3.11.154 Unemployment Tax Returns

Manual Transmittal

November 07, 2017

Purpose

(1) This transmits revised IRM 3.11.154, Document and Analysis - Unemployment Tax Return

Material Changes

(1) Various editorial changes were made throughout the Internal Revenue Manual (IRM).

(2) IRM 3.11.154.1, Program Scope and Objectives - Changed title from "Program Scope" to "Program Scope and Objectives" .

(3) IRM 3.11.154.1, Program Scope - Changed "Overview" in title to Program Scope and Objectives. (IPU 17U0637 issued April 06, 2017)

(4) IRM 3.11.154.1(1), Program Scope - Revised to include old paragraph (2) and (3) information. (IPU 17U0637 issued April 06, 2017)

(5) IRM 3.11.154.1(2), Program Scope - New paragraph to define Audience. (IPU 17U0637 issued April 06, 2017)

(6) IRM 3.11.154.1(3), Program Scope - New paragraph to define Policy Owner. (IPU 17U0637 issued April 06, 2017)

(7) IRM 3.11.154.1(4), Program Scope - New paragraph to define Program Owner. (IPU 17U0637 issued April 06, 2017)

(8) IRM 3.11.154.1(5), Program Scope - New paragraph to define Stakeholders. (IPU 17U0637 issued April 06, 2017)

(9) IRM 3.11.154.1.1, Background - New section providing essential background information pertinent to the program. (IPU 17U0637 issued April 06, 2017)

(10) IRM 3.11.154.1.2, Authority - New section providing any authorities relating to the type of work being done. (IPU 17U0637 issued April 06, 2017)

(11) IRM 3.11.154.1.2(1), Authority - Added to the end of paragraph series processed at "Ogden Submission Processing Center (OSPC) and Cincinnati Submission Processing Center CSPC: " and listed all forms separately in bullet format. Also added new note regarding Form 940 (cg) background information and old note was changed to a reminder.

(12) IRM 3.11.154.1.2(2), Authority - Deleted sub paragraphs a), b), c), d) and e) which are unnecessary explanation.

(13) IRM 3.11.154.1.2(4), Authority - Added reference to Exhibit 3.11.154.-14, Credit Reduction States and rates.

(14) IRM 3.11.154.1.2(5), Authority - Deleted unnecessary explanations sub paragraphs a), b), and c).

(15) IRM 3.11.154.1.3, Responsibilities - New section providing information regarding who is responsible for the activity(s) provided in the IRM. Include employee responsibilities and management responsibilities. (IPU 17U0637 issued April 06, 2017)

(16) IRM 3.11.154.1.4, Program Management and Review - Changed title from "Program Objective and Review" to "Program Management and Review" .

(17) IRM 3.11.154.1.4, Program Objectives and Review - New section providing the objectives or goals for the program. (IPU 17U0637 issued April 06, 2017)

(18) IRM 3.11.154.1.5, Program Controls - Added new section regarding Program Controls.

(19) IRM 3.11.154.1.5, Acronyms and Abbreviations - New section providing list or table of terms and/or abbreviations used throughout this IRM Section. (IPU 17U0637 issued April 06, 2017)

(20) IRM 3.11.154.1.6, "Terms/Definitions/Acronyms" - Changed title from "Acronyms and Abbreviations" to "Terms/Definitions/Acronyms" .

(21) IRM 3.11.154.1.6(1), Terms/Definitions/Acronyms - Changed to read "Although it is best to not use words that require interpretation, you may have to use them. If you do, you should include definitions for words which require interpretations. Examples of these words:"

(22) IRM 3.11.154.1.6, Related Resources - New section providing a list of additional websites, job aids, or electronic tools are needed to complete the work. (IPU 17U0637 issued April 06, 2017)

(23) IRM 3.11.154.1.8(1), Taxpayer Advocate Service (TAS - Deleted "Taxpayers have the right to receive assistance from the Taxpayer Advocate Service (TAS) if they are experiencing financial difficulty or if the RS 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."

(24) IRM 3.11.154.1.8(2), Taxpayer Advocate Service (TAS - Added new paragraph to read "Taxpayers have the right to receive assistance from the Taxpayer Advocate Service (TAS) if they are experiencing financial difficulty or if the RS 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."

(25) IRM 3.11.154.1.8(3), Taxpayer Advocate Service (TAS - Deleted ""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."

(26) IRM 3.11.154.1.8(4), Taxpayer Advocate Service (TAS - Deleted ""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."

(27) IRM 3.11.154.1.8.2(1), Form 911, Request for Taxpayer Advocate Service Assistance(TAS) (And Application for Taxpayer Assistance Order) - Changed IRM 3.11.154.1.3.2 to IRM 3.11.154.1.8.2. (IPU 17U0637 issued April 06, 2017)

(28) IRM 3.11.154.1.9(1), Business Master File (BMF) Consistency - Added "(C&E)" .

(29) IRM 3.11.154.1.9(2), Business Master File (BMF) Consistency - Added "Kansas City" , Deleted "Wage and Investment Division" and changed "Code and Edit/ERS Section" to "C&E/Error Resolution System (ERS)" .

(30) 3.11.154.1.10(1), IRM Deviation Procedures - Changed "Internal Management Documents System - Internal Revenue Manual (IRM) Process" to "When Procedures Deviate from the IRM" .

(31) IRM 3.11.154.2.2(3), Processing Guidelines for Form 940 Series - Add bullet regarding no room to place Document Locator Number. (IPU 17U0861 issued May 17, 2017)

(32) IRM 3.11.154.2.3(1), Return Perfection - Processing of Form 940 and Form 940-PR - Changed reference of "2016" to "2017" ,

(33) IRM 3.11.154.2.3(1)a), Return Perfection - Processing of Form 940 and Form 940-PR - Changed reference of "2016" to "2017" .

(34) IRM 3.11.154.2.3(2)a), Return Perfection - Processing of Form 940 and Form 940-PR - Changed reference of "2016 - 2012" to "2012 - 2017" , and "2010 - 2006" to "2006 - 2010" .

(35) IRM 3.11.154.2.3(5), Return Perfection - Processing of Form 940 and Form 940-PR - Changed reference of "2016" to "2017" .

(36) IRM 3.11.154.2.3(7)e), Return Perfection - Processing of Form 940 and Form 940-PR - Changed the references of "2016" to "2017" . Revised the second "Then" procedure box include a note regarding signature and revised paragraph 2) in its entirety. Also in the third "Then" procedure box revised paragraph 1) to include a reference to issuing correspondence and note regarding the Lead tax examiner.

(37) IRM 3.11.154.2.3(7)e), Return Perfection - Processing of Form 940 and Form 940-PR - In the second Then procedure box added new note regarding a signature being present on line designated for the taxpayer signature. ( IPU 17U1065 issued June 27, 2017)

(38) IRM 3.11.154.2.3(7)e), Return Perfection - Processing of Form 940 and Form 940-PR - Changed reference of "(5)" to "(8)" . (IPU 17U0040 issued January. 05, 2017)

(39) IRM 3.11.154.2.3(7)e), Return Perfection - Form 940 and Form 940-PR - In the third "Then" procedure box paragraph 2 changed the first "Form 940" reference to "Form 941" . (IPU 17U0263 issued February 09, 2017)

(40) IRM 3.11.154.2.3(7)e), Return Perfection - Form 940 and Form 940-PR - In the last "Then" procedure box Changed reference "Form 940 Schedule A" to "Form 940 Schedule R" , (IPU 17U1065 issued June 27, 2017)

(41) IRM 3.11.154.2.3(12), Return Perfection - Processing of Form 940 and Form 940-PR - Changed reference of "2016" to "2017" .

(42) IRM 3.11.154.2.4(4), Edit Marks - Updated Figure 3.11.154-2, Form 940 with Misplaced Edit Marks with a current year 2017 form.

(43) IRM 3.11.154.2.4(4), Edit Marks - Changed references of "2012 through 2016" to "2012 - 2017" and "2010 - 2006" to "2006 - 2010" .

(44) IRM 3.11.154.2.4(5), Edit Marks - In the table changed "removed" to "remove" and revised the order of the edit marks in table to be consistent with the consistency Internal Revenue Manual.

(45) IRM 3.11.154.2.4(5), Edit Marks - Revised the Asterisk description to clarify the deletion of data for non-transposition and/or correction of data for transcription. (IPU 17U0979 issued June 08, 017)

(46) IRM 3.11.154.2.6(4), Action Codes - The "Exception" regarding multiple Action Codes was deleted.

(47) IRM 3.11.154.2.6(5), Action Codes - Added new paragraph regarding more than one Action Code is needed.

(48) IRM 3.11.154.2.6(6), Action Codes - Deleted instruction to Attach Form 4227 when more than one Action Code is needed.

(49) IRM 3.11.154.2.6(7), Action Codes - Deleted "from the information present" .

(50) IRM 3.11.154.2.8(8), Routing Guide for Attachments - Added Kansas City mail stop to Form 433-B, Form 433-D, Action. In the action for For Form 940 Schedule R changed reference of "IRM 3.11.154.2.3(9)" to IRM "3.11.154.2.3(12)" . Revised the action for "Request for Money transfer" . In the action for Form 2848 replaced the PO Box address with a physical address and added mail address for Kansas City and deleted the note regarding the CAF Code. In the action for Form 8821 replaced the PO Box address with a physical address and added mail address for Kansas City. In the action for Form 9465 changed "Receipt and Control" to "R&C" and added Kansas City mail stop. Added to Form 12857 action to research IDRS for a TC 840. In the second action for Form 14039-B added "or Kansas City" . Revised the action procedures for Letter 112C, Letter 282C, 255C, 2284C in it’s entirety.

(51) IRM 3.11.154.2.8(8), Routing Guide for Attachments - Instructions for Form / Document Victim of ID theft changed the IRM 3.11.154.1.7 to IRM 3.11.154.1.2. (IPU 17U0637 issued April 06, 2017)

(52) IRM 3.11.154.2.8(8), Routing Guide for Attachments - Added Form 14039-B, Identity Theft Affidavit - Business. (IPU 17U0040 issued January 05, 017)

(53) IRM 3.11.154.2.9(3), Computer Condition Codes (CCC) - Changed reference of "2016" to "2017" .

(54) IRM 3.11.154.2.9.2(3), CCC "F" - Final Return - In the first and second "Then" procedure box replaced "send the return back to the taxpayer using Form 6800-A. Inform the taxpayer that they are no longer required to file a Form 940 and do not need to file a return now" with Replaced send the return back to the taxpayer using Form 6800-A. Inform the taxpayer that they are no longer required to file a Form 940 and do not need to file a return now with "take the return to lead for disposition" . (IPU 17U0263 issued February 09, 2017)

(55) IRM 3.11.154.2.9.6, CCC "R" - Reasonable Cause for Failing to Timely File Timely Return - In the title moved "Timely" to follow after "File" .

(56) IRM 3.11.154.2.9.6(1), CCC "R" - Reasonable Cause for Failing to Timely File Timely Return - Revised the procedures in it’s entirety.

(57) IRM 3.11.154.2.9.6(2), CCC "R" - Reasonable Cause for Failing to Timely File Timely Return - Revised the procedures in it’s entirety.

(58) IRM 3.11.154.2.9.9(1), CCC "3" - No Reply to Correspondence - Changed "becomes" to "is" .

(59) IRM 3.11.154.2.9.11(1), CCC "5" - Successor Employer - Changed reference of "2006 through 2016" to "2006 - 2017" .

(60) IRM 3.11.154.2.9.13, CCC "9" - No Payments to Employees (Revision Year 2006 and Subsequent) - Updated Figure - Updated Figure 3.11.154-3, No Payments to Employees and CCC “9” Edited with a current year 2017 form.

(61) IRM 3.11.154.2.9.13(2), CCC "9" - No Payments to Employees (Revision Year 2006 and Subsequent) - Updated Figure - Revised paragraph (2) to include old paragraph 3) instructions.

(62) 3.11.154.2.14(1), Correspondence - Changed second bullet from "Issuing correspondence to taxpayer" to "Correspondence issued to taxpayer" .

(63) IRM 3.11.154.2.15(2), Use of Tax for Taxpayer Submissions - The note has been deleted and added as new paragraphs (4) and (5). (IPU 17U0979 issued June 08, 2017)

(64) IRM 3.11.154.2.16, Third Party Designee - Deleted the extra "t" in the second sentence. (IPU 17U0040 issued January 05, 2017)

(65) IRM 3.11.154.2.18(1), Signature - The procedures for the exception of signature and jurat requirement has been revised in its entirety.

(66) IRM 3.11.154.2.18(3), Signature - Added new procedures regarding missing page 1 of Form 940. (IPU 17U0861 issued May 17, 2017)

(67) IRM 3.11.154.2.18(3), Signature - Change the reference of "waist" to "waste" . (IPU 17U1295 issued 08-31-2017)

(68) IRM 3.11.154.2.18(4), Signature - Revised the first "Then" procedure box to read "Follow local procedures for pulling or leaving the return in batch and continue processing."

(69) IRM 3.11.154.2.20(4), Early Filed Returns - Add note "Do not delete Sch A if attached." (IPU 17U0861 issued May 17, 2017)

(70) IRM 3.11.154.2.20(5), Early Filed Returns - Changed reference of "2016" to "2017" .

(71) IRM 3.11.154.3.1(1), Refund Returns (45 Day Jeopardy and $100 Million or more Refund Returns) - In the 3rd Then procedure box changes the 4th procedure to read Make a copy of the return for Criminal Investigations (CI). See IRM 3.11.154.3.15, Criminal Investigations (CI) Referral. (IPU 17U0040 issued January 05, 2017)

(72) IRM 3.11.154.3.2(3), Delinquent Returns - Added delinquent returns date information for Tax Period ending Dec. 31, 2018.

(73) IRM 3.11.154.3.2(3) b), Delinquent Returns - In the table corrected the Post Mark, 7 Day Grace Period and Delinquent dates. (IPU 17U0650 issued April 07, 2017)

(74) IRM 3.11.154.3.3(2), Received Date - In the third "Then" procedure box added a new note defining delivery services. (IPU 17U0040 issued January 05, 2017)

(75) IRM 3.11.154.3.3(4), In the table changed the year reference of "2017" to "2018" .

(76) IRM 3.11.154.3.3(6), Received Date - In the last Then procedure box changed "consists" to "consist" . (IPU 17U1418 issued October 12, 2017)

(77) IRM 3.11.154.3.4(3), Non-Table Returns - Changed reference of "2016" to "2017" . In the second Then procedure box added new procedures for when the return is non-taxable and has a valid Credit Reduction State.

(78) IRM 3.11.154.3.4(3), Non-Table Returns - Revised the editing procedures into a table format. (IPU 17U0263 issued February 09, 2017)

(79) IRM 3.11.154.3.6(2), Statute Returns - Deleted the exception not to route to Statute Control Unit when certain conditions apply.

(80) IRM 3.11.154.3.6(3), Statute Returns - Added new paragraph procedure regarding not to route to Statute Control Unit when certain conditions apply.

(81) IRM 3.11.154.3.6(7), Statute Returns - Added Tax Year 2017 statute bar dates.

(82) IRM 3.11.154.3.7(1), Amended Returns - Revised in entirety.

(83) IRM 3.11.154.3.7(2), Amended Returns - Has been deleted and the procedures from this paragraph has been included in paragraph (1) procedures.

(84) IRM 3.11.154.3.7(4), Amended Returns - The procedures for certain data which needs to be present and edited if missing on all amended returns has been moved to new paragraph (6).

(85) IRM 3.11.154.3.7(5), Amended Returns - Added "Exception: CCC “W”, CCC “3” and/or ERS Action Codes may be used with CCC "G" ."

(86) IRM 3.11.154.3.8(1)b), Compliance Secured/Prepared Returns - In the note added "(Return Delinquency)" description for "RD" .

(87) IRM 3.11.154.3.8.1(2), IRC 6020(b) - Prepared by Collections - Deleted "or Page 2" .

(88) IRM 3.11.154.3.8.1(2)b), IRC 6020(b) - Prepared by Collections - "Changed to read Returns must be signed by a Compliance Function representative. If not signed, route to Compliance using Form 4227. Note: Starting July 1, 2013, the Revenue Officer's (RO) electronic or typed signature will be accepted as a valid signature on the return."

(89) IRM 3.11.154.3.8.1(2)c), IRC 6020(b) - Prepared by Collections - Deleted the procedures regarding IRC 6020(b) returns to be brought to the attention of Campus Planning Analysis.

(90) IRM 3.11.154.3.8.1(2) f), IRC 6020(b) - Prepared by Collections - Changed to read "Do not correspond with the taxpayer for unprocessable conditions. If the return is unprocessable, edit CCC "3 " and continue processing."

(91) IRM 3.11.154.3.8.1(2) h), IRC 6020(b) - Prepared by Collections - changed to read "No special calculations or notations are necessary on an IRC 6020(b) return that involves a credit reduction state. Do not manually calculate any credit reduction amounts."

(92) 3.11.154.3.9, Re-Entry Documents Procedures - Changed title from "Re-Entry Documents" to "Re-Entry Documents Procedures" .

(93) IRM 3.11.154.3.10(3), Correspondence Imaging System (CIS) Returns - Change second If section of the table to read "The edit marks are in red or green." (IPU 17U0861 issued May 17, 2017)

(94) IRM 3.11.154.3.10(4), Correspondence Imaging System (CIS) Returns - Revised the procedures in the table for when the "CIS" return has a Form 13596 attached and added procedures for when. The "CIS " return has a Form 13596 attached and the return is incomplete.

(95) IRM 3.11.154.3.14(2), Frivolous Arguments - Changed reference of "Examination, Frivolous Return Processing (FRP)" to "Examination, Frivolous Return Program (FRP)" . (IPU 17U0979 issued June 08, 2017)

(96) IRM 3.11.154.3.15(2), Criminal Investigations (CI) Referral - Changed the sub paragraphs into table format.

(97) IRM 3.11.154.3.15(4), Criminal Investigations (CI) Referral - Added Kansas City Mail Stop to table.

(98) IRM 3.11.154.3.15, Criminal Investigations (CI) Referral - Added new sub paragraph e. regarding Refund Returns (45 Day Jeopardy and $100 Million or more Refund Returns). (IPU 17U0040 issued January 05, 2017)

(99) IRM 3.11.154.3.17, Aggregate Form 940 Returns and Choreworkers - Deleted "and Choreworkers" from the title.

(100) IRM 3.11.154.5.1, Bankruptcy - changed "using local procedures" to "Follow local procedures using Form 13934, Merge Sheet" .

(101) IRM 3.11.154.5.2(3), Entity Perfection - Employer Identification Number (EIN) - In the table added procedures when multiple EINs are present on an unnumbered return. In the "Then" procedure for multiple EINs on a numbered return change paragraph (2) to read Leave return in batch. Revised in its entirety the "Then" procedures for when the EIN is illegible, missing, other than 9 digits, all zeros or all nines. In the "Then" procedure for Pending, applied for is indicated in the EIN area of a unnumbered return added to paragraph 3) "using Form 13934, Merge Sheet" . In the "Then" procedure for Pending, applied for is indicated in the EIN area of a numbered return changed paragraph 2) to read "Leave in the batch" .

(102) IRM 3.11.154.5.2(5), Entity Perfection - Employer Identification Number (EIN) - Change the reference of "age" to "page" . (IPU 17U1295 issued 08-31-2017)

(103) IRM 3.11.154.5.3(1)b), Entity Perfection - Name Control - Changed to read "Disregard the word “The” in the Name Control only when followed by more than one word."

(104) IRM 3.11.154.5.3(4), Entity Perfection - Name Control - Added new procedure "If the taxpayer indicates on the return or on an attachment of a "Name Change" , route the return to Entity Control. Follow local procedures using Form 13934, Merge Sheet."

(105) 3.11.154.5.5(4), Entity Perfection - Domestic Addresses - Added to the "Then" procedures for Form 8822 Change of address "using Form 13934, Merge Sheet."

(106) IRM 3.11.154.5.6(5)d), Entity Perfection - Foreign Addresses - Change the reference of "providence" to "province" .(IPU 17U1295 issued 08-31-2017)

(107) IRM 3.11.154.5.7, Country Code - Canada - Change all references of "providence" to "province" and "Providence" to "Province" . (IPU 17U1295 issued 08-31-2017)

(108) IRM 3.11.154.6.1(1), "Type of Return" Boxes - Changed reference of "2016" to "2017" . Also in the sixth "Then" procedure box changed reference "An example of a" to "Example: A" .

(109) IRM 3.11.154.6.1(1), "Type of Return" Boxes - In the sixth Then procedure box deleted "Exception: Do not asterisk (*) on Form 940-PR returns." (IPU 17U1065 issued June 27, 2017)

(110) IRM 3.11.154.6.2(1), Part 1, Line 1 through Line 2 -Tell Us About Your Return - Changed the reference of "sate" to "State" . (IPU 17U1295 issued 08-31-2017)

(111) IRM 3.11.154.6.2(1), Part 1, Line 1 through Line 2 -Tell Us About Your Return - Changed reference of "2016" to "2017" .

(112) IRM 3.11.154.6.2.1(1),Box "1a" (Single State Filer), Box "1b" (Multi-State Filer), and Box "2" (Subject to Credit Reduction) - Changed reference of "Sate" to "State" . (IPU 17U1295 issued 08-31-2017)

(113) IRM 3.11.154.6.2.1(2),Box "1a" (Single State Filer), Box "1b" (Multi-State Filer), and Box "2" (Subject to Credit Reduction) - Changed reference of "should filed with return" to "should be filed with the return" .(IPU 17U1295 issued 08-31-2017)

(114) IRM 3.11.154.6.2.1(3), Box "1a" (Single State Filer), Box "1b" (Multi-State Filer), and Box "2" (Subject to Credit Reduction) - In the Note changed reference of "2004 through 2016" to "2004 - 2017" .

(115) IRM 3.11.154.6.2.1(3), Box "1a" (Single State Filer), Box "1b" (Multi-State Filer), and Box "2" (Subject to Credit Reduction) - Changed reference of "employer" to "employers" . (IPU 17U1295 issued 08-31-2017)

(116) IRM 3.11.154.6.2.1(4), Box "1a" (Single State Filer), Box "1b" (Multi-State Filer), and Box "2" (Subject to Credit Reduction) - Changed the reference of "that’s" to "that" . (IPU 17U1295 issued 08-31-2017)

(117) IRM 3.11.154.6.2.1(4)a), Box "1a" (Single State Filer), Box "1b" (Multi-State Filer), and Box "2" (Subject to Credit Reduction) - Changed reference of "2016" to "2017" .

(118) IRM 3.11.154.6.2.1(4)a), Box "1a" (Single State Filer), Box "1b" (Multi-State Filer), and Box "2" (Subject to Credit Reduction) - In the second "Then" procedure box changed 20014 to 2004. (IPU 17U1418 issued October 12, 2017)

(119) IRM 3.11.154.6.2.1(4)a), Box "1a" (Single State Filer), Box "1b" (Multi-State Filer), and Box "2" (Subject to Credit Reduction) - In the 3rd "Then" procedure box changed "sate" to "state" . (IPU 17U0040 issued January 05, 2017)

(120) IRM 3.11.154.6.2.1(4)b), Box "1a" (Single State Filer), Box "1b" (Multi State Filer), and Box "2" (Subject to Credit Reduction) - Changed reference of "2016" to "2017" .

(121) IRM 3.11.154.6.2.1(4)b), Box "1a" (Single State Filer), Box "1b" (Multi State Filer), and Box "2" (Subject to Credit Reduction) - In the first and second "Then" procedure box changed 20014 to 2004. (IPU 17U1418 issued October 12, 2017)

(122) IRM 3.11.154.6.2.1(4) b), Box "1a" (Single State Filer), Box "1b" (Multi-State Filer), and Box "2" (Subject to Credit Reduction) - In the first Then box changed "the" reference of he to "the" . (IPU 17U1295 issued 08-31-2017)

(123) IRM 3.11.154.6.2.1(4)b), Box "1a" (Single State Filer), Box "1b" (Multi State Filer), and Box "2" (Subject to Credit Reduction) - In the second "Then" procedure box paragraph 2 deleted "prepare a dummy schedule" . In the third "Then" procedure box deleted "Schedule A" from the second bullet statement and added a third bullet statement to read "Edit a mark in box 2 if not marked." In the fourth "Then" procedure box changed "Form 940 Schedule" to "Form 940 Schedule A." (IPU 17U0263 issued February 09, 2017)

(124) IRM 3.11.154.6.2.1(4)b), Box 1a (Single State Filer), Box 1b (Multi State Filer), and Box 2 (Subject to Credit Reduction) - In the second "Then" procedure box changed the third bullet to read "Edit an asterisk to the left of box 2 if marked." (IPU 17U0263 issued February 09, 2017)

(125) IRM 3.11.154.6.2.1(4)c), Box 1a (Single State Filer), Box 1b (Multi-State Filer), and Box 2 (Subject to Credit Reduction) - In the 1st Then procedure box, changed the 1st bullet statement for paragraph 1. to read "Edit an asterisk (*) to the left of Box 1a entry" . Added to paragraph 2. a new 3rd bullet statement to read "Edit an asterisk (*) to the left of Box 1a entry, if not present" . In the 2nd Then procedure box delete in paragraph 1. the 1st bullet statement "Edit an asterisk (*) to the left of Box 1a entry" . (IPU 17U0040 issued January 05, 2017)

(126) IRM 3.11.154.6.2.1(4)d), Box 1a (Single State Filer), Box 1b (Multi-State Filer), and Box 2 (Subject to Credit Reduction) - Changed reference "to process" to "processing" . (IPU 17U0040 issued January 05, 2017)

(127) IRM 3.11.154.6.3(1), Part 2, Line 3 through Line 8 - Determine Federal Unemployment TAX (FUTA) Before Adjustments - Changed reference of "2016 through 2017" to "2006 - 2017" .

(128) IRM 3.11.154.6.3.5(1), Line 7 (Line 7a Revision 2011) - Total Taxable FUTA Wages - Changed reference of "2016 - 2012" to "2012 - 2017" .

(129) IRM 3.11.154.6.3.6(1), Line 7b, - FUTA Wages Paid Before 7/1/2011 - Changed reference of "2016 - 2012" to "2012 - 2017" and "2016 and subsequent" to "2012 and subsequent" .

(130) IRM 3.11.154.6.3.7(1), Line 7d - FUTA Wages Paid After 06/30/2011 - Changed reference of "2016 - 2012" to "2012 - 2017" .

(131) IRM 3.11.154.6.3.7(1), Line 7d - FUTA Wages Paid After 06/30/2011 - In the 2nd Then procedure box changed reference of "tp" to "to" . (IPU 17U1295 issued 08-31-2017)

(132) IRM 3.11.154.6.4.3(2), Line 11 - Credit Reduction - In the first Then procedure box changed the procedure to See IRM 3.11.154.6.9.1, Preparing a Dummy Form 940 Schedule A. (IPU 17U0650 issued April 07, 2017)

(133) IRM 3.11.154.6.5.2(2), Line 13 - FUTA Tax Deposit - Changed "tp" to "to" . (IPU 17U0263 issued February 09, 2017)

(134) IRM 3.11.154.6.6(1), Part 5, Line 16 through Line 17 - Reporting of Quarterly Federal Unemployment Tax Liability (ROFTL) - Changed reference of "2016" to "2017" , "2016 - 2012" to "2012 - 2017" , and 2010 - 2006 to 2006 0 2010. Also Updated Figure 3.11.154-9, TY 2017 Form 940 Quarterly Wage Entered in Error with current year 2017 form.

(135) IRM 3.11.154.6.6(1), Part 5, Line 16 through Line 17 - Reporting of Quarterly Federal Unemployment Tax Liability (ROFTL) - In the fourth "And" procedure box changed "$500 or more" to "more than $500" . (IPU 17U0263 issued February 09, 2017)

(136) IRM 3.11.154.6.6.1(3), Schedule Indicator Code (SIC) - Changed reference of "(Revision 2016) and Form 940 Schedule A (Revision 2016)" to "(Revision 2017) and Form 940 Schedule R (Revision 2017)" and"(Revision 2016) and Form 940 Schedule A-PR (Revision 2016)" to "(Revision 2017) and Form 940 Schedule R-PR (Revision 2017)" .

(137) IRM 3.11.154.6.9(1), Form 940 Schedule A and Form 940 Schedule A-PR (Puerto Rican Version), Multi - State Employer and Credit Reduction Information - Changed reference of "2016" to "2017" .

