

    Also see ABLM Code "010" instructions in IRM 3.11.16.9.3, ABLM Code and Schedule M-3 Checkbox.

3.11.16.30 (01-01-2009)

Form 1120-POL Filed on Form 1120

  1. A return for a Political Organization can usually be determined by the name. Form 1120 returns received from political organizations are to be transshipped to OSPC.

3.11.16.31 (01-01-2025)

Form 1120-H Filed on Form 1120 (IRC 528)

  1. Apply the following general guidelines to IRC 528 filers who did not use Form 1120-H. The taxpayer must state "Section 528."

  2. Where the taxpayer is identified as an IRC 528 filer, and the return appears to be processable, transfer the data from the Form 1120 to Form 1120-H to the maximum extent possible.

  3. If the taxpayer is identified as an IRC 528 filer, but excludes a break-down of gross income (includable income cannot be identified), prepare an approved Correspondence Action Sheet, advising the taxpayer that they must file Form 1120-H.

  4. If taxpayer states that it is filing as an exempt organization specifically under IRC 501(c), prepare an approved Correspondence Action Sheet, advising the taxpayer to file Form 990.

3.11.16.32 (01-02-2020)

Return Processing - Form 1120-A

  1. Form 1120-A, U.S. Short-Form Corporation Income Tax Return, must be converted to Form 1120. Follow Form 1120 procedures for processing Form 1120-A.

  2. If a taxpayer files a Form 1120-A, refer the return to the lead for conversion. Form 1120-A has been obsolete since 2006.

3.11.16.33 (01-01-2015)

Return Processing - Form 1120-C (OSPC only)

  1. This subsection provides instructions for processing Form 1120-C, U.S. Income Tax Return for Cooperative Associations. Form 1120-C is valid for Tax Period ending 200612 and later.

  2. Form 1120-C is processed only at the Ogden Campus.

  3. Form 1120-C can be filed on a calendar or fiscal year basis.

  4. Action Codes apply to Form 1120-C, see IRM 3.11.16.3.1, Action Codes.

  5. Form 1120-C is due on or before the 15th day of the 9th month after the end of Tax Period.

3.11.16.33.1 (01-01-2010)

Form 1120-C- General Instructions

  1. To convert prior year tax returns, see Exhibit 3.11.16-9, Form 1120-C - Prior Year Conversion Chart.

3.11.16.33.2 (01-01-2025)

Sequence - Form 1120-C

  1. Document Perfection is responsible for arranging Form 1120-C in the following order when transcription line entries are present:

    • Form 1120-C, Pages 1 through 5

    • Schedule N (Form 1120)

    • Schedule O (Form 1120) (Tax period 201811 and prior only)

    • Form 4626 (Tax period 201811 and prior only (2017 revision))

    • Form 4626 (Tax period 2022 and later (2023 Revision and later))

    • Form 4136

    • Form 8978

    • Form 8941

    • Form 3800

    • Form 8936 Schedule A (Tax period 2023 and later)

    • Form 4255 (Tax period 2024 and later)

  2. It is not necessary to sequence the forms or schedules listed above if there are no transcription line entries.

  3. It is not necessary to sequence an Amended return. See IRM 3.11.16.3.9, Amended Returns, for more information.”

3.11.16.33.3 (01-01-2009)

EIN

  1. See IRM 3.11.16.6.2, Entity Perfection - Employer Identification Number (EIN).

3.11.16.33.4 (01-01-2009)

Name and Address

  1. See IRM 3.11.16.6.3, Entity Perfection - Name Control, through IRM 3.11.16.6.6, Entity Perfection - Foreign Address (OSPC).

3.11.16.33.5 (01-01-2009)

Tax Period

  1. Code the Tax Period ending (except current calendar year) in YYMM format to the right of the title on Page 1 of the return.

  2. If a return is for a short period, see IRM 3.11.16.7.4, Short Period - Editing Proof of Entitlement.

3.11.16.33.6 (01-01-2009)

Received Date

  1. Enter in MMDDYY format.

  2. Edit the received date on Page 1 in the dotted portion of the Deduction Section, Lines 11 through 18, see IRM 3.11.16.8, Received Date.

