3.11.213 Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return

Manual Transmittal

November 14, 2017

Purpose

(1) This transmits revised IRM 3.11.213, Returns and Documents Analysis, Form 1066, Real Estate Mortgage Investment Conduit Income Tax Return.

Material Changes

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

(2) Removed symbols from titles throughout.

(3) Removed Italics from forms placed the forms in citations and placed titles of form in Italics.

(4) IRM 3.11.213.1 Added, Program Scope - Added Internal Controls information as outlined in The Heightened Awareness, Sensitivity, and Understanding of Internal Controls Memo dated September 14, 2016. Renamed Introduction to the Error Correction Program - Service Center Replacement System (SCRS) to General Information

(5) IRM 3.11.213.1.1 Added Background - Added Internal Controls information as outlined in The Heightened Awareness, Sensitivity, and Understanding of Internal Controls Memo dated September 14, 2016.

(6) IRM 3.11.213.1.2 Added Authority - Added Internal Controls information as outlined in The Heightened Awareness, Sensitivity, and Understanding of Internal Controls Memo dated September 14, 2016

(7) IRM 3.11.213.1.3 Added Responsibilities - Added Internal Controls information as outlined in The Heightened Awareness, Sensitivity, and Understanding of Internal Controls Memo dated September 14, 2016

(8) IRM 3.11.213.1.4 Added Program Management and Review - Added Internal Controls information as outlined in The Heightened Awareness, Sensitivity, and Understanding of Internal Controls Memo dated September 14, 2016.

(9) IRM 3.11.213.1.5 Added Program Controls - Added Internal Controls information as outlined in The Heightened Awareness, Sensitivity, and Understanding of Internal Controls Memo dated September 14, 2016.

(10) IRM 3.11.213.1.6 Added Terms/Definitions/Acronyms - Added Internal Controls information as outlined in The Heightened Awareness, Sensitivity, and Understanding of Internal Controls Memo dated September 14, 2016.

(11) IRM 3.11.213.1.7 Added Interpretation Chart - Added Internal Controls information as outlined in The Heightened Awareness, Sensitivity, and Understanding of Internal Controls Memo dated September 14, 2016

(12) IRM 3.11.213.1.8 Added Related Resources - Added Internal Controls information as outlined in The Heightened Awareness, Sensitivity, and Understanding of Internal Controls Memo dated September 14, 2016

(13) IRM 3.11.213.2 Changed Sub Title and wording throughout Section to match BMF consistency IRM. Added Note. IPU 17U0355 issued 02-23-2017

(14) IRM 3.11.213.2.2 Added to (1) to match BMF consistency IRM. IPU 17U0355 issued 02-23-2017

(15) IRM 3.11.213.2.2 Changed (2) so the wording to match BMF consistency IRM. IPU 17U0355 issued 02-23-2017

(16) IRM 3.11.213.2.4 Updated Chart to separate X and I instructions to make it easier for the TE's to determine process. Changed some wording to match BMF consistency. IPU 17U0355 issued 02-23-2017

(17) IRM 3.11.213.3.2(5) Deleted Exception in Paragraph (4)6 and added table in (5).

(18) IRM 3.11.213.3.2(8) Added Action Code 450

(19) IRM 3.11.213.3.3 Updated chart to show instructions for unnumbered and numbered return. IPU 17U0355 issued 02-23-2017

(20) IRM 3.11.213.4.4 Added new instruction. (2) and (3) Update chart. IPU 17U0355 issued 02-23-2017

(21) IRM 3.11.213.4.4.1(4) Removed Note and added Alpha List in "Then" box.

(22) IRM 3.11.213.4.4.2 Changed Sub Title to Submissions from Transmissions added new instruction per Chief Counsel. IPU 17U0355 issued 02-23-2017

(23) IRM 3.11.213.5 (1) Added note from BMF consistency IRM (1). IPU 17U0355 issued 02-23-2017

(24) IRM 3.11.213.5(2) Added instruction addressing letters initiated by Accounts Management.