(138) IRM 3.11.154.6.9(2), Form 940 Schedule A and Form 940 Schedule A-PR (Puerto Rican Version), Multi - State Employer and Credit Reduction Information - Changed reference of "2016" to "2017" . In the eights "Then" procedure box added new bullet procedure regarding when Schedule A is attached with no state codes.

(139) IRM 3.11.154.6.9(2), Form 940 Schedule A and Form 940 Schedule A-PR (Puerto Rican Version), Multi - State Employer and Credit Reduction Information - Added new procedures for when multiple Form 940 Schedule A’s are attached. (IPU 17U0650 issued April 07, 2017)

(140) IRM 3.11.154.6.9(2), Form 940 Schedule A and Form 940 Schedule A-PR(Puerto Rican Version), Multi - State Employer and Credit Reduction Information - In the 6th "Then" procedure box, Moved paragraph 2. "Edit an asterisk (*) to the left of the state code in Box 1a." to paragraph 2 second bullet statement. Added new 3rd bullet statement to read "Check Box 1b on the return, if not checked." (IPU 17U0040 issued January 05, 2017)

(141) IRM 3.11.154.6.9.1(1), Preparing a "Dummy" Form 940 Schedule A - Changed reference of "2016" to "2017" .

(142) IRM 3.11.154.6.9.1(1), Preparing a "Dummy" Form 940 Schedule A - Changed all references of "sate" to "State" .(IPU 17U1295 issued 08-31-2017)

(143) IRM 3.11.154.7.3, Part 5, Line 16 through Line 17 - Record of Quarterly Federal Unemployment Tax Liability (ROFTL) - Changed the title from "Part III - Record of Quarterly Federal Unemployment Tax Liability (ROFTL)" to "Part 5, Line 16 through Line 17 - Record of Quarterly Federal Unemployment Tax Liability (ROFTL)" .(IPU 17U1295 issued 08-31-2017)

(144) IRM 3.11.154.8(2), Form 940-EZ - General Guidelines for Converting and Editing Returns - Added "Note: If being converted to a current Form 940 circle out the "-EZ" from the form number located in the upper top left of form."

(145) IRM 3.11.154.8(3), Form 940-EZ - General Guidelines for Converting and Editing Returns - Procedures in paragraph in (2) for when correspondence is needed has been relocated to this new paragraph (3),

(146) IRM 3.11.154.9.2(1), Credit Reduction States - Added "Note: If the converting the Form 940-PR to a Form 940 circle out "-PR" from the form number located in upper top left of the return. "

(147) IRM 3.11.154.9.2(2), Credit Reduction States - The procedures for when conversion is not possible has been moved paragraph (1) to this new paragraph (3).

(148) IRM 3.11.154.9.3.5(1)b), Line 5 - Total Taxable Wages - Changed reference of "2016 - 2012" to "2012 - 2017" .

(149) IRM 3.11.154.9.6(1), Parte IV - Record of Quarterly Federal Unemployment Tax Liability - Changed reference of "2016 - 2012" to "2012 - 2017" .

(150) Exhibit 3.11.154-1, Form 940 (Revision 2017) and Form 940 Schedule A (Revision 2017) - Changed reference "2016" to "2017" and changed 2016 Form 940 to 2017 Form 940.

(151) Exhibit 3.11.154-2, Form 940-PR (Revision 2017) and Form 940 Schedule A-PR(Revision 2017) - Changed 2016 Form 940-PR to current 2017 form and Form 940 Schedule A-PR to current year 2017 schedule.

(152) Exhibit 3.11.154-3, Form 940 Conversion Table - Revision 2012 - 2017 and 2006 - 2010 - Changed reference of "2016" to "2017" .

(153) Exhibit 3.11.154-4, Form 940-EZ Conversion Table - In the second box changed reference of "Sate" to "State" . (IPU 17U1295 issued 08-31-2017)

(154) Exhibit 3.11.154-14, Credit Reduction States and Rates (TY 2004 through 2017) - Changed Tax Year Reference of "2016" to "2017" in the title. Added new table for Credit Reduction States and Rates for Tax Year 2017 once they become available in November 2017 from the Department of Labor.

(155) Exhibit 3.11.154-14, Credit Reduction States and Rates (TY2004-2016) - Added the Tax Year 2016 Credit Reduction States and Rates for California and Virgin Islands.(IPU 17U0040 issued January 05, 2017)

(156) Exhibit 3.1.154-16, Acronyms, Abbreviations, and Definitions - Added new table for C&E acronyms, abbreviations, and definitions. (IPU 17U0637 issued April 06, 2017)

Effect on Other Documents

IRM 3.11.154 dated November 15, 2016 (effective January 1, 2017) is superseded and includes the following IRM Procedural Updates (IPUs): 17U0040 issued January 05, 2017, 17U0263 issued February 09, 2017, 17U0637 issued April 06, 2017, 17U0650 issued April 07, 2017, 17U0861 issued May 17, 2017, 17U0979 issued June 08, 2017, 17U0861 issued June 27, 2017, 17U1065 issued June 27, 2017 and, 17U1295 issued August 31, 2017, and 17U1418 issued October 12, 2017.

Audience

Wage and Investment, Submission Processing

Effective Date

(01-01-2018)

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

Program Scope and Objectives

  1. Purpose of this Internal Revenue Manual (IRM) section is to provide instructions for Document Perfection to code and perfect (edit) documents for the following Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return series processed at Ogden Submission Processing Center (OSPC) and Cincinnati Submission Processing Center (CSPC):

    • Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return(Processed at OSPC and CSPC)

    • Form 940 Schedule A, Multi-State Employer and Credit Reduction Information (Revisions 2006 and subsequent) (Processed at OSPC and CSPC)

    • Form 940 Schedule R, Allocation Schedule for Aggregate Form 940 Filers(Processed at OSPC and CSPC)

    • Form 940-PR, Planilla Para La Declaracion Federal Anual Del Patrono De La Contribucion Federal Para El Desempieo (FUTA) (Puerto Rico - Spanish version) (Processed at (OSPC only)

    • Form 940 Schedule A-PR, Anexo A (Formulario 940-PR) (Puerto Rico - Spanish version) - Revisions 2006 and subsequent (Processed at (OSPC only)

    • Form 940(cg), Employer's Annual Federal Unemployment Tax Return-Computer Generated

      Note:

      This return reports the same Federal Unemployment (FUTA) Tax as Form 940. The return is computer generated rather than hand written or typed, and is filed by Examination or Collection personnel based on secured taxpayer information (i.e., as a Secured return) rather than mailed by the taxpayer. Also, in Compliance, some Revenue Officers use Form 940(cg) returns under Internal Revenue Code (IRC) 6020(b) and indicate IRC 6020(b) on the return. Submission Processing examiners should process Form 940(cg) returns using the same applicable procedures in IRM 3.11.154, Document and Analysis - Unemployment Tax Return for Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return series

      .

    Reminder:

    The exhibits in this IRM were made based on proof copies of the Form 940, Form 940-PR, and Form 940 Schedule A. The Form may be changed in their final version after this IRM is distributed. Any calculations must be consistent with the final revision of the returns.

  2. Audience for this IRM are as follows:

    • C&E Supervisory Tax Technicians, Lead Tax Technicians, Tax Examining Technicians, Clerks, Lead Clerks and Supervisory Clerks.

    • ERS Supervisory Tax Examining Assistants, Lead Tax Examining Technicians, Tax Examining Technicians.

    • Rejects Supervisory Tax Examining Technicians, Lead Tax Examining Technicians, Tax Examining Technicians.

  3. Policy Owner for this IRM is Director, Submission Processing.

  4. Program Owner responsible for the administration, procedures, and updates related to this program is Paper Processing Branch, Business Master File (BMF) Section.

  5. Primary Stakeholders affected by these procedures or have input to the procedures which may include a change in work flow, additional duties, change in established time frames, and similar issues are:

    • Accounts Management (AM)

    • Small Business/Self-Employed (SBSE)

    • Large Business and International (LB&I)

    • Chief Financial Officer (CFO)

    • Tax Payer Advocate (TAS)

    • Chief Counsel, Information Technology programmers

    • Statistics of Income (SOI)

    • Tax Exempt/Government Entities (TEGE)

    • Compliance, Modernized E-file (MeF), Submission Processing (SP)

Background

  1. The purpose of Document Perfection is to code and edit (perfect) returns and other documents for input to the Master File (MF) through the Integrated Submission and Remittance Processing System (ISRP) or the Service Center Recognition Image Processing System (SCRIPS). In addition, Document Perfection forwards any other documents or attachments not related to the processing of the returns to the function responsible for handling them. It is not the purpose of Code and Edit to mathematically verify or to check the validity of the returns and other documents being processed unless otherwise specified in the applicable section. The computer and/or Error Correction (Resolution) will perform these functions if the returns and other documents are coded and edited as prescribed in the applicable subsections of this section.

Authority

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

  2. The Federal Unemployment Tax Act (FUTA) established the Federal Unemployment Tax and required cooperation between the States, Internal Revenue Service, and the Department of Labor to determine an employer's contribution to the Unemployment System

  3. Tax revenue collected from the FUTA is applied under the FUTA Trust Fund and passed on to the States by the Department of Labor (DOL) to help them administer their unemployment programs.

  4. Credit Reduction States are announced by the Department of Labor each November. See Exhibit 3.11.154-14, Credit Reduction States and Rates (TY2004 - 2017).

  5. After the return is processed, the FUTA Certification Program verifies the credit claimed and the FUTA wage amount reported by the employer on their Form 940 return. Information is exchanged with the states to certify the amounts.

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

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

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

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

Responsibilities

  1. The Directors, Ogden Service Center (OSC) and Cincinnati Service Center (CSC) are responsible for monitoring operational performance for their Submission Processing campus.

  2. The Operations Managers for OSC and CSC are responsible for monitoring operational performance for their operation.

  3. The Department Managers for OSC and CSC are responsible for monitoring Team Units performance within their department.

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

  5. The team employees are responsible to follow the instructions contained in this IRM and maintain updated IRM procedures.

Program Management and Review

  1. Program Goal for C&E is to ensure documents are perfected (code and edit) ready for transcription.

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

  3. Program Effectiveness is measured by:

    • Embedded Quality Submission Processing (EQSP)

    • Balanced Measures

    • Managerial reviews

  4. Annual Review is performed by Federal Managers Financial Integrity Act (FMFIA) to ensure accuracy and promote consistent tax administration.

Program Controls

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

Terms/Definitions/Acronyms

  1. Although it is best to not use words that require interpretation, you may have to use them. If you do, you should include definitions for words which require interpretations. Examples of these words:

    Word Definition Example of using a word that is open to interpretation. (This column is for illustration purposes only)
    Fair Provide accurate and professional service to all persons without regard to personal bias. Treat the customer in a fair manner when working with FOIA requests.
    Usually Provide the exceptions when something is not required or what would create the unusual circumstance. Pay adjustments will be accomplished within a reasonable amount of time, usually within two (2) pay periods.
    Timely Provide the time frame to consider what is or is not timely. Process all IMF adjustments in a timely fashion.
    Significant entry Any entry other than zero or blank. For example: If line 1 has a significant entry. Edit CCC "A" .
  2. For a list of C&E acronyms / abbreviations and definitions see Exhibit 3.11.154-16, Acronyms / Abbreviations and Definitions.

Related Resources

  1. Additional job aides, electronic tools, or websites needed to complete the work are listed below:

    • Servicewide Electronic Research Program (SERP)

    • Submission Processing Design Center (SPDC)

    • Integrated Data Retrieval System (IDRS)

♦IRS Employee Contacts - RRA 98 IRC §3705(a)♦

  1. The Internal Revenue Service Restructuring and Reform Act of 1998, "Section 3705" , provides identification requirements for all IRS employees working tax related matters.

  2. IRS employees are required to give their name and unique identification number during taxpayer telephone, face-to-face and written contact. In addition, name of the employee and unique identification number are required on all manually generated taxpayer correspondence. Other correspondence must include a telephone number that the taxpayer may contact. This will provide taxpayers with enough information to identify an IRS employee who has previously assisted with tax related matters.

Contact Procedures
  1. All IRS employees in the field, territory office, or headquarters 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 - Your title (e.g., Mr., Mrs., Ms., Miss), last name and badge identification (ID Card) number.

    2. Face-to-Face Contact - Their title (e.g., Mr., Mrs., Ms., Miss), provide 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 IDRS (Integrated Data Retrieval System) 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 and 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) his or her 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.

♦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.

  2. 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.

  3. 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.

  4. "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)

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

♦TAS Service Level Agreement♦
  1. The National Taxpayer Advocate 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) Division, Criminal Investigation, (CI), Appeals and Large Business and International(LB&I) Division, 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/default.aspx.

Form 911, Request for Taxpayer Advocate Service Assistance(TAS) (And Application for Taxpayer Assistance Order)
  1. A referral to a TAS office should be made if the IRS employee receives a taxpayer contact that meets TAS acceptance criteria (see IRM 3.11.154.1.9.2 (5)), Form 911, Request for Taxpayer Advocate Service Assistance(TAS) (And Application for Taxpayer Assistance Order and the employee cannot initiate action to resolve the taxpayer's inquiry or provide the relief requested by the taxpayer. A taxpayer should not have to specifically request TAS assistance to be referred to TAS. IRS employees will advise taxpayers of the option to seek TAS assistance when appropriate. TAS will generally accept the taxpayer's problem at a face value, and will not require documentation from the taxpayer unless it is needed by the IRS to provide the requested relief, or required by the IRM for TAS to provide the relief.

  2. A referral to a TAS office is not necessary even if TAS Case Criteria are met if the IRS employee can resolve a taxpayer's inquiry or provide the relief requested, as outlined in IRM 13.1.7.4Same Day Resolution. The definition of "Same Day Resolution" "is within 24 hours" . However, although you cannot completely resolve the issue within 24 hours, if you have taken steps within 24 hours to resolve the taxpayer's issue, these cases also meet the definition of "same day" . Do not refer these cases to TAS unless the taxpayer asks to be transferred to TAS.

    Note:

    It is important that all IRS employees handle potential TAS cases with the taxpayer's best interest in mind.

  3. Refer also to IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines, for more information. The National Taxpayer Advocate (NTA) toll-free number, 1-877-777-4778 or TTY/TDD 1-800-829-4059, should be provided to the taxpayer and the taxpayer should be advised that TAS is available if the taxpayer is not satisfied with the service he or she received.

  4. The following types of cases should not be referred to TAS:

    • The taxpayer's complaint or inquiry only questions the constitutionality of the tax system.

    • Cases where the focus of the taxpayer's inquiry is solely to employ frivolous tax strategies to avoid or delay filing or paying federal taxes.

  5. TAS Case Acceptance Criteria:

    • The taxpayer is experiencing economic harm or is about to suffer economic harm.

    • The taxpayer is facing an immediate threat of adverse action.

    • The taxpayer will incur significant costs if relief is not granted (including fees for professional representation).

    • The taxpayer will suffer irreparable injury or long-term adverse impact if relief is not granted.

    • The taxpayer has experienced a delay of more than 30 days to resolve a tax account problem.

    • The taxpayer has not received a response or resolution to their problem or inquiry by the date promised.

    • A system or procedure has either failed to operate as intended, or failed to resolve the taxpayer's problem or dispute within the IRS.

    • The manner in which the tax laws are being administered raise considerations of equity, or have impaired or will impair the taxpayer's rights.

    • The NTA determines compelling public policy warrants assistance to an individual or group of taxpayers.

      Note:

      Case criteria are not meant to be all-inclusive; each taxpayer situation should be evaluated based on the unique facts and circumstances of each case.

♦Business Master File (BMF) Consistency♦

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

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

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

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

♦IRM Deviation Procedures♦

  1. IRM deviations must be submitted in writing following instructions from IRM 1.11.2.2.4, When Procedures Deviate from the IRM, and elevated through appropriate channels for executive approval.

Local Desk Procedures

  1. Some Submission Processing Centers have developed local use Desk Procedures.

  2. Such procedures are only to be used:

    • To supplement existing Headquarters' procedures.

    • To expand Submission Processing Center Returns and Documents Analysis procedures by incorporating material from other IRMs, ADP (Automatic Data Processing) handbooks, etc.

    • For local routing procedures.

  3. Unit managers must have a signed approval on file from the responsible Operations Manager on all Submission Processing Center Desk Procedures.

  4. All existing local information and procedural issuances should be reviewed by the Operations Manager upon receipt of the new IRM revision to ensure conformance with Headquarters procedures.

♦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 P&A staff for referral to one of the SP BMF ID Theft liaisons. The taxpayer must indicate that they are a victim of "ID Theft" ; do not send cases that are subject to Criminal Investigation (CI), Examination (Exam), or “Fraud” review.

General Instructions for Unemployment Returns

  1. This section provides general processing instructions for the Coding and Editing of Federal Unemployment Tax Returns (FUTA) and the related documents.

  2. Instructions in specific Sections of this IRM take precedence over the general Section instructions in case of a conflict.

  3. Always consider the taxpayer's intent while editing returns in the Code and Edit function by:

    1. Reviewing the return and/or attachments,

    2. Applying the appropriate Actions Codes and Computer Conditions Codes as outlined in this IRM,

    3. Corresponding with the taxpayer if needed to perfect the return for processing.

Coding and Editing Returns

  1. The purpose of Document Perfection is to code and edit returns and other documents for input to the Master File.

  2. The Service Center Recognition Image Processing System (SCRIPS) and the Integrated Submission and Remittance Processing System (ISRP) process Form 940 Series Returns. See IRM 3.11.154.2.2, Processing Guidelines for Form 940 Series Returns.

  3. Some lines on the return are correctly entered as zero "-0-" , dash "–" "N/A" or "none" and do not need to be edited.

  4. Edit all money amounts in dollars and cents, if the distinction between dollars and cents is not clear.

  5. Edit any misplaced or illegible transcription entry to the proper transcription line. The entry may have to be computed from other figures on the return or attachment.

  6. If the taxpayer submits tax information for any year after 2005 on a Form 940 or Form 940-PR with a prior revision year, edit the return, as necessary. See IRM 3.11.154.2.2, Processing Guidelines for Form 940 Series Returns.

  7. All Form 940-EZ returns must be converted to the current year Form 940.

Processing Guidelines for Form 940 Series Returns

  1. Form 940 returns are processed through the Service Center Recognition Image Processing System (SCRIPS), or the Integrated Submission and Remittance Processing System (ISRP).

  2. Form 940 returns which should be processed through SCRIPS are Tax Year 2006 and subsequent filed on Form 940, Revision and subsequent.

  3. The Integrated Submission and Remittance Processing System (ISRP) transcribes information from forms that cannot be input through SCRIPS. ISRP should process the following forms:

    • Tax year 2005 and prior (filed on any Form 940 revision including the current year revision).

    • Re-entry or re-processable forms (Form 3893, Form 13596 or Form 13133 from the front of Form 940).

    • Ripped or torn returns and forms.

    • Non-standard returns or forms.

    • All Form 940-PR returns. These are processed only at the Ogden Submission Processing Campus.

    • Any Form 940-EZ (Obsolete) converted to a Form 940 return.

    • Any Form 940(CG). This form can be identified by the presence of "Form 940(CG)" in the upper left hand corner.

    • Returns with no room to place DLN at the top of the return.

Return Perfection - Processing of Form 940 and Form 940-PR.

  1. Form 940 returns filed on Revision 2006 and subsequent forms were designed to be processed through SCRIPS scanning system. See Exhibit 3.11.154-1, Form 940 (Revision 2017) and Form 940 Schedule A (Revision 2017) for transcription lines.

    Note:

    Do not change the line numbers for any return being processed through SCRIPS.

    1. Tax Year 2006 and subsequent which are filled on a 2006 and subsequent revision do not change the line numbers. See, Form 940 (Revision 2017) and Form 940 Schedule A (Revision 2017) for transcription lines.

  2. All Tax Year 2005 and prior Form 940 returns are processed through ISRP regardless of the year revision:

    1. The return line format should correspond to the current year line format and must be renumbered. See Exhibit 3.11.154-3, Form 940 Conversion Table - Tax Year 2012 - 2017 and 2006 - 2010.

  3. All Form 940-EZ returns must be converted to current tax year Form 940 format:

    1. If Credit Reduction applies, transfer the information to a current Form 940 Schedule A and/or Form 940 Schedule R.

    2. See Exhibit 3.11.154-4, Form 940-EZ Conversion Table.

  4. All Form 940-PR revisions are processed through ISRP:

    1. Revisions 2006 and subsequent do not require line number conversions.

    2. Revisions 2005 and prior must be converted to current year line number. See

  5. Form 940-PR (all Revisions) are processed through ISRP and no line conversion is needed. Form 940-PR has the same transcription lines as Form 940. See Exhibit 3.11.154-2, Form 940-PR (Revision 2017) and Form 940 Schedule A-PR (Revision 2017)for transcription lines.

  6. Returns processed through SCRIPS are batched and prepared separately as "Perfects" or "Imperfects" .

    1. "Perfects" are returns with no attachments, such as envelopes, letters, copies of notices, internal forms for processing or routing, etc. "Perfect" returns cannot have extraneous writing on the face of the return.

    2. "Imperfects" are returns not covered in a) above.

    3. A two sided return is a "Duplex" return.

    4. A return submitted on two separate sheets of paper is a "Non-Duplex" Return.

  7. Form 940 returns (Revisions 2006 and subsequent), which are batched as "Perfects" , must be prepared as follows:

    1. Carefully remove all staples. It is permissible to cut off the left corner of the return providing that no identifying information is damaged or lost (e.g., the return year, entity information, etc.).

    2. Repair any large staple holes and all rips or tears on the top or right hand side of the return.

    3. If the EIN is missing on Form 940, edit the last 4 digits of the EIN from page 2 of Form 940 or Form 940-PR in the EIN field. This is not necessary if the taxpayer has submitted a duplex form.

      Note:

      If the return is damaged or the print is too light (difficult to read), pull the return from the batch and request that the return be re-batched as "Original Entry (OE) PAPER" . For Form 940, and Form 940-PR revisions being processed through OE paper, edit e.g., change the line numbers, only if required by ISRP procedures.

    4. If the EIN on Form 940 page 2, or on Form 940 Schedule A, or on Form 940 Schedule A does not match the EIN in the entity portion of Form 940, Edit on Form 940 page 2, and/or on Form 940 Schedule A, and/or on Form 940 Schedule R:

      • An asterisk to the left of the EIN.

      • The last 4 digits of EIN from Form 940 page 1 to the left of the asterisk.

      Note:

      The Employer EIN in the EIN field. This is not necessary if the taxpayer has submitted a duplex form.

    5. "Perfects and Imperfects" :

      IF THEN
      The taxpayer completes Form 940 (Revisions 2006 through 2017) using orange, or pink ink,

      Note:

      If the signature is in orange or pink ink, see (8) below.

      1. Batch and process the return as an Imperfect.

      2. Photocopy the return to allow processing through SCRIPS.

      3. Consider the original Form 940 as an attachment and request the document be merged into an Imperfect batch.

      Page 1 Form 940 is missing (one sided return), (Revision 2006 and subsequent)
      1. Follow local procedures to reduce the chance of duplicate letters being sent to the taxpayer.

        Note:

        If a signature is present on line designated for the taxpayer signature see IRM 3.11.154.2.18 (3), Signature.

      2. See IRM 3.11.154.2.14.2(2), Issuing Correspondence

        Note:

        The Lead tax examiner will use tools such as Decision Assisting Program (IDAP) and Integrated Data Retrieval System (IDRS) Command Codes Business master File On Line (BMFOL) and Error Resolution System (ERS) Inventory Verification (ERVIN) and request Page 2 to be associated with Page 1, when possible.

      3. If it is not possible to associate Page 2 with Page 1, then:

        • Insert a blank copy of Page 1.

        • Edit from Page 2 to Page 1.

        • Taxpayer's Name (If name only, research for EIN).

        • EIN (If EIN only, research for Name).

      4. If Name and EIN field are blank on Page 2, use the information from the envelope, if available, to research:

        • If the Name and EIN are blank, and research cannot be performed to obtain the necessary information, give the return to your lead for disposition.

        • If there is a legible signature, route to Entity for research.

      5. If necessary, edit the tax period.

      6. If necessary, edit the address in the following priority:

        • From the envelope, if there is a name match.

        • Otherwise, leave blank and allow to fall out to ERS.

          Note:

          If research is being performed for Name and/or EIN, research also for address.

      7. Edit a Received Date, if necessary.

      8. Edit Action Code 211 and correspond for a damaged form. (Refer to Form 12522, 940 Correspondence Action Sheet).

      A page 2 (on one sided) Form 940(Rev 2006 and subsequent) is missing, or the page 2 attached is from Form 941,
      1. Follow local procedures to ensure that the taxpayer does not receive duplicate correspondence. See IRM 3.11.154.2.14.2(2), Issuing Correspondence.

        Note:

        The Lead tax examiner will use tools such as Decision Assisting Program (IDAP) and Integrated Data Retrieval System (IDRS) Command Codes Business master File On Line (BMFOL) and Error Resolution System (ERS) Inventory Verification (ERVIN) and request Page 2 to be associated with Page 1, when possible.

      2. If it is not possible to associate:

        • Insert a blank copy of Page 2 behind the taxpayer's Page 1.

        • Line through page 2 (Form 941) and attach the page to the back of the Form 940 return.

        • Use AC 211 to correspond using Letter 142C for Form 940 (or Letter 142(C/SP) for Form 940-PR) for a missing page.

        • Edit SIC (Schedule Indictor Code) 1 if Line 12 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

      The taxpayer encloses a duplicate Page 2 in error (one sided or duplex return),
      1. Consider the extra page as an attachment and request the document be merged into an Imperfect batch.

      2. Line through (/) the duplex Page 2.

      The taxpayer used only Page 1 of a duplex return (two sided) and a separate Page 2,
      1. Photocopy the original Page 1.

      2. Line through (/) the original Page 1 and Page 2. This now becomes an attachment.

      3. Request the document be merged into an Imperfect batch.

      Taxpayer used only Page 2 of a duplex (two sided) return and a separate Page 1,
      1. Photocopy the original Page 2.

      2. Line through (/) the original page 1 and the duplex page 2. This now becomes an attachment.

      3. Request the document be merged into an Imperfect batch.

      Taxpayer files Form 940 with more than one Form 940 Schedule A page,
      1. Batch and process the returns as Perfect.

      2. Perform normal editing for the Form 940 and the top page of Form 940 Schedule A.

      3. Place all subsequent pages of Form 940 Schedule A behind the top page of the Form 940 Schedule A. Do not edit or change Line 11. Allow the return to generate to ERS.

      4. Process as normal.

  8. When a SCRIPS Form 940 return is submitted typed or with blue or black ink and any check box or the signature is in orange, or pink, recheck the boxes in red or place an asterisk (*) in the left most position in the signature box.

  9. When Code and Edit reviews the return, determine:

    IF THEN
    The return (Revision 2006 and subsequent) with attachments was incorrectly assigned to a "Perfect" batch, Pull the return from that batch and request that it be merged into an Imperfect batch, unless it can be made "Perfect" .
    The return (Revision 2006 and subsequent) with no attachments was incorrectly assigned to an Imperfect batch, Do not take any action.
  10. Code and Edit examiners should ensure that the jurat and authorized signature are shown and are in their proper location on the return, e.g., Form 940 or Form 940-PR.

  11. After review and editing, when placing the return in a batch, Form 940, Form 940-PR and Form 940 Schedule A or attachments should be in sequential order. This will assist SCRIPS and ISRP during data transcription:

    • Return Page 1

    • Return Page 2

    • Form 940 Schedule A, if it applies

    • Form 940 Schedule R or Continuation Sheet for Form 940 Schedule R

    • Any attachments

  12. If Form 940 Schedule R or Continuation Sheet for Form 940 Schedule R is attached:

    IF THEN
    The EIN is not present on Form 940 Schedule R, Edit the last 4 digits of the EIN,
    Form 940 Schedule R is not a federal Form 940 Schedule R format, Do the following:
    1. Edit the data from the submitted Form 940 Schedule R to a federal Form 940 Schedule R.

    2. The page 1 of the federal Form 940 Schedule R should contain the first 15 clients with some sub totals and other totals.

    3. The page 2 of the federal Form 940 Schedule R should contain additional clients up to 25 with sub totals.

    The entire Form 940 Schedule R is blank (no entity and no money amounts present), Do not edit the SRI Code.
    Form 940 Schedule R contains entries in the entity portion or money amounts), Edit the SRI Code in the right margin of the return next to Line 6, subtotal. See Figure 3.11.154-1, Form 940 (Revision 2017) and Form 940 Schedule R (Revision 2017).

