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3.11.16  Corporate Income Tax Returns

Manual Transmittal

November 04, 2016

Purpose

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

Material Changes

(1) Minor editorial changes have been made throughout this IRM (e.g., line number updates, spelling, punctuation, links, etc,). Other significant changes to this IRM are shown below.

(2) IRM 3.11.16.1, Deleted paragraph (3) which references IRM 3.0.273. This IRM is obsolete.

(3) IRM 3.11.16.1.1(1),(2)b, c and j IRS Employee Contacts - RRA 98 IRC §3705(a) - Editorial changes to paragraphs (1), (2), and (2)b, . Changed language in Paragraph (2)c. Reworded and added acronym "TBOR" to "Note" in paragraph (2)j. (07-25-2016)

(4) IRM 3.11.16.1.1(1), IRS Employee Contacts - RRA Section 3705(a) - Added "The Internal Revenue Service" to beginning of paragraph (1).

(5) IRM 3.11.16.1.3(1), IRM Deviation Procedures - Changed the IRM reference for IRM 1.11.2, Internal Revenue Manual (IRM) Process from IRM 1.11.2.2 to IRM 1.11.2.2.4 and title (Start-Up IPU 16U0014 issued 01-04-2016)

(6) IRM 3.11.16.1.4(1), Taxpayer Advocate Service (TAS) - Added acronym "TBOR" and link, "Taxpayer Bill of Rights" to paragraph (1) (07-25-2016).

(7) IRM 3.11.16.1.5 (4) Table, Edit Marks - Added instructions for editing photocopied returns with black edit marks, Also, added an "Exception" to row 11 .

(8) IRM 3.11.16.1.6(1), Frivolous Arguments - Changed IRM 4.10.12 (obsolete) to IRM 25.25.10, Frivolous Return Program. The information has been moved to IRM 25.25.10 to be under the same chapter and section as all other Integrity & Verification Operation (IVO) IRM data. (IPU 16U1004 issued 01-04-2016)

(9) IRM 3.11.16.1.9, Criminal Investigation (CI) Referral - Changed "Funny Box" to "Referral" . Added copy and routing procedures per Criminal Investigation (CI) IRM 3.11.217 feedback (IPU 16U1434 issued 09-26-2016).

(10) IRM 3.11.16.1.10(2),Examination (Exam) "Funny Box" - Removed paragraph to accentuate the need to identify special returns for examination. (IPU 16U0554 issued 03-15-2016).

(11) IRM 3.11.16.1.11(1),BMF Identification (ID) Theft - Removed "Funny Box" and added "Criminal Investigation (CI), Examination (Exam)" . (IPU 16U1434 issued 09-26-2016)

(12) IRM 3.11.16.2.1(8), Action Codes - Added Action Code "370" to Action Code table. (11-04-2015) - Start-Up IPU 16U0014 issued 01-04-2016)

(13) IRM 3.11.16.2.4.2(2), Issuing Correspondence - Added Paragraph (2), instructions for returns that appear to be duplicate filings (IPU 16U1383 issued 09-13-2016).

(14) IRM 3.11.16.2.4.2(3), Issuing Correspondence - Added Forms 8288-A, 8805 and 1042-S to Exception

(15) IRM 3.11.16.2.4.4(1), Use of Fax for Taxpayer Submissions - Changed "fax" to "faxed" and added information and a link about accepting signed taxpayer documents by fax per Chief Counsel IRM 3.11.249 feedback.

(16) IRM 3.11.16.2.6.1 (2)c, IRC §6020(b) - Prepared by Collection - Revised instructions for editing CCC "D" on returns prepared under IRC 6020(b).

(17) IRM 3.11.16.2.6.3 (1)c, Examination Prepared - Added "Note" revising instructions to not edit CCC "D" for returns with return due date (without regard to extensions) after July 30, 1996 .

(18) IRM 3.11.16.2.10 (2)(3)Table, IRC 847 Deduction - Added "Note" and clarification to table (row 1). Separated paragraph (2) and added paragraph (3).(IPU 16U0447 issued 03-03-2016)

(19) IRM 3.11.16.3 Refund Returns (45 Day Jeopardy (Million Dollar Refunds) IPU 16U0496 issued 03-10-2016 and reversed with IPU 16U0554 issued 03-17-2016).

(20) IRM 3.11.16.3(1), Refund Returns (45 Day Jeopardy (Million Dollar Refunds) - Changed section title to match BMF Consistency Template, Changed 10 million to 100 million in section title and paragraph (1), Table (first and third rows) (IPU 16U1253 issued 07-29-2016).

(21) IRM 3.11.16.4.5(1)c Minimum Edit - Changed Paragraph (1)c to an "Exception."

(22) IRM 3.11.16.5.5(3), Entity Perfection - Domestic Address - Added instructions to send Form 8822-B, Change of Address or Responsible Party - Business to Entity if Lines 8 and 9 are present (IPU 16U1076 issued 06-15-2016).

(23) IRM 3.11.16.6, Tax Period - Added "Reminder" to edit the Tax Period Beginning Date to the following sections in the IRM that refer to short periods. IRM 3.11.16.6.4, IRM 3.11.16.6.4.1, IRM 3.11.16.6.5, IRM 3.11.16.6.6, IRM 3.11.16.6.7, IRM 3.11.16.6.9, and IRM 3.11.16.8.3.

(24) IRM 3.11.16.6.1, Tax Period - General Changed title of section and figure 3.11.16-4 from "Tax Period - General" to "Tax period -Ending" to differentiate between editing the tax period beginning and tax period ending.

(25) IRM 3.11.16.6.2, Tax Period Beginning - Initial, Final, or Short Period Form 1120 Return - Added new section for editing the tax period beginning date.

(26) IRM 3.11.16.6.4(2)Table, Short Period - Proof of Entitlement - Changed reference for Form 1120-F, Schedule J from Page 4 to Page 5 and throughout IRM.

(27) IRM 3.11.16.7(2), Received Date - Changed due date in example for private metered mail.

(28) IRM 3.11.16.7(3)(4), Received Date - Added new paragraphs (3) and (4) for Forms 1120. This paragraph adds consistent instructions for received date editing when a return has been rejected electronically and the taxpayer has filed a delinquent paper return. These instructions are for income tax returns only. (IPU 16U0074 issued 01-08-2016)

(29) IRM 3.11.16.7(8) and (9), Received Date - Deleted Paragraph (8) and added new instructions in Paragraph (9) for EEFax (IPU 16U1253 issued 07-29-2016).

(30) IRM 3.11.16.7(8), Received Date - New - Added IRS Received Date for faxes - Enterprise Electronic Fax (EEFax) per memo “Revision of Policy for Use of Fax in Taxpayer Submissions” dated November 19, 2015. (IPU 16U0650 issued 03-31-2016)

(31) IRM 3.11.16.7(7)(1), Received Date - Added instructions for returns sent back for insufficient postage (IPU 16U1004 issued 05-31-2016).

(32) IRM 3.11.16.8.1.4(2), CCC D - Reasonable Cause for Failing to Pay Timely - Added "Note" revising instructions to not edit CCC "D" if the return was prepared under IRC 6020(b) and the return due date is after July 30, 1996.

(33) IRM 3.11.16.8.1.4(5), CCC D - Reasonable Cause for Failing to Pay Timely - Added "Exception" for Form 1120-F.