(25) IRM 3.11.213.5 Added (3) to (2) chart and placed forms in form numeric order. To eliminate duplications in charts in (2) and (3). IPU 17U0355 issued 02-23-2017

(26) IRM 3.11.213.5(2) Added Kansas City Mail Stops for several forms in the Routing Guide.

(27) IRM 3.11.213.6.3 Added instructions for "GNMA" name control. IPU 17U0355 issued 02-23-2017

(28) IRM 3.11.213.6.4 Update chart to consistent with BMF consistency IRM. IPU 17U0355 issued 02-23-2017

(29) IRM 3.11.213.8 Updated restricted instructions in chart. changed 2016 to 2017 in chart. IPU 17U0355 issued 02-23-2017

(30) IRM 3.11.213.9 Added note (1) to bullet list removed reminder. Added new instructions to the Note already in place. IPU 17U0355 issued 02-23-2017

(31) IRM 3.11.213.9 Added wording Form Specific to (5) c. IPU 17U0355 issued 02-23-2017

(32) IRM 3.11.213.9 Added two notes to (3) updated Chart to match BMF consistency IRM. IPU 17U0355 issued 02-23-2017

(33) IRM 3.11.213.9 Added wording Form Specific to (6). IPU 17U0355 issued 02-23-2017

(34) IRM 3.11.213.9 Added (6) with new Signature updates.

(35) IRM 3.11.213.12.1 Added more instruction to be consistent with BMF IRM. IPU 17U0355 issued 02-23-2017

(36) IRM 3.11.213.12.3 Added Note to (C). IPU 17U0355 issued 02-23-2017

(37) IRM 3.11.213.16.2 Added Note updated subsection to match BMF consistency IRM. IPU 17U0355 issued 02-23-2017

(38) Exhibit 3.11.213-3 Updated incorrect spelling for Province, State and Territory Abbreviations.

(39) IRM 3.11.213.24 Changed (1) page 4 to page 3. IPU 17U0355 issued 02-23-2017

Effect on Other Documents

IRM 3.11.213 dated November 8, 2016 (effective date January 1, 2017) is superseded. The following IRM Procedural Updates (IPUs) are incorporated in this revised IRM: IPUs 17U0355 issued 2-23-2017 and 17U1164 issued 7-19-2017.

Audience

Wage and Investment (W&I), Submission Processing

Effective Date

(01-01-2018)

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

Program Scope and Objectives

  1. This section contains instructions for perfecting Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return. for processing throughout the Submission Processing pipeline.

  2. Purpose: This section provides instructions for perfecting tax returns filed by taxpayers using Form 1066. These instructions apply to the Submission Processing Pipeline, Document Perfection Branch to Code and Edit (perfect) documents.

  3. Audience:

    • Supervisory Tax Technician

    • Lead Tax Technician

    • Tax Examining Technicians

    • Supervisory Clerk

    • Lead Clerk

    • Clerk

  4. Policy Owner: Director, Submission Processing.

  5. Program Owner: Paper Processing Branch, Business Master File (BMF) Section

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

    • Accounts Management (AM)

    • Small Business/Self-Employed (SB/SE)

    • Large Business and International (LB&I)

    • Chief Financial Officer (CFO)

    • Taxpayer Advocate Service (TAS)

    • 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). The IRC has been amended by acts, public laws, rules and regulations such as the following:

    • Foreign Account Tax Compliance Act (FATCA)

    • Revenue Reconciliation Act of 1998 (RRA 98)

    Note:

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

Responsibilities

  1. The Campus Director is responsible for monitoring operational performance for the Submission Processing campus.

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

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

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

Program Management and Review

  1. Program Goal: Ensure documents are code and edit ready for transcription.

  2. Program Reports: The Batch Block Tracking System (BBTS) captures and stores a vast amount of inventories used for processing.

  3. Program Effectiveness:

    • Embedded Quality Submission Processing (EQSP)

    • Balanced Measures

    • Managerial Reviews

  4. Annual Review: Review the processes included in this manual annually 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. The table lists commonly used acronyms and abbreviations and their definitions.