3.11.16.33.7 (01-01-2023)

Computer Condition Codes

  1. Edit the applicable Computer Condition Codes to the dotted portion of Page 1, Lines 8 through 9, of Form 1120-C. Valid Computer Condition Codes for Form 1120-C are B, D, E, F, G, I, J, L, M, O, P, R, S, T, W, X, Y, 3, 5, 7, 8, and 9. For specific instruction, see IRM 3.11.16.9.1, Computer Condition Codes.

3.11.16.33.8 (04-20-2023)

Return Processing Code (RPC)

  1. Return Processing Code (RPC) is an alpha or numeric character used to alert the computer to a special condition or computation.

  2. RPCs are edited on Page 1, in the right margin next to Line 1c of Form 1120-C.

  3. Refer to the table below for an explanation of when to edit each RPC.

    RPC Explanation
    E Form 8865, Schedule G, Statement of Application for the Gain Deferral Method Under Section 721(c), is attached.
    F Form 8865, Schedule H, Acceleration Events and Exceptions Reporting Relating to Gain Deferral Method Under Section 721(c), is attached.
    G Form 5471, Schedule G-1, Cost Sharing Arrangement is attached.
    J For Tax Period 202201 - 202212, taxpayer writes IRA22 DPE on Form 3800,Form 1120-C, Line 30f or on an attachment.

    1. Completely edit the return.

    2. Edit RPC "J."

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

      Note:

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

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "DPE" in the batch ID.
    K For Tax Period 202201 - 202212, taxpayer writes IRA22TRE on Form 3800, an attachment or at the top of the return.

    1. Completely edit the return.

    2. Edit RPC "K."

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

      Note:

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

    4. Give the return to the lead.

    5. The lead will have the returns rebatched with "TRE" in the batch ID.
    L Form 7204, Consent to Extend the Time to Assess Tax Related to Contested Foreign Income Taxes - Provisional Foreign Tax Credit Agreement, is attached.
    M Form 7205, Energy Efficient Commercial Buildings Deduction, is attached.
    N Form 4626, Alternative Minimum Tax (2023 Revision and later) is attached or Form 1120-C, Schedule J, Line 3 shows a significant amount.
    1 Form 8991, Tax on Base Erosion Payments of Taxpayers with Substantial Gross Receipts, is attached.
    2 Form 8992, U.S. Shareholder Calculation of Global Intangible Low-Taxed Income (GILTI), is attached.
    3 Form 8993, Section 250 Deduction for Foreign-Derived Intangible Income (FDII) and Global Intangible Low-Taxed Income (GILTI), is attached.
    4 Form 8994, Employer Credit for Paid Family and Medical Leave, is attached.
    6 Form 8996, Qualified Opportunity Fund, is attached.
    7 Form 8990, Limitation on Business Interest Expense IRC 163(j), is attached.

3.11.16.33.9 (01-01-2012)

Consolidated Return

  1. A consolidated Form 1120-C combines the tax information of a cooperative and its affiliates.

  2. Identify a consolidated return by one or more of the following:

    1. Box A1, Page 1, to the left of the entity section is marked or the return is marked "Consolidated."

    2. Form 851, Affiliations Schedule is attached with the Name, Address, EIN, and prepaid credits of each organization included on Form 851.

    3. One or more Form(s) 1122, Return of Information, Authorization, and Consent of Subsidiary Corporation in a Consolidated Return, is attached.

    4. A list of title holding corporations is attached.

  3. A consolidated Form 1120-C must submit Form 851 on an annual basis. Correspond if Form 851 is missing or the subsidiaries are not included on an attached Form 851.

    Note:

    Before corresponding for missing Form 851, research the parent corporation using Command Code INOLE. Do not correspond if subsidiaries are not shown.

  4. For Form 851 processing procedures, see IRM 3.11.16.29.3, Form 851 - Affiliations Schedule.

3.11.16.33.10 (01-01-2009)

ABLM Code

  1. The ABLM Code is computer generated for Form 1120-C. No editing is required.

3.11.16.33.11 (01-01-2009)

Schedule M-3 Checkbox - Item A2

  1. Edit Computer Condition Code "B" when Box A2, "Schedule M-3 attached" is marked or Schedule M-3 is attached to Form 1120-C.