(34) IRM 3.11.16.8.1.4(5), CCC "D" – Reasonable Cause for Failing to Pay Timely - Corrected Citation format

(35) IRM 3.11.16.8.1.5(2), CCC "F" – Final Return - Added paragraph to edit Tax Period Beginning.

(36) IRM 3.11.16.8.1.11(1), CCC "N " - Joint Committee Case - Changed $2,000,000 to $5,000,000.

(37) IRM 3.11.16.8.1.11(1)(3), CCC "N " - Joint Committee Case - Added Line numbers for Forms 1120-F, 1120-FSC, 1120-L, 1120-PC and 1120-SF. Added Forms 8805 and 1042-S to Paragraph (3) sixth bullet.

(38) IRM 3.11.16.8.1.15(3) and (6),CCC "R" – Reasonable Cause for Failing to File a Timely Return - Corrected Citation format in paragraph (3) and deleted paragraph (6).

(39) IRM 3.11.16.8.1.15(3),CCC "R" – Reasonable Cause for Failing to File a Timely Return - Added "Exception" for Form 1120-F.

(40) IRM 3.11.16.8.1.22(2), CCC "Y" – Short Period return for Changes in Accounting Period - Added paragraph to edit Tax Period Beginning.

(41) IRM 3.11.16.8.1.25, CCC "2" - Statement of Specified Foreign Financial Assets - Added CCC "2" to valid Computer Condition Codes when For 8938, Statement of Specified Foreign Financial Assets is attached to a 201601 and subsequent return.

(42) IRM 3.11.16.8.1.30(2), CCC "8" – Waiver of Estimated Tax Penalty Changed prior year from 2006 to 2002.

(43) IRM 3.11.16.9.1(1) Additional Return Perfection - Added clarification for editing audit codes etc.

(44) IRM 3.11.16.9.1 (4)f), Audit Codes - Changed instruction for Audit Code "2" , Schedule N.

(45) IRM 3.11.16.9.2(21), Missing Schedule Code (MSC) - Added instructions for MSC "49" , Form 8834. Also, IRM 3.11.16.24.12.3 (Form 1120-C, IRM 3.11.16.25.14.3 (Form 1120-F), IRM 3.11.16.28.10.3 (Form 1120-L), IRM 3.11.16.30.11.3 (Form 1120-PC), IRM 3.11.16.31.10.3 (Form 1120-REIT) and IRM 3.11.16.32.10.3 (Form 1120-RIC). (Start-Up IPU 16U0014 issued 01-04-2016)

(46) IRM 3.11.16.9.2(36), Missing Schedule Code (MSC) - Added subsection for MSC "66" , Form 8907. Also, IRM 3.11.16.25.14.3 (Form 1120-F), IRM 3.11.16.28.10.3 (Form 1120-L), IRM 3.11.16.30.11.3 (Form 1120-PC), IRM 3.11.16.31.10.3 (Form 1120-REIT) and IRM 3.11.16.32.10.3 (Form 1120-RIC. (Start-Up IPU 16U0014 issued 01-04-2016)

(47) IRM 3.11.16.9.2(41), Missing Schedule Code (MSC) - Added subsection for MSC "71" , Form 8909. Also, IRM 3.11.16.24.12.3 (Form 1120-C), IRM 3.11.16.25.14.3 (Form 1120-F), IRM 3.11.16.28.10.3 (Form 1120-L), IRM 3.11.16.30.11.3 (Form 1120-PC), IRM 3.11.16.31.10.3 (Form 1120-REIT) and IRM 3.11.16.32.10.3 (Form 1120-RIC). (Start-Up IPU 16U0014 issued 01-04-2016)

(48) IRM 3.11.16.9.2(43), Missing Schedule Code (MSC) - Added subsection for MSC "73" , Form 8931. (Start-Up IPU 16U0014 issued 01-04-2016)

(49) IRM 3.11.16.10(2), Return Processing - Form 1120 - Clarified instructions for "Pro Forma" returns. (Start-Up IPU 16U0014 issued 01-04-2016)

(50) IRM 3.11.16.10.6.4(1), Backup Withholding - Added instructions to correspond for Form 1099 if Backup Withholding is claimed. Also added instructions to IRM 3.11.16.24.15, Form 1120-C, IRM 3.11.16.26.18, 1120-FSC, IRM 3.11.16.27.11, Form 1120-H, IRM 3.11.16.28.12, 1120-L, IRM 3.11.16.29.11, 1120-ND, IRM 3.11.16.30.15, 1120-PC, IRM 3.11.16.31.14, 1120-REIT and IRM 3.11.16.32.15, Form 1120-RIC.

(51) IRM 3.11.16.10.6.5(1)c and (2), FIRPTA, Form 1042-S, and Form 8288-A Credits - Added "Note " to Paragraph (1)c and clarified instructions in paragraph (2)

(52) IRM 3.11.16.10.7(3), Signature - Added reference to Issuing Correspondence in Paragraph (3) (IPU 16U1383 issued 09-13-2016).

(53) IRM 3.11.16.10.11(1), Schedule J, Page 3 - Controlled Group Code / Personal Service Corporation Code / Tax Computation - changed transcription placement of Controlled Group Code / Personal Service Corporation Code due to changes of Form 1120, Schedule J, Line 1.

(54) IRM 3.11.16.10.13.2(1),(2) and (4), Schedule J, Line 5b - Form 8834 Credit and Form 5735 - Added MSC "49" instructions. (Start-Up IPU 16U0014 issued 01-04-2016)

(55) IRM 3.11.16.10.14.11, Form 8834, Qualified Plug-in Electric Vehicle Credit - Added MSC "49" instructions. (Start-Up IPU 16U0014 issued 01-04-2016)

(56) IRM 3.11.16.10.14.13(2)(3)a)(6),Form 8844, Empowerment Zone and Renewal Community Employment Credit - Delete paragraph (2) "work around" instructions no longer needed., change line numbers from Part III, Line 3 to Part II, Line 22.

(57) IRM 3.11.16.10.14.13(4)c, Form 8844, Empowerment Zone and Renewal Community Employment Credit - Changed Schedule J, Page 4 to Schedule J, Page 5 and throughout IRM.

(58) IRM 3.11.16.10.14.26, Form 8907, Non Conventional Source Fuel Credit - Added subsection for Form 8907. (Start-Up IPU 16U0014 issued 01-04-2016)

(59) IRM 3.11.16.10.14.28, Form 8909, Energy Efficient Appliance Credit - Added subsection for Form 8909. (Start-Up IPU 16U0014 issued 01-04-2016)

(60) IRM 3.11.16.10.14.32, Form 8931 - Agriculture Chemical Security Credit - Added subsection for Form 8931. (Start-Up IPU 16U0014 issued 01-04-2016)

(61) IRM 3.11.16.10.17.1(1)Table, Schedule J, Line 9a – Recapture of investment credit (Form 4255)- Changed line number for Form 4255.

(62) IRM 3.11.16.10.19.4, Schedule J, Part II, Line 17 - Withholding - Added subsection to add instructions for corresponding for Form 1099 if Backup Withholding is claimed.

(63) IRM 3.11.16.10.26.10, Schedule N, Line 8 - Statement of Specified Foreign Financial Assets - Added section for processing of Form 8938.