    Acronyms and Abbreviations Definition
    AAR Amended Return of Administrative Adjustment Request to Account Management
    ADP Automated Data Processing
    AMRH Accounts Maintenance Research
    APO Army Post Office
    BMF Business Master File
    c/o Care of
    C&E Code and Edit
    CAS Correspondence Action Sheet
    CC Command Code
    CCC Computer Condition Code
    CDP Collection Due Process
    CI Criminal Investigation
    CIS Correspondence Imaging System
    CP Computer Paragraph
    CSPC Cincinnati Submission Processing Center or Cincinnati Submission Processing Campus
    DLN Document Locator Number
    DPO Diplomatic Post Office
    EEFax Enterprise Electronic Fax
    e.g. For Example
    EIN Employer Identification Number
    ERS Error Resolution System
    etc. Et Cetera
    Exam Examination
    Fax Facsimile
    FedEx Federal Express Corporation
    FPO Fleet Post Office
    FRP Frivolous Return Program
    ID Identification or Identity
    IDRS Integrated Data Retrieval System
    ISRP Integrated Submission and Remittance Processing
    IMF Individual Master File
    IPU Interim Procedural Update
    IRC Internal Revenue Code
    IRS Internal Revenue Service
    LB&I Large Business and International
    MCC Major City Code
    MFT Master File Transaction
    N/A Not Applicable
    OAR Operations Assistance Request
    OID Original Issue Discount
    OMB Office of Management and Budget
    OSPC Ogden Submission Processing Center or Ogden Submission Processing Campus
    P&A Planning and Analysis
    PTIN Preparer Tax Identification Number
    R&C Receipt and Control
    Rev. Proc. Revenue Procedure
    RO Revenue Officer
    RRA98 Restructuring and Reform Act of 1998
    SBSE Small Business Self-Employed
    SCRS Service Center Replacement System
    SERP Servicewide Electronic Research Program
    SFR Substitute for Return
    SLA Service Level Agreement
    SOI Statistics of Income
    SP Submission Processing
    SPDC Submission Processing Design Center
    SSN Social Security Number
    TAS Taxpayer Advocate Service
    TBOR Taxpayer Bill of Rights
    TC Transaction Code
    TE Tax Examiner
    TEGE Tax Exempt and Government Entities
    TETR Telephone Excise Tax Refund
    TIN Taxpayer Identification Number
    TPNC Taxpayer Notice Code
    U.S. United States
    UCC Uniform Commercial Code
    URL Unidentified Remittance File
    USPS United States Postal Service
    W&I Wage and Investment
    YYYYMMDD Year Year Year Year Month Month Day Day
    ZIP Zone Improvement Plan (Zip code) processing

    Note:

    The above list may not be all inclusive

Interpretation Words

  1. The table lists Interpretation Words and their definitions.

    Word Definition Example of using a word that is open to interpretation

    Note:

    This column is for illustration purposes only.

    Fair Provide accurate and professional service to all persons without regard to personal bias. For example: 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.
    Significant Entry Any entry other than zero or blank. For example: Copy any significant amount on Line 1d to Line 2d, when the amount on Line 2d is blank and the Common Parent’s Name and EIN are blank.
    Timely Provide the time frame to consider what is or is not timely. For example: A Final return is received after the short period due date but received timely.

Related Resources

  1. The following resources may assist in performing the work as outlined in this IRM.

    • Servicewide Electronic Research Program (SERP)

    • Submission Processing Design Center (SPDC)

General Information

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

  2. This section provides instructions for general processing actions required to be taken on returns or other input documents as opposed to the specific line item instructions required in the subsequent section. The document to be processed by this Section is the Form 1066U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax ReturnForm 1066, are filed at Ogden Submission Processing Campus.

  3. Form 1066 is used to report the income, deductions, gains and losses from the operation of a real estate mortgage investment conduit (REMIC). See Exhibit 3.11.213-1, Real Estate Mortgage Investment Conduit - Form 1066, for transcription information. In addition, the form is used to report and pay the taxes on net income from prohibited transactions, foreclosure property, and contributions after the startup day. For the 2016 tax year and thereafter, a REMIC must file Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, by the 15th day of the 3rd month following the close of the tax year. Additionally, see IRM 21.7.4.4.3.1, Business Tax Returns and Non-Master File for further information regarding Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC)due dates, payments, and extensions. The MFT is 07, tax class 3 and document code 60. The program code is 12201.