    Figure 3.11.154-1

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    Please click here for the text description of the image.

♦Edit Marks♦

  1. Edit marks are edited on the return for transcription to the Automated Data Processing (ADP) System through ISRP or SCRIPS. The editing can be entered in brown, red, orange, purple, or green pencil/pen.

  2. The only items edited on the 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 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. The return line format on returns should correspond to the current year's revision. To convert a return to the current format, you must renumber the lines to the current revision:

    • SeeExhibit 3.11.154-3, Form 940 Conversion Table - Tax Year 2012 - 2017 and 2006 - 2010.

    • SeeExhibit 3.11.154-4, Form 940-EZ Conversion Table.

    • SeeExhibit 3.11.154-5, Form 940-PR Conversion Table 2005 and Prior).

  5. The table below provides a description of edit marks for SCRIPS and ISRP processing:

    Edit Mark SCRIPS ISRP Description
    Asterisk "*" X X Is used to prompt the SCRIPS or ISRP system operator to stop at a field so that the operator can make a change:
    • To delete the data for non-transcription edit an "*" closest to the left of the line entry or the data that is present.

    • To correct the data to be transcribed edit an "*" closest to the left of the line entry along with the correct entry or data or to be transcribed to the left of the "*" .

    Exception:

    An asterisk (*) in the signature box indicates that the signature is on an attachment or is not needed.

    / X X A / can be used when deleting a form or schedule that is not to be transcribed.
    / XX /$
    XX represents the two digit foreign country code
      X ISRP ONLY: Indicates a foreign address. The two digit alpha foreign country code will be preceded by / and followed with /$. See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries. This cannot be used for documents processed via SCRIPS.
    % X X Indicates an in-care of name or address for transcription.
    Circle X X Used to remove an entry in a Code and Edit field (i.e., Action Code, CCC, Received Date, Schedule Indicator Code (SIC), Form 940 Schedule R Indicator (SRI), or Tax Period.)
    Underline X X Used to identify a Name Control that is to be transcribed.
    Decimal point X X Indicates the separation of dollars and cents.
    Line through X X Entity Perfection Only - Used to delete data. Unless otherwise specified, a horizontal line through data will always indicate the data is being deleted from the return.

    Note:

    Always edit an asterisk (*) as closely as possible to the left of the lined through entry.

    Zero, Dash, or None X X "Zero" , "dash" or "None" are considered valid entries except when specific instructions require editing of an entry.
    Edit Marks Made by Other IRS Functions X X 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.

    Note:

    If the edit mark is in other than a Code and Edit field (i.e., Action Code, CCC, Received Date SIC, SRI or Tax Period) and the edit mark is in orange or pink ink, re-edit using red ink.

    Exception:

    Photocopied Returns.

    Photocopied Returns X X Re-edit or underline any valid, black edit marks. See IRM 3.11.154.3.9, Re-Entry Documents

    Note:

    The "X" and "arrow" will no longer be used in editing Form 940 Series returns.

    Figure 3.11.154-2

    This is an Image: 33581804.gif
     

    Please click here for the text description of the image.

Audit Trails/Action Trails

  1. The following action will be edited on the Unemployment Returns in the Code and Edit program:

    IF THEN
    Changes to Employer Identification Numbers (EIN) or Taxpayer Identification Numbers (TIN), Edit change on the Entity portion of the return.
    Only One Action Code (AC) needed, Notate the Action Codes on bottom left hand corner of the return.
    More than one Action Code (AC) is needed, Notate the first Action Code on the bottom left hand corner of the return and the additional Action Codes on Form 4227, Intra-SC Reject or Routing Slip.
    An IDRS transaction is input, A notation must be made on the document showing the TC (Transaction Code) and the date.
    Instructed to prepare Form 3465, Adjustment Request,
    1. Make a copy of the original return and attachments, notate COPY on the photocopy and place in the "BMF Adjustment Out Box" .

    2. Notate 3465 Prep in the bottom left margin of the original Form/Return.

♦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. See Exhibit 3.11.154-12, Action Code Chart for suspense periods.

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

  3. Edit Action Codes for Form 940 and Form 940-PR (Revisions 2006 and subsequent) just below the line that states "For Privacy Act..." . Do not extend into the left margin. Edit the Action Code in the bottom left margin of the return (Revision 2005 and prior).

  4. Assign Action Codes in the following priority order:

    1. Action Code 310 (Statute Control).

    2. Action Code 320 (Entity Control).

    3. Action Code 4XX.

    4. Action Code 6XX.

    5. Action Code 3XX.

    6. Action Code 2XX. (Correspondence)

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

    IF THEN
    Action Codes include 211, 215, 225 or 226 and Action Code 341,
    1. Edit the Action Code 211, 215, 225 or 226 on the return.

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

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

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

    3. See Exhibit 3.11.154-12 (6), Action Code Chart for suspense periods.

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

      Exception:

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

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

  6. Edit the following Action Codes when a return cannot be perfected:

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

    2. The taxpayer notates on the 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 return (only issue for correspondence).
    OSPC Only: 226 International Taxpayer Correspondence (Signature Only) Unsigned return (only issue for correspondence).
    480 (Early Filed - Suspense) The return is an early filed current return.
    610 (Renumbered Non-remittance) or 611 (Renumbered with remittance) A return is mis-blocked (e.g., Form 1065 in a Form 940 batch of work)
    640 (Void) To delete the assigned DLN (Document Locator Number) on the return (e.g., Re-entry returns).
    650 (AC International) An International return that must be forwarded to Ogden Submission Processing Center (OSPC).
  7. Continue perfecting the return after editing the Action Codes.

  8. For a list of the valid Action Codes, See Exhibit 3.11.154-12, Action Code Chart.

♦CAF Codes♦

  1. Editing of CAF codes is no longer required.

  2. The Centralized Authorization File (CAF) contains the type of authorization that taxpayers give to representatives regarding the taxpayers' accounts. Representatives may submit Form 2848, Power of Attorney and Declaration of Representative (POA) or Form 2848 (SP), Power of Attorney and Declaration of Representative (Spanish Version) (POA), or Form 8821, Tax Information Authorization (TIA).

    IF THEN
    Form 2848, Form 2848 (SP), or Form 8821,
    1. Form 2848, Form 2848 (SP), or Form 8821.

    2. Edit taxpayer name and EIN on Form 2848, Form 2848 (SP), or Form 8821, if missing.

    3. Edit received date on Form 2848, Form 2848 (SP), or Form 8821.

    4. Route Form 2848, Form 2848 (SP), or Form 8821 to CAF function.

    5. Edit action trail on tax return.

    A "General Power of Attorney" or a "Durable Power of Attorney" or "Tax Information Authorization" is submitted on any document other than Form 2848, Form 2848 (SP), or Form 8821, Take no action. Leave the Power of Attorney or Tax Information Authorization attached to the return. Do not route to the CAF function.

♦Routing Guide for Attachments♦

  1. All attachments to the return must be reviewed before the return can be considered processable.

  2. Attachments should only be detached when specifically instructed.

    Note:

    Consider a return or document an "original" if it has an original signature or has been stamped "Process as Original" .

  3. Edit Action Trail(s) (e.g., "2848 DETACHED" )in the lower left corner going vertically up the side of the return.

  4. Before detaching an attachment for routing, verify that it contains the Name, EIN (Employer Identification Number) or SSN (Social Security Number). Edit if missing.

  5. When a document is detached, also edit the Received Date in the lower left corner, ( for example Rec'd MM/DD/YY).

  6. For Form 940 and Form 940-PR returns Code and Edit must ensure the taxpayer's EIN is on all attachments, in case they are separated from the return during processing. If the EIN is not shown on an attachment, (to be processed with the return), edit the last 4 digits of the taxpayer’s EIN. Routed attachments should show the Name, full EIN, and a Received Date.

  7. Imperfect Form 940 and Form 940-PR (Rev 2006 and subsequent) - After detaching a document from the return, and only page(s) 1, 2, and (if applicable) Form 940 Schedule A and Form 940 Schedule R remain, do not pull the return, leave return in “Imperfect” batch.

  8. Follow the general guidelines below for each attachment:

    FORM/DOCUMENT DETACH ACTION
    CP 161, No Math Error, Balance Due No Route to Accounts Management.
    CP 259 or CP 959 (Spanish version) No Correspondence is attached or taxpayer’s response indicates any of the following:
    • Taxpayer disagrees that they are required to file the return.

    • Only page one of the return is attached.

    • EIN on notice does not match EIN on return.

    • Return requested on notice not the same as return submitted.

    • Taxpayer asking question(s) or requesting IRS take action(s) on their account.

    • Case involves any other IRS action(s) C&E not trained to complete.

    Then, Route to Compliance Services Collection Operations (CSCO). Use return address on CP notice:
    • Brookhaven - Stop #662

    • Memphis - Stop #81

    • Philadelphia - 4-N31.142


    If none of the above apply, correspondence or written response to the notice is not attached and/or, "599" is notated:
    1. Move the notice to the back of the return.

    2. Continue processing the return.

    Note:

    If the return is unsigned, but the taxpayer has signed the CP notice under the jurat, it is not necessary to correspond for the signature.

    CP 259 A through H No OSPC BMF Entity
    Mail Stop 6273.
    CP 504 or CP 504-B No
    1. Pull CP 504 or CP504-B to the front.

    2. Route notice and return to Accounts Management.

    CP 518 No Correspondence is attached or taxpayer’s response indicates any of the following:
    • Taxpayer disagrees that they are required to file the return.

    • Only page one of the return is attached.

    • EIN on notice does not match EIN on return.

    • Return requested on notice not the same as return submitted.

    • Taxpayer asking question(s) or requesting IRS take action(s) on their account.

    • Case involves any other IRS action(s) Code and Edit not trained to complete.

    Then, Route to Compliance Services Collection Operations (CSCO). Use return address on CP notice:
    • Brookhaven - Stop #662

    • Memphis - Stop #81

    • Philadelphia - 4-N31.142


    If none of the above apply, correspondence or written response to the notice is not attached and/or, "599" is notated:
    1. Move the notice to the back of the return.

    2. Continue processing the return.

    Note:

    If the return is unsigned, but the taxpayer has signed the CP notice under the jurat, it is not necessary to correspond for the signature.

    Includes tax liability for MULTIPLE tax periods or types of tax No
    1. Numbered returns - route to Rejects.

    2. Unnumbered returns - prepare a dummy return if possible; otherwise correspond.

    Letter 142C attached No Route to Rejects.
    Letter attached or indication on return requesting a prompt determination under IRC 505(b) No See IRM 3.11.154.3.12, Prompt, Quick and Jeopardy Assessments.
    Other tax returns (original signatures) Yes Route to appropriate function unless specifically directed otherwise.

    Example:

    Returns such as those attached to a consolidated return.

    Returns marked as Protective Claim, Protective RefundProtective Claim for Refund, or similar statement No
    1. Remove return from batch

    2. Notate "Protective Claim" in the remarks box of Form 4227

    3. Route to Accounts Management.

    Petitions in opposition of tax law provisions Yes

    Note:

    No action Trail needs to be edited when detaching a petition.

    Route to:
    IRS
    ≡ ≡ ≡ ≡
    1111 Constitution Ave NW
    Washington, DC 20224
    State Tax Return, original or copy with original signature Yes Route to Receipt and Control.
    Statement establishing Reasonable Cause for delinquent filing No See IRM 3.11.154.2.9.6, CCC "R" - Reasonable Cause for Failing to Timely File Return.
    Remittance found No Immediately hand carry return and remittance to supervisor.
    Request for Acknowledgement No No action required.
    Form/Document: Victim of ID Theft, Attachment or statement clearly indicating taxpayer is/has been a victim. No See IRM 3.11.154.1.13, BMF Identification (ID) Theft.
    Requests for information or inquiries Yes
    1. Photocopy the attachment if it contains any data necessary to continue processing the return.

    2. Attach the copy to the return.

    3. Route original attachment to the proper office for necessary action.

    Request for adjustment to another document Yes Route to appropriate function. Attachment must contain Name, Address, EIN and Received Date. Edit if missing.
    Request for money transfer No/Yes No - notates transfer of money TO the return you are processing:
    1. Prepare Form 3465 and:

      1. Indicate in the Routing box "Rejects" .

      2. Notate "See attached money transfer request" in the Remarks Box.

    2. Edit Action Code 450 to route the request to Rejects.


    YES - notates transfer of money FROM the return you are processing:
    1. Edit CCC "X" to freeze overpayment.

    2. Detach transfer request.

    3. Prepare Form 3465 and:

      1. Indicate in the Routing box "Adjustments" .

      2. Notate the requested action in the "Remarks Box" .

    4. Attach Form 3465 to the request and route to Accounts Management.

    5. Continue editing the return.

    Request for Forms or Schedules No
    1. Request for Current Year Forms:

      • Prepare Form 4190, Order Form for Tax Forms and Publications.

      • Forward to Forms Distribution Center for processing.

    2. Request for Prior Year Forms:

      • Prepare Form 6112. Partnership Returns Order.

      • Forward to Forms Distribution Center.

    Note:

    Form 4190 and Form 6112 are generally used for IMF (Individual Master File) requests. Therefore, enter all BMF requests for forms and/or schedules in the WRITE-IN portion of the form.

    Form CT-1X, Adjusted Employer's Annual Railroad Retirement Tax Return of Claim for Refund Yes Route to Accounts Management.
    Form 56, Notice Concerning Fiduciary Relationship Yes Enter Received Date and route to Entity. Review attachments for evidence of fiduciary authority to be routed at the same time.
    Form 433-B, Collection Information Statement for Businesses Yes
    Ogden - Route to Collections.

    Cincinnati - Route to Receipt and Control.

    Kansas City - route to Mail Stop P4 5000.
    Form 433-D, Installment Agreement Yes
    Ogden - Route to Collections.

    Cincinnati - Route to Receipt and Control.

    Kansas City - route to Mail Stop P4 5000.
    Form 637, Application for Registration (For Certain Excise Tax Activities) Yes Route to Excise. Complete Form 13538, Consolidated Shipping Transmittal Form and place in outgoing mail to:

    Cincinnati Service Center
    M/S 5701G,
    Attn: Exam
    Form 843, Claim for Refund and Request for Abatement Yes Route to Accounts Management if the claim is for a tax or tax period other than that covered by the return. See Exhibit 3.11.154-13, Potential Frivolous Return for Examination Review.
    Form 895, Notice of Statute Expiration No See IRM 3.11.154.3.12, Prompt, Quick and Jeopardy Assessments.
    Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order) Yes Route to Taxpayer Advocate Service (TAS).
    Form 940 Schedule R, Allocation Schedule for Aggregate Form 940 Filers No Edit Form 940 Schedule R Indicator (SRI) "R" . See IRM 3.11.154.2.3(12), Return Perfection - Processing of Form 940 and Form 940-PR.
    Also, edit SRI "R" when the Form 940 Schedule R Continuation page is attached.
    Form 940-B, Request for Verification of Credit Information shown on Form 940. No Route to Accounts Management. (If received without return, route to FUTA Certification Unit).
    Form 940-C, Employer Account Abstract No Route to Accounts Management. (If received without return, route to FUTA Certification Unit).
    Form 940-VForm 940-EZ (V), Payment Voucher Yes, if payment present. Hand-carry remittance and voucher to supervisor. If no payment, leave attached.
    Form 941 Schedule B, Report of Tax Liability for Semiweekly Schedule Depositors Yes Route to Accounts Management.
    Form 941-C, Supporting Statement to Correct Information Yes Route to Accounts Management
    Form 941-X, Adjusted Employer's Quarterly Federal Tax Return or Claim For Refund Yes Route to Accounts Management.
    Form 943-X, Adjusted Employer's Annual Tax Return for Agricultural Employees or Claim For Refund Yes Route to Accounts Management.
    Form 944-X, Adjusted Employer's Annual Federal Tax Return or Claim For Refund Yes Route to Accounts Management
    Form 945-X, Adjusted Annual Return of Withheld Federal Income Tax or Claim For Refund Yes Route to Accounts Management
    Form 1040 Schedule H, Household Employment Taxes Yes See IRM 3.11.154.3.11, Form 1040 Schedule H instructions.
    Form 1043, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons Yes
    1. CSPC Route to OSPC.

    2. OSPC Route to Receipt and Control.

    Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding Yes
    1. CSPC Route only Copy A to OSPC

    2. OSPC Route only Copy A to Receipt and Control and leave all other copies attached to return.

    Form 1096, Annual Summary and Transmittal of U.S. Information Returns Yes Route to Receipt and Control
    Form 1099, U.S. Information Return Yes (Copy A Only) Route Copy A Only to Receipt and Control (R and C).
    Form 1331 (NMF), Notice of Adjustment Yes Route to Accounting.
    Form 2553, Election by a Small Business Corporation Yes Detach and route to Entity on Form 4227.
    Form 2275, Record Request-Charge and Recharge Yes Photocopy return and route to requestor. Process original.
    Form 2644, Recommendation for Jeopardy/Termination Assessment No See IRM 3.11.154.3.12, Prompt, Quick and Jeopardy Assessments.
    Form 2848, Power of Attorney and Declaration of Representative or Form 2848 (SP), Power of Attorney and Declaration of Representative (Spanish Version) Yes
    Ogden - Route to: Mail Stop 6737

    Cincinnati - Route to:
    Internal Revenue Service
    5333 Getwell Rd., Mail Stop 8423
    Memphis, TN 38118

    Kansas City - route to:
    Internal Revenue Service
    5333 Getwell Rd., Mail Stop 8423
    Memphis, TN 38118

    For Private Delivery Carriers:
    Internal Revenue Service
    5333 Getwell Road Mail Stop 8423
    Memphis, TN 38118
    Form 2859, Request for Quick or Prompt Assessment No See IRM 3.11.154.3.12, Prompt, Quick, and Jeopardy Assessments.
    Form 3198, Special Handling Notice/ Examination Case Processing No See IRM 3.11.154.3.12, Prompt, Quick, and Jeopardy Assessments.
    Form 3244, Payment Posting Voucher Yes, if original Route original voucher to Receipt and Control.
    Form 3753, Special Handling Manual Refund Posting Voucher No
    1. If name control, EIN, and tax period are the same as return, leave attached and edit CCC "O" . Research IDRS for TC 840.

    2. If data is not the same, send return and attachment back to originating function.

    Form 3870, Request for Adjustment Yes Photocopy return and route copy and 3870 to Collections.
    Form 3949, Information Report Referral Yes
    1. Route Form 3949 according to page 2 of Form 3949 to CI, Exam, Disclosure, etc. following local procedures.

    2. Continue processing the return

    Form 3949-A, Information Report Referral Yes
    1. Route Form 3949-A to the Fresno Service Center.

    2. Continue processing the return.

    Form 4251, Return Charge Out Yes Photocopy return and route to requestor. Process original.
    Form 5344, Examination Closing Record No See IRM 3.11.154.3.12, Prompt, Quick, and Jeopardy Assessments.
    Form 5403, Appeals Closing Record No See IRM 3.11.154.3.12, Prompt, Quick, and Jeopardy Assessments.
    Form 5604, IRC 6020(b) Action Sheet No See IRM 3.11.154.3.8.1, IRC 6020(b), Prepared by Collections.
    Form 5792, Request for IDRS Generated Refund No
    1. If Name Control, EIN, and Tax Period are the same as return, leave attached and edit CCC O. Research IDRS for "TC 840" .

    2. If data is not the same, send return and attachment back to originating function.

    Form 5884, Work Opportunity Credit Yes, if original. Return to taxpayer. Advise that it should be filed with income tax return.
    Form 5884, Work Opportunity Credit No, if copy. Leave attached.
    Form 8274, Certification by Churches and Qualified Church-Controlled Organizations Electing Exemption From Employer Social Security and Medicare Taxes Yes Route to Ogden Entity Control Unit.
    Form 8655, Reporting Agent Authorization Yes Accounts Management Service Campus
    MS 6748 RAF Team
    1973 North Rulon White Blvd. Ogden, Utah 84404

    Note:

    See IRM 3.11.154.2.18 (8), Signature and refer to note.

    Form 8821, Tax Information Authorization Yes Ogden - Route to: Mail Stop 6737

    Cincinnati - Route to:
    Internal Revenue Service
    5333 Getwell Rd., Stop 8423
    Memphis, TN 38118

    Kansas City - route to:
    Internal Revenue Service
    5333 Getwell Rd., Mail Stop 8423
    Memphis, TN 38118
    Form 8822, Change of Address, or Form 8822-B, Business Change of Address No If information is the same, leave attached.
    Form 8822, Change of Address, or Form 8822-B, Business Change of Address Yes If information is different, detach and route to Entity on Form 4227.
    Form 9465, Installment Agreement Request, or letter substitute Yes
    Ogden - route to Collections.

    Cincinnati - Route to R&C.

    Kansas City Mail Stop P4 5000.
    Form 12857, Refund Transfer Posting Voucher No
    1. Research IDRS for TC 840

    2. If name control, EIN, and tax period are the same as return, leave attached and edit CCC "O"

    3. If data is not the same, send return and attachment back to originating function.

    Form 14039-B, Identity Theft Affidavit - Business No
    1. If the envelope is addressed to a specific function or a specific function is indicated by an IRS CP notice or IRS letter, place the Form 14039-B on top and route Form 14039-B and the return to the specific function.

    2. If Cincinnati Ogden, or Kansas City receives a Form SS-4, Application for an Employer Identification Number and Form 14039-B route the returns to BMF Entity:
      201 W. Rivercenter Blvd.
      Mail Stop 343
      Covington, KY 41011.

    3. For the following returns:

      • Loose Form 14039-B.

      • No correspondence attached (e.g., no IRS CP notice or IRS letter).

      • The envelope is not addressed to a specific function.

      1. Place the Form 14039-B on top of the return.

      2. Route to the local Image Control Team (ICT).
        Cincinnati - Mail Stop 318G.
        Ogden - Mail Stop 6552.

    Form 14157, Complaint: Tax Return Preparer Yes Route to:
    Attn: Return Preparer Office
    401 W. Peachtree Street NW
    Mail Stop 421-D
    Atlanta, Georgia 30308
    OAR-7010, Notice of SSA Determination Yes Follow Campus Routing Guide.
    Form SS-4, Application for Employer Identification Number No, if for return. Route return and Form SS-4 to Entity.
    Form SS-4, Application for Employer Identification Number Yes, if for separate account. Detach Form SS-4 and route to Entity.
    Form SS-16, Certification of Election of Coverage Under FICA Yes Route to Entity.
    Form W-2, Wage and Tax Statement Yes Follow Campus Routing Guide.
    Form W-3, Transmittal of Income and Tax Statement Yes Follow Campus Routing Guide.
    Form W-4, Employee's Withholding Allowance Certificate, attached to Form 3210, Document Transmittal and no return is included Yes Route to:
    Withholding Compliance
    Internal Revenue Service
    310 Lowell Street
    Mail Stop 837
    Andover, MA 01810.
    Form W-4, Employee's Withholding Allowance Certificate, attached to a return No Leave it attached. No action is required. Do not verify any information. Do not edit any information.
    Letter 112C, Payment/Overpayment/Credit Applied; No record of Return Filed, or
    Letter 282C, Return Not Received: Copy Requested/Received, or
    Letter 255C, or
    Letter 2284C, Delinquent Return (Form 940, Form 941, Form 942, or Form 943)
    No
    1. Identify which organization initiated the letter to the taxpayer (e.g., what organization signed the letter?).

    2. Route letters initiated by Accounts Management (AM) to Accounts Maintenance Research (AMRH):

      • Ogden - Mail Stop 6712

      • Cincinnati - Mail Stop 534G

      • Kansas City - Mail Stop N2 6800

    3. Route letters initiated by Collections as follows:

      1. If correspondence is attached or taxpayer’s response indicates any of the following:

        • Taxpayer disagrees that they are required to file the return.

        • Only page one of the return is attached.

        • EIN on letter does not match EIN on return.

        • Return requested on letter not the same as return submitted.

        • Taxpayer asking question(s) or requesting IRS take action(s) on their account.

        • Case involves any other IRS action(s) C&E not trained to complete.

        Then, Route to Compliance Services Collection Operations (CSCO). Use return address on letter;

        • Brookhaven - Stop #662

        • Memphis - Stop #81

        • Philadelphia - 4-N31.142

      2. If none of the above apply, correspondence or written response to the letter is not attached and/or, no "599" is notated:
        Then, Move the letter to the back of the return and continue processing.

    Note:

    If the return is unsigned, but the taxpayer has signed the letter under the jurat, it is not necessary to correspond for the signature.

♦Computer Condition Codes (CCC)♦

  1. Computer Condition Codes (CCC) are used to identify a special condition or computation to post to the Master File.

  2. For Secured and Prepared Returns, edit the applicable CCC as indicated on the return, attachment, or Form 13133.

  3. Edit Computer Condition Codes in the following locations:

    FORM LOCATION
    Form 940(Revisions 2006 and subsequent) Edit immediately to the right of the line that states: "You MUST fill out both pages of this form and SIGN it." If spacing on the form will not allow CCC to be edited, enter the CCC below Line 15, in the center. See Exhibit 3.11.154-1, Form 940 (Revision 2017) and Form 940 Schedule A (Revision 2017).
    Form 940-PR (Revisions 2006 and subsequent) Edit to the right of the words "DEBE llenar ambas paginas del Formulario 940PR luego y FIRMARLO" . See Exhibit 3.11.154-2, Form 940-PR (Revision 2017) and Form 940 Schedule A-PR (Revision 2017).
    Form 940(Revision 2005 and prior) Edit to the center of the bottom margin on Page 1.
    Form 940-PR (Revision 2005 and prior) Edit to the center of the bottom of Page 1.
  4. If instructed to issue a Letter 1382C See IRM 3.11.154.3.9.1, Form 3893, Re-Entry Document Controlwhen Form 3893 is attached or See IRM 3.11.154.3.9.2, Form 13596, Reprocessing Returnswhen Form 13596 is attached to determine if a letter should be issued.

♦CCC "D" - Reasonable Cause for Failing to Pay Timely♦
  1. Do not edit CCC "D" , if the taxpayer requests abatement for Failing to Pay Timely when the return is submitted. Send Letter 1382C to inform the taxpayer of the proper procedure to follow to request abatement, if, and when a penalty is assessed.

  2. Edit CCC "D" if an internal use form or routing slip is attached and indicates DO NOT ASSESS FAILURE TO PAY PENALTY.

    Note:

    Do not enter CCC "D" if the return was prepared by IRS under IRC 6020(b) and the return due date (without regard to extensions) is after July 30, 1996.

♦CCC "F" - Final Return♦
  1. Edit CCC "F" when the taxpayer:

    1. Checks the box for "Will not have to file returns in the future" (Revision 2005 and prior) or "Business Closed or stopped paying wages" (Revisions 2006 and subsequent).

    2. Gives positive indication that he/she will not be liable for filing future returns.

    3. The common indications of a final return are notations such as (but not limited to) "Final" , "Deceased" , "Out of Business" , "Liquidation" , "Dissolved" , "Exempt under IRC 501(c)(3) or IRC 501(c)(5)" , etc.

      Note:

      If taxpayer states "not liable" or "no employees" on non - taxable returns do not edit CCC "F" .

  2. If the return is a federally-recognized Indian Tribal Government (or its instrumentalities), see IRM 3.11.154.3.5, Indian Tribal Government procedures when any of the following notations are present to indicate exempt to the FUTA tax:

    • "Indian Tribal Government for tax years 2000 and subsequent"

    • "Announcement 2001-16"

    • "IRC 3306(c)(7)"

    • "The Community Renewal Tax Relief Act of 2000; (Section 166)"

    • "H.R. 5662, incorporated in H.R. 4577, the Consolidated Appropriations Act, 2001"

    • "Public Law No. 106 -554, 114 Stat. 2763"

    • Similar explanation as described above

  3. If Box "d" (e.g., "Final Return" shown on Revisions 2006 or later) is not marked, mark the box in addition to entering CCC "F" .

    IF AND THEN
    Only Entity information is present e.g., Name or Name Control, EIN, Tax Year or period, Address, e.g., Street, City, State, and ZIP Code, and there are no attachments containing tax, The return is not signed, Correspond for signature.

    Caution:

    Before corresponding, research IDRS for status of filing requirement. If the filing requirements are finalized (closed) or there is no filing requirement, Take the return to lead for disposition.