(64) IRM 3.11.16.17(3)(4) Form 8941 - Small Employer Health Insurance Premium - Corrected paragraph (3), changed TY2015 to TY2014. (IPU 16U0180 issued 01-25-2016)

(65) IRM 3.11.16.17(2)(4) Form 8941 - Small Employer Health Insurance Premium - Added paragraph (4) - Correspondence instructions for new Line C on Form 8941 for Form 1120 only. Added line changes in table in paragraph (2) Also changed table in IRM 3.11.16.24.30, Form 1120-C, IRM 3.11.16.25.26, Form 1120-F, IRM 3.11.16.27.15, Form 1120-H, IRM 3.11.16.28.22, Form 1120-L, IRM 3.11.16.30.29, Form 1120-PC, IRM 3.11.16.31.31, Form 1120-REIT, and IRM 3.11.16.32.31 Form 1120-RIC.

(66) IRM 3.11.16.20.3(12) and (20), Form 851 – Affiliations Schedule - Changes paragraph (12) to 2 cycles and deleted paragraph (20).

(67) IRM 3.11.16.24.20(4), Schedule J, Line 2 through 8 - Added MSC "49" instructions. (Start-Up IPU 16U0014 issued 01-04-2016)

(68) IRM 3.11.16.24.20(7)Table, Schedule J, Line 2 through 8 - Changed line number for Form 4255.

(69) IRM 3.11.16.25, "Return Processing — Form 1120-F (OSPC Only)" - updated section with page change numbers according to new draft.

(70) IRM 3.11.16.25, Return Processing — Form 1120-F (OSPC Only) - Changed FPP Process to editing Action Code 440 vs placing in buckets for FPP review throughout section 3.11.16.25.

(71) IRM 3.11.16.25(4)a, Return Processing — Form 1120-F (OSPC Only) - Changed Form 1120-F, Page 3, Section II to Page 4, Section II and throughout IRM.

(72) IRM 3.11.16.25.6, Tax Period - Added IRM references for Tax Period Ending, Tax Period Beginning and Short Period returns. Also for IRM 3.11.16.26.5, Form 1120-FSC, IRM 3.11.16.27.4, Form 1120-H, IRM 3.11.16.28.4, Form 1120-L, IRM 3.11.16.29.6, Form 1120-ND, IRM 3.11.16.30.5, Form 1120-PC, IRM 3.11.16.31.5, Form 1120-REIT, IRM 3.11.16.32.5, Form 1120-RIC, IRM 3.11.16.33.5, Form 1120-SF.

(73) IRM 3.11.16.25.9, Page 1, Question D(1) — Location of Books and Records and Page 1, Question D(3) — Office or Place of Business - Added "Note" to clarify instructions relating to CCC "D" and "R" .

(74) IRM 3.11.16.25.14.7(2), Form 1120-F Indicator Code - Changed "List" to "Table"

(75) IRM 3.11.16.25.16(1), Line 5i - Computation of Tax Due or Overpayment - added additional criteria in "Note" for Form 1042-S, Box 13. (IPU 16U0669 issued 04-01-2016).

(76) IRM 3.11.16.25.16(2) Table, Line 5i - Computation of Tax Due or Overpayment - Added "Note" to first row "Form 1042-S, Copy A cannot be used as supporting documentation" (IPU 16U1327 issued 08-26=2016).

(77) IRM 3.11.16.25.28(1) and (2b), Refund Returns ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ - Moved and clarified instructions for Entity perfection on Form 1120-F before sending to Foreign Payments Practice (FPP) for review (Start-Up IPU 16U0014 issued 01-04-2016)

(78) IRM 3.11.16.25.29(1)b, Refund Returns ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Credit to Next Year's ES Tax – ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ) - Deleted "2012" and added "next year’s estimated tax." (IPU 16U0447 issued 03-03-2016)

(79) IRM 3.11.16.25.30(2)(3), Form 1042-S Recipient Copy (Form 1120-F Only) - Added tolerance to Foreign Paper Practice (FPP) review procedures. (IPU 16U0447 issued 03-03-2016)

(80) IRM 3.11.16.25.306), Form 1042-S Recipient Copy (Form 1120-F Only) - Added "Note" as a reminder to remove staples from top left side of return if more than one Form 1042-S is attached (IPU 16U1076 issued 06-15-2016).

(81) IRM 3.11.16.25.30(1)b through (6)- Form 1042-S Recipient Copy (Form 1120-F Only) - Revised subsection beginning with Paragraph (1)b through Paragraph (6) for clarity.(IPU 16U1327 issued 08-26=2016)

(82) IRM 3.11.16.25.30.1, Printing MeF Form 1120-F with 1042-S (Clerical) - Deleted subsection 3.11.16.25.30.1. MeF redesigned programing to include Form 1042-S. This subsection is no longer needed. (IPU 16U0447 issued 03-03-2016)

(83) IRM 3.11.16.26.18(6),(7), and (8), Tax Data Perfection, Page 1 - Tax and Payments - Added instructions for Paragraphs (6), (7) and (8).

(84) IRM 3.11.16.27.7(2), Additional Form 1120-H Perfection - Deleted instructions to put additional information in numerical order and deleted table.

(85) IRM 3.11.16.27.11(6),(8)a and (9),Tax and Payments - Lines 21 through 26 - added Paragraph (6), Added Paragraph (8)a and deleted Paragraph (9).

(86) IRM 3.11.16.28.16(2), Schedule K, Lines 5a through 5c - Added MSC "49" instructions. (Start-Up IPU 16U0014 issued 01-04-2016)

(87) IRM 3.11.16.28.25(8), Annual Statement - Form 1120-L and IRM 3.11.16.30.25(8) Annual Statement - Form 1120-PC - Deleted instructions to research for TC 150 and send to files. Rejects will research returned correspondence. (IPU 16U1174 issued 07-01-2016)

(88) IRM 3.11.16.30.14(2), Lines 8a through 8c - Added MSC "49" instructions. (Start-Up IPU 16U0014 issued 01-04-2016)

(89) IRM 3.11.16.31.20(1) and (3)b, Schedule J, Line 3b - Form 8834 Credit - Added MSC "49" instructions. (Start-Up IPU 16U0014 issued 01-04-2016)

(90) IRM 3.11.16.31.25(1) Table, Schedule K, Line 5b and Line 5c - Added If Question 5 is answered Yes

(91) IRM 3.11.16.32.19(1) and (3)b, Schedule J, Line 3b - Form 8834, Qualified Electric and Plug-in Electric Vehicle Credit - Added MSC "49" instructions. (Start-Up IPU 16U0014 issued 01-04-2016)

(92) IRM 3.11.16.32.23(1)a) Table, Schedule J, Line 6 - Recapture Taxes (Form 4255, Form 8611 and Recapture of Indian Employment Credit) - Changed line number for Form 4255.

(93) IRM 3.11.16.32.25(1) Table Schedule K, Line 5(b)(2) - Added "If Question 5b is answered Yes"

(94) IRM 3.11.16.33.7, Computer Condition Codes - Updated Computer Condition Codes for Form 1120-SF.

(95) Exhibit 3.11.16-2, Due Date Charts - Changed due date charts for Forms 1120 to conform with Public Law 114-41.

(96) Exhibit 3.11.16-3, Form 1120 - Prior Year Conversion Chart - Changed "2007 and 2006 only" to "2007 and prior" (IPU 16U0763 issued 04-19-2016)

(97) Exhibit 3.11.16-15, Potential Frivolous Arguments for Examination Review - Form 1099-OID - Description Column - Removed Caution with special care requirements for Form 1099-OID. (IPU 16U0554 issued 03-15-2016).