  2. Do not correspond for Schedule M-3 if Item A2 is checked and Schedule M-3 is not attached.

3.11.16.33.12 (08-11-2021)

Form 1120-C - Box C

  1. Two Codes are determined from the checkboxes in Box C, Page 1 of the entity section. See IRM 3.11.16.33.12.1, Type of Cooperative Code and IRM 3.11.16.33.12.2, Type of Organization Code.

3.11.16.33.12.1 (08-11-2021)
Type of Cooperative Code

  1. No editing is required. Data transcribes this code from the checkbox entries in Box C.

    • Data enters a "1" if C(1) is marked.

    • Data enters a "2" if C(2) is marked.

3.11.16.33.12.2 (08-11-2021)
Type of Organization Code

  1. The Type of Organization Code is also determined from the checkboxes marked in Box C, Page 1 of the entity section. The Type of Organization Code is edited in the margin to the right of Item C.

  2. Always edit a Type of Organization Code.

    If Then
    The Farmer's tax exempt cooperative Box, C(1) is marked, Edit code "6."
    The Nonexempt cooperative Box, C(2) is marked, Edit code "7."
    Neither box is marked or both boxes are marked, Edit code "7."

3.11.16.33.13 (01-01-2014)

Additional Form 1120-C Perfection

  1. This subsection addresses the editing of additional Form 1120-C information. General Business Credits will be transcribed from Form 3800, see IRM 3.11.16.10, Additional Return Perfection.

3.11.16.33.13.1 (01-01-2015)
Form 8844 Indicator

  1. Edit "1 - 1" in the left margin of Form 1120-C near Line 12 when:

    1. Form 8844 is shown on Form 1120-C, Schedule J, Line 5c.

    2. Form 8844 is attached to the return even if dollar amounts are not present.

    3. Form 3800, Part III, Line 3 has an entry.


    See IRM 3.11.16.11.21.1, Form 8844, Empowerment Zone Employment Credit.

3.11.16.33.13.2 (01-01-2024)
Audit Codes

  1. Valid Audit Codes are "2," "3," and C. No editing is required for Audit Codes 2 and 3.

  2. Audit Code "C" - Edit Audit Code "C" when Form 8283 is attached and:

    1. Box 2b is checked, or

    2. Box 2b1 is checked, or

    3. Line 3, Column (h) has an entry.

3.11.16.33.13.3 (01-01-2013)
Penalty and Interest Code

  1. Edit "4 - 1" in the left margin near Line 12 when precomputed delinquency penalty and/or interest is shown on a return with a received date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  2. This code is valid within the unextended (original) ≡ ≡ ≡ ≡ ≡ period. When the precomputed interest does not pertain to the ≡ ≡ ≡ ≡ period but to some other situation, such as an estimated Tax Penalty, do not Code "4 - 1" and do not insert Computer Condition Code "R." If only interest is shown, edit CCC "R."

    Note:

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

3.11.16.33.13.4 (08-13-2015)
Reserve Code

  1. The Reserve Code is "4."

  2. Edit "5 - 4" in the left margin near Line 12 if Form 2220 is attached and Part II, Box 8 is checked for Large Corporation.

3.11.16.33.13.5 (01-01-2013)
Installment Sale Indicator (Form 6252)

  1. Edit "6 -" followed by the right Installment Sale Indicator code in the left margin near Line 12 when Form 6252, Installment Sale Income, is present (e.g., "6 - 1" ), see IRM 3.11.16.10.4, Installment Sale Indicator (Form 6252).

3.11.16.33.14 (01-01-2025)

Income - Lines 1a through 10

  1. Line 1c - Gross receipts balance. If blank, do one of the following:

    1. Edit the sum of Line 1a minus Line 1b. Bracket if negative.

    2. Edit the sum of Line 2 plus Line 3. Bracket if negative.

  2. Line 2 - Cost of goods sold. If blank, edit from Form 1125-A, Line 8. Bracket if negative.

  3. Line 7 - Capital gain net income. If there is a significant entry and Schedule D (Form 1120) is not attached, correspond. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

  4. Line 8 - Net gain or loss from Form 4797, Part II, line 17, if an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 4797 is not attached and the taxpayer has not attached Form 4684, correspond. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