     

    Note:

    If the return indicates it is being filed under IRC 6020(b), e.g., "IRC 6020(b)" indicated on margin: DO NOT correspond. See IRM 3.11.154.3.8.1, IRC 6020(b), Prepared by Collections for address to send return to. If the return meets the criteria for a Collection Secured Return or Examination Secured Return, see IRM 3.11.154.3.8.2, Collection Secured or see IRM 3.11.154.3.8.4, Examination Secured for processing procedures.

    There is an indication of a previously filed Final Return,  
    1. Research IDRS to determine the status of the filing requirements.

    2. If the filing requirements are finalized or there is no filing requirement, take the return to lead for disposition.

    IRC 501(c)(3) or IRC 501(c)(5) is notated on the return, ONE of the following is present in the Entity Name:
    • Church(es) - IRC 501(c)(3)

    • Unions - IRC 501(c)(5)

    • Municipal Groups - IRC 501(c)(3)

    • non profit organizations) (Schools and Hospitals)

    • Foundations - IRC 501)c)(3)

    • Tax Exempt Organizations - IRC 501(c)(3)

    • (Colleges, Museums, etc.)

    Edit CCC "F" on the return and continue processing.
    IRC 501(c)(3) or IRC 501(c)(5) is notated on the return, None of the above is present in the Entity Name
    1. Research IDRS for Form 990, Return of Organization Exempt From Income Tax F/R. If found, then edit CCC "F" on the return and continue processing.

    2. If no Form 990, Return of Organization Exempt From Income Tax F/R is found, correspond using Letter 142C, requesting copy of "Exemption Letter" from the IRS.

    3. If No Reply, notate on Form 4227Do Not Edit CCC "F" on return and continue processing.

    Form 1040 Schedule H is attached The Form 940 liability (on line 12) is the same as the Form 940 Schedule H (Line 27 or line 25) FUTA liability. See IRM 3.11.154.3.11, Form 1040 Schedule H.
♦CCC "G" - Amended Return♦
  1. See IRM 3.11.154.3.7, Amended Returns.

♦CCC "J" - Reasonable Cause for Failing to Make Timely Deposits♦
  1. Do not edit CCC "J" when the taxpayer requests abatement for Failing to Make Timely Deposits when the return is submitted. Whenever the taxpayer has requested penalty relief, send Letter 1382C, Penalty Removal request Incomplete to inform the taxpayer of the proper procedure to follow to request abatement, if, and when a penalty is assessed.

    Exception:

    See IRM 3.11.154.3.9.1, Form 3893, Re-Entry Document Controlwhen Form 3893 is attached or See IRM 3.11.154.3.9.2, Form 3893. Reprocessing Returnswhen Form 13596 is attached to determine if a letter should be issued.

  2. If the taxpayer does not request abatement, but notates that they are filing an aggregate FUTA return, edit CCC "J" . See IRM 3.11.154.3.17, Aggregate Form 940 Returns and Choreworkers. You can identify the return as being filed in the aggregate by any of the following notations indicated by the taxpayer at the top of the return or in the entity section of the return:

    • "State"

    • "City"

    • "County"

    • "Notice 2003-70"

    • "Fiscal Agent"

    • "Fiscal Intermediary"

    • "Home-Care Service Provider"

    • "Household Employer Agent"

    • "Chore Workers"

    Note:

    In the case of a disaster, specific instructions for the use of this code will be provided at that time.

♦CCC "O" - Module Freeze♦
  1. CCC "O" is entered when a pre-settlement Manual Refund will be made and a Form 3753, Form 5792 or Form 12857 is attached. Verify that the Name Control, EIN, and Tax Period on the return is the same as the data on the form. When editing CCC "O" , research to determine if TC 840 (Manual Refund Transaction) has posted.

    IF THEN
    TC 840 has posted Enter CCC "O" and continue processing.
    TC 840 has not posted Enter Action Code 341 to issue Manual Refund.
♦CCC "R" - Reasonable Cause for Failing to File Timely Return♦
  1. CCC R is no longer edited when a reason is given by the taxpayer for a delay in filing a return. Issue Letter 1382C and continue editing the return.

  2. Edit CCC R on the return when any of the following conditions are present:

    • There is an indication such as "DO NOT ASSESS FAILURE TO FILE PENALTY" on a secured return annotated with "599" .

    • If an internal use form or routing slip is attached and indicates do not assess failure to file penalty.

      Note:

      All "R" coded returns must have an IRS Received Date. If one is not present, edit the IRS Received Date in the middle of the return.

      Note:

      CCC "R" cannot be used with CCC "4" .

♦CCC "W" - Return Cleared by Statue♦
  1. See IRM 3.11.154.3.6, Statute Returns.

CCC "X" - Refund/Settlement Freeze
  1. Edit CCC "X" when the following conditions occur:

    IF THEN
    The taxpayer requests any balance left over after paying tax and/or penalties be applied to another account,

    Note:

    Subtract the tax, penalties and interest amounts from the remittance amount, if available.

    1. Edit CCC X.

    2. Prepare Form 3465 and route to Accounts Management with the request and a photocopy of page 1 of the return.

    3. Notate "Form 3465 Prepared" on original Form 940.

    There is no reply to correspondence and a refund is due, Edit CCC "X" and "3" .
♦CCC "3" - No Reply to Correspondence♦
  1. Edit CCC "3" when the return is unprocessables due to no reply from correspondence, e.g., for example, correspondence for the signature.

♦CCC "4" - IRC 6020(b) Return♦
  1. Edit CCC "4" when the IRS's Compliance Branch has prepared a return and the Revenue Officer has entered IRC 6020(b). See IRM 3.11.154.3.8.1, IRC 6020(b) Prepared by Collections.

    Note:

    CCC "4" cannot be used with CCC "R" .

  2. IRC 6020(b)Form 940 returns, at the campus' option, can be processed through ISRP or SCRIPS.

CCC "5" - Successor Employer
  1. The taxpayer will signify if they are a Successor Employer by checking Box "b" of the Form 940 or Form 940-PR (Revisions 2006 - 2017). This designation will notify IRS that the employer is entitled to certain credits based on payments made by the predecessor employer. If the taxpayer marks Box "b" , enter CCC "5" , which will signify that they are a successor employer.

  2. If the taxpayer signifies that they are a Successor Employer on the return or attachments, and Box "b" is not checked, check Box "b" in addition to entering CCC "5" .

♦CCC "7" - Reasonable Cause Denied♦
  1. Do not edit CCC "7" when the taxpayer requests an abatement for failing to file or for failing to pay taxes timely, when submitting a return. Whenever the taxpayer has requested penalty relief, send Letter 1382C to inform the taxpayer of the proper procedure to follow to request abatement, if, and when a penalty is assessed.

    Exception:

    See IRM 3.11.154.3.9.1, Form 3893, Re-Entry Document Controlwhen Form 3893 is attached or See IRM 3.11.154.3.9.2, Aggregate Form 940 Returns and Choreworkerswhen Form 13596 is attached to determine if a letter should be issued.

CCC "9" - No Payments to Employees (Revision Year 2006 and Subsequent)
  1. The taxpayer should indicate that no payments were made to employees by checking Box "c" (Revisions 2006 and subsequent).

  2. If Box "c" is checked on a signed return, (or on a return with a signed statement attached, e.g., indicating or using phrases to indicate no payments were made to employees,) and the return lines indicate "0" (zero), or none, or dashes, then edit a CCC "9" .

    Note:

    Do not edit CCC "9" on returns with no tax data that are not signed or do not have an attached signed statement, e.g., indicating "No payments to employees".

    1. If Box "c" is checked, then edit a CCC "9" .

    2. If Box "c" is not checked, then mark box "c" and edit a CCC "9" .

    Figure 3.11.154-3

    This is an Image: 33581801.gif
     

    Please click here for the text description of the image.

Pre-Computed Penalty and Interest Code

  1. Code and Edit will no longer edit the Penalty and Interest code "1" on the Form 940, or Form 940-PR.

Pre-Computed Penalties - Failure to Deposit Penalty (FTD)

  1. Code and Edit will no longer edit the FTD Penalty on Form 940, or Form 940-PR.

Other Pre-Computed Penalties

  1. The Internal Revenue Code (IRC) provides for other penalties to be assessed against taxpayers. Those penalties are explained in IRC 6663 and IRC 6674.

  2. Provisions have not been made for assessing these penalties on the original input of the return. Therefore, they should not be included on the return.

  3. Pre-Computed penalties other than Delinquency (Late Filing Penalty), Failure To Deposit Penalty (FTD) or Failure to Pay (FTP) should be handled as follows:

    1. Edit a receive date if not present. See IRM 3.11.154.3.3, Received Date.

    2. Prepare a Form 3465 to request an assessment of the penalty.

    3. If a remittance amount includes all or part of the penalty, indicate on the Form 3465 that this portion of the remittance is available for application to the assessment.

    4. Edit CCC "X" to freeze the refund until the assessment for penalty posts to the BMF.

    5. Annotate in the left margin of the return "3465 Prep" .

    6. Route Form 3465 to Accounts Management.

  4. Failure to Deposit - When a pre-computed Failure to Deposit penalty is shown on the return, add the penalty amount to the balance due amount or, subtract the amount of the penalty from the overpayment (refund) amount claimed.

  5. Delinquency, Failure to Pay and Minimum Penalty - When a Delinquency, Failure to Pay, or Minimum Penalty is shown on the return, subtract the penalty from the balance due amount if the taxpayer has computed the penalty and interest, and added it to the balance due amount.

Unprocessable Conditions

  1. A return must contain specific items before it is considered processable and timely filed. Perfect all documents to the extent possible from schedules and other attachments. The specific items needed are:

    • An Employer Identification Number (EIN)

    • A legible name (for name control)

    • A valid Tax Year

    • Legible tax data, if tax liability is indicated

    • A signature attesting to the perjury statement shown on the document

  2. Conditions which make a document unprocessable are:

    1. Name so illegible or incomplete that the name control cannot be determined.

    2. EIN is other than 9 numeric digits (XX–XXXXXXX), and cannot be perfected from information on the return or attachment.

    3. The document has two or more EINs.

    4. Taxpayer files a return for more than one type of tax, See Exhibit 3.11.154-6, Correspondence Action Table, third correspondence and action procedure.

    5. Tax data entries on the document are so incomplete, illegible or contradictory that the tax liability cannot be determined.

    6. The document is blocked incorrectly.

    7. Any condition set forth as unprocessables in the specific procedures.

    8. The return is unsigned, or signed in the wrong location,

    9. The return has only entity data and no other statements, attachments or signature by the taxpayer.

  3. Procedures for Unprocessables Documents

    1. After IDRS research, returns with unresolved entity problems should be routed to the Entity Control function for research (AC 320).

    2. On a return with multiple EINs or illegible name, take the following action:

    IF THEN
    The return is a numbered document, Place an asterisk (*) to the left of the EIN.

    Exception:

    Do not asterisk on Form 940-PR returns.

    Note:

    The record will automatically be placed on the Error Inventory of ERS.

    Illegible name, Edit Action Code 320 on the return and prepare a Form 4227 for research action.
    The return is unnumbered, Pull the return from the block, prepare Form 4227 or Form 6882, (IDRS/Master File Information Request), and send return to the Entity Control Function for research.
    The document is unnumbered and the Employer Identification Number (EIN) is missing, applied for, pending, etc.,
    1. Research IDRS for EIN.

    2. Unable to locate EIN, send to the Entity Control function for EIN.

    The taxpayer's EIN, name or address cannot be determined from the attachments, or after research procedures, and the return cannot be returned to the taxpayer due to the illegible entry data, Pull the return from the batch and give it to your lead tax examiner or supervisor for disposition in accordance with the Records Control Schedules, Document 12990, Catalog 57910D.
  4. DO NOT send the following unprocessable returns to the Hold File:

    Note:

    Local procedures determine where the Hold File will be maintained.

    1. IF THEN
      Overpaid returns for which the taxpayer replied but it is still unprocessable or for which no reply has been received, Edit CCC "X" on the return.
      The only tax data entries on the return represent FTD credits and/or balance due/overpayment amounts, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
      The return is an IRC 6020(b) prepared by a Compliance, Substitute For Return (SFR) prepared by Examination, and the return is unprocessable, Route the return (per local procedures) to: Internal Revenue Service
      2970 Market St.
      Mail Stop 2 - J11.151
      Philadelphia, PA 19104
      The return contains no entity data or signature, and the only entries on the return are figures, Give the return to your manager for administrative determination.
      The return falls into the category of undeliverable, this includes returns devoid of entity that cannot be identified by a signature after IDRS research, Pull the return from the batch and give to your manager for disposition in accordance with the Records Control Schedules, Document 12990, Catalog 57910D.
Blank Returns Indicating Payroll Service or Leased Employees
  1. Returns received with no tax data and taxpayer states the return is filed by another company should be processed as follows:

    IF THEN
    The taxpayer submits a blank Form 940 (no tax data entries) and states that he/she has a payroll service that files the return, Give the return to your manager or lead to be disposed of as classified waste.
    The taxpayer submits a blank Form 940 (no tax data entries) and states he/she has leased employees, but you are unable to determine if it is a payroll service or a company who leased employees, Correspond using Letter 142C, as applicable. If the initial return was unsigned also correspond for the signature.
Unprocessable Returns with Replies
  1. This function will take place in Rejects.

No Replies on Unprocessable Returns
  1. This function will take place in Rejects.

♦Correspondence♦

  1. There are two types of correspondence Code and Edit may encounter:

    • Correspondence received from taxpayer

    • Correspondence issued to taxpayer

♦Definition of Correspondence from Taxpayer♦
  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 taxpayer waiting for a response from us?

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

    3. Is 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.

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

    Exception:

    Do not correspond on returns prepared by Collections, IRC 6020(b) or by Examination and "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. Examine the return so that all of the conditions can be include in the same correspondence.

    IF AND THEN
    Correspondence is needed, Requires a response,
    1. Complete an approved Correspondence Action Sheet (Form 12522, or Paperless Correspondence)indicating the letter number (Letter 142C, Letter 86C, etc.) or local equivalent, Master File Tax (MFT) Code, and the appropriate paragraphs.

      Reminder:

      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.

      Note:

      It is now acceptable to receive a missing signature, forms, etc. by fax. Be sure to include the letter paragraph advising the taxpayer of this option when completing Form 12522, or the local equivalent to Form 12522.

    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 the return.

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

    Correspondence is needed, Does Not require a response,
    1. Complete an approved Form 12522, Correspondence Action Sheet or Paperless Correspondence, or the local equivalent) indicating the letter number (Letter 142C, Letter 86C, etc.), MFT (Master File Tax Code), 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 return and attach the Correspondence Action Sheet below the Entity area on the front of the copy of the return. Be sure the name and address shows clearly above the Correspondence Action Sheet.

    3. Forward the copy to the Correspondence Area.

    4. Edit an Action Trail (e.g. Letter "142C 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 his or her Lead or Manager for copies of these letters to facilitate processing.

  4. Conditions requiring correspondence and the suggested correspondence action, see Exhibit 3.11.154-6, Correspondence Action Table.

♦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/dcse/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 examiners will indicate the fax paragraph on the Form 12522, Correspondence Action Sheet to advise taxpayers of the option to fax their response.

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

    • IRM 21.1.3.2.3, Required Taxpayer Authentication

    • IRM 21.1.3.2.4Additional Taxpayer Authentication

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

    • IRM 11.3.2.7.1, Leaving Information on Answering Machines/Voice Mail Fax

    • IRM 11.3.1.11, Facsimile Transmission of Tax Information

♦Third Party Designee♦

  1. The Third Party Designee election was created to allow a designated individual to discuss and/or disclose information about the taxpayer's Form 940, or Form 940-PR, with the IRS. The Third Party Designee election applies only while the return is being processed, and the third party designation authority expires one year from the due date of the return in question. Refer to IRM 21.1.3.3.1, Third Party Designee Authentication.

  2. The Third Party Designee is located in Part 6, Form 940 and Form 940-PR (Revisions 2006 and subsequent).

Third Party Designee Check box
  1. The Third Party Designee Check box (Yes or No) indicates whether the taxpayer has elected to allow the named Third Party Designee to answer questions about the taxpayer's return as it is processed.

  2. No action is required.

Third Party Designee Phone Number
  1. The Third Party Designee phone number is located in Part 6 of Form 940 and Form 940-PR.

  2. No action is required.

Third Party Designee Personal Identification Number (PIN)
  1. The PIN number is self-selected by the taxpayer or designee. It is not assigned by IRS.

  2. This field can be up to 5 characters long.

  3. The entry may be a combination of alpha (a-z) and numeric (0-9).

  4. Asterisk (*) to the left if illegible.

Paid Preparer Section

  1. The Paid Preparer information is located in Part 7 of Form 940 and Form 940-PR (Revision 2008 and subsequent) or Part 8 (revisions 2007 - 2006).

♦Paid Preparer Social Security Number or Preparer Taxpayer Identification Number♦
  1. The Paid Preparer's Social Security Number (SSN) is a nine-digit number. The SSN cannot be all zeroes or all nines.

  2. The Preparer Taxpayer Identification Number (PTIN) consists of nine characters. The PTIN begins with the letter "P" followed by eight numbers (e.g., PXXXXXXXX).

  3. If the Preparer's SSN or PTIN is invalid, all zeros or all nines, asterisk (*) to the left of the entry. No other editing is required.

♦Paid Preparer Employer Identification Number♦
  1. The Paid Preparer's Employer Identification Number (EIN) must consist of nine numbers. The EIN cannot be all zeroes or all nines. The Paid Preparer's EIN is the TIN of the firm or business where the individual preparer works. If the Paid Preparer's TIN is invalid, asterisk (*) to the left of the entry. No other editing is required.

♦Paid Preparer Phone Number♦
  1. No action is required on amended returns.

  2. If a complete Paid Preparer Phone Number is located on the Paid Preparer's Phone Number line, no editing of this line is necessary.

  3. If the Paid Preparer's Phone Number is incomplete, illegible, or less than 10 digits, review the return and all attachments.

    Note:

    If more than 10 digits are present, continue processing the return. Only the first 10 digits will be transcribed.

    IF THEN
    A complete Paid Preparer's Phone Number is located elsewhere on the return or attachments, Edit to the "Phone Number" line.
    A complete Paid Preparer's Phone Number is not located or the number is illegible, Asterisk (*) to the left of the incomplete or illegible phone number.

♦Signature♦

  1. A signature and jurat are required on all returns except the following:

    • Returns prepared under IRC 6020(b). These returns must be signed by a Compliance Function Representative. See IRM 3.11.154.3.8.1, IRC 6020(b)Prepared by Collections.

      Note:

      Starting July 1, 2013 we will accept the Revenue Officer (RO) electronic or typed signature will be accepted as a valid signature.

    • Returns prepared by Examination. for example, "SFR" (Substitute for Return) or "SUBSTITUTE RETURN" See IRM 3.11.154.3.8.3, Examination Prepared.

    • Dummy returns prepared by IRS.

    • Returns filed under IRC 501(d), a Religious or Apostolic Organization.

    • Correspondence containing a signature and jurat is attached showing that the taxpayer is responding to an IRS letter. See paragraph (9) below.

    • Re-entry returns originally filed electronically (E-File). These returns may be identified by the presence of Mod E-file printouts or "TRPRT print Do not process" in lieu of an actual return.

      Note:

      If the TRPTR print states "TRPRT print Do not process" in the top margin, circle "Do Not Process" .

  2. Do not correspond for a signature on "CIS" returns that have Form 13596 attached. See IRM 3.11.154.3.10, Correspondence Imaging System (CIS) Returns, for processing instructions.

  3. If a signature is present on line designated for the taxpayer signature and page 1 of Form 940 or Form 940-PR is missing take the following action:

    • Pull the return and take to Lead Tax Examiner to research IDRS command code BMFOLE for TC 150.

    • If BMFOLE reflects a TC 150 discard the page 2 as classified waste.

  4. If a signature is missing correspond:

    Note:

    See IRM 3.11.154.2.14.2, Issuing of Correspondence for returns that are incomplete and appear to be duplicate filing.

    :

    IF THEN
    • The return is not signed on the line designated for the Form 940 or Form 940-PR signature,

    • The jurat is not present on the line designated for the Form 940 or Form 940-PR signature (non-standard return).

    • Only the Entity information is present and there are no attachments containing tax data.

    1. Edit Action Code 225 (Correspondence for Signature Only) or 226, (International Correspondence for Signature Only).

    2. Follow local procedures for pulling or leaving the return in batch and continue processing.

    Note:

    Paper returns sent in by the filer that states their return was rejected through the E-file system require a signature. Form 8879-EMP is not an acceptable substitute for a paper return.

  5. If the jurat is altered or stricken (crossed out), see IRM 3.11.154.3.14, Frivolous Arguments.

  6. Accept a signature declaration, (a signature with a jurat obtained through IRS correspondence), if attached to the return.

    Note:

    Edit an asterisk (*) in the left most position in the signature box to indicate that a signature declaration is attached.

    1. If the signature declaration is altered or stricken (crossed-out), see IRM 3.11.154.3.14, Frivolous Arguments instructions.

    2. If the Tax Payer responds with a self prepared "signature declaration" , it must contain the same language as the jurat on the tax return,(e.g. "UNDER PENALTIES OF PERJURY, I DECLARE THAT I HAVE EXAMINED THIS RETURN, INCLUDING ACCOMPANYING SCHEDULES AND STATEMENTS, AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, IT IS TRUE, CORRECT AND COMPLETE" .

    3. Form 8879-EMP, is not an acceptable signature substitute for a paper return.

  7. Since tax examiners are not expected to be handwriting experts, Section 301.6064-1 of the Regulations allows the service to presume that the signature on a return, statement or other document is the true signature of the person who actually signed the document.

    Note:

    A or "X" used to designate where the Form 940 should be signed on the return. When this happens:

    IF AND THEN
    An "X" is shown in the "Sign your name here" box, There is a name shown in the "Print your name here" box, Do not correspond.
    An "X" is shown in the "Sign your name here" box, The "Print your name here" box is blank, Correspond with the taxpayer to obtain a signature.
  8. Facsimile Signature:

    1. Rather than a handwritten signature an owner, partner, corporate office, or duty authorized agent may sign Form 940 or Form 940-PR by facsimile (i.e., by rubber stamp, mechanical device, or computer software program).

      Note:

      If a facsimile is used, the person filing the form must retain a letter, signed by the individual authorized to sign the return declaring under penalties of perjury that the facsimile signature appearing on the form is the signature adopted by the person and that the signature was placed there by their direction.

    2. Correspond if no facsimile is found.

  9. For SCRIPS processing. If a return is submitted typed with blue or black ink and the signature is in orange or pink, place an asterisk (*) in the left most position in the signature box to prevent the SCRIPS system from generating a notice to the taxpayer.

  10. Only one correspondence attempt is required for a signature.

Tax Period

  1. All returns must have a Tax Period. Edit the Tax Period to the right of the form title in YY format.

    IF THEN
    The return is for current processing year, Do not edit current tax year. No editing is necessary.
    The taxpayer has notated a Tax Period other than the current year, Edit the Tax Period based on the taxpayer's indication.
    The Tax Period is missing, incomplete, or illegible,
    1. Review the return and attachments for the correct period.

    2. If found, edit the Tax Period to the right of the form title in YY format.

    3. Unable to determine the Tax Period after searching the return and attachments, process the return for the year currently being processed.

    More than one Tax Period is shown on the return,
    1. Review the return or the attachments for the correct Tax Period.

    2. If the Tax Period cannot be determined, edit and process the return for the earliest Tax Period shown by the taxpayer.

    3. Edit the correct Tax Period in YY format.

  2. Prepare a dummy return for each Tax Year involved when more than one tax year is shown on a return. Correspond with the taxpayer if a dummy return cannot be prepared.

Early Filed Returns

  1. An Early-Filed return is a return with a Received Date prior to the Tax Period Ending date.

  2. Never send back an Early-Filed return to the taxpayer.

    Note:

    When correspondence issues are present on an Early-Filed return, edit the Correspondence Action Code ("211" ,"225" , or

    "226" on the return. Edit Action Code "480" (Early filed- Suspense) on Form 4227 and forward for correspondence action.

  3. Circle out the received date if one is shown on the return.

  4. Do not edit Credit Reduction information on Early-Filed return.

    Note:

    Do not delete Form 940 Schedule A if attached.

  5. Do not pull from pack if the return is an early filed SCRIPS.

    IF THEN
    The taxpayer submits a return using a 2005 or prior revision and marks "2017" on the "Calendar Year" or "Año contributivo" line of the return, Process through ISRP as a current year return.
    The return is a non Final early-filed and is a return with a processing date prior to November 1 and you cannot determine the reason for filing an early return, Edit A/C 211 and correspond using Letter 142C (or acceptable local letter).
    The return is a non Final early-filed and is a return with a receive date of November 1 through December 1, Edit A/C 480 and leave in batch.
    The return is early-filed, "Final" and complete,
    1. Edit CCC "F" .

    2. Edit Action Code 480.

    The return is early-filed, "Final" and incomplete,
    1. If return is incomplete, correspond for missing data using Letter 142C (or an accepted local letter).

    2. Suspend with AC 211.

    3. Edit CCC "F" .

Special Conditions

  1. Processing special return conditions in the code and edit function.

♦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 return is batched in a non-refund batch,
    1. Completely edit the return.

    2. Pull the return from the non-refund batch and merge into a refund batch using local procedures.

      Exception:

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

    The processing date is more than 20 days after the Received Date or the Return Due Date (whichever is later) and the 45 Day Interest Free period is in jeopardy and the refund ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    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. Give the return to the manager for expedite processing.



    Numbered Returns:
    1. Code and edit the return as completely as possible.

    2. Edit Action Code 341 (or CCC U as applicable) and leave in batch.

      Note:

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

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

    Note:

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

    Unnumbered Returns:
    1. Pull the return from the batch.

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

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

      Note:

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

    4. Make a copy of the return for Criminal Investigation (CI). See IRM 3.11.154.3.15, Criminal Investigations (CI) Referral.

    5. Expedite processing.



    Numbered Returns:
    1. Code and edit the return as completely as possible.

    2. 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.

    3. Make a copy of the return for Criminal Investigation (CI). See IRM 3.11.154.3.15, Criminal Investigations (CI) Referral.

Delinquent Returns

  1. A return is normally delinquent if it is not received on or before the return due date. Accept a return as timely ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . A return is not delinquent if the return is timely postmarked and mailed before, or on the due date. If the due date falls on a weekend or legal holiday, the return is timely if postmarked by the first business day following the weekend or legal holiday. See IRM 3.11.154.3.3, Received Date for instructions on determining timeliness of returns.

  2. If the return is truly delinquent, check return or attachments for an explanation of late filing. Send the taxpayer Letter 1382C to inform the taxpayer we have received their request. Do not code the return "R" if a pre-computed delinquency penalty is shown. See IRM 3.11.154.3.9.1, Form 3893, Re-Entry Document Control when Form 3893 is attached or See IRM 3.11.154.3.9.2, Form 13596 - Reprocessing Returns when Form 13596 is attached to determine if a letter should be issued.

    Exception:

    For secured or prepared returns, edit the applicable CCC as indicated on the return, any attachment, or Form 13133.

  3. Form 940 and Form 940-PR are annual (calendar year) returns.

    1. The due date is the last day of the month following the end of the calendar year (January 31).

    2. If January 31 falls on Saturday, Sunday, or a legal holiday, consider the return timely if postmarked by the first work day thereafter.

      Tax Period ending Return Due Date Post Mark Date On or Before 7 Day Grace Period On or Before Delinquent Date on or after
      Dec. 31, 2018 Jan. 31, 2019 Jan. 31, 2019 Feb. 07, 2019 Feb. 08, 2019
      Dec. 31, 2017 Jan. 31, 2018 Jan. 31, 2018 Feb. 07, 2018 Feb. 08, 2018
      Dec. 31, 2016 Jan. 31, 2017 Jan. 31, 2017 Feb. 07, 2017 Feb. 08, 2017
      Dec. 31, 2015 Jan. 31, 2016 Feb. 01, 2016 Feb. 07, 2016 Feb. 08, 2016
      Dec. 31, 2014 Jan. 31, 2015 Feb. 02, 2015 Feb. 07, 2015 Feb. 08, 2015

♦Received Date♦

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

  2. A valid IRS Received Date is required on the following Form 940 returns:

    • Delinquent.

    • CCC "R" , "D" or "7" coded.

    • Amended (CCC "G" Coded).

    • Re-entry.

    • IRC 6020(b).

    • Delinquent original that is used to prepare other returns. (For example, a dummy return is prepared from a multiple period return. Tax data is transferred to the current revision of the return).