(98) Exhibit 3.11.16-17(2), Routing Guide for Attachments - Revised instructions for routing CP Notices 259, 959 and 518. Added Letters 112C, 282C, 2255C and 2284C reflecting the returns the sites are seeing.( IPU 16U0650 issued 03-31-2016)

(99) Exhibit 3.11.16-17(2), Routing Guide for Attachments - Revised instructions for routing CP Notices 259, 959 and 518. Added Letters 112C, 282C, 2255C and 2284C with same instructions.(Start-Up IPU 16U0014 issued 01-04-2016)

(100) Exhibit 3.11.16-17(2), Routing Guide for Attachments - Added "Note" to CP 259/518 and Letters 112C, 282C, 2255C or 2284C. (IPU 16U0763 issued 04-19-2016)

(101) Exhibit 3.11.16-17(2), Routing Guide for Attachments - Changed instructions for Schedule N due to possible line changes to Schedule N .

(102) Exhibit 3.11.16-17(2), Routing Guide for Attachments - Form 2220 - Reserve Code.

(103) Exhibit 3.11.16-17(2), Routing Guide for Attachments - Added instructions for Form 8822-B, Lines 8 and 9 (IPU 16U1076 issued 06-15-2017).

(104) Exhibit 3.11.16-17(2), Routing Guide for Attachments- Added CCC "2" to Form 8938, Statement of Specified Foreign Financial Assets .

(105) Exhibit 3.11.16-17(2), Routing Guide for Attachments - Added Form 14157, Complaint: Tax Return Preparer to routing guide. (Start-Up IPU 16U0014 issued 01-04-2016)

(106) IRM references updated throughout the IRM.

(107) Figures revised throughout the IRM.

(108) Exhibits revised throughout the IRM.

(109) Tables revised throughout IRM for 508 Compliance.

Effect on Other Documents

IRM 3.11.16 dated October 14, 2016 (effective January 1, 2017) is superseded. The following IRM Procedural Updates (IPUs), 16U0014, 16U0074, 16U0180, 16U0447, 16U0496, 16U0554, 16U0650, 16U0669, and 16U0763, 16U1004, 16U1076, 16U1174, 16U1253, 16U1327, 16U1383, and 16U1434 issued from January 2, 2016 through September 2, 2016, have been incorporated into this IRM:

Audience

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

Effective Date

(01-01-2017)

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

3.11.16.1  (11-04-2016)
General Information

  1. 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 sub-sections.

  2. In case of a conflict of instruction between this general sub-section and the subsequent specific sub-section, the specific sub-section will govern.

3.11.16.1.1  (11-04-2016)
♦IRS Employee Contacts - RRA Section 3705(a)♦

  1. The Internal Revenue Service Restructuring and Reform Act of 1998, Section §3705(a), provides identification requirements for all IRS employees working tax related matters. IRS employees are required to give their name and unique identification number during taxpayer telephone, face-to-face and written contact. In addition a telephone number is required on all taxpayer correspondence. This will provide taxpayers with enough information to identify an IRS employee who has previously assisted with tax related matters.

  2. All IRS employees who communicate, by telephone, correspondence, or face-to-face, with taxpayers, or their personal representatives, on tax related matters are required to provide (at a minimum) the following information:

    1. Telephone Contact – Their title (e.g., Mr., Mrs., Ms., Miss), their last name, and ID card number (badge).

    2. Face-to-Face – This information should be their title (e.g., Mr., Mrs., Ms., Miss), provided as appropriate during the conversation, their last name and badge identification (ID Card) number.

    3. Correspondence – All correspondence must include a telephone number that taxpayers can call for answers to any questions they may have. In addition, manually generated and handwritten correspondence must have the employee’s title (e.g., Mr., Mrs., Ms., Miss), last name, and Integrated Data Retrieval System (IDRS) number, letter system number, or their badge identification (ID card) number.

    4. The IDRS number and numbers for some other letter systems are automatically generated. If it is not generated, or a handwritten note is prepared, the badge identification (ID card) number must be used. Toll-free employees may also provide their location for identification purposes. Faxes to taxpayers on tax related matters are considered manually-generated correspondence and must include the required information.

    5. Correspondence, whether sent directly to the taxpayer or to the taxpayer's personal representative, must contain the required information.

    6. When a taxpayer requests to speak with a specific employee who previously handled their inquiry or request, or complains about the level of service previously provided, every attempt should be made to resolve the taxpayer's inquiry. If the issue cannot be resolved, the employee should refer the inquiry using established procedures to his or her manager.

    7. Correspondex letters will require a specific employee name and telephone number only if the employee initiating the correspondence is in the best position to respond to any questions that the taxpayer may have about the correspondence, or the employee is asking the taxpayer to provide additional case-related information.

    8. Otherwise, if the taxpayer does not need to contact a specific employee, the correspondence needs only an IRS telephone number and standard signature.

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

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

    Note:

    The Taxpayer Bill of Rights (TBOR) was adopted by IRS in June 2014 and provides that taxpayers have the right to receive prompt, courteous and professional assistance in their dealings with the IRS. They are to be spoken to in a way that is easily understood and any correspondence from the IRS must be clear and understandable. They have the right to speak to a supervisor whenever quality service is not received.

3.11.16.1.2  (01-01-2010)
♦ BMF Consistency ♦

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

  2. Topics for the BMF Consistency have been identified and developed as a coordinated effort between Cincinnati, Ogden, and Paper Processing Branch, BMF Code and Edit (C&E) /Error Resolution System (ERS).

  3. BMF Consistency subsections are identified by a "♦" (diamond) before and after the title.

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

3.11.16.1.3  (01-01-2016)
♦ IRM Deviation Procedures♦

  1. IRM deviations must be submitted in writing following instructions from IRM 1.11.2.2.4, Internal Management Documents System - Internal Revenue Manual (IRM) Process, When Procedures Deviate from the IRM, and elevated through appropriate channels for executive approval.

3.11.16.1.4  (11-04-2016)
♦ Taxpayer Advocate Service (TAS) ♦

  1. Per the Taxpayer Bill of Rights (TBOR), taxpayers have the right to expect a fair and just tax system which provides taxpayers with the opportunity to have their facts and circumstances considered when it might affect their underlying liabilities, ability to pay, or ability to provide information timely. Taxpayers have the right to receive assistance from the Taxpayer Advocate Service (TAS) if they are experiencing  financial difficulty or if the IRS has not resolved their tax issues properly and timely through normal channels. For additional information on the Taxpayer Bill of Rights, visit http://taxpayeradvocate.irs.gov/About-TAS/Taxpayer-Rights.

  2. Refer taxpayers to TAS when the contact meets TAS criteria (see IRM 13.1.7, Taxpayer Advocate Service (TAS) Case 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. "Same day" includes cases that can be completely resolved in 24 hours, as well as cases where steps can be taken within 24 hours to begin resolving the issue. (See also IRM 13.1.7.4, Same Day Resolution by Operations.)  When making a TAS referral, use Form 911, and forward to TAS in accordance with your local procedures.

3.11.16.1.4.1  (07-02-2015)
♦ TAS Service Level Agreements (SLAs) ♦

  1. The National Taxpayer Advocate (NTA) has reached agreements with the Commissioners of the Wage and Investment (W&I) Division, Small Business and Self-Employed (SB/SE) Division, Tax Exempt and Government Entities (TE/GE), Criminal Investigation (CI), Appeals, and Large Business and International (LB&I) that outline the procedures and responsibilities for the processing of 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 located at http://tas.web.irs.gov/policy/sla/default.aspx.