  5. Line 10 - Total income. If blank, do one of the following:

    1. If there are entries on Lines 1a through 9, compute and edit Line 10. Bracket if negative.

    2. Double arrow Line 25c to Line 10 if Line 25c is the first dollar entry on Form 1120-C.

3.11.16.33.15 (01-01-2025)

Deductions - Lines 11 through 26c

  1. Line 11 - Compensation of Officers (attach Form 1125-E). Accept taxpayer's entry.

  2. Line 12 - Salaries and wages. Accept taxpayer's entry.

  3. Line 13 - Bad debts. Accept taxpayer's entry.

  4. Line 22 - Section 199A(g) deduction (Tax Year 2018 and later). Domestic Production Activities Deduction under section 199 (Tax Year 2005 to 2017).

  5. Line 24 - Total deductions. If blank, edit the sum of Lines 11 through 23. Bracket if negative.

  6. Line 25b - Deductions and adjustments under IRC 1382. If blank, edit from Schedule H, Line 5. Bracket if negative.

  7. Line 26a - Net operating loss deduction. If blank, edit from attachments if possible.

  8. Line 26b - Special deductions. If blank, edit from Schedule C, Line 24 (Schedule C, Line 20 for 2017-2011).

3.11.16.33.16 (01-01-2025)

Tax and Payments - Lines 27 through 35 (2024 revision)

  1. Line 27 - Taxable income. If blank, edit the sum of Line 10 minus Lines 24, 25b, 26a, and 26b.

  2. Line 28 - Total tax. If blank, edit from Schedule J, Line 11. (Line 10 for 2023) (Line 9 for 2022 and prior)

  3. Line 29 - Reserved - For Tax Period 201712 through 202012, follow the instructions in a) and b):

    1. If blank enter amount from Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts, as follows:

      Reporting Tax Year Form 965-B
      2017 Part II, Column (k), Line 1
      2018 Part II, Column (k), Line 2
      2019 Part II, Column (k), Line 3
      2020 Part II, Column (k), Line 4

    2. Edit CCC "J" and Action Code "460."

  4. Line 30a - Preceding Year’s Overpayment Credited to Current Year. Accept taxpayer’s entry.

  5. Line 30b - Current Year’s Estimated Tax Payments. Accept taxpayer’s entry.

  6. Line 30c - Current Year’s Refund Applied for on Form 4466 . If there is a significant entry on Line 30c, see IRM 3.11.16.9.1.15, CCC "O" - Module Freeze.

  7. Line 30d - Tax deposit with Form 7004 (Line 30e for 2023 - 2018) (Line 29e for 2017 and prior). Accept taxpayer's entry.

  8. Line 30d - Balance of payments for 2023 - 2018 (Line 29d for 2017 and prior). If blank, edit the sum of Lines 30a and 30b minus Line 30c (Lines 29a and 29b minus Line 29c for 2017 and prior).

  9. Line 30e - Credit for Tax Paid on Undistributed Capital Gains. (Line 30f for 2023) (Line 30f(1) for 2022) (Line 29f(1) for 2017 and prior)

    If Then
    The Undistributed Capital Gain Credit ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 2439 is missing, Correspond.
    Form 2439 shows a lesser amount, Place an "X" to the left of the entry on Line 30e (Line 30f for 2023) (Line 30f(1) for 2022 - 2018) (Line 29f(1) for 2017 and prior) Form 1120-C. Edit the lesser amount to the left of the "X."
    Form 2439 shows a larger amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, Correspond.

  10. Line 30f - Credit from Form 4136.

    1. Form 4136 must be attached if there is an amount on Line 30f (Line 30g for 2023) (Line 30 f(2) for 2022 - 2018) (Line 29f (2) for 2017 and prior). Correspond for missing Form 4136 if Line 30f (Line 30g for 2023) (Line 30f(2) for 2022 - 2018) (Line 29f(2) for 2017 and prior) has a significant amount.

    2. For Form 4136 processing instructions, see IRM 3.11.16.19, Form 4136 - Credit for Federal Tax Paid on Fuels.

  11. Line 30f - Credits (1) Form 2439 and (2) Form 4136 (2022 - 2018) and Line 29f (2017 and prior).

    1. (Tax Period 202201 - 202211) - If a significant amount is present for an "Elective or Deemed Payment Election," edit RPC "J."