    • Pre-computed penalty and interest is present.

    IF THEN
    The return is received within ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or extended due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , The return is considered timely.
    The due date falls on a weekend or legal holiday, The return is timely if postmarked by the first business day following the weekend or legal holiday.
    The IRS received date stamp is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ of legal or extended due date and the postmark or shipment date is on or before the due date, Circle out the receive dates to make the return timely.

    Note:

    The postmark or shipment date includes returns delivered by:
    • U.S. Postal Service,
    • Private Delivery Services, e.g.
    Federal Express Corporation (Fed Ex) or United Parcel Service (UPS), or
    • Returns with a Foreign Postmark.

    Caution:

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

    Note:

    For certified mail returns only in Code and Edit: If a postmark is not present, look for a "USPS.com Track and Confirm" record attached to the return, e.g., right before the envelope. Use the "Acceptance" date to determine timeliness and follow normal editing procedures. See Exhibit 3.11.154-15, "Track and Confirm" Receipt. If the "USPS.com Track and Confirm" record is not attached, no action is required.

  3. When a Form 940 or Form 940-PR is delinquent and the taxpayer explains the return is late due to the rejection of a timely filed electronic return, check the return for a MeF rejection notification.

    Note:

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

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

    Note:

    The taxpayer has 10 days to resubmit an electronically filed return after being rejected and 10 days to submit a paper return after the last rejection.

    IF AND THEN
    The postmark date is within 10 days of the date of the rejection,   Edit the IRS Received Date to be the date of the rejection.
    For example, postmark date is 03-22-2018 and first rejection is 03-12-2018. Change Received Date to first reject date 03-12-2018.
    The postmark date is more than 10 days after the date of the rejection,   Leave the IRS Received Date as is.
    For example, postmark date is 03-23-2018 and first rejection is 03-12-2018. Leave the Received Date as is.

    Exception:

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

    There are two rejections, Within 10 days of one another and one is within 10 days of the postmark date, Edit the IRS Received Date to be the date of the first rejection.
    For example, postmark date is 03-22-2018, the second rejection is 03-12-2018. The first rejection is 03-09-2018 Change the Received Date to the first rejection date 030918.
    There are two rejections with the time between the first rejection and the second rejection greater than 10 days, The second rejection is within 10 days of the postmark date, Edit the IRS Received Date to be the date of the second rejection.
    For example, postmark date is 03-22-2018, the second rejection is 03-12-2018. The first rejection is 03-01-2018 Change the Received Date to second rejection date 031218.
    There are two rejections, Not within 10 days of one another and not within 10 days of the postmark date, Leave the IRS Received Date as is.
    For example, postmark date is 03-23-2018, the second rejection is 03-12-2018. The first rejection is 03-01-2018. Leave the Received Date as is.

    Exception:

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

  5. The IRS Received Date may or may not be stamped on the face of the return.

  6. A valid IRS Received Date Stamp may consist of the following:

    • The word "Received" .

    • Month (alpha or numeric).

    • Day (for example; "1" or "01" .

    • Year - four digits.

    • "Area Office" , "Campus" , "Field Office" , "Taxpayer Assistance Center (TAC)" plus the City, location, or function area within one of these sites (Compliance service Collection Operations (CSCO), Examination (EXAM), Image Control Team (ICT), Correspondence Imaging System (CIS), Accounts Management (AM), etc.))

      Note:

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

  7. If the received date is not present or the date is illegible/invalid, edit the Received Date in "MMDDYY" format in the middle of page 1 of the return. Edit the Received Date in the following priority:

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

      IF THEN
      An envelope is not attached, Use the postmark date stamped on the face of the return.
      A document was returned for insufficient postage, Use the postmark date that coincides with the correct delivery of the return.
      The postmark is missing and the envelope is "certified" ,
      1. Look for a USPS.com Track and Confirm record attached to the return, e.g., right before the envelope.

      2. Use the Acceptance date to determine timeliness and follow normal editing procedures. See Exhibit 3.11.154-15, "Track and Confirm" Receipt.

      3. If the USPS.com Track and Confirm record is not attached, no action is required.

      An envelope has a USPS and private metered postmark, Always use the USPS postmark.
      An envelope has a foreign and private metered postmark, Always use the foreign postmark.
      An envelope has two private metered postmarks, Always use the latest private postmark.
      An envelope has only one private metered postmark, Use the private metered postmark.
    2. Service Center Automated Mail Processing System (SCAMPS) digital date.

    3. Revenue Officer's Signature date.

    4. Signature date (only if within current year).

    5. Julian control date minus 10 days.

    6. Current date minus 10 days.

  8. Edit the Received Date as follows:

    IF AND THEN
    A timely received date is the only received date stamped on the return,   No action is required.
    Two or more dates stamped on the return, the return is delinquent,
    1. Use the earliest IRS stamped Received Date.

    2. Circle out all other dates.

      Note:

      Received dates, which have been circled out by another function, should be treated as if they are not present.

    A Federal return is addressed to the IRS, delivered to a State agency Use the postmark date as the received date.
    A Federal return is addressed to a State agency,   Use the IRS date stamp as the received date.
    Envelope is attached to the return,  
    1. Check the envelope for remittance.

    2. If found, hand-carry remittance to your manager.

    The only Received Date on the return is a Taxpayer Advocate Service (TAS) Received Date,   Edit the Received Date according to instructions.

    Reminder:

    If an envelope is attached to the return, always check the envelope for remittance. If found, hand carry remittance to manager.

  9. If a return has been faxed to another area of the service and then sent to Submission Processing for processing, do not edit the Enterprise Electronic Fax (EEFax) Date as the IRS Received Date. Edit a Received Date according to normal procedures.

    Caution:

    The EEFax Date cannot legally be used as an IRS Received Date.

Non-Taxable Returns

  1. Form 940 and Form 940-PR returns are non-taxable when they are filed without any tax data entries or with no entries for tax.

    Note:

    The taxpayer may also identify the return by stating Not liable, No Employees, (No Sujeto A Impuesto, No Tiene Empleados will generally be shown on Form 940-PR), or other similar phrases.

  2. If there are indications on the return or attachments that the taxpayer is liable, correspond for all missing items necessary to process the return (unless otherwise directed by IRM procedures).

  3. If you determine the return is non-taxable, edit as follows:

    IF THEN
    If Box 1a contains a valid non-Credit Reduction state code entry, Continue to process the remainder of the return. See Exhibit 3.11.154-7, State Abbreviations.
    If Box 1a contains a valid Credit Reduction state code entry, See Exhibit 3.11.154-14, Credit Reduction States and Rates (TY2004 - 2017),
    1. If the state is a CR state:

      1. enter an asterisk (*) to the left of the entry in Box 1a, and edit "ZZ" to the left of the asterisk.

        Note:

        State Code ZZ is only applicable in credit reduction years, e.g., such as, Tax Year 2009 through- 2017.

    2. If the state is not a CR state:

      1. Enter the correct entity state code.

      2. If the entry in 1a is not a valid state code, enter an asterisk (*) to the left of the entry in Box 1a, and edit the correct state code to the left of the asterisk.

        Exception:

        For Form 940-PR returns circle out the CR state and do not enter an asterisk (*).

    If box 1a is blank, or incorrect, Using the State Code of the entity state, determine if that State is a Credit Reduction (CR) state for the return filing year. See Exhibit 3.11.154-14, Credit Reduction States and Rates (TY2004 - 2017)
    1. If the state is a CR state:

      1. If box 1a is blank enter "ZZ" in Box 1a.

      2. If the entry in Box 1a is not a valid state code, enter an asterisk (*) to the left of the entry in Box 1a, and edit "ZZ" to the left of the asterisk.

        Note:

        State Code "ZZ" is only applicable in credit reduction years, e.g., such as, Tax Year 2009 through- 2017.

    2. If the state is not a CR state:

      1. Enter the correct entity state code.

      2. If the entry in 1a is not a valid state code, enter an asterisk (*) to the left of the entry in Box 1a, and edit the correct state code to the left of the asterisk.

        Exception:

        For Form 940-PR returns circle out the CR state and do not enter an asterisk (*).

    If the taxpayer indicates the return is "Final" , Edit a CCC "F" .
    If the taxpayer claims exempt status under IRC 501(c)(3), Edit a CCC "F" . Correspond if there is any doubt about the taxpayer's claim. See IRM 3.11.154.2.14, Correspondence.
    If a signature is or is not present, Follow normal procedures for perfecting the signature area.
    The Quarterly Federal Tax Liability for Unemployment Tax (ROFTL) in Part 5 is incomplete or unnecessary, Enter Schedule Indicator Code (SIC) "1" . See IRM 3.11.154.6.6.1, Schedule Indicator Code (SIC).
    If taxpayer states "not liable" or "no employees" on non - taxable returns. Do not edit CCC "F" .

Indian Tribal Government Procedures

  1. Services rendered to a federally-recognized Indian Tribal Government (or its instrumentalities) are exempt from FUTA tax, subject to the tribe's compliance with applicable state law.

  2. For submission processing purposes, Code and Edit employees should accept all FUTA tax returns notated or referenced with the following explanations for ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    1. Indian Tribal Government for tax years 2000 and subsequent

    2. Announcement 2001-16

    3. Internal Revenue Code Section 3309(d)

    4. The Community Renewal Tax Relief Act of 2000; (Section 166)

    5. H.R. 5662, incorporated in H.R. 4577, the Consolidated Appropriations Act, 2001

    6. Public Law No. 106–554, 114 Stat. 2763

    7. Similar explanation as described above

  3. Perfect the return as "Non Taxable" and "Final" . See the following procedures:

    Reminder:

    If the return is an amended return see IRM 3.11.154.3.7, Amended Returns.

    IF THEN
    An exempt payment is claimed, Allow the entry.
    Tax data is present,
    1. Edit CCC "F" and asterisk (*) to the left of all T Lines making the return " non-taxable."

      Exception:

      For Form 940-PR returns do not asterisk (*) instead circle out all T Lines.

    2. If the taxpayer is claiming any Federal Tax Deposits, do not asterisk (*) the amount claimed.

    3. Perfect the return so the overpayment is refunded to the taxpayer. See Figure 3.11.154-4, Form 940-EZ Conversion Table.

    Figure 3.11.154-4

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♦Statute Returns♦

  1. A potential statute control return is any return with a received date that is 2 years and 9 months or more after the return due date.

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

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

    • Compliance IRC 6020(b) returns.

    • Secured by Examination/Collections, Secured by TE/GE, Secured by TE/GE EP Exam.

    • Returns with "TC 59X" or "ICS" (Integrated Collections System) notated on the face of the return.

    • Returns that are substitute returns prepared by Examination (SFR) in top margin of the return.

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

  4. 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 and send it 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.

  5. Statute returns are unprocessable until they are cleared by Statute Control:

    IF THEN
    The return is numbered,
    1. Edit Action Code 310 on the return.

    2. Attach Form 4227 and check the box for Statute Control Unit.

    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 Unit.

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

  7. 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

    • similar statement indicating there is no statute issue, The return is stamped, “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

    • similar statement indicating there is no statute issue

    Do not edit a CCC "W" and continue processing return.
  8. See the reference table below for Form 940 and Form 940-PR statute barred dates for timely filed returns for tax year 200612 and subsequent.

    TAX YEAR STATUTE BARRED DATE 90 DAYS TO STATUTE BAR DATE
    2017 01-31-2021 01-31-2020
    2016 01-31-2020 01-31-2019
    2015 01-31-2019 11-02-2018
    2014 01-31-2018 11-02-2017
    2013 01-31-2017 11-02-2016
    2012 01-31-2016 11-02-2015
    2011 01-31-2015 11-02-2014
    2010 01-31-2014 11-02-2013
    2009 01-31-2013 11-02-2012
    2008 01-31-2012 11-02-2011
    2007 01-31-2011 11-02-2010
    2006 01-31-2010 11-02-2009

♦Amended Returns♦

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

    • The Amended Box is checked.

    • Words such as "Supplemental" , "Corrected" , or "Additional" 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 and edit the Action Trail on the return.

  3. There is an indication the return is amended and:

    IF THEN
    "TC 59X" or "ICS" was edited on the return by Compliance Services, Do not edit CCC "G" . Process the return as an original.
    The return is stamped"Delinquent Original Cleared for Processing" or with similar phrasing, by Statute, Do not edit CCC "G" . Process the return as an original.
    Form 3893 or Form 13596 is attached,
    1. Do not edit CCC G.

    2. See IRM 3.11.154.3.9.1, Form 3893, Re-Entry Document Control.

    3. See IRM 3.11.154.3.9.2, Form 13596 - Reprocessing Returns.

    None of the above are present, Edit CCC G. No other codes may be used with a CCC "G" .

    Exception:

    CCC "W" , CCC "3" and/or ERS Action Codes may be used with CCC "G" .

    Note:

    When Computer Condition Code "G" is edited, Box "a" , "Amended" , (Revision 2006 and subsequent) should be marked. Mark Box "a" , if it is not marked.

    Exception:

    CCC "W" , CCC "3" and/or ERS Action Codes may be used with CCC "G" .

  4. Only the following data must be present and edited if missing on all amended returns:

    • See IRM 3.11.154.5.2, Entity Perfection - Employer Identification Number (EIN)

    • See IRM 3.11.154.5.3, Entity Perfection - Name Control

    • See IRM 3.11.154.5.4, Entity Perfection - "In care of" Name

    • Signature, see IRM 3.11.154.2.18, Signature

    • See IRM 3.11.154.2.19, Tax Period

    • CCC "G" .(See Exception in paragraph (4) note above).

    • See IRM 3.11.154.3.3, Receive Date

  5. If Box "a" is marked erroneously and needs to be deleted, place as asterisk (*) as closely as possible to the left of the box.

    Figure 3.11.154-5

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    Please click here for the text description of the image.

♦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 "IRC 6020(b)" or SFR (Substitute for Return).

    2. Secured tax returns are notated with TC 59X or ICS (Integrated Collection System) or 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" (Return Delinquency) is notated on the return and not circled, remove from the batch and route to Collections.

♦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. These returns can be received in various formats.

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

    1. Returns must have an IRS Received Date. If missing, follow the normal procedures for editing the IRS Received Date. See IRM 3.11.154.3.3, Received Date.

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

      Note:

      Starting July 1, 2013, the Revenue Officer's (RO) electronic or typed signature will be accepted as a valid signature on the return.

    3. Edit CCC "4" . See IRM 3.11.154.2.9.10, CCC 4 - IRC 6020(b) Return.

      Note:

      CCC "R" should not be used with CCC "4" .

    4. 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" .

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

    6. Edit CCC "W" if the IRS Received Date is more than two years nine months after the return due date. Do not send the return to Statute Control function. See IRM 3.11.154.2.9.7, CCC "W" - Return Cleared by Statute.

    7. No special calculations or notations are necessary on an IRC 6020(b) return that involves a credit reduction state. Do not manually calculate any credit reduction amounts.

  3. At the campus' option, IRC 6020(b)Form 940 returns can be processed through ISRP or SCRIPS.

♦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 Sheets to correspond for conditions that cannot be processed (e.g., missing signature, missing schedules, etc.)

    3. Edit CCC "W" if the IRS Received Date is more than two years nine months after the Return Due Date. Do not send the return to Statute Control function. See IRM 3.11.154.2.9.7, Return Cleared by Statue.

    Reminder:

    If there is an indication that a penalty (or penalties) should be suppressed, edit the appropriate Computer Condition Code(s). See IRM 3.11.154.2.9, Computer Condition Code (CCC) for more information

    .

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

    1. Returns must have an IRS Received Date. If no IRS Received Date is present, follow the normal procedures for editing the IRS Received Date.

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

    3. If the Form 13133 is attached, edit the Computer Condition Code(s) that are checked on the form.

      Note:

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

    4. Edit CCC "W" if the Received Date is more than two years nine months after the Return Due Date. Do not send the return to Statute Control. See IRM 3.11.154.2.9.7, CCC "W" - Return Cleared by Statue.

♦Examination Secured♦
  1. These 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 Code(s) that are checked on Form 13133.

    4. Edit CCC "W" if the received date is more than two years nine months after the Return Due Date. Do not send the return to Statute Control. See IRM 3.11.154.2.9.7, CCC "W" - Return Cleared by Statue.

♦Re-Entry Documents Procedures♦

  1. A return posted to the wrong account or module 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, or "TRPRT PRINT DO NOT PROCESS" printed on the top margin. Do not correspond for missing signatures on these documents.

  3. Each re-entry return must have a Form 3893, Re-Entry Document Control or Form 13596, Reprocessing Returns, attached. This will indicate to the examiner that special handling is required:

    • Form 3893 is used to re-input documents that have not posted to an account or module. See Figure 3.11.154-6, Form 3893, Re-Entry Document Control.

    • Form 13596 is used to reprocess documents 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.

    Exception:

    If the return is more than 2 years and 9 months from return due date, do not use Form 3893 or Form 13596 reprocessing procedures. Route the return to the Statute Control Unit following statute procedures.

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

    Caution:

    If the Received Date is two years and nine months or more after the Return Due date, refer to Statute procedures before reentering or reprocessing the return. See IRM 3.11.154.3.6, Statute Returns.

    Figure 3.11.154-6

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    Please click here for the text description of the image.

Form 3893, Re-Entry Document Control
  1. Form 3893, Re-Entry Document Control is used to re-input 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 number), edit all returns using current processing procedures and keep all returns clipped together.

  3. Circle the CCC "G" if present and asterisk box a if marked.

  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 procedures, circle any Action Codes, Computer Condition Codes and any other edit marks that are no longer applicable. Re-edit according to current processing procedures.

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

    Form 3893 ACTION TAKEN
    Box 14 (Remarks) Ensure that the information is edited to the return.
    Box 15 (Process as),
    1. Circle out the 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 to the appropriate area.
    Taxpayer error, Leave the entries as shown on the document.
  9. An IRS Received Date must be present on all re-input returns. See IRM 3.11.154.3.3, Received Date for receive date editing procedures.

  10. When additional information is still needed to make the return processable, prepare 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 on the return and attach Form 4227 notating, "Perfection Not Possible" and leave in batch.

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

  2. If the return was not edited according to current processing procedure, re-edit according to current processing instructions.

    Note:

    Do not edit CCC "G" on an amended return.

  3. Do not send Letter 1382C if a request for reasonable cause is attached.

  4. 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.

  5. If the return was edited according to current processing procedures, ensure that the information from Form 13596 is edited on the return.

    Form 13596 Action Taken
    TIN correction, Edit correct TIN on return.
    Tax period correction, Edit correct tax period on return.
    The return is an early filed return See IRM 3.11.154.2.20, Early Filed Returns, paragraph (5) and follow these procedures if they apply.
    Reasonable cause, Edit appropriate computer condition code:
    1. Edit CCC "R" if the Failure to File (FTF) box is checked.

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

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

    IF THEN
    Improper perfection, Edit the same correction in red to the appropriate area.
    Taxpayer error, Leave the entries as shown on the document.
  7. A received date must be present on all reprocessed returns. See IRM 3.11.154.3.3, Received Date editing procedures.

  8. Circle out the green rocker and edit marks that may indicate a receipt of remittance.

  9. When additional information is still needed to make the return processable, prepare Correspondence Action Sheet Form 12522(Letter 142C) or Form 4227 for the appropriate action (e.g., correspondence, research, etc.).

♦Correspondence Imaging System (CIS) Returns♦

  1. Correspondence Imaging System "CIS" is an inventory system for scanning all Account 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.

    Note:

    Enter an asterisk (*) in the left most position of the signature box.

  3. Verify all edit marks on a "CIS" return.

    IF THEN
    The edit marks are in black, Underline the edit mark if correct or circle if incorrect.
    The edit marks are in red or green, Circle if incorrect.
    The edit marks are missing or incorrect, Perfect as necessary.
  4. Follow the instructions below for "CIS" Returns.

    IF AND THEN
    The CIS return is an early filed return,   See IRM 3.11.154.2.20, Early Filed Returns.
    The "CIS" return has a Form 13596 attached,

    Note:

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

    The return is incomplete, (i.e., missing signature, schedules or forms),
    1. Do not correspond.

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

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

    The CIS return has a Form 13596 attached and the return is incomplete (e.g., missing signature, schedules, or forms), 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 AM. Continue processing the return.
    The "CIS" return does not have a Form 13596 attached, The return is incomplete (i.e., missing signature, schedules or forms), Follow normal correspondence procedures.

Form 1040 Schedule H

  1. Some taxpayers are filing Form 940 returns with Form 1040 Schedule H attached for prior tax years.

    1. IF THEN
      Form 1040 Schedule H is attached,
      1. Edit Form 940 or Form 940-PR as a non - taxable final return.

      2. Asterisk (*) out all money and T- line entries on the return.

        Exception:

        For Form 940-PR returns do not asterisk (*) instead circle out all money and T-lines.

      3. Detach and route Form 1040 Schedule H to IMF Code and Edit:

      4. Attach Form 4227 to Form 1040 Schedule H.

      5. Notate: "Form 1040 Schedule H attached to Form 940 or Form 940-PR. Please process. Do not send back to the taxpayer."

      6. Edit CCC "F" on the return.

Prompt, Quick and Jeopardy Assessments

  1. Returns requiring "prompt" , "quick" , "jeopardy" , or "termination assessments" will be received in Document Perfection accompanied by one of the following forms:

    • Form 2644, Recommendation for Jeopardy/Termination Assessment

    • Form 2859, Request for Quick or Prompt Assessment

    • Form 895, Notice of Statute Expiration

    • Form 3198, Special Handling Notice for Examination Case Processing

    • Form 5344, Examination Closing Record

    • Form 5403, Appeals Closing Record

    • Letter attached or indication on return requesting a prompt determination under IRC 505(b) of the United States Bankruptcy Code.

  2. Route these returns to Accounting.

  3. If the Form 2859 is attached to the return and there is a TC 59X with no received date, edit the received date on the return from the Date of Request box on the Form 2859.

Substitute Form Received from Prepares

  1. Some employers have been given permission by National Office to file computer-printed Form 940.

  2. Computer-generated/computer-printed forms which do not conform to the official version should be given to your manager so that National Office can be notified. For example:

    • Different format

    • Cramped space between lines

    • Missing line items

    • Small size returns, etc.

♦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. See Exhibit 3.11.154-13, Potential Frivolous Return for Examination Review.

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

    IF THEN
    The return meets any of the conditions identified as a frivolous return. See Exhibit 3.11.154-13, Potential Frivolous Return for Examination Review.

    Caution:

    If the return shows Action Code 331 a CCC X and has a Form 4227 attached with the remarks "Refer to Exam FRP for audit after processing" , then continue to next procedure.

    Remove the return from the batch and place the return in the locally designated basket for Examination, Frivolous Return Program (FRP) for review.
    Examination has selected the return as frivolous, e.g., indicated by an Action Code 331 and a Form 4227 with the remarks "Refer to Exam FRP for audit after processing" , and so the return is send for processing, Continue to process the return using the procedures in IRM 3.11.154, Document and Analysis - Unemployment Tax Returns. However, do not circle out or void the Action Code or CCC "X" indicating a frivolous return.

    Note:

    Returns having only zeros, no entries, are blank or indicate "None" , "Not Liable" , etc. with no evidence of a frivolous argument are not to be considered as frivolous returns.

♦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 the 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 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , do the following:

    Refund Claim Cincinnati, Ogden, and Kansas City
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    1. Make a copy of the return.

    2. Attach Form 4227 to the copy.

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

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

    5. Edit Action Code 341 or CCC "U" (whichever is applicable) on the return. See IRM 3.11.154.3.1, Refund Returns (45 Day Jeopardy and $100 Million or more Refunds), Refund Returns (45 Day Jeopardy and $100 Million or more Refunds)

    6. Continue processing the return.

  3. Other CI Referral Criteria:

    Other CI Referrals Criteria
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

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

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

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

    • Make a copy of the return.

    • Attach Form 4227 to the copy.

    • Route the copy as indicated in the table below.

      Cincinnati Ogden Kansas City
      Mail Stop 83G, Criminal Investigation (CI) Mail Stop 9001, Criminal Investigation (CI) Mail Stop S2 9000, Criminal Investigation (CI)
    • 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.

    • 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.

♦CADE 2♦

  1. The Customer Account Data Engine (CADE) 2 Program Office in Headquarters is charged with the primary goal to implement a single, modernized programming solution to provide daily processing of taxpayer accounts.

  2. CADE 2 is comprised of several components to modernize the IRS to a daily processing environment with several Transition States.

  3. The CADE 2 program has began to deploy the first transition state towards implementing a single modernized environment to process individual and business taxpayer accounts.

  4. Under CADE 2, the Business Master File transaction posting time frames changed as follows:

    1. Transactions are viewable using CFOL Command Codes on Saturday following the weekly Master File processing run on Thursday.

    2. Transactions are viewable as posted transactions using IDRS Command Codes on Monday following the weekly Master File processing run on Thursday.

      Note:

      With the acceleration of the IDRS weekly analysis being performed the weekend directly after the Master File processing on Thursday, transactions are posted instead of in pending status on Monday.

  5. The BMF campus cycles are:

    1. Campus Cycle: Thursday – Wednesday

    2. Master File Processing: Friday – Thursday

    3. Notice Review Saturday: Monday (8+ days)

    4. Unpostables: New available Tuesday; Closing Tuesday

  6. Cycle posting dates will reflect a format of "YYYYCCDD." YYYY will indicate the year. CC will indicate the posting cycle.

    Note:

    BMF cycle posting dates on BMFOL will continue to reflect "YYYYCC" . YYYY will indicate the year. CC will indicate the posting cycle. BMF cycle posting dates in TXMOD will reflect a format of "YYYYCCDD" . The DD value will be 08.

Aggregate Form 940 Returns

  1. If the return is an Aggregate Form 940 return containing the notation of "State" , " City" , "County" in the entity area of the return, or "Notice 2003-70" , "Fiscal Agent" , " Fiscal Intermediary" , "Home-Care Service Providers" , "Household Employer Agent" , or "Chore Workers" noted on the return:

    1. Accept and process submitted Aggregate Form 940 returns containing the following notation in the entity area of the return

  2. If the Aggregate Form 940 return does not contain any of the notations mentioned in (1) above, correspond and send the return back to the taxpayer to inform them they are not eligible to file an aggregate return.

    Note:

    This is a special procedure for aggregate choreworker FUTA returns only, and is an exception to our standard correspondence procedures.

  3. If the taxpayer requests abatement for Failing to Make Timely Deposits when the return is submitted Do not edit CCC "J" . Send Letter 1382C to inform the taxpayer of the proper procedure to follow to request abatement, if, and when a penalty is assessed. If the taxpayer does not request abatement, but notates that they are filing an aggregate FUTA return, edit CCC "J" .

    Exception:

    See IRM 3.11.154.3.9.1, Form 3893, Re-Entry Document Control when Form 3893 is attached or IRM 3.11.154.3.9.2, Form 13596 - Reprocessing Returns when Form 13596 is attached to determine if a letter should be issued.

♦Foreign Currency♦

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

♦Protective Claims♦

  1. 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.

♦Entity Perfection♦

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

    • Employer Identification Number

    • Name

    • Complete Address, e.g., City, State, ZIP Code

♦Bankruptcy♦

  1. If the Form 940 or Form 940-PR indicates bankruptcy (e.g. shows RECEIVER, TRUSTEE, or DEBTOR IN POSSESSION in the entity area or on an attachment, route to Entity Control. Follow local procedures using Form 13934, Merge Sheet.

♦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 on the top 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 ITIN, Unnumbered
      1. Remove return from batch.

      2. Route to Entity Control following local procedures for EIN assignment.

      The EIN is either a PTIN or ITIN, Numbered
      1. Edit Action Code 320.

      2. Leave document in batch.

      Multiple EINs are present, Unnumbered,
      1. Remove return from batch.

      2. Route to Entity Control following local procedures using Form 13934, Merge Sheet for EIN assignment.

      Multiple EINs are present, Numbered
      1. Edit Action Code 320.

      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

      • All nines

      Unnumbered
      1. Asterisk (*) to the left and line through the illegible EINs, zeroes, and/or nines.

      2. Research IDRS.

      3. If found, edit to the proper location.

      4. If not found, route to Entity Control following local procedures using Form 13934, Merge Sheet.

      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

      • All nines

      Numbered
      1. Asterisk (*) to the left and line through the illegible EIN, zeroes, or all nines.

      2. Edit Action Code 320.

      3. Attach Form 4227 and leave in the 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 using Form 13934, Merge Sheet.

      Pending, applied for, etc., is indicated in the EIN area, Numbered
      1. Edit Action Code 320.