  4. Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns, may be filed if additional time to file is needed.

  5. The REMIC uses Schedule Q to notify Residual Interest Holders (RIH) of their quarterly share of the taxable income or net loss. A copy is sent to each RIH by the last day of the month following the end of the calendar quarter. The original Schedule Q (Copy A) for all quarters is filed with Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC)

  6. Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC), can be amended. It will be "G" coded and sent to Accounts Management (AM) after processing.

Internal Revenue Service (IRS) Employee Contact - RRA 98, IRC 3705(a)

  1. The Restructuring and Reform Act of 1998 (RRA 98), IRC Section 3705(a), provides identification requirements for all IRS employees working tax-related matters. IRS employees are required to give their name and unique identification number during taxpayer telephone, face-to-face, and written contact. In addition, a telephone number is required on all taxpayer correspondence. This will provide taxpayers with enough information to identify an IRS employee who has previously assisted with tax related matters.

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

    1. Telephone Contact - Their 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), provided as appropriate during the conversation, their last name and badge identification (ID Card) number.

    3. Correspondence - All correspondence must include a telephone number that the taxpayers can call for answers to any question they may have. In addition, manually generated and handwritten correspondence must 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 for 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 Right (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. Taxpayers have the right to receive assistance from the Taxpayer Advocate Service (TAS) if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through normal channels. For additional information on the Taxpayer Bill of Rights, visit http://taxpayeradvocate.irs.gov/About-TAS/Taxpayer-Rights

  2. Refer taxpayers to TAS when the contact meets TAS criteria (see IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria), or when Form 911, (Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order) is attached and steps cannot be taken to resolve the taxpayer's issue the same day. "Same day" includes cases that can be completely resolved in 24 hours, as well as cases where steps can be taken within 24 hours to begin resolving the issue. (See also IRM 13.1.7.4, Same Day Resolution by Operations.) When making a TAS referral, use Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order and forward to TAS in accordance with your local procedures.

TAS Service Level Agreements (SLAs)
  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), Criminal Investigation (CI), Appeals, and Large Business and International (LB&I), that outline the procedures and responsibilities for the processing of Taxpayer Advocate Service (TAS) casework when either the statutory or delegated authority to complete case transactions rests outside of TAS. These agreements are known as Service Level Agreements (SLAs).

  2. The SLAs are located at http://tas.web.irs.gov/policy/sla/default.aspx.

BMF Identification (ID) Theft

  1. BMF Identity Theft is increasing. If a tax examiner in Submission Processing (SP) Code and Edit (C&E) finds a case with attachments or correspondence indicating the taxpayer is a victim of ID Theft, provide the whole case to your senior/lead. Your senior/lead will expedite the case to the Planning and Analyst staff for referral to one of the Submission Processing BMF ID Theft liaisons. The taxpayer must clearly state that they are a victim of "ID Theft" ; do not send cases that are subject to Criminal Investigation (CI), Examination (Exam) or "Fraud" review.

Incomplete Returns

  1. The following are procedures for ensuring the return is complete:

    If Then
    Incomplete return When the return serves only as a transmittal for statements, schedules and other attachments, or is otherwise incomplete, analyze the supporting documents and supply the missing entries on the form itself.
    Data on the substitute schedules is in suitable format for transcription It is not necessary to transfer the data to an IRS form.
  2. A primary consideration is the proper presentation of income and deduction items for subsequent transcription and computer processing. Document Perfection is responsible for arranging the return in the following order:

    • Page 1

    • Page 2

    • Page 3

  3. Enter only transcription items. Leave lines blank if the entry would be a zero amount. See Figure 3.11.213-1 Example of an incomplete Form 1066.

    Figure 3.11.213-1

    This is an Image: 33587001.gif
     

    Please click here for the text description of the image.