3.11.16.1.5  (11-04-2016)
♦ 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). The editing can be entered in brown, red, orange, purple, or green pencil/pen.

  2. The only items edited on the tax return are those to be transcribed except where specific instructions require editing of a non-transcribed item. Lines are left blank if the entry would be a zero amount unless otherwise instructed.

  3. The original entry on a tax return is never obliterated, altered, or erased 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. For a description of specific edit marks, see the table below:

    Edit Mark Description
    "X" or "/"
    • An X is used to delete tax data or to indicate that an item is not to be transcribed.

    • A slash / can be used when deleting a form or schedule not being transcribed.

    "/ /$" "/ /$" is used in the entity area to identify the beginning and ending of a Foreign Country Code.

    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 that an entry is not to be transcribed. Also used to delete Entity data or a received date.

    Note:

    If the taxpayer circles an entry, edit the entry.

    Underline Indicates an entry is to be transcribed (e.g., name control, tax period, etc.).
    Arrow Indicates the correct placement of a misplaced entry. An arrow may be used if the misplaced item is close to the correct line and there is no question where the entry belongs.

    Note:

    A double arrow may be used if the same figure is to be transcribed in two different places (along with any required transcription data between the two arrows).

    Check Mark Indicates that an entry has been 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. It will be necessary to bracket negative amounts when editing negative entries on transcription lines (e.g., computing and entering a line entry, entering a missing line entry, etc.).

    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 considered valid entries except when specific instructions require editing of an entry.
    Edit Marks Made by Other IRS Functions Edit marks entered by other areas (such as Collections, Entity or Accounts Management) are not to be re-edited except to place the marks in the correct area or to perfect for legibility. Do not edit (or write) over another area's edit marks.

    Exception:

    Photocopied Returns

    Photocopied Returns Re-edit or underline any valid, black edit marks. See IRM 3.11.16.2.4.3, Correspondence Imaging System (CIS) Returns, and IRM 3.11.16.2.8Re-Entry Document Procedures
    Rocker Indicates the amount paid when drawn under a remittance amount.

3.11.16.1.6  (03-08-2016)
♦ Frivolous Arguments ♦

  1. A frivolous argument is used for the purpose of expressing dissatisfaction with the substance, form, or administration of the tax laws by attempting to illegally avoid or reduce tax liabilities. Recognized frivolous arguments made by businesses include, but are not limited to, the examples in IRM 25.25.10, Frivolous Return Program, shown in Exhibit 3.11.16-15, Potential Frivolous Arguments for Examination Review.

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

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

    Exception:

    If the return shows Action Code "331" , and has a Form 4227 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 Processing (FRP) for review.
    Examination has selected the return as frivolous (e.g., indicated by an Action Code "331" , and a Form 4227 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 indicating a frivolous return.

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ " ≡ ≡ "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

3.11.16.1.7  (01-01-2010)
♦ Foreign Currency ♦

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

3.11.16.1.8  (01-21-2011)
♦ Protective Claims ♦

  1. Returns marked as "Protective Claim" , "Protective Refund" , "Protective Claim for Refund" , or similar statement will be removed from the batch and routed to Accounts Management. Notate "Protective Claim" in the remarks box of Form 4227.

    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.

3.11.16.1.9  (09-23-2016)
♦ 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. For returns with refund claims of $100,000,000 or more, do the following:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

    4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

  3. Other CI Referral Criteria:

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

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

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

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

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡
  4. For all other CI Referral criteria listed in paragraph (3), do the following:

    1. Make a copy of the return.

    2. Attach Form 4227 to the copy.

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

      Cincinnati Ogden
      Mail Stop 83G, Criminal Investigation (CI) 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. Continue processing the return.

  5. If CI has stamped the return, no further CI action is required.

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

3.11.16.1.10  (03-10-2016)
♦ Examination(Exam) Funny Box ♦

  1. The primary objective in identifying tax returns for examination is to promote the highest degree of voluntary compliance. Examination will provide support and assist Submission Processing (SP) with any questionable return identified during processing. Exam has a vast multitude of programs and tolerance criteria already identified in various IRM sections. Exam does not restrict SP with the flexibility to refer questionable returns other than what is currently identified in various IRMs.

3.11.16.1.11  (09-23-2016)
♦ BMF Identification (ID) Theft ♦

  1. BMF identification theft is increasing. If a tax examiner in Submission Processing (SP) Code and Edit (C&E) finds a case with attachments or correspondence indicating the taxpayer is a victim of ID Theft, provide the whole case to your senior/lead. Your senior/lead will expedite the case to the Planning & Analyst (P&A) staff for referral to one of the SP BMF ID Theft liaisons. The taxpayer must identify 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  (01-01-2012)
Unprocessable Documents - Error Resolution System

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

  2. 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 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 indicate 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, and Form 1120-RIC.

  3. Form 1120-FSC, Form 1120-ND, and Form 1120-SF are processed through a manual correction system. Use Computer Condition Code "U" on these returns when action such as correspondence is needed.

3.11.16.2.1  (01-04-2016)
♦ Action Codes ♦

  1. Action Codes are used to indicate whether correspondence, research, or some other action is needed. The Action Code will set the suspense period to be assigned to the return and place the return in the workable or unworkable suspense inventory.

  2. When necessary, a three digit Action Code will be assigned by the tax examiner. 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, and 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 is 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).

      Exception:

      When more than one Action Code is needed attach Form 4227. If more than one Action Code of the same priority is required (e.g. 310 and 341), edit the Action Code with the shortest suspense period and attach Form 4227 to indicate the second unprocessable condition. Use Action Code "211" , "215" , "225" , or "226" before Action Code "341" to ensure the return is complete before a manual refund is issued.

  5. Attach Form 4227 when more than one Action Code is needed. See Figure 3.11.16-1.

    Figure 3.11.16-1
    This image is too large to be displayed in the current screen. Please click the link to view the image.
  6. Edit the following Action Codes when a return cannot be perfected:

    Action Code Description
    "211" (First Correspondence) or "215" (International Correspondence)
    • Return is illegible, incomplete, or contradictory and therefore cannot be processed.

    • 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).

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

    "610" (Renumbered non-remittance) or
    "611" (Renumbered with-remittance)
    • A return is mis-blocked (e.g., Form 1065, U.S. Return of Partnership Income, found in a 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 that must be forwarded to Ogden Submission Processing Campus (OSPC).

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

  8. 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
    (MeF only)
    Entity Control - Form 1120 with Form 851 attached 20
    331 Frivolous Review 3
    341 Manual Refund 10
    342 Credit Verification 10
    343 Black Liquor 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 IRC Section 6501(d) 10
    420 2006 Tax Return with Form 8913 Credit 5
    440 Manager's Suspense 15
    480 Early Filed Suspense 150
    610 Renumber - Non-Remittance 0
    611 Renumber - Remittance 0
    640 Void 0
    650 International 0

3.11.16.2.2  (01-01-2011)
Unprocessable Conditions and Rejection of Tax Returns

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

    1. The tax return has a foreign address.

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

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

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

    5. 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 is attached.

      Note:

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

3.11.16.2.3  (01-01-2012)
Treatment of All Unprocessable Tax Returns

  1. Cincinnati Submission Processing Campus (CSPC) If the tax return is an Ogden Submission Processing Campus (OSPC) "only" return, discontinue perfection of the return. Prepare Letter 86C to inform the taxpayer the return has been sent to Ogden Submission Processing Campus.