      2. Leave in the batch.

  4. If the EIN is missing on page 2 of Form 940 or Form 940-PR, and /or on Form 940 Schedule A, and/or 940 Schedule R, edit the last 4 digits of the EIN from page 1 of Form 940 or Form 940-PR in the EIN designation area of page 2. This is not necessary if the taxpayer has submitted a duplex form.

  5. If EIN on page 2 of Form 940 or Form 940-PR, and /or on Form 940 Schedule A, and/or Form 940 Schedule R, does not match the EIN in the entity portion of Form 940 or Form 940-PR, edit on page 2 of Form 940 or Form 940-PR, and/or Form 940 Schedule A, and/or Form 940 Schedule R:

    • An asterisk to the left of the EIN.

    • The last 4 digits of the EIN from page 1 to the left of the asterisk.

      Note:

      It is not necessary to edit the EIN on a duplex form submitted by the taxpayer.

♦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.

    Note:

    If an individual and a trade name are present and it can be determined that the trade name is for a corporation or partnership, follow the Name Control procedures for corporations or partnerships. If other than a corporation or partnership, follow the Name Control procedures for individuals, regardless of which line the individuals owner's name is listed.

  2. See Job Aid Document 7071A to properly determine the Name Control.

  3. It is no longer necessary to edit a name control on returns that will be processed through SCRIPS. Do not take any action if the name control is already edited.

  4. If the taxpayer indicates on the return or on an attachment of a"Name Change" , route the return to Entity Control. Follow local procedures using Form 13934, Merge Sheet.

  5. Edit the Name Control on the returns processed through ISRP as follows:

    IF AND THEN
    Able to determine the Name Control,   Underline the Name Control.
    Unable to determine the Name Control, Unnumbered,
    1. Research IDRS.

    2. If found, edit to the proper location.

    3. If not found, route to Entity Control following local procedures using Form 13934, Merge Sheet.

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

    2. Leave the return in the batch.

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" (percent).

  2. Ensure that the "in care of name" is located above the street address.

    Note:

    Asterisk (*) to the left and line through the in care of symbol c/o or percent, if it is present with an address. Do not use the ampersand (&) or the percent sign (percent) when editing address information. Do not asterisk (*) on Form 940-PR returns.

    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 below the street address,
    1. Edit an asterisk (*) and line through the "in care of name" .

      Exception:

      Do not edit an asterisk (*) on Form 940-PR returns.

    2. Edit the "in care of name" above the street address beginning with the percent or c/o in the first position.

    3. Continue processing the return.

    The "in care of name" is shown on an attachment,
    1. Edit the in care of name above the street address beginning with the percent or c/o in the first position.

    2. Continue editing the return.

    The street address for the "in care of name" is different from the street address of the employer,
    1. As necessary, asterisk (*) and line through the in care of street and edit below the in care of name, or edit the in care of street address below the in care of name, if located on an attachment.

      Exception:

      Do not asterisk (*) on Form 940-PR returns.

    2. Edit an asterisk (*) to the left and line through the business address and input TC 014.

      Exception:

      Do not asterisk (*) on Form 940-PR returns.

    3. Continue editing the return.

  3. If the taxpayer crosses out the original "in care of name" , or adds a new "in care of name" , they are indicating that the "in care of name" has been changed.

    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.

    2. Continue editing the return.

    An "in care of name" is present and there is an indication of an address change,
    1. Edit the in care of name.

    2. Correct the address.

    3. Continue to process the return.

♦Entity Perfection - Domestic Addresses♦

  1. Perfection of the address is necessary when the mailing address (Street or P.O. Box) is not easily identified. For a list of correct street abbreviations, see Document 7475.

    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. If the return requires that the city, state, or ZIP Code be changed, edit an asterisk (*) to the left, line through the incorrect entity, and enter the correction in the entity where space allows.

  4. The procedures for perfection of addresses are as follows:

    IF AND THEN
    The address is blank or incomplete on the return or attachment,  
    1. Research IDRS.

    2. If found, edit to the proper location.

    3. If not found, leave blank to allow the return to fallout to ERS.

    The address contains information other than a street address or P.O. Box,   No perfection is necessary. ISRP or SCRIPS 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, Change of Address, or Form 8822-B, Change of Address for Business is attached, All of the following applies:
    • Mailing address information is the same,

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

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

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

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

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

    Detach Form 8822 or Form 8822-B and route to Entity following local procedures using Form 13934, Merge Sheet.
    Both a P.O. Box and a street address are shown,  
    1. Edit an asterisk (*) to the left and line through the street address.

      Exception:

      Do not asterisk (*) on Form 940-PR returns instead circle the street address.

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

    3. Input "TC 014"

    Two street addresses are shown,  
    1. Edit an asterisk (*) to the left and line through the second street address.

      Exception:

      Do not asterisk (*) on Form 940-PR returns instead circle the second street address.

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

    3. Input TC 014. See Exhibit 3.11.154-8, Entity Sate Codes and Zip Codes

    One street address is shown, Shows a change of the address to a P.O. Box,
    1. Edit an asterisk (*) to the left of the address, and if the taxpayer has not already done so, line through the street address.

      Exception:

      Do not asterisk (*) on Form 940-PR returns instead circle the street address.

    2. Notate "TC014" in the upper left margin.

    3. Input "TC 014" See Exhibit 3.11.154-9, U.S. Possessions Zip Codes.

    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 return.
    [For ISRP returns only] The ZIP Code is missing or illegible, Is not available from the return or attachments, See Exhibit 3.11.154-8, Entity Sate Codes and Zip Codes.
    Only the first three digits of the ZIP Code can be determined,   Edit "01" for the fourth and fifth digits.

    Figure 3.11.154-7

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    Please click here for the text description of the image.

    Figure 3.11.154-8

    This is an Image: 33581743.gif
     

    Please click here for the text description of the image.

    Note:

    Always asterisk (*) to the left and line through the "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.

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

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

♦Entity Perfection - Foreign Addresses♦

  1. A foreign (international) address is any address that is not one of the 50 U.S. states, or the District of Columbia.

  2. Returns with APO/DPO or FPO addresses are considered domestic addresses. See IRM 3.11.154.5.5, Entity perfection - Domestic Addresses.

    Note:

    All returns with a Foreign Address should be processed through ISRP at the Ogden Submission Processing Center. If the return is batched for SCRIPS processing, after editing, pull the return from the batch and request the return be batched for ISRP processing. If numbered take the necessary steps to cancel the DLN.

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

  4. Returns with addresses in the following U.S. Possessions are considered to be a foreign address 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 ABBREVIATION
      American Samoa AS
      Federated States of Micronesia FM
      Guam GU
      Marshall Islands MH
      Northern Mariana Islands MP
      Palau PW
      Puerto Rico PR
      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 3.11.154-9, U.S. Possession 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. Edit an asterisk (*) and line through the foreign country. Then, edit the country code preceded by a "/" and followed by "/$" . See Exhibit 3.11.154-10, Foreign Country Codes.

      Exception:

      Do not asterisk (*) on Form 940-PR returns instead circle the foreign country.

    3. A unique country code will be edited for returns filed with an address in Canada. See IRM 3.11.154.5.7, County Code - Canada.

    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 name is present, Edit the appropriate province, state, or territory abbreviation. See Exhibit 3.11.154-11, Province, Foreign Sate, and Territory Abbreviations.
      A province, state or territory is not present, Continue editing the return.
      Province, state or territory is shown in abbreviated format, Continue editing the return.
    5. A ZIP Code is not required on a foreign address. Foreign addresses use a postal code that is entered before the city or foreign country and is part of the address.

Country Code - Canada

  1. 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/territory.

    IF THEN
    The foreign address contains a Canadian Province/Territory name, or abbreviation shown in the table below,
    1. See table below to ensure the correct Canadian Province/Territory is present or edited on the return. If incorrect edit an asterisk (*) to the left and line through the country name.

      Exception:

      Do not asterisk (*) on Form 940-PR returns instead circle the country name.

    2. 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 or abbreviation shown in the table below,
    1. Edit an asterisk (*) and line through the country name.

      Exception:

      Do not asterisk (*) on Form 940-PR returns instead circle the country name.

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

    Canadian Province/Territory Province/Territory 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

♦Entity State Codes♦

  1. An Entity State Code is required on ALL Form 940.

    Exception:

    "G" coded returns (Amended) or, an entity containing an International address other than Puerto Rico or one of the U.S. Possessions or Territories see IRM 3.11.154.5.6, Entity perfection - Foreign Addresses.

  2. Perfect the Entity State code as follows:

    IF THEN
    The State code is present and in a 2 digit format (e.g., "MT" for Montana), No action is necessary.
    The State is spelled out in full, No action is necessary.
    No State or State code is present in the entity portion of the return,
    1. Search return and attachments for State code.

    2. If found, edit to the entity section.

    3. If not found, research IDRS.

      Note:

      Revisions 2006 and subsequent: The state code in on Form 940 or Form 940-PR, Box 1a can be used ONLY if one state is present.
      Revision 2005 and prior: The state code shown on Form 940, Part II, Line 3a can be used if ONLY one state is present.

    A return is filed with a foreign address,
    1. CSPC ONLY --Route to OSPC. See IRM 3.11.154.5.6, Entity perfection - Foreign Addresses

    2. OSPC ONLY -Edit country code. See Exhibit 3.11.154-10, Foreign Country Codes.

Form 940 and Form 940-PR - Code and Edit Return Procedures

  1. For editing Form 940 or Form 940-PR follow procedures below:

    1. See IRM 3.11.154.2.1, Coding and editing Returns.

    2. See IRM 3.11.154.2.16, Third Party Designee Returns.

    3. See IRM 3.11.154.2.18, Signature.

    4. See IRM 3.11.154.2.19, Tax Period.

    5. See IRM 3.11.154.3.3, Received Date.

    6. See IRM 3.11.154.3.5, Indian Tribal Government Procedures.

    7. See IRM 3.11.154.3.6, Statue Returns.

    8. See IRM 3.11.154.5, Entity Perfection.

    9. If the return is a 2005 and prior revision see IRM 3.11.154.7, Form 940- Revision 2005 and Prior and follow all instructions in this IRM section that apply.

"Type of Return" Boxes

  1. The "Type of Return" box can be found in the upper right hand corner, to the right of the entity area on Form 940 (Rev. 2006 and subsequent):

    • See Exhibit 3.11.154-1, Form 940 (Revision 2017) and Form 940 Schedule A (Revision 2017)

    • See Exhibit 3.11.154-2, Form 940-PR (Revision 2017) and Form 940 Schedule A-PR (Revision 2017).

    IF THEN
    Box "a" is checked The taxpayer is indicating this is an amended return. See IRM 3.11.154.3.7, Amended Returns to determine if a CCC "G" should be edited.
    Box "b" is checked, The taxpayer is indicating they are entitled to special credits as a successor employer and have based their calculations on that fact. Edit CCC "5" .
    Box "c" is checked, See IRM 3.11.154.2.9.13, CCC "9" - No Payments to Employees - Revisions Year 2006 and Subsequent to determine if a CCC "9" should be edited.
    Box "d" is checked, See IRM 3.11.154.2.9.2, CCC "F" - Final Return to determine if CCC "F" should be edited.
    The taxpayer does not check a box, but indicates on the return or on an attachment that any of the four boxes applies to the return,
    1. Enter the appropriate Computer Condition Code.

    2. Check the box, as applicable.

    A box is marked erroneously, Place an asterisk (*) as closely as possible to the left of the box.
    An example of

    Example:

    A box that would be considered to be marked erroneously would be a return that the taxpayer has marked "Amended." However, Code and Edit receives the return with a "TC 599" notation on the return. Since returns notated "TC 599" cannot be "G" coded, the check box must be deleted.

Part 1, Line 1 through Line 2 -Tell Us About Your Return

  1. Form 940 and Form 940-PR-, Part 1 allows the employer to indicate whether:

    • They have been paying wages to employees in only one state, or

    • They have been paying wages to employees in more than one state, and

    • The state, or any of the multiple states, was identified as a "Credit Reduction" state for the tax period (year) of the return. See IRM 3.11.154.6.2.1, Box "1a" (Single State Filer), Box "1b" (Multi State Filer), Box "2" (Subject to Credit Reduction).

    • See Exhibit 3.11.154-1, Form 940 (Revision 2017) and Form 940 Schedule A (Revision 2017).

    • See Exhibit 3.11.154-2, Form 940-PR (Revision 2017) and Form 940 Schedule A-PR (Revision 2017).

Box "1a" (Single State Filer), Box "1b" (Multi-State Filer), and Box "2" (Subject to Credit Reduction).
  1. Employers who paid Federal taxable wages in only one state are considered to be "Single State" filers and should enter in Box "1a" the abbreviation of the state in which the Federal unemployment taxable wages were paid. See Exhibit 3.11.154-7, State Abbreviations.

    Note:

    "G" coded returns are not edited.

  2. Employers who paid Federal taxable wages in more than one state or territory are considered to be "Multi-State" filers and should mark Box 1b. A completed Form 940 Schedule A indicate which of the 50 US States, District of Columbia, Puerto Rico or US Virgin Islands employee wages were paid should be filed with the return. For an explanation of Form 940 Schedule A, see IRM 3.11.154.6.9, Form 940 Schedule A, and Form 940 Schedule A-PR (Puerto Rican Version), Multi - State Employer and Credit Reduction Information.

    1. Mark Box 2 if not marked to indicate a Schedule A is required.

  3. All employers who have paid employee wages in a "credit reduction state" for the tax year should check Box "2" and file a completed Form 940 Schedule A or Form 940 Schedule A-PR with their return. See IRM 3.11.154.6.9, Form 940 Schedule A and Form 940 Schedule A-PR (Puerto Rican version), Multi - State Employer and Credit Reduction Information.

    Exception:

    Credit Reduction is not applicable to IRC 6020(b) returns, Early-Filed returns, non-taxable returns, or on returns claiming a Line 9 amount.

    Note:

    For tax years 2004 - 2017, there were Credit Reduction states. See Exhibit 3.11.154-14, Credit Reduction States and Rates (TY2004 - 2017)

    .

  4. If Box "1a" and/or Box "1b" , and/or Box "2" , Is or Is not marked examine the return and attachments to determine the proper boxes that would be marked:

    1. If return is taxable and Box 1a contains an entry, or an attachment or Form 940 Schedule A indicates the taxpayer is a single state filer,

      IF THEN
      The entry is not a valid state code or
      the attachment or the Form 940 Schedule A indicates the entry is not a valid state code,

      See Exhibit 3.11.154-8, Entity State Codes and Zip Codes.
      1. Edit an asterisk (*) to the left of Box 1a, and to the left of the asterisk (*), edit the valid state code from the entity.

        Exception:

        If the state code in the entity portion of the return is AA, AE, AP, AS, FM, GU, MH, MP, or PW, or a foreign country, do not edit the state code.

      The entry is a valid state code or the attachment indicates a valid state code,

      See Exhibit 3.11.154-8, Entity State Codes and Zip Codes.
      Determine if the state code is a valid Credit Reduction state. See Exhibit 3.11.154-14, Credit Reduction States and Rates (2004 - 2017) for a list of valid Credit Reduction states.
      1. If the state code is not a valid Credit Reduction state:

        • Edit an asterisk (*) to left of box 1b if marked.

        • Edit an asterisk (*) to the left of Box 2 if marked.

        • Slash (/) across the attachment or the Form 940 Schedule A.

      2. If the state code is a valid Credit Reduction state:

        • If Form 940 Schedule A is not attached, See IRM 3.11.154.6.9.1, Preparing a "Dummy" Form 940 Schedule A.

        • Edit an asterisk (*) to left of Box 1b if marked.

        • Edit a mark in Box 2 If not marked.

      If box 1a. is a Credit Reduction State and Box 1b. is blank,
      1. If Form 940 Schedule A or an attachment lists a different single State Code:

        • Delete the State Code on Form 940 Schedule A

        • Check the State Code from Box 1a on Form 940

        • Edit a mark in Box 2 if not marked.

      If box 1a. is not a Credit Reduction State and Box 1b. is blank, If Form 940 Schedule A or an attachment lists a different single state code, delete the Form 940 Schedule A.
    2. If return is non-taxable Box 1a contains an entry, or an attachment indicates the taxpayer is a single state filer,

      IF THEN
      The entry is not a valid state code or
      the attachment indicates the entry is not a valid state code,

      See Exhibit 3.11.154-8, Entity Sate Codes and Zip Codes.
      Determine if the entity state code is a valid Credit Reduction state. See Exhibit 3.11.154-14, Credit Reduction States and Rates (2004 - 2017) for a list of valid Credit Reduction states.
      1. If the entity state code is not a Credit reduction state:

        1. Edit an asterisk (*) to the left of Box 1a, and to the left of the asterisk (*), edit entity state code:

          Exception:

          If the state code in the entity portion of the return is AA, AE, AP, AS, FM, GU, MH, MP, or PW, or a foreign country, do not edit the entity state code.

        • Edit an asterisk (*) to left of Box 1b if marked.

        • Edit an asterisk (*) to the left of Box 2 if marked.

      2. If the entity state code is a Credit Reduction state:

        • Edit an asterisk (*) to the left of Box 1a, and to the left of the asterisk (*) edit ZZ.

        • Edit an asterisk to the left of Box 1b if marked.

        • Edit an asterisk (*) to the left of Box 2 if marked.

      The entry is a valid state code or the attachment indicates a valid state code,

      See Exhibit 3.11.154-8, Entity Sate Codes and Zip Codes.
      Determine if the state code is a valid Credit Reduction state. See Exhibit 3.11.154-14, Credit Reduction States and Rates (2004 - 2017) for a list of valid Credit Reduction states:
      1. If the state code is not a Credit reduction state:

        • Edit an asterisk to left of Box 1b if marked.

        • Edit an asterisk (*) to the left of Box 2 if marked.

      2. If the state code is a Credit Reduction state:

        • Edit an asterisk (*) to the left of Box 1a, and to the left of the asterisk (*) edit ZZ.

        • Edit an asterisk (*) to the left of Box 1b if marked.

        • Edit an asterisk to the left of box 2 if marked.

    3. Box 1b, is or is not marked, or an attachment or Form 940 Schedule A indicates the taxpayer is a multi state filer,

      IF THEN
      Box 1a does or does not have entry and Box 1b is marked
      1. If multi-states are present on Form 940 Schedule A:

        • Edit an asterisk (*) to the left of Box 1a entry.

        • Mark Box 1b if not marked.

        • Mark Box 2, if not marked.

        • Check the appropriate state box for each state including the state originally shown in Box 1a.

      2. If multi-states are listed on an attachment and Form 940 Schedule A is not attached:

        • Prepare a dummy Form 940 Schedule A.

          Note:

          See IRM 3.11.154.6.4.3(1), Line 11 - Credit Reduction for a list of filing conditions which waive the Form 940 Schedule A requirement.

        • Check the appropriate state box for each state including the state originally shown in Box 1a.

        • Edit an asterisk (*) to the left of Box 1a entry if not present.

        • Mark Box 1b, if not marked.

        • Mark Box 2, if not marked.

      Box 1a does not have entry and Box 1b is not marked,
      1. If multi-states are shown on Form 940 Schedule A:

        • Mark Box 1b if not marked.

        • Mark Box 2, if not marked.

      2. If multi-states are listed on an attachment and Form 940 Schedule A is not attached:

        • Prepare a dummy Form 940 Schedule A.

          Note:

          See IRM 3.11.154.6.4.3(1), Line 11 - Credit Reduction for a list of filing conditions which waive the Form 940 Schedule A requirement.

        • Check the appropriate state box for each state including the state originally shown in Box 1a.

        • Mark Box 1b, if not marked.

        • Mark Box 2, if not marked.

    4. If Box 1b, is marked and Form 940 Schedule A is not attached and there is no attachment identifying the multi-states is attached to the return, then take no action and continue processing the return.

Part 2, Line 3 through Line 8 - Determine Federal Unemployment TAX (FUTA) Before Adjustments

  1. Part 2 on Form 940 and Form 940-PR, Revision 2006 - 2017, is comprised of lines 3 through 8.

Line 3 - Total Payments to All Employees
  1. The taxpayer will enter the amount of total payments made to all employees on Line 3, Total Payments to Employees.

    IF THEN
    The taxpayer enters the same amount on Line 3 and Line 5, Edit an asterisk (*) on Line 5 to make the return generate to Error Resolution.
Line 4 - Payments Exempt from FUTA Tax
  1. The taxpayer will enter on Line 4 the total of all exempt payments, if any.

    IF THEN
    Lines 4, 5, and 6 are identical significant entries other than zero, blank, etc., SSPND 211 and correspond for correct entries using open paragraph "Z" on Letter 142C.
    Lines 4, 5, and 6 all have zero, blank, etc., entries, but there are entries with significant amounts other than zero, blank, etc., on Line 7 (or 7a) and/or Line 8, Accept Lines 4, 5, and 6 being zero, blank, etc. Do not correspond to verify or secure the correct entries.
Line 5 - Total Payments to Employees in Excess of $7,000
  1. The taxpayer will enter the amount of total payments made to employees in excess of $7,000.

    IF THEN
    The taxpayer enters the same amount on Line 3 and Line 5, Edit an asterisk (*) on Line 5 to make the return generate to Error Resolution.
Line 6 - Subtotal
  1. Line 6 is the total sum of Lines 4 and 5 amounts.

    IF THEN
    There is no entry on Line 4 or Line 5, but there is an entry on Line 6, Accept the taxpayer's entry on Line 6. Do not correspond.
    If Line 6 is greater than Line 3, Correspond with the taxpayer using Form 12522 (Letter 142C, or local letter as permitted) requesting the correct amounts for line 3, line 4, line 5, and line 6.

    Note:

    The total of exempt and excess payments (Line 4 and Line 5) cannot exceed total payments to employees, (Line 3).

Line 7 (Line 7a Revision 2011) - Total Taxable FUTA Wages
  1. If amount is or is not present on line 7 do the following:

    IF THEN
    If there is an entry on Line 3 (Total Payments) and Lines 4 through 6 show an entry, such as, a "0" (zero), dash"-" or "None" written on the line, Edit the amount from Line 3 to Line 7 (or Line 7a, Rev 2011)
    Line 3 and Line 7 (Rev 2012 - 2017 or 2010 and prior) or Line 7a, (Rev 2011) have no entries (blank),
    1. Tax Year 2012 - 2017 or 2010 and prior:

      • Review the return and attachments for an indication by the taxpayer; e.g., "Final" , "Out of Business" , "No Activity" , etc.

      • If there is no indication, continue to process the return.

      • If the taxpayer filed any Tax Year other than a 2011 on a Revision 2011 Form 940, place an asterisk (*) to the left of any entry on Line(s) 7b or 7d.

      • If it appears the entry (or entries) were included in the Tax Before Adjustments, line 8, continue to process the return.

    2. Tax Year 2011:

      • Review the return and attachments for an indication by the taxpayer; e.g., "Final" , "Out of Business" , "No Activity" , etc.

      • If there is no indication, continue to process the return.

    Line 7 (Rev 2012 - 2017 or 2010 and prior) or line 7a, (Rev 2011) is blank or zero because Line 6 equals Line 3,
    1. Tax Year 2012 - 2017 or 2010 and Prior:

      • The return may be Non-taxable. See IRM 3.11.154.3.4, Non-Taxable Returns.

      • If the taxpayer filed any Tax Year other than 2011 on a Revision 2011 Form 940, place an asterisk (*) to the left of any entry on Line(s) 7b or 7d.

      • If it appears the entry (or entries) were included in the Tax Before Adjustments, line 8, continue to process the return.

    2. Tax Year 2011:

      • The return may be Non-taxable. See IRM 3.11.154.3.4, Non-Taxable Returns.

Line 7b, - FUTA Wages Paid Before 7/1/2011
  1. Line 7b, is FUTA Wages paid before 07/01/2011 from line 7a, Total Taxable FUTA Wages paid:

    1. IF AND THEN
      Line 7b was not on the form revision, The return is a revision 2012 and subsequent 2010 and prior,
      1. Tax Year 2012 - 2017, or 2010 and prior, take no action and continue to process the return as normal.

      2. Tax Year 2011 take no action and continue to process the return as normal.

      Line 7b does not have an entry or the entry is "None", zero (0), etc., Revision 2011,
      1. Tax Year 2012 - 2017, or 2010 and prior, take no action and continue to process the return as normal.

      2. Tax Year 2011:

        • Review the return and attachments for the line 7b amount.

        • If an amount for line 7b cannot be determined, take no action and continue to process the return as normal.

        • If an amount for line 7b can be determined, edit the amount to the left of line 7b.

          Note:

          Do not calculate line 7c, or the tax on line 8.

      Line 7b contains a significant entry, Revision 2011 - for Tax Year 2017 and subsequent or 2010 and prior, Asterisk (*) the entry on lines 7b and 7d.
      Line 7b contains a significant entry, Revision 2011 - for Tax Year 2011, No action is required, Continue to edit the remainder of the return.
Line 7d - FUTA Wages Paid After 06/30/2011
  1. Line 7d, is FUTA Wages paid after 06/30/2011 from line 7a, Total Taxable FUTA Wages paid:

    IF AND THEN
    Line 7d was not on the form revision, Revision 2012 - 2017, or 2010 and prior,
    1. Tax Year 2012 - 2017, or 2010 and prior, take no action and continue to process the return as normal.

    2. Tax Year 2011, take no action and continue to process the return as normal.

    Line 7d does not have an entry or the entry is "None", zero (0), etc., Revision 2011,
    1. Tax Year 2012 - 2017, or 2010 and prior, take no action and continue to process the return as normal.

    2. Tax Year 2011:

      • Review the return and attachments for the line 7d amount.

      • If an amount for line 7d cannot be determined, take no action and continue to process the return as normal.

      • If an amount for line 7d can be determined, edit the entry to the left of line 7d.

        Note:

        Do not calculate line 7e, or the tax on line 8.

    Line 7d contains a significant entry, Revision 2011 for Tax Year 2012 - 2017, or 2010 and prior,
    1. Asterisk (*) the entry on lines 7d and 7b.

    2. If there is no entry in box 7e, take no action.

    Line 7d contains a significant entry, Revision 2011 for Tax Year 2011, No action is required, Continue to edit the remainder of the return.
Line 8 - FUTA Tax Before Adjustments
  1. If an amount is or is not present on line 8, do the following:

    IF THEN
    Line 8 is blank, "0" or "none" , Do not compute or edit an amount on line 8.
    Line 8 is illegible, Asterisk the illegible entry.
    The entry is a negative number, Asterisk the negative entry.

Part 3, Line 9 through Line 11 - Determine Your Adjustments

  1. Part 3 contains the taxpayers amounts for Adjustments and Credit Reduction lines 9, 10, and 11.

Line 9 - All Wages Paid Excluded from State Unemployment Tax
  1. Line 9 is taxpayers entry for All Taxable FUTA Wages paid excluded from state unemployment tax:

    IF THEN
    There are significant entries on both Line 9 and Line 10 There cannot be an entry also on Line 10. Enter an asterisk (*) as closely as possible to the left of the entry on Line 10.
    There are significant entries on both Line 9 and Line 11 There cannot be an entry on Lines 9 and 11, even if credit Reduction applies:
    • Asterisk (*) the entry on line 11.

    • Do not check box 2 if blank.

    • Asterisk (*) box 2 if marked.

    • Do not dummy a Form 940 Schedule A if not present.

    • If Form 940 Schedule A is present and contains only one credit reduction state, edit a slash through the Form 940 Schedule A.

    The line 9 entry is equal to:
    1. The total of some or all of the previous lines above Line 9, or

    2. The taxpayer's Line 12 entry,

    Asterisk (*) out the line 9 entry.
Line 10 - Some FUTA Wages Paid Excluded from State Unemployment Tax, or
State Unemployment Tax Was Paid Late
  1. Line 10 is taxpayers entry for Some Taxable FUTA Wages paid excluded from state unemployment tax or state unemployment tax paid late:

    IF THEN
    Both Line 9 and Line 10 have entries, There cannot be an entry on line 10. Enter an asterisk (*) as closely as possible to the left of the entry on line 10.
Line 11 - Credit Reduction
  1. If FUTA wages are paid to an employee, or to employees, in at least one state subject to Credit Reduction, or in multiple states, the employer must file a Form 940 Schedule A (Rev 2011 or subsequent) with their return.

    Exception:

    Credit Reduction should not be computed for non-taxable returns, (i.e., line 5 equals line 3), early filed returns, IRC 6020(b) returns, or for return claiming an amount on line 9. For those returns Line 11 should not contain an amount. If an amount was entered on Line 11, edit an asterisk (*) to the left of the entry of Line 11.