Prior Year Conversion

  1. If the line items on a prior year form do not agree with line items on the current form, transfer the data to the appropriate line items on a current form. Fold back the entity area of the current form and attach below the entity area of the prior year form, or renumber the prior year to comply with current year line items.

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 and Paper Processing Branch BMF Code and/Error Resolution.

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

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

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 Intra-SC Reject or Routing Slip.

    Exception:

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

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 are willful and deliberate attempts to evade or defeat the income tax. Flagrant criminal activity includes but is not limited to the failure to pay taxes due and/or taxes collected or withheld and claims of false refunds based on bogus return information.

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

    1. Make a copy of the return.

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

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

      Cincinnati Ogden
      Mail Stop 83G, Criminal Investigation (CI) Mail Stop 9001, Criminal Investigation (CI)
    4. Edit an action trail "Copy to CI" , or "CI Referral" , or similar language in the lower left corner going vertically up the side of the return.

    5. Continue processing the return.

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

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

Examination (Exam) "Funny Box"

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

General Editing Guidelines

  1. The Document Perfection tax examiner will identify a return that is unprocessable and requires correspondence, research or other action to make the return processable.

  2. The tax examiner will determine the kind of action required and assign an Action Code to the return.

Edit Marks

  1. Edit marks are edited on the return for transcription to the Automatic Data Processing (ADP) System through the Integrated Submission and Remittance Processing (ISRP) System. 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. For a description of specific edit marks, see the table below:

    EDIT MARK DESCRIPTION
    "X" or The "X" is used to delete tax data or to indicate that an item is not to be transcribed. For example, if deleting an original taxpayer entry, edit an "X" to the left of the entry to be deleted. Edit the correct entry to the left or above the "X" .
    "I" A "I" can be used when deleting a form or schedule not being transcribed.
    "//$" The "//$" is used in the entity area to identify the beginning and ending of a foreign country code. For example, "/EI/$" is edited for "Ireland" or "/GM/$" is edited for "Germany" .
    "c/o" or "%" Indicates an "in-care-of" name for transcription.
    Circle Indicates that an entry is not to be transcribed. Also used to delete entity data or a Received Date.

    Note:

    If the taxpayer circles an entry, edit the entry.

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

    Note:

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

    Check Mark Indicates that an entry has been manually math verified and is correct.
    Bracket/Parentheses Indicates a negative numerical amount.

    Note:

    Code and Edit is not required to bracket negative amounts when brackets are preprinted on the form or schedule or when the taxpayer clearly indicates a negative amount with brackets () or "-" sign. It will be necessary to bracket negative amounts when editing negative entries on transcription lines (e.g., computing and entering a line entry, entering a missing line entry, etc.).

    Vertical Line or Decimal Point Indicates the separation of dollars and cents.
    Zero, Dash, None, or N/A "ZERO" , "DASH" , "NONE" , or "N/A" are considered valid entries except when specific instructions require editing of an entry.
    Edit Marks Made by Other IRS Functions Edit marks entered by other areas such as Collections, Entity or Accounts Management, are not to be re-edited except to place the marks in the correct area, or to perfect for legibility. Do not edit (or write) over another area's edit marks.

    Note:

    Exception Photocopied Returns

    .
    Photocopied Returns Re-edit or underline any valid, black edit marks.
    Rocker Indicates the amount paid when drawn under a remittance amount.

Action Codes

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

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

  3. Edit the Action Code in the bottom left margin of Form 1066, Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return. See Figure 3.11.213-2, Provides an example of Editing the Action Code for Correspondence Request.

    Figure 3.11.213-2

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  4. Assign Action Codes in the following priority:

    1. Action Code 310 (Statute Control)

    2. Action Code 320 (Entity Control)

    3. Action Code 4XX

    4. Action Code 6XX

    5. Action Code 3XX

    6. Action Code 2XX (Correspondence)

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

    If Then
    Action Codes include 211, 215, 225 or 226 and Action Code 341,
    1. Action Codes include 211, 215, 225 or 226 on the Form 1066.

    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 Form 1066.