    2. See (9) Line 30e editing instructions for Form 2439.

    3. See (10) Line 30f editing instructions for Form 4136.

  12. Line 30g - Reserved for future use (2022 - 2018).
    Line 30g - Refundable credits from Form 8827 - Revisions 2019 and prior (Line 29g for 2017 and prior):

    If Then
    The amount on Line 30g (Line 29g for 2017 and prior)≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8827 is not attached, Correspond for Form 8827

  13. Line 30g - IRC 1383 adjustment (Line 30h for 2023 - 2018) (Line 29h for 2017 - 2008). A schedule showing the adjustment computation must be attached. Correspond for the missing computation schedule ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

  14. Line 30h - Elective Payment Election amount from Form 3800 (Line 30i for 2023). Accept taxpayer's entry.

    1. For Tax Period 201712 through 202012, follow the instructions in b) and c).

    2. If blank enter amount from Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts, as follows:

      Reporting Tax Year Form 965-B
      2017 Part II, Column (d), Line 1
      2018 Part II, Column (d), Line 2
      2019 Part II, Column (d), Line 3
      2020 Part II, Column (d), Line 4

    3. Edit CCC "J" and Action Code "460."

  15. If the taxpayer has claimed backup withholding ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 1099 is not attached, correspond using Letter 118C, Corporate Return Incomplete for Processing: Form 1120, Form 1120 Series, Form 1120-S. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

  16. Line 32 - Estimated tax penalty (Line 31 for 2023 - 2018) (Line 30 for 2017 and prior). If Form 1120-C, Line 32 (Line 31 for 2023 - 2018) (Line 30 for 2017 and prior) is blank and Form 2220 is attached with a significant entry on Page 2, Line 38, then edit the amount from Form 2220, Page 2, Line 38 to Form 1120-C , Line 32 (Line 31 for 2023 - 2018) (Line 30 for 2017 and prior). See IRM 3.11.16.11.6.6, Line 34 - Estimated Tax Penalty.

  17. Lines 33 and 34 - Amount owed/Overpayment (Lines 32 and 33 for 2023 - 2018) (Lines 31 and 32 for 2017 and prior). Edit the proper entry to Line 33 or 34 (Lines 32 or 33 for 2023 - 2018) (Lines 31 and 32 for 2017 and prior) if both are blank. Do both of the following:

    1. For 2024, add Lines 28 and 32 minus 30a through 30z.

    2. For 2023, add Lines 28 and 31 minus 30a through 30i.

    3. For 2022 - 2018, add Lines 28, 29 and 31, subtract Line 30j.

    4. For 2017 and prior, add Lines 28 and 30 minus Line 29j.

    5. Edit the positive result on Line 33 (Line 32 for 2023 - 2018) (Line 31 for 2017 and prior) or the negative result (do not bracket) on Line 34 (Line 33 for 2023 - 2018) (Line 32 for 2017 and prior).

  18. If pre-computed interest or delinquency penalty or additional charge is evident, ensure that it has not been included in Line 33 (Line 32 2023 - 2018) (Line 31 2017 and prior) or reduced Line 34 (Line 33 2023 - 2018) (Line 32 for 2017 and prior).

    If Then
    The amount on Line 33 (Line 32 for 2023 - 2018) (Line 31 for 2017 and prior) has pre-computed interest or penalty or additional charge,

    1. "X" Line 33 (Line 32 for 2023 - 2018) (Line 31 for 2017 and prior).

    2. Delete the interest, penalty, or additional charge from the total.

    3. Edit the correct amount owed to the left of the original entry.
    The amount on Line 34 (Line 33 for 2023 - 2018) (Line 32 for 2017 and prior) has pre-computed interest or penalty or additional charge,

    1. "X" Line 34 (Line 33 for 2023 - 2018) (Line 32 for 2017 and prior).

    2. Delete the interest, penalty, or additional charge from the total.

    3. Edit the correct Overpayment to the left of the original entry.

  19. Line 35 - Credited to estimated tax (Line 34 2023 - 2018 and Line 33 for 2017 and prior). Accept the taxpayer’s entry.