  2. If the taxpayer does not attach a Form 940 Schedule A, (when required), or the Form 940 Schedule A filed with the return is blank, or missing, Code and Edit should review the return and any attachments for an indication of the states in which employees were paid, and for the wage amount(s) paid in each state.

    IF AND THEN
    Both the state code and the associated FUTA Taxable Wages amount paid in each state to employees have been identified by the taxpayer, None of the following conditions exist:
    • Has a valid entry on line 9, see IRM 3.11.154.6.4.1, Line 9 - All Wages Paid Excluded From State Unemployment Tax.

    • Is a non-taxable return, see IRM 3.11.154.3.4, Non - Taxable Returns.

    • Is an early-filed return. see IRM 3.11.154.2.20, Early Filed Returns.

    • Is filed under IRC 6020(b) see IRM 3.11.154.3.8.1, IRC 6020(b) Prepared by Collections.

    See IRM 3.11.154.6.9.1, Preparing a Dummy Form 940 Schedule A.
    Both the state code and the associated FUTA Taxable Wages amount paid in each state to employees has not been identified by the taxpayer, The return is not a taxable return, Take no action.
    Either the state code and the associated FUTA Taxable Wages amount paid in each state to employees has not been identified by the taxpayer,   Take no action.

    Exception:

    Though a return may indicate wages paid in one or more states, Credit Reduction should not be computed for non-taxable returns, (i.e., line 5 equals line 3), early filed returns, IRC 6020(b) returns, or for returns claiming a Line 9 amount. For those returns, Line 11 should not contain an amount. If an amount was entered to Line 11, edit an asterisk (*) to the left of Line 11.

Part 4, Line 12 through 15 - Determine Your FUTA Tax and Balance Due or Overpayment

  1. In Part 4 of Form 940 or Form 940-PR, the taxpayer calculates the total FUTA tax for the return tax year, applies any payments, deposits, or overpayments from a prior year against the calculated FUTA tax, and determines the balance due or overpayment amount.

Line 12 - Total FUTA Tax After Adjustments
  1. Line 12, Total FUTA Tax After Adjustments, is taxpayers for Federal Unemployment Tax (FUTA) after adjustments.

    IF THEN
    Line 12 is "zero" blank, dash or none, Edit the total of Lines 8, 9, 10, and 11 to Line 12.
    Line 12, Line 13, and Line 14 are the same amount, Edit an asterisk (*) to the left of the entry on line 13.
    The entry is a negative number, Enter an asterisk (*) as closely as possible to the left of the entry on Line 12.
Line 13 - FUTA Tax Deposit
  1. The amount in Line 13 should be the total amount of FUTA tax deposited for the year of the return. This amount should also include any credit elect applied from a prior tax year.

    IF THEN
    Line 13 is blank (zero, dash, none, illegible, etc), Search return and attachments for the Line information:
    • If Line 13 can be perfected from return or attachment, enter amount to Line 13.

    • If Line 13 cannot be perfected from return or attachment, leave blank.

    The entry is a negative number, Enter an asterisk (*) as closely as possible to the left of the entry on Line 13.
  2. If the return shows excess credit (remittance or FTD) and the taxpayer requests the credit to be transferred to another type of tax do the following:

    • Edit CCC “X”.

    • Prepare Form 3465. (Part 4, Line 13 (2006 and Subsequent)) or (Part II, Line 8 (2005 and prior)).

    • Photocopy related materials and attach to Form 3465.

    • Route to BMF Accounts Management.

Line 14 - Balance Due
  1. If any amounts are or are not present on lines 12, 13, or 14, do the following:

    IF THEN
    Line 12, Line 13, and Line 14 are the same amount, Edit an asterisk (*) to the left of the entry on line 13.
    Line 12 is more than line 13, and line 14 is blank or illegible,
    1. Perfect line 14 by subtracting line 13 from line 12.

    2. If line 13 is blank, dash, zero, None, etc., edit line 12 to line 14.

    The return shows an FTD Penalty, Subtract the FTD penalty amount from the Line 14 balance due amount.
Line 15 - Overpayment
  1. If an amount is or is not present on line 15, do the following:

    IF THEN
    Line 13 is more than Line 12, The difference should be entered on Line 15.
    Line 15 is zero (0), blank, dash, None, N/A, or illegible, and line 13 is more than line 12,
    1. Subtract line 13 from line 12.

    2. Edit the difference to line 15.

    The return shows a FTD Penalty, Add the FTD penalty to the overpayment.

Part 5, Line 16 through Line 17 - Reporting of Quarterly Federal Unemployment Tax Liability (ROFTL)

  1. Part 5 of Form 940 and Form 940-PR consists of Lines 16a through 16d, the Record of Tax Liability (ROFTL) quarterly liability amounts, and Line 17, "Total Tax Liability for the Year" amount. The quarterly amounts on Lines 16a through Line 16d are transcribed, and Line 17 is generated by the system (e.g., not transcribed).

    IF AND THEN
    The SIC 1 has been edited,   No further editing is necessary to Part 5, Form 940 or Form 940-PR.
    Line 16d (fourth quarter is blank, Line 12 is larger than the sum of Lines 16a through 16c, Edit the difference between Line 12 and the sum of Lines 16a through 16c to Line 16d.
    The taxpayer entered a negative figure in any quarter of the liability fields on Lines 16a through 16d,   Enter SIC "1" and see IRM 3.11.154.6.6.1, Schedule Indicator Code (SIC).
    The taxpayer entered FUTA wages on Lines 16a through 16d and/or the Total FUTA Wages on Line 17, Line 7 (Rev 2012 - 2017 or 2006 - 2010) or Line 7a, (Rev 2011) is the same amount as Line 17, (or the total of Lines 16a through 16d), and

    Line 12 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ,
    1. For Tax Year 2012 - 2017 or 2006 - 2010:

      • Multiply each wage amount on Line(s) 16a through 16d by .006 (.008 for Tax Year 2006 - 2010).

      • Enter an asterisk (*) to the left of the taxpayer entry and enter the corrected figure to the left of the asterisk (*). See Exhibit 3.11.154-9, U.S. Possession Zip Codes.

    2. Tax Year 2011:

      • Enter an asterisk (*) to the left of the taxpayer entry on Line 16a and Line 16b. Multiply the wage amounts on Line 16a and Line 16b by .008.

      • Enter an asterisk (*) to the left of the taxpayer entry on Line 16c and Line 16d. Multiply those wage amounts on Line 16c and Line 16d by .006. See Exhibit 3.11.154-10, Foreign Country Codes.

      • Do not calculate a new amount for Line 17. It is not a transcribed line. The total deposits are generated.

    Figure 3.11.154-9

    This is an Image: 33581744.gif
     

    Please click here for the text description of the image.

    Figure 3.11.154-10

    This is an Image: 33581700.gif
     

    Please click here for the text description of the image.

    Figure 3.11.154-11

    This is an Image: 33581745.gif
     

    Please click here for the text description of the image.

Schedule Indicator Code (SIC)
  1. The Schedule Indicator Code (SIC) is used to notify the computer that the quarterly federal tax liability for Unemployment Tax (ROFTL) in Part 5 is incomplete or unnecessary.

  2. Edit SIC Code "1" when:

    1. Line 12 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    2. The ROFTL total is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    3. There is a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ in the ROFTL.

    4. The ROFTL is blank.

    5. Line 17 ROFTL total has an entry, but there are no quarterly liability amounts present.

    6. The difference between Line 12 and the Total ROFTL Line 17 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

  3. When SIC "1" is edited, the computer determines if a Federal Tax Deposit (FTD) penalty should be assessed based on a quarterly average of the total liability for the year. Edit the SIC Code in the following locations:

    FORM TYPE LOCATION
    Form 940 (Revision 2006 and subsequent) On Page 1, to the right of the Part 1 line. See Exhibit 3.11.154-1, Form 940 (Revision 2017) and Form 940 Schedule A (Revision 2017).
    Form 940-PR (Revision 2006 and subsequent) On Page 1, to the right of the Parte 1 (Part 1) line. See Exhibit 3.11.154-2, Form 940-PR (Revision 2017) and Form 940 Schedule A-PR (Revision 2017).

Part 6 - Third Party Designee

  1. See IRM 3.11.154.2.16, Third Party Designee.

Part 7 - Signature Area

  1. Part 7 of Form 940 and Form 940-PR- consists of an area on Page 2 for the taxpayer to sign the return, date the return, indicate their title, and provide a daytime phone number. The signature must appear in the "Sign your name here" box, or on the "Signature" line. See IRM 3.11.154.2.18, Signature.

  2. Below the signature area on Page 2, Form 940 and Form 940-PR is a designated area for Paid Preparer information. See IRM 3.11.154.2.17, Paid Preparer Section.

Form 940 Schedule A and Form 940 Schedule A-PR (Puerto Rican Version), Multi - State Employer and Credit Reduction Information

  1. Form 940 Schedule A shows the amount of taxable FUTA Wages paid to employees by state, provides the State taxable Credit Reduction rate, if any and provides a way for the employer to determine the total Credit Reduction amount for Line 11 of Form 940 and Form 940-PR. See Exhibit 3.11.154-14, Credit Reduction States and Rates (TY2004 - 2017).

    Exception:

    Credit Reduction should not be computed for non-taxable returns, (e.g., line 5 equals line 3), IRC 6020(b) returns, early filed returns, or returns claiming Line 9.

  2. On Form 940 Schedule A, if the box to the left of the state abbreviation is not checked, then check the box. Do not compute the Credit Reduction amount. Allow the return to fall out to ERS who will compute any Credit Reduction.

    IF THEN
    The entire Form 940 Schedule A should be deleted, Edit a slash (/) across the Form 940 Schedule A.
    The Form 940 Schedule A is attached for a single state, and Box 1a contains an entry,
    1. Compare the Box 1a entry to the Form 940 Schedule A to ensure the same state is shown. Correct any transcription errors made in Box 1a. See Exhibit 3.11.154-14, Credit Reduction States and Rates (2004 - 2017) to determine if its a valid Credit Reduction state.

    2. If the state is not a Credit Reduction state, and no other states are marked, draw a slash (/) across the Form 940 Schedule A to delete it.

    3. If the state code shown or entered in Box 1a is not the state marked on Form 940 Schedule A, then place an asterisk (*) to the left of the state checked on Form 940 Schedule A, and mark the box for the correct state.

    4. If the state is a Credit Reduction state, mark Box 2, if blank.

    5. If the same state is indicated on Form 940 Schedule A, continue to process.

    An attached Form 940 Schedule A indicates a single state, but Box 1a is blank or illegible,
    1. Enter the correct state code for the state indicated on Form 940 Schedule A in Box 1a.

    2. Determine if the state on Form 940 Schedule A is a Credit Reduction state for the Form 940 tax year being filed. See Exhibit 3.11.154-14, Credit Reduction States and Rates (2004 - 2017):

      • If the state is a Credit Reduction state, mark Box 2, if blank.

      • If the state is not a Credit Reduction state, and no other states are marked, draw a slash (/) across the Form 940 Schedule A to delete it.

    Form 940 Schedule A is attached, and multiple states are marked, Mark box 1b if not marked.
    Multiple Form 940 Schedule A’s are attached,
    1. If the state codes for all Schedules are the same and wages for all Schedules are different, Then edit the combined amount of all Schedules Taxable Wages on to the first Schedule attached and slash the additional Schedules.

    2. If the state codes for all Schedules are not the same, then edit all states code and Schedule Taxable Wages on to the first Schedule attached and slash the additional Schedules.

    Form 940 Schedule A is not attached, but Form 940 or an attachment indicates the taxpayer is a multi-state filer, e.g., Box 1b checked, multiple states are listed for the current tax year on a Form 940 page from a prior year revision, an attachment to a correct revision Form 940 indicating the multiple states, etc. See IRM 3.11.154.6.9.1, Preparing a "Dummy" Form 940 Schedule A.
    Box 1a contains a valid state code and Box 1b is checked,
    1. If the only state checked on Form 940 Schedule A is the state shown in Box 1a:

      • Determine if the state on Form 940 Schedule A is a Credit Reduction state for the return tax year (See Exhibit 3.11.154-14, Credit Reduction States and Rates (2004 - 2017)

      • If the state is a Credit Reduction state, no action is needed on the Form 940 Schedule A. Edit an asterisk (*) to the left of the entry in Box 1b. If Box 2 was not checked, check Box 2.

      • If the state marked on Form 940 Schedule A is not a Credit Reduction state, edit a slash through the entire Form 940 Schedule A. Also, edit an asterisk (*) to the left of the entry in Box 1b and Box 2 on the return, if checked.

    2. If Form 940 Schedule A shows multiple states:

      • Check that the state initially shown in Box 1a was also checked on Form 940 Schedule A. If not checked, then check the box of the state on Form 940 Schedule A.

      • Edit an asterisk (*) to the left of the state code Box 1a.

      • Check Box 1b on the return, if not checked.

      • Check Box 2 on the return, if not checked.

    3. If Form 940 Schedule A is not attached, but the return or attachments indicate the return is a multi-state filer:

      • See IRM 3.11.154.6.9.1, Preparing a "Dummy" Form 940 Schedule A.

    There is no entry in Box 1a or Box 1b.
    1. Examine the return, Form 940 Schedule A, and all attachments.

    2. If no states are listed:

      • Consider the taxpayer to be a single state filer. Edit the valid state code from the entity section of the return to Box 1a.

      • Determine if the state in the entity is a Credit Reduction state.

      • If the state is not a Credit Reduction state for the return tax year, no action is needed.

      • Schedule A is attached with no state codes or the state listed is not a credit reduction state, delete the Schedule A.

    3. If multiple Credit Reduction states are listed on an attachment see IRM 3.11.154.6.9.1, Preparing a "Dummy" Form 940 Schedule A (Rev 2017)

Preparing a "Dummy" Form 940 Schedule A
  1. Use the following instructions to prepare a “dummy” Form 940 Schedule A when required:

    Note:

    If a loose Form 940 Schedule A is received without a Form 940, forward the Form 940 Schedule A to Accounts Management.

    IF AND THEN
    The taxpayer is a Multi-State employer (i.e., multiple states are found listed on an attachment or elsewhere),

    Note:

    States can be any combination of Credit Reduction and non-Credit Reduction states.

     
    1. Dummy a current Form 940 Schedule A (2017 Rev.) as follows:

      • Enter the last 4 digits of the taxpayer’s EIN.

      • Check a box for each state indicated on the attachment, including the state shown in Box 1a if present.

      • Enter the FUTA Wage amounts, if available to the applicable column on Form 940 Schedule A for each state. Do not compute any credit reduction amounts.

    2. Edit Form 940 as follows:

      • Edit an asterisk (*) to the left of the state code in Box 1a if present.

      • Mark Box 1b if not marked.

      • Mark Box 2 if not marked.

    The taxpayer is a Single-State employer AND The state is subject to Credit Reduction,

    Note:

    If multiple Credit Reduction states are present, see the Multi-State employer instructions above.

    None of the following conditions exist:
    • has a valid entry on Line 9 see IRM 3.11.154.6.4.1, Line 9 - All Wages Paid Excluded From State Unemployment Tax.
    • is a non-taxable return see IRM 3.11.154.3.4, Non-Taxable Returns.
    • is an early-filed return see IRM 3.11.154.2.20, Early Filed Returns.
    • is filed as an IRC 6020(b) see IRM 3.11.154.3.8.1, IRC 6020(b) Prepared by Collections.
    1. Edit Form 940 as follows:

      • Edit an asterisk (*) to the left Box 1b if marked.

      • Mark Box 2 if not marked.

    2. Do not dummy a Form 940 Schedule A; it is not required.

    3. Do not calculate or edit Credit Reductions amounts or information.

    The taxpayer is a Single-State employer AND The state is subject to Credit Reduction,

    Note:

    If multiple Credit Reduction states are present, see the Multi-State employer instructions above.

    One or more of the following conditions exist:
    • has a valid entry on Line 9 see IRM 3.11.154.6.4.1, Line 9 - All Wages Paid Excluded From State Unemployment Tax.
    • is a non-taxable return see IRM 3.11.154.2.20, Non-Taxable Returns.
    • is an early-filed return see IRM 3.11.154.2.20, Early Filed Returns.
    • is filed as an IRC 6020(b) see IRM 3.11.154.3.8.1, IRC 6020(b) Prepared by Collections.
    1. Do not dummy a Form 940 Schedule A (2017 Rev.); it is not required.

    2. Do not calculate or edit Credit Reduction amounts or information.

    3. Edit Form 940 as follows:

      • Edit an asterisk (*) to the left of Line 11 if it contains an entry.

      • Edit an asterisk (*) to the left of Box 1b if marked.

      • Edit an asterisk (*) to the left of Box 2 if marked.

    4. If the return is non-taxable, also edit the following on Form 940:

      • If Line 1a is blank, edit "ZZ" in Box 1a.

      • If the taxpayer completed Box 1a, edit an asterisk (*) to the left of the entry in Box 1a and edit "ZZ" to the left of the asterisk.

    The taxpayer is a Single-State employer AND The state is NOT a Credit Reduction state,  
    1. Do not dummy a Form 940 Schedule A; it is not required.

    2. Edit Form 940 as follows:

      • Edit an asterisk (*) to the left of Box 1b if marked.

      • Edit an asterisk (*) to the left of Box 2 if marked.

    A Revision 2010 or prior Form 940 Schedule A is attached, The return has conditions requiring a Form 940 Schedule A, Replace the 2010 or prior Form 940 Schedule A Revision with a current Form 940 Schedule A 2017 Revision:
    1. On the Form 940 Schedule A 2017 revision to be dummied:

      • Enter the last 4 digits of the taxpayer’s EIN.

      • Mark the box to the left of each state which was indicated on the 2010 or prior Form 940 Schedule A revision.

      • Enter the FUTA Wage amounts, if available to the applicable column on Form 940 Schedule A for each state.

    2. On the 2010 or prior Form 940 Schedule A revision:

      • Delete the Form 940 Schedule A by editing a slash ( / ) through the entire page.

      • Place the deleted Form 940 Schedule A in order behind the dummied Form 940 Schedule A.

Form 940 - Revision 2005 and Prior

  1. General guidelines for editing returns.

Part I, Line 1 through Line 7 - Computation of Taxable Wages

  1. Form 940 - Part I should be completed by all filers. If Part I does not contain sufficient information to determine Line 5, Total taxable wages, correspond.

    Exception:

    It is not necessary to correspond to obtain Part I information from the taxpayer when they indicate "not liable" , zero, dash, all blank entries or "final return" and the return has been signed. We should consider taxpayer intent.

Line 1 - Total Payments
  1. Form 940 - Part I, Line 1 - Total Payments for Services of Employees:

    1. After editing the line number to current year line number format see IRM 3.11.154.6.3.1, Line 3 - Total Payments to All Employees.

    2. If the taxpayer does not respond, disallow the entry on Line 3.

Line 2 - Exempt Payments
  1. Form 940 - Part 1, Line 2, Exempt Payments:

    1. After editing the line number to current year line number format see IRM 3.11.154.6.3.2, Line 4 - Payments Exempt from FUTA Tax.

Line 3 - Excess Payment of More Than $7,000
  1. Form 940 - Part 1, Line 3, Excess Payment:

    1. After editing the line number to current year line number see IRM 3.11.154.6.3.3, Line 5 - Total Payments to Employees in Excess of $7,000.

Line 4 - Total Exempt Payments
  1. Form 940 - Part 1, Line 4, Total Exempt Payments:

    1. After editing the line number to current year line number see IRM 3.11.154.6.3.4, Line 6 - Subtotal.

Line 5 - Total Taxable Wages
  1. Form 940 - Part 1, Line 5, Total Taxable Wages:

    1. After editing the line number to current year line number format see IRM 3.11.154.6.3.5, Line 7 (Line 7a Revision 2011) - Total Taxable FUTA Wages.

Line 6 - Credit Reduction
  1. See IRM 3.11.154.6.9, Form 940 Schedule A and Form 940 Schedule A-PR (Puerto Rican Version), Multi-State Employer and Credit Reduction Information.

Line 7 - Total Credit Reduction
  1. See IRM 3.11.154.6.9, Form 940 Schedule A and Form 940 Schedule A-PR (Puerto Rican Version), Multi-State Employer and Credit Reduction Information (Puerto Rican Version) (Revision 2011 and Subsequent).

Part II, Line 1 through Line 10 - Tax Due or Refund

  1. This section contains instructions for Form 940, Part II.

Line 3(a) - Name of State
  1. If the state name is written out in its entirety, or shown in a format other than as a valid state code, edit the correct two character state code.

  2. If more than one state code is present on the return or attachments, attach a Form 940 Schedule A and mark the applicable state code boxes.

  3. Valid state codes, for purposes of unemployment tax, include all fifty states, the District of Columbia, Puerto Rico and the U.S. Virgin Islands. See Exhibit 3.11.154-7, State Abbreviations.

  4. "G" coded returns (Amended) are not edited.

  5. When processing a non - taxable return from a single state filer subject to credit reduction state, edit a "ZZ" State Code to Part II, Line 3(a).

  6. If the State Code is missing or illegible, edit the State used in the entity section of the return to Part II, Line 3(a).

  7. Edit a State Code only once, even if the taxpayer has entered it more than once.

  8. Do not edit any data listed for foreign countries including:

    • American Samoa

    • Federated States of Micronesia

    • Guam

    • Marshall Islands

    • Northern Mariana Islands

    • Palau

    Note:

    Only Puerto Rico and U.S. Virgin Islands will be edited to Part II, Line 3(a) or Form 940 Schedule A.

Line 7 - Total FUTA Tax
  1. Form 940 - Part II, Line 7, Total FUTA Tax

    1. After editing the line numbers to current year format see IRM 3.11.154.6.5.1, Line 12 - Total FUTA Tax After Adjustments and follow all procedures that apply.

Line 8 - Total FUTA Federal Tax Deposit (FTD)
  1. Form 940 - Part II, Line 8, Total FUTA FTD

    1. After editing the line numbers to current year format see IRM 3.11.154.6.5.2, Line 13 - FUTA Tax Deposit.

Line 9 / Line 10 - Balance Due/Overpayment
  1. Form 940 - Part II, Line 9, Balance Due / Line 10, Overpayment

    1. After editing the line numbers to current year format see IRM 3.11.154.6.5.3, Line 14 - Balance Due.

    2. Also see IRM 3.11.154.6.5.4, Line 15 - Overpayment.

Part III - Record of Quarterly Federal Unemployment Tax Liability (ROFTL)

  1. After editing the line numbers to current year format see IRM 3.11.154.6.6, Part 5, Line 18 through Line 17 - Reporting of Quarterly Federal Unemployment Tax Liability (ROFTL).

Schedule Indicator Code (SIC)
  1. The Schedule Indicator Code (SIC) is used to notify the computer that the Quarterly Federal Tax Liability for Unemployment Tax (ROFTL), Part III is incomplete or unnecessary. When the SIC 1 is edited the computer will determine if a Federal Tax Deposit penalty should be assessed based on a quarterly average of the total liability for the year. The SIC code will be edited in the right margin, next to the line that separates the entity information from the ABCD Questions.

  2. Edit SIC Code "1" when:

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

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

    3. There is a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ in the ROFTL.

    4. The ROFTL is blank.

    5. There is a total in the ROFTL, but there are no Quarterly Liability Amounts present.

    6. The difference between Line 7 Part II and the Total ROFTL is ≡ ≡ ≡ ≡ ≡ ≡ .

Form 940-EZ - General Guidelines for Converting and Editing Returns

  1. Form 940-EZ was filed between Tax Years 2005 and 2009. If filed now, they are converted to a current year Form 940.

  2. All Form 940-EZ returns are converted to a current year Form 940 for processing see Exhibit 3.11.154-4, Form 940-EZ Conversion Table.

    Note:

    If being converted to a current Form 940 circle out the "-EZ" from the form. number located in the upper top left of form.

  3. If correspondence is needed to resolve unprocessable conditions, first convert the return to a Form 940.

  4. If credit reduction applies to a state on a filed Form 940-EZ, transfer the information to a current Form 940 revision and/or Form 940 Schedule A. See IRM 3.11.154.6.9, Form 940 Schedule A, Form 940 Schedule A-PR) (Puerto Rican Version), Multi - State Employer and Credit Reduction Information and, Multi - State Employer and Credit Reduction Information.

  5. This section provides instructions for processing Form 940-EZ in the Code and Edit function.

    1. See IRM 3.11.154.2.1, Coding and editing Procedures

    2. See IRM 3.11.154.2.16, Third Party Designee

    3. See IRM 3.11.154.2.18, Signature

    4. See IRM 3.11.154.2.19, Tax Period

    5. See IRM 3.11.154.3.3, Received Date

    6. See IRM 3.11.154.3.5, Indian Tribal Government Procedures

    7. See IRM 3.11.154.3.6, Statute Returns

    8. See IRM 3.11.154.5, Entity Perfection

Question B (1) - Valid State Code

  1. Valid - State Code - Question B(1)

    1. Question B(1) of the Form 940-EZ is converted to Line 1a on the Form 940 (current revision).

    2. See IRM 3.11.154.6.2.1, Box "1a" (Single State Filer), Box "1b" (Multi Sate Filer), Box "2" (Subject to Credit Reduction).

    3. For a list of valid state codes see Exhibit 3.11.154-7, State Abbreviation.

Part I, Line 1 through Line 9 - Taxable Wages and FUTA Tax

  1. Form 940-EZ, Part I should be completed by all filers.

    1. If Part I does not contain sufficient information to determine Total Taxable Wages, correspond.

    2. It is not necessary to correspond to obtain Part I information from the taxpayer when they indicate "not liable" , zero, dash, all blank entries or "final return" and the return has been signed. We should consider taxpayer intent.

Line 1 - Total Payments
  1. Form 940-EZ - Part I, Line 1 - Total Payments:

    1. Line 1 of the Form 940-EZ is converted to Line 3 of the Form 940.

    2. See IRM 3.11.154.6.3.1, Line 3 - Total Payments to All Employees.

Line 2 - Exempt Payments
  1. Form 940-EZ - Line 2, Exempt Payments:

    1. Line 2 of the Form 940-EZ is converted to Line 4 of the Form 940.

    2. See IRM 3.11.154.6.3.2, Line 4 - Payments Exempt from FUTA Tax.

Line 3 - Excess Payment More Than $7,000
  1. Form 940-EZ - Line 3, Excess payment:

    1. Line 3 of the Form 940-EZ is converted to Line 5 of the Form 940.

    2. See IRM 3.11.154.6.3.3, Line 5 - Total Payments to Employees in Excess of $7,000.

Line 4 - Total Exempt Payments
  1. Form 940-EZ - line 4, Total Exempt Payments:

    1. Line 4 of the Form 940-EZ is converted to Line 6 of the Form 940.

    2. See IRM 3.11.154.6.3.4, Line 6, - Subtotal.

Line 5 - Total Taxable Wages
  1. Form 940-EZ - Line 5, Total Taxable Wages:

    1. Line 5 of the Form 940-EZ is converted to Line 7 of the Form 940.

    2. See IRM 3.11.154.6.3.5, Line 7 (Line 7a Revision 2011) - Total Taxable FUTA Wages.

Line 6 - FUTA Tax
  1. Form 940-EZ - Line 6, FUTA Tax:

    1. Line 6 of the Form 940-EZ is converted to Line 12 of the Form 940.

    2. See IRM 3.11.154.6.5.1, Line 12 - Total FUTA Tax After Adjustments for processing procedures.

Line 7 - Total FUTA Tax Deposits
  1. Form 940-EZ, Total FUTA Tax Deposits:

    1. Line 7 of the Form 940-EZ is converted to Line 13 of the Form 940.

    2. See IRM 3.11.154.6.5.2, Line 13 - FUTA Tax Deposit.

Line 8 - Balance Due
  1. Form 940-EZ - Line 8, Balance Due:

    1. Line 8 of the Form 940-EZ is converted to Line 14 of the Form 940.

    2. See IRM 3.11.154.6.5.3, Line 14 - Balance Due.

Line 9 - Overpayment
  1. Form 940-EZ - Line 9 Overpayment:

    1. Line 9 of the Form 940-EZ is converted to Line 15 of the Form 940.

    2. See IRM 3.11.154.6.5.4, Line 15 - Overpayment.

Part II - Record of Quarterly Federal Unemployment Tax Liability (ROFTL)

  1. Form 940-EZ Part II - Liability for Quarter:

    1. Part II, First, Second, Third and Fourth Quarter Liability boxes will be converted to Line 16a, 16b, 16c, and 16d.

    2. See IRM 3.11.154.6.6, Part 5 - Reporting of Quarterly Federal Unemployment Tax Liability (ROFTL).

Schedule Indicator Code (SIC)
  1. See IRM 3.11.154.6.6.1, Schedule Indicator Code (SIC).