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

    3. See IRM 3.11.213.3.2(8), Action Codes for suspense periods.

    Action Codes have different priorities,
    1. Edit the Action Code with the higher priority on the Form 1066.

      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)
    • Return is illegible, incomplete, or contradictory and therefore cannot be processed

    • 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)

    226 (Missing Signature International Correspondence)
    • Unsigned foreign return (only issue for correspondence)

    480 (Early Filed Suspense)
    • Early filed return

    610 (Renumbered Non-remittance) or
    611 (Renumbered with remittance)
    • A return is mis-blocked (e.g., Form 1065 found in a 1066 batch of work)

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

    650 (International)
    • An International return that must be forwarded to Ogden Submission Processing Center (OSPC)

      Note:

      An Army Post Office (APO) / Diplomatic Post Office (DPO) / Fleet Post Office (FPO) address is not considered foreign.

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

  8. Valid Action Codes are listed below:

    Action Code Description Workday Suspense Period
    211 First Taxpayer Correspondence 40
    212 Second Correspondence 25
    215 International Correspondence 45
    225 Taxpayer Correspondence (Signature Only) 40
    226 International Correspondence (Signature Only) 40
    310 Statute Control 10
    320 Entity Control 10
    331 Frivolous Review 3
    341 Manual Refund 10
    342 Credit Verification 10
    343 Black Liquor 10
    352 Name Research 3
    360 Other-in-House Research 10
    420 2006 tax return with Form 8913 credit 5
    440 Manager's Suspense 15
    450 Management Suspense D 20
    480 Early Filed Suspense 150
    610 Renumber - Non-remit 0
    611 Renumber - Remit 0
    640 Void 0
    650 International 0

Refund Returns (45 Day Jeopardy and Million Dollar 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. Pull the return from the non-refund batch using local procedures.

    2. Code and Edit the return as completely as possible

    Note:

    Follow the instructions below when the processing date is more than 20 days after the Received Date or the return due date OR the refund is $1,000,000 or more.

    The processing date is more than 20 days after the Received Date or the Return Due Date (whichever is later) and the refund amount is $25,000 or more., Unnumbered Returns:
    1. Pull the return from the batch.

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

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

      Note:

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

    4. 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, Intra-SC Reject or Routing Slip and check the "Reject Correction" box.

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    Note:

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

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

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

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

      Note:

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

    4. Place the return in the CI box.



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

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

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

      Note:

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

    The Wage and Investment Submission Processing TAS Liaison walks a return through Code and Edit, In addition to normal editing, edit the following:
    1. Computer Condition Code (CCC) "O" , to freeze the refund.

    2. CCC "Y" , to send the return to Error Resolution (ERS).

Unprocessable Conditions

  1. The Document Perfection tax examiner will have the first opportunity to identify a return having a problem which requires correspondence, research or other action to make the return processable. An Action Code is edited to identify these unprocessable returns. See IRM 3.11.213.3.2, Action Codes.

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

  3. The following information pertains to multiple return information on one return:

    If Then
    Liability for two or more Form 1066, Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, returns was reported on one unnumbered return and the information necessary for the preparation of the individual return is present,
    1. Adjust the line entries on the period return to reflect the liability for the earliest period.

    2. Prepare "Dummy" returns as necessary for additional periods.

    3. Retain all the unnumbered returns in batch.

    The original return is numbered,
    1. Edit Action Code 360 and leave in the block.

    2. Attach Form 4227, Intra-SC Reject or Routing Slip, for Reject Correction. Notate "Multiple Period" .

    If there is not enough information to prepare additional period returns, Correspond.

Suppression of Delinquency Check

  1. The following information pertains to suppression of the delinquency check.

    If Then
    An unnumbered, unprocessable return is withdrawn from processing, Input Transaction Code (TC) 599, Closing Code "17" to suppress the normal delinquency check and edit in the top of the left margin. See Figure 3.11.213-3, Example of Form 1066 with TC599, CC17

    Figure 3.11.213-3

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TC 599 Closing Code 17
  1. The following information pertains to TC 599:

    If Then
    Inputting TC 599 via Integrated Data Retrieval System (IDRS), The following information is necessary:
    1. Employer Identification Number (EIN)

    2. Name Control

    3. MFT (07 for Form 1066)

    4. Tax Period

    The above information is present, Flag the return for input of TC 599, Closing Code "17" via IDRS.
    Using TC 599, Closing Code "17" , Use only with management approval per instructions in IRM 3.30.123, Processing Timeliness: Cycles, Criteria and Critical Dates.