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

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

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

  3. Action to secure perfection:

    1. Where indicated, prepare Form 4227, Intra-SC Reject or Routing Slip, indicating the reason for rejecting the document and that the document should 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 forward 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 appropriate Action Code in the bottom left margin of the return and leave it in the block.

3.11.16.2.4  (01-01-2015)
♦ Correspondence ♦

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

    1. Correspondence received from taxpayers, and

    2. Issuing correspondence to taxpayers.

3.11.16.2.4.1  (01-01-2014)
♦Definition of Correspondence from Taxpayers♦

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

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

    2. Written communications, including annotated notice responses, that provide additional 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 us?

    2. Is the taxpayer waiting for an action to be taken by us?

    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 such as, for example - "Taxpayer (TP) requests penalties be waived" - does not constitute correspondence from the taxpayer.

3.11.16.2.4.2  (11-04-2016)
♦Issuing Correspondence♦

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

    Note:

    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 appears to be a duplicate, give the return to the lead. The lead will initiate research for a Transaction Code (TC) 150 and/or any other research necessary to determine if the return should continue to be processed or other actions taken. A duplicate return could include any of the following:

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

    • Incomplete returns indicating "Payment Only" .

    • Incomplete returns indicating they have previously e-filed.

    Note:

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

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

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

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

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

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

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

  4. Examine the return so that all of the conditions can be included in the same correspondence.

    If... And... Then...
    Correspondence is needed A response is required,
    1. Complete an approved Correspondence Action Sheet indicating the letter number (86C, 118C, etc.), Master File Tax (MFT), and the appropriate paragraphs.

      Note:

      Within these paragraphs, there may be fill-ins that the tax examiner will be required to enter, such as, tax period, form 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, or 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.

    Correspondence is needed A response is not required,
    1. Complete an approved Correspondence Action Sheet indicating the letter number (86C, 118C, etc.), Master File Tax (MFT), and the appropriate paragraphs.

      Note:

      Within these paragraphs, there may be fill-ins that the tax examiner will be required 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 the front of the photocopy. Be sure the name and address show clearly above the Correspondence Action Sheet.

    3. Forward the copy to the Correspondence area.

    4. Edit an Action Trail (e.g., "118C 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 may be additional letters that are exclusive to the tax examiner's campus. These letters are for specific forms or conditions where it was deemed necessary for processing. The tax examiner should go to their lead or manager for copies of these letters to facilitate processing.

3.11.16.2.4.3  (07-13-2015)
♦ Correspondence Imaging System (CIS) Returns ♦

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

  2. "CIS" returns are identified with "CIS Image - Do not correspond for Signature" stamped below the signature line or "CIS" annotated on the front of the return.

  3. Verify all edit marks and ensure placement is correct on a "CIS" 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 "CIS" returns

    If... And... Then...
    The "CIS" return has a Form 13596 attached

    Note:

    If there is an indication on the return that correspondence has been sent (e.g., CCC "3" is edited on the return), do not route the return to Accounts Management. Continue processing.

    The return is not complete (e.g., missing signature, schedules, or forms), Remove the return from the batch and route to Accounts Management.

    Note:

    Do not correspond for missing information on "CIS" reprocessable/reinput returns.

    The "CIS" return does not have a Form 13596 attached The return is not complete (e.g., missing signature, schedules, or forms), Follow normal correspondence procedures.

3.11.16.2.4.4  (11-04-2016)
♦ Use of Fax for Taxpayer Submissions ♦

  1. 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. For more information about accepting signed taxpayer documents by fax, see the most recent revision of the IRS Policy for Use of Fax, available at http://irweb.irs.gov/AboutIRS/co/dese/memo/48254.aspx.

  2. Contact with the taxpayer may be by telephone or correspondence. Follow local procedures to determine which method of contact will be used.

  3. Code and Edit tax examiners will indicate the fax paragraph on the approved Correspondence Action Sheet to advise taxpayers of the option to fax their response.

    Caution:

    Before disclosing tax information, you must be sure you are speaking to the taxpayer or authorized representative. See the Taxpayer Authentication guidelines in IRM 21.1.3.2.3, Required Taxpayer Authentication and IRM 21.1.3.2.4, Additional Taxpayer Authentication. Also, before leaving any messages on a taxpayer's answering machine, review IRM 11.3.2.6.1, Leaving Information on Answering Machines/Voice Mail. Fax procedures contained in IRM 11.3.1.11, Facsimile Transmission of Tax Information must be reviewed prior to faxing confidential information to the taxpayer.

3.11.16.2.5  (01-01-2009)
C/SC Letters

  1. Listed below are letters and a form which are provided by the Headquarters for Submission Processing Center use in corresponding for items listed in this IRM. It is expected that tax examiners or their supervisors (or delegates) will have access to and be familiar with the Submission Processing Center Correspondex Handbook for selection of appropriate letters.

    1. Letter 86(C/SC/SP) - Letter referring taxpayer inquiry/forms to another office.

    2. Letter 118(C) - Letter requesting missing schedules or documents.

    3. Letter 143(C) - Letter advising taxpayer that we have received tax form and need additional information in order to complete action on it. (Also use this letter for missing signature only.)

    4. Letter 319(C/SC) - Letter advising taxpayer that IRS cannot process return because it shows an improper tax period or a period of more than 12 months or a period less than 12 months without an explanation.

    5. Letter 105(C) - Letter disallowing Federal Telephone Excise Tax Credit, explaining appeal rights and procedures.

    6. Form 6800 - Request for Missing Information or Papers to Complete Your Tax Return or Form 8038-CP.

3.11.16.2.6  (06-27-2011)
♦ Compliance Secured/Prepared Returns ♦

  1. Compliance functions (Collections and Examination) secure returns from the taxpayer and also prepare returns if the taxpayer does not provide them.

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

    2. Secured tax returns are notated with "TC 59X" or "ICS" (Integrated Collections System) or are notated "Process as original" with an attached Form 13133, Expedite Processing Cycle. The "Delinquent Return" box on Form 13133 should be checked.

    Note:

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

3.11.16.2.6.1  (11-04-2016)
♦ IRC §6020(b) – Prepared by Collections ♦

  1. When the taxpayer fails to file a required return, IRC §6020(b) is the authority for the IRS to prepare the return.

  2. These tax 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 3.11.16.7, Received Date

    2. Returns must be signed by Compliance Function representative. If not signed, route to Compliance using Form 4227.

      Note:

      Starting July 1st, 2013 we will accept the Revenue Officers (RO) electronic signature or typed signature as a valid signature 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 2 years and 9 months after the return Due Date. Do not send the return to Statute Control.

3.11.16.2.6.2  (03-04-2011)
♦ 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 cannot be processed (e.g., missing signatures, missing schedules, etc.).

    3. Edit CCC "W" if the received date is more than 2 years and 9 months after the return Due Date. Do not send to Statute Control function.

    Reminder:

    If there is an indication a penalty or penalties should be suppressed, edit the appropriate Computer Condition Code(s). Please refer to IRM 3.11.16.8.1, Computer Condition Codes for additional information.

3.11.16.2.6.3  (11-04-2016)
♦ 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 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 2 years and 9 months after the return Due Date. Do not send to Statute Control function.

3.11.16.2.6.4  (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 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 cannot be processed (e.g., missing signatures, missing schedules, etc.).