3.11.16.33.17 (01-01-2015)

Paid Preparer Information

  1. See IRM 3.11.16.11.8, Paid Preparer Checkbox Indicator, and IRM 3.11.16.11.9, Paid Preparer Section.

3.11.16.33.18 (01-01-2013)

Schedule G - Allocation of Patronage and Nonpatronage Income and Deductions

  1. Line 5, Column (a) - Total income. If blank, edit the sum of Column (a), Lines 3 and 4.

  2. Line 5, Column (b) - Total income. If blank, edit the sum of Column (b), Lines 3 and 4.

  3. Line 6c Column (a) - Total deductions. Accept taxpayer's entry.

  4. Line 6c, Column (b) - Total deductions. Accept taxpayer's entry.

  5. Line 9a, Column (a) - Net operating loss. Accept taxpayer's entry.

  6. Line 9a, Column (b) - Net operating loss. Accept taxpayer's entry.

  7. Line 9b, Column (a) - Special deductions. Accept taxpayer's entry.

  8. Line 9b, Column (b) - Special deductions. Accept taxpayer's entry.

  9. Line 12, Column (a) - Unused patronage loss. Accept taxpayer's entry.

  10. Line 13, Column (b) - Unused nonpatronage loss. Accept taxpayer's entry.

3.11.16.33.19 (01-01-2014)

Schedule H - Deductions and Adjustments Under IRC 1382

  1. Lines 3a and 3b. Accept taxpayer's entry.

3.11.16.33.20 (01-01-2019)

Schedule J, Line 1 - Controlled Group Code

  1. The instructions in this subsection only apply to Tax Period 201811 and prior.

  2. Edit "1" to the right of the checkbox on Line 1, if the box on Line 1 is marked.

  3. If the box on Line 1 is not checked, edit "1" to the right of the checkbox on Line 1 if both of the following apply:

    1. Page 1, Line 27 is more than $0.

    2. Schedule O (Form 1120) is attached with the cooperative portion of the group's allocation.

3.11.16.33.21 (01-01-2025)

Schedule J, Tax Computation

  1. Line 1a - Income tax (Line 1 for 2023 and Line 2 for 2022 and prior). Accept taxpayer's entry.

  2. Line 1b - Section 1291 Tax from Form 8621. Accept taxpayer’s entry.

  3. Line 1c - Tax Adjustment from Form 8978. Accept taxpayer’s entry.

  4. Line 1d - Base Erosion Minimum Tax from Form 8991 (Line 2 for 2023 and Line 3 for 2022 and prior).Prior to 2018 this line was used to report Prior Year Alternative Minimum Tax, Form 4626 (Tax periods 201811 and prior only).

    If Then
    The Tax Period is 201811 and prior and Line 2 (Line 3 for 2022 and prior) has a significant entry, but Form 4626 (2017 revision) is not attached, Correspond.
    The Tax Period is 201811 and prior and Line 2 (Line 3 for 2022 and prior) is blank and Form 4626 is attached with an amount on Line 14, Edit the Line 14, Form 4626 amount to Schedule J, Line 2 (Line 3 for 2022 and prior).
    The Tax Period is 201812 and later and Form 8991, Tax on Base Erosion Payments of Taxpayers with Substantial Gross Receipts, is attached, Do the following:

    1. Edit RPC "1."

    2. Edit the amount from Form 8991, Line 5e to Form 1120-C, Schedule J, Line 1d (Line 2 for 2023 and Line 3 for 2022 and prior).
    The Tax Period is 201812 and later and Schedule J, Line 1d (Line 2 for 2023 and Line 3 for 2022 and prior) has a significant entry and Form 8991 is not attached, Correspond.

  5. Line 1e - Amount from Form 4255, Part I, Line 3, Column (q) - If Form 1120, Schedule J, Line 1e (Amount from Form 4255, Part I, Line 3 Column (q)) has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, and Form 4255 is not attached, correspond. See IRM 3.11.16.3.4.2, Issuing Correspondence, for more information.

  6. Line 1z - Other Chapter 1 tax. Accept taxpayer’s entry.

  7. Line 3 - Corporate Alternative Minimum Tax Form 4626 (2023 revision and later). Correspond for Form 4626 if Line 3 has a significant entry and Form 4626 is not attached.

  8. Line 5a - Foreign tax credit, Form 1118:

    If Then
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Edit CCC "P."
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡Form 1118 or similar statement is not attached, Correspond.

  9. Line 5b - Credits f