Form 940-PR - General Guidelines for Editing Returns (OSPC Only) (Revision 2005 and Prior)

  1. Procedures for editing Form 940-PR in the Code and Edit function.

  2. See Pub 850 (EN/SP) (Revised May 2011) "English-Spanish Glossary of Tax Words and Phrases used in Publications by the IRS" which may be used as a resource tool for processing Form 940-PR returns.

    IF AND THEN
    The taxpayer completes Parte I, Parte II, Parte III, and Parte IV,  
    1. Examine the return and attachments.

    2. Delete the incorrect used Parte.

    Wages were paid in Puerto Rico only, Unemployment payments were made timely, Only Parte I and Parte II should be completed by the taxpayer. It is not necessary for the taxpayer to complete Parte III or Parte IV.
    The taxpayer completed both Parte II and Parte III,  
    1. Examine the return and attachments.

    2. If only Puerto Rico is shown in both Parte II and Parte III, delete Parte III.

    3. If Puerto Rico and any other possession or state is shown in Parte III, delete Parte II.

    The taxpayer completes Parte I, Parte III, and Parte IV,   Take no action. The taxpayer is indicating that their unemployment tax payments were not made timely or that wages were paid in other states, the District of Columbia or the Virgin Islands.

Procedures for Coding and Editing Returns

  1. For Code and Editing Form 940-PR, follow instructions below:

    1. See IRM 3.11.154.2.1, Code and Editing Returns

    2. See IRM 3.11.154.2.16, Third Party Designee

    3. See IRM 3.11.154.2.18, Signature

    4. See IRM 3.11.154.2.19, Tax Period

    5. See IRM 3.11.154.3.3, Received Date

    6. See IRM 3.11.154.3.5, Indian Tribal Government Procedures

    7. See IRM 3.11.154.3.6, Statute Returns

    8. See IRM 3.11.154.5, Entity Perfection

Credit Reduction States

  1. For some Tax Year(s) 2005 and prior, the taxpayer may be required to use Form 940 to report the FUTA wages paid in a Credit Reduction state. Form 940-PR cannot be used if credit reduction applies. Convert to Form 940.

    Note:

    If the converting the Form 940-PR to a Form 940 circle out "-PR" from the form number located in upper top left of the return.

  2. If conversion is not possible, correspond with the taxpayer.

Parte I, Line 1 through Line 5 - Computation of Taxable Wages

  1. Form 940-PR, Parte I, should be completed by all filers.

    1. If Parte I does not contain sufficient information to determine Line 5, Total Taxable Wages, correspond.

      Exception:

      It is not necessary to correspond to obtain Parte I information from the taxpayer when they indicate "not liable" , zero, dash, all blank entries or "final return" and the return has been signed. We should consider taxpayer intent.

Line 1 - Total Payments for Services of Employees
  1. Parte I, Line 1 - Total Compensation Paid to Employees:

    1. If Line 1 and Line 3 have the same line entries, edit an asterisk (*) on Line 3 to make the return generate to Error Resolution.

Line 2 - Exempt Payments
  1. Parte 1, Line 2, Exempt Payments No action is necessary.

Line 3 - Excess Payments More Than $7,000
  1. Parte 1, Line 3, Excess Payment:

    1. If Line 3 equals Line 1, edit an asterisk (*) on Line 3 to make the return generate to Error Resolution.

Line 4 - Total Exempt Payments
  1. Parte I, Line 4 - Total Exempt Payments:

    1. If there is no entry in Parte I, Line 2 and Line 3, accept the taxpayer's entry on Line 4. Do not correspond.

    2. If Line 4 is greater than Parte I, Line 1, correspond. (Total exempt payments cannot exceed total payments.)

Line 5 - Total Taxable Wages
  1. Line 5, Total Taxable Wages:

    1. If there is an entry on Line 1 (Total Payments) and Lines 2 through Line 5 shows a significant entry such as a "0" (zero), blank, dash "-" , or the word "NONE" written on the line, edit the amount on Line 1 to Line 5 or compute and enter Line 1 less Line 4.

    2. If Parte I, Line 1 and 5 have no entries, correspond to obtain the total taxable wages, except:

      IF THEN
      Line 1, Parte II has an entry, Determine the wages by dividing this amount by .008 (for tax years 2010 and prior, or .006 for tax year 2012 -2017. (For tax year 2011, see Form 940, Rev 2011)
      The state in Parte III, Line 3, Column (a) has a taxable state wage base of $7,000 and there are no exempt payments, Edit the amount from Parte II, Line 3, Column (c) - Taxable payroll to Line 5.
    3. If Line 5 is "blank" or "zero" because Line 3 equals Line 1, edit an asterisk (*) on Line 3 to make the return generate to Error Resolution.

Parte II, Line 1 through 4 - Balance Due/Overpayment

  1. Form 940-PR - Parte II, Line 3, Balance Due/Line 4, Overpayment:

    1. If these lines are blank or illegible, perfect from the return or attachments if possible.

    2. Perfect the Balance Due/Overpayment by subtracting Line 4 from Line 1 of Part II, Form 940-PR.

      IF THEN
      The Balance Due amount on Line 3 contains Failure to Deposit (FTD), Failure to File (FTF), or Failure to pay (FTP) penalty and/or interest,
      1. Circle out the Line 3 amount.

      2. Subtract the FTD, FTF, FTP penalty and interest from the Balance Due amount.

      3. Edit the Balance Due amount to the left.

      4. Edit a Received Date, if necessary.

      The Overpayment amount on Line 4 is reduced by FTD, FTF, FTP penalty and/or interest,
      1. Circle out the Line 4 amount.

      2. Add the FTD, FTF, FTP penalty and interest to the Overpayment amount.

      3. Edit the Overpayment amount to the left.

      4. Edit a Received Date, if necessary.

Parte III, Line 1 through Line 10 - Tax Owed (due) or Refund

  1. The taxpayer will complete Part III and Parte IV, if applicable.

Line 3(a) - State Codes
  1. All returns must have at least one State Code.

  2. The only exception is a "G" coded return (amended return).

  3. The word "State" as used here, pursuant to IRC 3306(j)(1), includes the fifty U.S. States plus the District of Columbia, Puerto Rico, and the U.S. Virgin Islands, participating by the Federal Unemployment Tax Act.

  4. The State Code can only be edited in two locations:

    1. On the Form 940-PR, Parte III, Line 3, Column (a), or

    2. On the Form 940 Schedule A.

  5. If there are one or two state codes, ISRP will capture the 2 character state code in Parte III, Line 3, Column (a) of the form.

  6. If there are three or more state Codes, enter the states on Form 940 Schedule A.

  7. A non-taxable return will be given a " ZZ" State Code when the state is subject to credit reduction.

  8. If a State Code(s) cannot be determined from Parte III or attachments to the return, use the Entity State Code of the taxpayer's mailing address.

  9. If the State Code cannot be determined, correspond.

  10. Edit a State Code only once, even if the taxpayer has entered it more than once on the return.

  11. OSPC Only - The only countries that should be listed on Form 940-PR, or should be edited will be Puerto Rico and the U.S. Virgin Islands. You may sometimes see the following countries listed in Parte III. They should not be listed on Form 940-PR and should not be edited because they do not participate in our unemployment system. Asterisk (*) to the left of any data listed for foreign countries, including the following:

    • American Samoa

    • Federated States of Micronesia

    • Guam

    • Marshall Islands

    • Northern Mariana Islands

    • Palau

    Note:

    Remember only Puerto Rico or the U.S. Virgin Islands can qualify for Credit Reduction.

Line 7 - Total FUTA Tax
  1. Form 940-PR - Parte III, Line 7, Total FUTA Tax

    IF THEN
    Line 7 is blank or illegible,
    1. Perfect it from the return or attachments if possible.

    2. Do not compute the Gross FUTA Tax, Line 1 of Parte III, or the Maximum Credit, Line 2 of Parte III, in order to perfect Line 7.

    Lines 1 through 3 of Parte III have been completed by the taxpayer or perfected from information on the return, Perfect Line 7 by subtracting Line 3 from the amount on Line 1, Parte III.
Line 8 - Total FUTA Tax Deposits
  1. If Form 940-PR - Parte III, Line 8, Total FUTA Tax Deposits is blank, perfect it from the following areas on the return:

    1. Enter the amount from Parte II, Line 4, if you can determine it is a misplaced entry.

    2. The taxpayer may have the FTD amount erroneously entered in the amount line of Question A or on an attachment.

    3. If you can determine the correct FTD amount from this area, enter it on Line 8, Parte III.

  2. If the return shows excess credit (remittance or FTD) and the taxpayer requests the credit to be transferred to another type of tax do the following:

    • Edit CCC “X”.

    • Prepare Form 3465. (Parte III, Line 8 (2005 and prior)).

    • Photocopy related materials and attach to Form 3465.

    • Route to BMF Accounts Management.

Line 9/10 - Balance Due Overpayment
  1. Form 940-PR - Parte III, Line 9, Balance Due/Line 10, Overpayment

    1. If Line 9 or Line 10 are blank or illegible, perfect from the return or attachments if possible.

    2. Perfect the balance due/overpayment by subtracting Line 8 from Line 7.

      IF THEN
      The Balance Due amount on Line 9 contains Failure to Deposit (FTD), Failure to File (FTF), or Failure to Pay (FTP) penalty and/or interest,
      1. Circle out the Line 9 amount.

      2. Subtract the FTD, FTF, FTP penalty and interest from the Balance Due amount.

      3. Edit the Balance Due to the left.

      4. Edit a received date, if necessary.

      The Overpayment amount on Line 10 is reduced by FTD, FTF, FTP penalty and/or interest,
      1. Circle out the Line 10 amount.

      2. Add the FTD, FTF, FTP penalty and interest to the Overpayment amount.

      3. Edit the Overpayment amount to the left.

      4. Edit a Received Date, if necessary.

    3. If the taxpayer has entered the same amounts in Lines 7, 8, and 9, the amount is equal to total amount of the ROFTL, delete the entry on Line 8.

    4. Do not edit if the computation on Line 9 or 10 is less than ≡ ≡ ≡ ≡ ≡ .

Parte IV - Record of Quarterly Federal Unemployment Tax Liability

  1. Form 940-PR -Liability for the Quarter:

    1. IF AND THEN
      Parte II and Parte III are completed and the remittance or ROFTL does not agree, The taxpayer's intent cannot be determined, Correspond with the taxpayer.
      Blank,   Edit from attachments.
      Only the fourth quarter is blank, The taxpayer indicates a larger amount on Line 7, Parte III,
      1. Edit an amount to the fourth quarter that would allow the total of all quarters to equal total FUTA tax.

      2. Edit a Received Date, if necessary to keep a penalty from being charged.

      The taxpayer entered wages instead of tax in Parte IV,  
      1. Compare Parte I, Line 5 with the Total for Year, Parte IV.

      2. If the amounts agree, and Parte II, Line 1 or Parte III, Line 7 is more than ≡ ≡ ≡ , multiply the wage amount shown for each quarter by .008 for tax years 2010 or prior, or .006 for 2012 - 2017. Edit the correct entries. (For tax year 2011, see Form 940, Rev 2011.) See Figure 3.11.154-12, Correct Editing Form 940-PR (TY2005) Part IV.

      The taxpayer has entered a negative figure in any quarter of the ROFTL fields,   Enter SIC "1" to the right margin next to the line that separates the entity information from the ABC Questions.

    Figure 3.11.154-12

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Schedule Indicator Code (SIC)

  1. The Schedule Indicator Code (SIC) is used to notify the computer that the Quarterly Federal Tax Liability for Unemployment Tax (ROFTL), Parte IV is incomplete or unnecessary. When the SIC "1" is edited, the computer will determine if a Federal Tax Deposit penalty should be assessed based on a quarterly average of the total liability for the year. The SIC code is edited in the right margin next to the line that separates the entity information from the ABC Questions.

  2. Edit SIC Code "1" when:

    1. Line 1, Parte II, is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    2. Line 7, Parte III, is ≡ ≡ ≡ ≡ ≡ ≡ .

    3. The ROFTL Total is ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    4. There is a ≡ ≡ ≡ ≡ ≡ ≡ ≡ in the ROFTL.

    5. The ROFTL is blank.

    6. There is a total in the ROFTL, but there are no Quarterly Liability Amounts present.

    7. The difference between Line 1, Parte II and the Total ROFTL is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    8. The difference between Line 7, Parte III and the Total ROFTL is ≡ ≡ ≡ ≡ ≡ ≡ .

Form 940 (Revision 2017) and Form 940 Schedule A (Revision 2017)

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Form 940-PR (Revision 2017) and Form 940 Schedule A-PR (Revision 2017)

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Form 940 Conversion Table - Revision 2012 - 2017 and 2006 - 2010

2012 - 2017 and 2006 - 2010 Revisions - Part 2

Part 2 Line Name Part 2 Line Number
Total Taxable FUTA Wages 7
 

2012 - 2017 and 2010 - 2006 Revisions - Part 3

Part 3 Line Name Part 3 Line Number
If Credit Reduction applies, enter the total from Form 940 Schedule A. 11
 

2012 - 2017 and 2010 - 2006 Revisions - Part 4

Part 4 Line Name Part 4 Line Number
Total FUTA Tax After Adjustments 12
FUTA tax deposited for the year 13
Balance Due 14
Overpayment 15
 

2012 - 2017 and 2010 - 2006 Revisions - Part 5

Part 5 Line Name Part 5 Line Number
FUTA Tax Liability- 1st Quarter 16a
FUTA Tax Liability- 2nd Quarter 16b
FUTA Tax Liability- 3rd Quarter 16c
FUTA Tax Liability- 4th Quarter 16d
 

2003 - 2005 Revisions - Part I

Part 2
Line Name
Part 2
Line Number
2005
Part I
Line Number
2004
Part I
Line Number
2002- 2003
Part I
Line Number
Total Taxable FUTA Wages 7 5 5 5
 

2003 - 2005 Revisions - Part I

Part 3
Line Name
Part 3
Line Number
2005
Part I
Line Number
2004
Part I
Line Number
2002- 2003
Part I
Line Number
If Credit Reduction applies, enter the total from Form 940 Schedule A 11 7 6 N/A
 

2003 - 2005 Revisions - Part II

Part 4
Line Name
Part 4
Line Number
2005
Part II
Line Number
2004
Part II
Line Number
2002- 2003
Part II
Line Number
Total FUTA Tax After Adjustments 12 7 7 7
FUTA tax deposited for the year 13 8 8 8
Balance Due 14 9 9 9
Overpayment 15 10 10 10
 

2003 - 2005 Revisions - Part III

Part 5
Line Name
Part 5
Line Number
2005
Part III
Line Number
2004
Part III
Line Number
2002- 2003
Part III
Line Number
FUTA Tax Liability- 1st Quarter 16a First First First
FUTA Tax Liability- 2nd Quarter 16b Second Second Second
FUTA Tax Liability- 3rd Quarter 16c Third Third Third
FUTA Tax Liability- 4th Quarter 16d Fourth Fourth Fourth

Form 940-EZ Conversion Table

Line Item Description Form 940-EZ Line Number Current Form 940 Line Numbers Transcription Line
Contributions Paid to State Unemployment Fund A Not Applicable NO
Name of State Where Contributions are Paid B(1) 1a Yes
Total Payments to Employees 1 3 NO
Exempt Payments 2 4 NO
Payments of More than $7,000 3 5 NO
Add Lines 2 and 3 4 6 NO
Total Taxable Wages 5 7 Yes
FUTA Tax 6 12 Yes
Total FUTA Tax Deposited 7 13 Yes
Balance Due 8 14 Yes
Overpayment 9 15 Yes
First Quarter Liability First Box in Part II 16a Yes
Second Quarter Liability Second Box in Part II 16b Yes
Third Quarter Liability Third Box in Part II 16c Yes
Fourth Quarter Liability Fourth Box in Part II 16d Yes

Form 940-PR Conversion Table (2005 and Prior)

Parte I - Computo De Salarios Sujetos A La Contribucion

Line Name Parte I Line number Current Year Parte II Line Number Conversion
Total de Salarios a la contribucion 5 7
 

Parte II - Contribucion Adeudada O Reembolso

Line Name Parte II Line number Current Year Part IV Line Number Conversion
Contribucion federal bruta el desempleo 1 12
Menos El total de la contribucion 2 13
Balance adedado 3 14
Cantidad pegada de mais 4 15
 

Parte III - Contribucion Adeudada O Reembolso

Line Name Parte III Line number Current Year Line Number Conversion
Totales 3a Box 1a, Parte I
Contribucion federal para el desemplo total 7 12, Parte IV
Total de la contribucion federal para desempleo depositada para el ano 8 13, Parte IV
Balance adedado 9 14, Parte IV
Cantidad pegada de mais 10 15, Parte IV
 

Parte IV - Registero De La Obligacio Trimestral

Line Name Parte IV Line number Current Year Parte V Line Number Conversion
Primero Obilgacion contribucion pare el trimestre Primero 16a
Segundo Obilgacion contribucion pare el trimestre Segundo 16b
Tercero Obilgacion contribucion pare el trimestre Tercero 16c
Cuarto Obilgacion contribucion pare el trimestre Cuarto 16d

Correspondence Action Table

Form TYPE Correspondence is required when the following conditions exists Suggested Correspondence Action required on "No Reply" , "Undeliverable" , and Insufficient Response
Form 940 or Form 940-PR Signature missing on an Unnumbered overpaid or zero/even return Edit AC 225 (AC 226 for International)
  1. Edit CCC "3" on all returns with this condition.

  2. Edit CCC "X" on overpaid returns.

Form 940 or Form 940-PR Signature missing on an Unnumbered balance due or Numbered return Edit AC 225 (AC 226 for International)
  1. Edit CCC "3" on all returns with this condition.

  2. Edit CCC "X" on overpaid returns.

  3. Edit an asterisk (*) in the left most position in the "Sign your name here" box.

Form 940 or Form 940-PR Return indicating tax liability for more than one type of tax:
  • Unnumbered overpaid or zero/even returns

  • Unnumbered balance due and numbered returns

Correspond:
  • Complete Form 12522 for Letter 142C. (or local letter as permitted by campus.)

  • Edit AC 211.

  1. Edit CCC "3" on all returns with this condition.

  2. Edit CCC "X" on overpaid returns.

Form 940 or Form 940-PR Taxpayer enters non-calendar year Tax Period:
  • Unnumbered overpaid or zero/even returns

  • Unnumbered balance due and numbered returns.

Correspond:
  • Complete Form 12522 for Letter 142C, (or local letter as permitted by campus.)

  • Edit AC 211.

  1. Edit CCC "3" on all returns with this condition.

  2. Edit CCC "X" on overpaid returns.

Form 940 or Form 940-PR Information provided not complete or not sufficient to determine Total Taxable Wages:
  • Unnumbered overpaid or zero/even returns

  • Unnumbered balance due and numbered returns.

Take no Action and continue to process the return.
  1. If possible, determine Total Taxable Wages from information provided on the return or attachments.

  2. If unable to determine the Total Taxable Wages, allow return to generate to ERS.

Form 940 or Form 940-PR Taxpayer’s amount for payments of more than $7,000.00 is the same amount as total payments for services to employees:
  • Unnumbered overpaid or zero/even returns

  • Unnumbered balance due and numbered returns.

Take no Action and continue to process the return. Edit asterisk (*) to disallow the entry on line 5.
Form 940 or Form 940-PR Taxpayer has not given taxable wage breakdown for credit reduction states:
  • Unnumbered overpaid or zero/even returns

  • Unnumbered balance due and numbered returns.

Take no Action and continue to process the return. Take no Action and continue to process the return.
Form 940 or Form 940-PR Early Filed Return (Do not return to taxpayer):
  • Non-final, and it cannot be determined the reason for filing a future year

  • Final and complete (Not a correspondence condition.)

  • Final and incomplete

  1. If final and complete, Edit AC 480 and CCC "F"

  2. Other than final and complete:

    • Complete Form 12522 for Letter 142C, (or local letter as permitted by campus)

    • Edit AC 211.

When correspondence is received, Rejects will suspend the return until the upcoming January.
Form 940 or Form 940-PR Taxpayer’s intent cannot be determined. (Not covered by previous conditions):
  • Unnumbered overpaid or zero/even returns

  • Unnumbered balance due and numbered returns.

Correspond:
  • Complete Form 12522 for Letter 142C, (or local letter as permitted by campus.)

  • Edit AC 211.

  1. Edit CCC "3" on all returns with this condition.

  2. Edit CCC "X" on overpaid returns.

State Abbreviations

State Code State State Code State
AL Alabama MT Montana
AK Alaska NE Nebraska
AZ Arizona NV Nevada
AR Arkansas NH New Hampshire
CA California NJ New Jersey
CO Colorado NM New Mexico
CT Connecticut NY New York
DC District of Columbia NC North Carolina
DE Delaware ND North Dakota
FL Florida OH Ohio
GA Georgia OK Oklahoma
HI Hawaii OR Oregon
ID Idaho PA Pennsylvania
IL Illinois RI Rhode Island
IN Indiana SC South Carolina
IA Iowa SD South Dakota
KS Kansas TN Tennessee
KY Kentucky TX Texas
LA Louisiana UT Utah
ME Maine VT Vermont
MD Maryland VA Virginia
MA Massachusetts WA Washington
MI Michigan WV West Virginia
MN Minnesota WI Wisconsin
MS Mississippi WY Wyoming
MO Missouri *ZZ Used for Zero Liability Tax in Credit Reduction State(s) only

Entity State Codes and ZIP Codes

State Code State ZIP Code
AA America-Atlantic 34001
AE America-Europe 09001
AP America-Pacific 96201
AL Alabama 35001
AK Alaska 99501
AZ Arizona 85001
AR Arkansas 71601
CA California 90001
CO Colorado 80001
CT Connecticut 06001
DC District of Columbia 20001
DE Delaware 19701
FL Florida 32001
GA Georgia 30001
HI Hawaii 96701
ID Idaho 83201
IL Illinois 60001
IN Indiana 46001
IA Iowa 50001
KS Kansas 66001
KY Kentucky 40001
LA Louisiana 70001
ME Maine 03901
MD Maryland 20601
MA Massachusetts 01001
MI Michigan 48001
MN Minnesota 55001
MS Mississippi 38601
MO Missouri 63001
MT Montana 59001
NE Nebraska 68001
NV Nevada 88901
NH New Hampshire 03001
NJ New Jersey 07001
NM New Mexico 87001
NY New York 00501
NC North Carolina 27001
ND North Dakota 58001
OH Ohio 43001
OK Oklahoma 73001
OR Oregon 97001
PA Pennsylvania 15001
RI Rhode Island 02801
SC South Carolina 29001
SD South Dakota 57001
TN Tennessee 37001
TX Texas 75001
UT Utah 84001
VT Vermont 05001
VA Virginia 20101
WA Washington 98001
WV West Virginia 24701
WI Wisconsin 53001
WY Wyoming 82001

U.S. Possession ZIP Codes

American Samoa (AS)

American Samoa (AS) City American Samoa (AS) Zip Code
Faga'itua 96799
Leone 96799
Olosega Manua' 96799
Pago Pago 96799
 

Federated States of Micronesia (FM):

Federated States of Micronesia (FM) City Federated States of Micronesia (FM) Zip Code
Chuuk 96942
Kosrae 96944
Pohnpei 96941
Yap 96943
 

Guam (GU)

Guam (GU) City Guam (GU) Zip Code
Agana 96910
Inarajan 96917
Merizo 96916
Tamuning 96931
Umatac 96915
Yona 96915
 

Marshall Islands (MH)

Marshall Islands (MH) City Marshall Islands (MH) Zip Code
Ebeye 96970
Majuro 96960
 

Northern Mariana Islands (MP)

Northern Mariana Islands (MP) City Northern Mariana Islands (MP) Zip Code
Capitol Hill 96950
Rota 96951
Saipan 96950
Tinian 96952
 

Palau (PW)

Palau (PW) City Palau (PW) Zip Code
Koror 96940
Palau 96940
 

U. S. Virgin Islands (VI)

U. S. Virgin Islands (VI) City U. S. Virgin Islands (VI) Zip Code
Charlotte Amalie 00802
Christiansted 00820
Cruz Bay 00830
Downtown 00840
Frederiksted 00840
Kingshill 00850
Saint Croix 00820
Saint John 00830
Saint Thomas 00805
Sunny Isle 00850
Veterans Annex 00820
 

Puerto Rico (PR)

Puerto Rico (PR) City Puerto Rico (PR) Zip Code
Adjuntas 00601
Aquada 00602
Aquadilla 00603
Aguas Buenas 00703
Aguirre 00704
Aibonito 00705
Añasco 00610
Angeles 00611
Arecibo 00612
Arroyo 00714
Bajadero 00616
Barceloneta 00617
Barraquitas 00794
Barrio Obrero Station 00935
Bayamon 00956
Boqueron 00622
Cabo Rojo 00623
Caguas 00725
Camuy 00627
Canovanas 00729
Caparra Heights 00920
Carolina 00982
Catano 00962
Cayey 00736
Ceiba 00735
Cerro Gordo 00754
Ciales 00638
Cidra 00739
Coamo 00769
Comerio 00782
Condado 00907
Corozal 00783
Coto Laurel 00780
Culebra 00775
Dorado 00646
Ensenada 00647
Esperanza 00765
Fajardo 00738
Fernandez Juncos 00936
Florida 00650
Fort Buchanan 00934
Garrachales 00652
Guanica 00653
Guayama 00784
Guayanilla 00656
Guaynabo 00965
Gurabo 00778
Hatillo 00659
Hato Rey 00936
Hormigueros 00660
Humacao 00791
Isabela 00662
Jayuya 00664
Juana Diaz 00795
Juncos 00777
La Cumbre 00926
Lajas 00667
Laplata 00786
Lares 00669
Las Marias 00670
Las Piedras 00771
Levittown 00949
Loiza 00772
Loiza Street Station 00936
Luquillo 00773
Manati 00674
Maricao 00606
Maunabo 00707
Mayaquez 00680
Mercedita 00715
Minillas Center 00936
Moca 00676
Morovis 00687
Naguabo 00718
Naranjito 00719
Orocovis 00720
Palmer 00721
Patillas 00723
Penuelas 00624
Ponce 00731
Puerta de Tierra 00936
Puerta Real 00740
Punta Santiago 00741
Quebradillas 00678
Ramey 00603
Rincon 00677
Rio Blanco 00744
Rio Grande 00721
Rio Piedras 00927
Rosario 00636
Sabana Grande 00637
Sabana Hoyos 00688
Sabana Seca 00952
Saint Just 00978
Salinas 00751
San Antonio 00690
San Francisco 00927
San German 00683
San Juan 00936
San Lorenzo 00754
San Sebastian 00685
Santa Isabel 00757
Santurce 00936
Toa Alta 00953
Toa Boa 00949
Trujillo Alto 00976
University 00936
Utuado 00641
Vega Alta 00692
Vega Baja (box 1-9049) 00694
Vieques 00765
Villalba 00766
Yabucoa 00767
Yauco 00698

Foreign Country Codes

Foreign Country Country Code
Afghanistan AF
Akrotiri AX
Albania AL
Algeria AG
Andorra AN
Angola AO
Anguilla AV
Antarctica AY
Antigua and Barbuda AC
Argentina AR
Armenia AM
Aruba AA
Ashmore and Cartier Islands AT
Australia AS
Austria AU
Azerbaijan AJ
The Bahamas BF
Bahrain BA
Baker Island FQ
Bangladesh BG
Barbados BB
Barbuda AC
The Bahamas BF
Belgium BE
Belarus BO
Belize BH
Benin (Dahomey) BN
Bermuda BD
Bhutan BT
Bolivia BL
Bosnia and Herzegovina BK
Botswana BC
Bouvet Island BV
Brazil BR
British Indian Ocean Territory IO
British Virgin Islands VI
Brunei BX
Bulgaria BU
Burkina Faso UV
Burma BM
Burundi BY
Cambodia CB
Cameroon CM
Canada CA

Note:

See Exhibit 3.11.154-11, Province, Foreign State, and Territory Abbreviations for Canadian province abbreviations.

Cape Verde CV
Cayman Islands CJ