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

    4. Edit CCC "W" if the received date is more than 2 years and 9 months after the return Due Date. Do not send to Statute Control function.

    Reminder:

    If Form 13133 (or something similar) indicates a penalty or penalties should be suppressed, edit the appropriate Computer Condition Code(s). Please refer to IRM 3.11.16.8.1, Computer Condition Codes for additional information.

3.11.16.2.7  (06-11-2015)
♦ Statute Returns ♦

  1. Any tax return with a received date that is 2 years and 9 months or more after the Return Due Date is a potential statute control return.

  2. Statute returns must be routed to the Statute Control Unit daily or more often if needed.

    Exception:

    Do not route the return to Statue Control Unit for clearance, edit CCC "W" and continue processing if any of the following conditions are present:

    • Compliance (IRC §6020(b)) returns.

    • Tax returns with "TC 59X" or "ICS" notated on the face of the return.

    • Secured by Examination/Collections

    • Tax returns that are substitute returns prepared by Examination ("SFR" notated in top margin).

    • Tax returns with a stamp indicating a previous clearance by the Statute Control Unit within the last ninety days.

  3. If a Form 12412, Operations Assistance Request (OAR) is received from TAS and the return is a potential statute control return but is not stamped "Cleared by Statute" , give the return to your lead. The lead will contact the TAS employee listed on the OAR for rejection of the return back to TAS for clearance by the Statute 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 for clearance.

  4. Statute returns are unprocessable until they are 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, and Form 1120-RIC.

    2. All other returns edit CCC "U" and attach Form 4227. Check the "Statute Control" box on Form 4227.

    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 and check the box for "Statute Control" .

  5. Edit a CCC "W" if the tax return has been cleared by the Statute Control Unit. Statutes will stamp or indicate clearance on the front of the return.

  6. Statute may stamp a return as "No Statute Issue" . Follow the chart below to determine if a CCC "W" is needed:

    If... And... Then...
    The return received date is 2 years and 9 months or more after the Return Due Date The return is stamped, "No Statute issue" , "Statute N/A" , or a similar statement indicating there is no statute issue, Edit a CCC W
    The return received date is less than 2 years and 9 months from the Return Due Date The return is stamped, "No Statute issue" , "Statute N/A" , or a similar statement indicating there is no statute issue, Do not edit a CCC W

3.11.16.2.8  (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 2 years and 9 months or more after the Return Due Date, refer to Statute procedures before re-entering or reprocessing the return. See IRM 3.11.16.2.7 Statute Returns.

3.11.16.2.8.1  (01-01-2015)
♦ Form 3893 – Re-Entry Document Control ♦

  1. Form 3893, Re-Entry Document Control is used to reinput a return that has not posted to an account or 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 if a request for reasonable cause is attached.

  6. If the return was 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 was 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 appropriate 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 3.11.16.7, Received Date.
    Multiple Received Dates are present, Circle all but the earliest date.

  10. When additional information is still needed to make the return processable, prepare an approved Correspondence Action Sheet or Form 4227 for the appropriate action (e.g., correspondence, research, etc.).

  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.

3.11.16.2.8.2  (01-01-2015)
♦ 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 if a request for reasonable cause is attached.

  5. If the return was 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 you receive a Form 1120 converted from Form 1120S, ensure that the following items are present: EIN, name control, 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.

  6. If the return was 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 appropriate 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 appropriate 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 3.11.16.7, 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 additional information is still needed to make the return processable, prepare an approved Correspondence Action Sheet or Form 4227 for the appropriate action (e.g., correspondence, research, etc.).

3.11.16.2.9  (01-02-2015)
♦ 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 (information may be useful to Accounts Management)

    • Detach any unrelated documents and route them to the appropriate function using Form 4227. Edit an Action Trail on the return.

    Note:

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

  3. If there is an indication the return is amended and:

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

    2. Process the return as an original.

    The return is stamped "Delinquent Original Cleared for Processing" by Statute,
    1. Do not edit CCC "G" .

    2. Process the return as an original.

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

    2. See IRM 3.11.16.2.8.1, Form 3893 - Re-Entry Document Control or IRM 3.11.16.2.8.2, Form 13596 - Reprocessing Returns.

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

    2. No other codes may be used 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 3.11.16.5.3, Entity Perfection - Name Control

    2. EIN. See IRM 3.11.16.5.2, Entity Perfection - Employer Identification Number (EIN)

    3. Tax period. See IRM 3.11.16.6, Tax Period

    4. CCC "G" . See Exception above

    5. Received date. See IRM 3.11.16.7, Received Date

    6. Signature. See IRM 3.11.16.10.7, Signature

3.11.16.2.10  (02-25-2016)
IRC 847 Deduction

  1. IRC 847(2) requires certain insurance companies to make Special Estimated Tax Payments (SETP) in the amount equal to the tax benefit derived from the additional deduction permitted under IRC 847.

  2. SETP are reported on Form 1120, Consolidated Form 1120, Form 1120-L, and Form 1120-PC.

    Note:

    Consolidated Form 1120 returns with a subsidiary Form 1120-PC or Form 1120-L can claim SETP credits.

  3. The SETP payment is found 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 II, Line 13 (Page 1, Line 32b for 2010 and prior revisions) identified 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 is attached.
    Form 1120-L Page 1, Lines 29b and/or 29d and/or Form 8816 is attached.
    Form 1120-PC Page 1, Lines 14b and/or 14d (for 1999 and prior, Lines 16b and/or 16d) 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 your lead.

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

    1. Edit an action trail such as "Faxed to LB&I Exam MM-DD-YYYY" (MM-DD-YYYY 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 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.

3.11.16.2.11  (01-01-2014)
Prompt Assessment (Form 4810) / Prompt Determination

  1. A "Prompt Assessment" , IRC 6501 is requested, either in the form of a letter or on Form 4810. A "Prompt Determination" is requested under IRC 505(b) of the U.S. Bankruptcy Code.

    If... And... Then...
    A Prompt Assessment or Prompt Determination request is not attached to a tax return,   Forward 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 forward 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.

3.11.16.2.12  (01-01-2015)
Form 8913 - Credit for Federal Telephone Excise Tax Paid Only Tax Return

  1. For corporation returns claiming ONLY a refund of the Federal Telephone Excise Tax Credit (Form 8913) and no other income or deduction entries are present on the corporate return, edit the following:

    1. Entity area. See IRM 3.11.16.5.

    2. Tax period. See IRM 3.11.16.6.

    3. Action code "420" . (CCC "U" for Forms 1120-FSC/ND/SF.)

    4. Received date. See IRM 3.11.16.7.

    5. Initial return code (Form 1120, Form 1120-REIT, and Form 1120-RIC). See IRM 3.11.16.8.3.

    6. Signature. See IRM 3.11.16.10.7.

    7. Form 8050 (Form 1120, place in sequence order if entries are present).

    8. Form 8913 (place in sequence if Line 15, Column (d) or (e) contain a significant entry).

3.11.16.3  (07-29-2016)
♦ Refund Returns (45 Day Jeopardy and $100 Million or more Refunds) ♦

  1. Document Perfection is responsible for identifying refunds and for initiating requests for 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 refund is $100,000,000 or more.

    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 $25,000 or more,

    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, 1120-C, 1120-F, 1120-H, 1120-L, 1120-PC, 1120-REIT, and 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 $100,000,000 or more,

    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 and check the "Reject Correction" box.

      4. Place the return in the CI box. See IRM 3.11.16.1.9.

      5. When cleared, 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 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.

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

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

3.11.16.4  (01-01-2012)
Examination of Tax Data

  1. This subsection addresses general tax data editing procedures.

3.11.16.4.1  (01-01-2010)
Non-Standard or Prior Year Format

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

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

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

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

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

3.11.16.4.2  (01-01-2014)
Conversion of Form 1120S to Form 1120

  1. If a taxpayer filed Form 1120S 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 1120S to a Form 1120. No action is required for Document Perfection.

    Caution:

    If you receive a Form 1120 converted from Form 1120S and the Form 13596, Reprocessing Returns, is attached for reprocessing, see IRM 3.11.16.2.8.2, Form 13596 - Reprocessing Returns for additional information.

3.11.16.4.3  (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.

3.11.16.4.4  (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 appropriate transcription lines of both the income and deduction sections. This does not apply to Consolidated – Mixed Component returns.

    Exception:

    See instructions for Minimum Edit, IRM 3.11.16.4.5.

    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 an indication the income and/or deduction items are included on an attachment (e.g., a notation such as "See attached" , "See Schedule F" , "Statement attached" , etc.).

    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.

3.11.16.4.5  (11-04-2016)
Minimum Edit

  1. If Form 1120 does not require Balance Sheet inspection (see IRM 3.11.16.10.25, 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 19. 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 appropriate 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, should be brought to the attention of your supervisor. Taxpayer correspondence should 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."

3.11.16.4.6  (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 should be entered,

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

    No editing is required.

3.11.16.4.7  (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 indicates 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, etc.), Bracket the negative amount.

3.11.16.5  (01-01-2014)
♦ Entity Perfection - General ♦

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

    • Employer Identification Number (EIN)

    • Name

    • "In-care-of" Name

    • Address

3.11.16.5.1  (06-08-2015)
♦Bankruptcy♦

  1. If the Form 1120, 1120-C, 1120-F, 1120-FSC, 1120-H, 1120-L, 1120-PC, 1120-REIT, 1120-RIC, 1120-ND, or 1120-IC-DISC indicates bankruptcy (e.g. shows RECEIVER, TRUSTEE, or DEBTOR IN POSSESSION) in the entity area or on an attachment, route to Entity Control using local procedures.

3.11.16.5.2  (07-30-2015)
♦ 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 You can determine the correct EIN 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 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, and Form 1120-RIC. All other returns edit CCC "U" .

      2. Leave return in batch.

      The EIN contains any of the following conditions and cannot be determined from attachments and/or schedules:
      • Illegible;

      • Missing;

      • Other than 9 digits;

      • All zeroes; or,

      • All nines

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

      2. Research IDRS.

      3. If found, edit to the proper location.

      4. If not found, route to Entity Control following local procedures.

      The EIN contains any of the following conditions and cannot be determined from attachments and/or schedules:
      • Illegible;

      • Missing;

      • Other than 9 digits;

      • All zeroes; or,

      • All nines

      Numbered,
      1. Circle all illegible EINs, zeroes, 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, and Form 1120-RIC. All other returns edit CCC "U" .

      3. Leave return in batch.

      "PENDING" , "APPLIED FOR" , etc., is indicated 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.

      PENDING, APPLIED FOR, etc., is indicated 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, and Form 1120-RIC. All other returns edit CCC "U" .

      2. Leave return in batch.

3.11.16.5.3  (06-08-2015)
♦ 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.

    • *(For Form 1120-C - Box D(3), Form 1120-F - Box Name or address change, Form 1120-FSC - Box F(2), 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.

      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, and 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 image is too large to be displayed in the current screen. Please click the link to view the image.

3.11.16.5.4  (01-01-2014)
♦ 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 located in the proper location.

    If... Then...
    The "in-care-of" name is located on the street address line preceding the street address, No editing is required.
    The "in-care-of" name is located above the first name line or below the street address,
    1. Arrow the "in-care-of" name so it appears below the first name line and above the street address.

    The "in-care-of" name is shown on an attachment, Edit the "in-care-of" name above the street address beginning with the "%" or "c/o" in the first position.
    The street address for the "in-care-of" name is different from the street address of the corporation,
    1. Arrow the "in-care-of" street address below the "in-care-of" name or edit the "in-care-of" street address below the "in-care-of" name if included on an attachment.

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

    Note:

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

  3. A change in the "in-care-of" name can be determine by any of the following:

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

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

    • An indication that the "in-care-of" name is changed (e.g., the taxpayer crossed out the original "in-care-of" name and added the new name or has entered a new "in-care-of" name in brackets)

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

      2. Correct the address. See IRM 3.11.16.5.5, Entity Perfection – Domestic Addresses.

      3. Continue editing the return.

3.11.16.5.5  (06-10-2016)
♦ Entity Perfection – Domestic Addresses ♦

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

    Exception:

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

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

  3. The procedures for perfection of returns indicating an address change are as follows:

    If... And... Then...
    The address contains information other than a street address or P.O. Box,   No perfection is necessary. ISRP will enter the complete address.
    There is an indication 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 of the following applies:
    • Mailing address information is the same,

    • No location address is listed on Form 8822/8822-B, Line 7,

    • 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 of the following applies:
    • Mailing address information is different,

    • Location address is listed on Form 8822/8822-B, Line 7,

    • An entry is listed on Form 8822-B, Lines 8 or 9,

    Detach Form 8822/Form 8822-B and route to Entity Control following local procedures.
    Both a P.O. Box and street address are shown,
    See Figure 3.11.16-3.
     
    1. Notate "TC 014" in the upper left margin.

    2. Input TC "014" .

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

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

    3. Input TC "014" .

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

    2. Input TC "014" .

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

    Note:

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

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

    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 image is too large to be displayed in the current screen. Please click the link to view 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

3.11.16.5.6  (01-01-2010)
♦ 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. Returns with APO, DPO, and FPO addresses are considered domestic addresses. See IRM 3.11.16.5.5, Entity Perfection – Domestic Addresses.

  3. Route returns with a foreign address to the Ogden Submission Processing Center (OSPC) for processing. Prepare Letter 86C to inform the taxpayer the return has been sent to Ogden.

  4. Returns with addresses in the following U.S. Possessions/Territories are considered to be a foreign for processing purposes but are edited in the same way as domestic addresses.

    1. A two-character alpha code must be edited 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 appropriate ZIP Code if one is not provided. See Exhibit 3.11.16-19, U.S. Possessions ZIP Codes.

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

    1. The foreign country must be 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, ZIP Codes, and Countries.

    3. A unique country code will be edited for returns filed with an address in Canada. See IRM 3.11.16.5.6.1 Country Code – Canada.

      Note:

      Submission Processing BMF Foreign Address Job Aid (Number 2324-002) provides examples for editing foreign addresses.

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

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

      2. Edit the appropriate abbreviation. See Exhibit 3.11.16-16, Province, State and Territory Abbreviations.

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

  6. A ZIP Code or state are 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.

3.11.16.5.6.1  (04-06-2015)
♦ Country Code – Canada ♦

  1. In an effort 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 contains 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 appropriate "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 contain 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 I XQ
    Saskatchewan SK S XW
    Yukon YT Y XY

  2. The rest of the foreign address is edited using procedures in IRM 3.11.16.5.6, Entity Perfection – Foreign Address (OSPC).

3.11.16.6  (01-01-2013)
Tax Period

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


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