Correspondence

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

    1. Correspondence received from taxpayers, and

    2. Correspondence issued to taxpayers.

Definition of Correspondence from Taxpayers

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

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

    2. Written communications, including annotated notice responses, that provide additional information or dispute a notice.

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

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

    1. Is 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 does not constitute correspondence from the taxpayer. For instance, the note may state something like the following: "Taxpayer (TP) requests penalties be waived" .

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, "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 return 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 included in the same correspondence.

    If And Then
    Correspondence is needed, Requires a response,
    1. Complete an approved Correspondence Action Sheet indicating the (Letter number (86C, Referring Taxpayer Inquiry/Forms to Another Office,Letter 854CPenalty Waiver or Abatement Disallowed/Appeals Procedure Explained, etc.), Master File Tax (MFT), and the appropriate paragraphs.

      Note:

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

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

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

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

    Correspondence is needed, Does not require a response,
    1. Complete an approved Correspondence Action Sheet indicating the (Letter 86C, Referring Taxpayer Inquiry/Forms to Another Office, Letter 854C, Penalty Waiver or Abatement Disallowed/Appeals Procedure Explained, etc.,), MFT, and the appropriate paragraphs.

      Note:

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

    2. Photocopy first page of return and attach the Correspondence Action Sheet below the Entity area on the front 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 854C sent)" ), Penalty Waiver or Abatement Disallowed/Appeals Procedure Explained, etc.,), in the lower left corner going vertically up the side of the return.

    5. Finish editing the return and leave in the 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.

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

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

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

    If Then
    The edit marks are black, Underline the edit mark if correct or circle if incorrect.
    The edit marks are red or green, Circle if incorrect.
    The edit marks are missing or incorrect, Perfect as necessary.
  4. Follow the instructions below for processing "CIS" returns.

    If And Then
    The "CIS" return has a Form 13596, attached, The return is incomplete (e.g., missing signature, schedules or forms),
    1. Do not correspond.

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

    3. If the return comes back from AM with 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 (e.g., missing signature, schedules or forms), Follow normal correspondence procedures.
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, fax signatures are acceptable. For more information about accepting signed taxpayer documents by fax, see the most recent revision of the IRS Policy for Use of Fax, available at http://irweb.irs.gov/AboutIRS/co/dese/memo/48254.aspx.

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

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

    Caution:

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

Routing Guide for Attachments

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

    1. 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"

    2. Edit Action Trail(s) (e.g., "Form 2848, Power of Attorney and Declaration of Representative, DETACHED" ) in the lower left corner going vertically up the side of the return.

    Note:

    When a document is detached and routed for processing, edit the name, address and EIN if not present. Also, edit the return Received Date (e.g., "Rec'd MM/DD/YY" ) in the lower left margin of the detached document before forwarding.

    Caution:

    The Attachment Guide is included as an exhibit only for use in assisting in the identification of possible forms or conditions that require action or routing to other functions. The guide should not be used in place of the completed IRM section governing those conditions, since space limitations do not always allow for full instructions in the Attachment Guide.

  2. Follow the general guidelines below for each attachment:

    Document Detach Action
    CP 259, Master file Generated 1st TDI NoticeCP 959(Spanish) 1st Return Delinquency Notice. 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.

    • Employer Identification Number (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.

    CP 259 A through H, Master File Generated 1st TDI Notice No Ogden Submission Processing Center, (OSPC)
    Mail Stop 6273.
    CP 504/504B, Final Notice Balance Due. No
    1. Pull CP 504, Final Notice Balance Due. to the front.

    2. Route notice and return to Accounts Management.

    CP 518, Final Notice-Return Delinquency 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.

    Letter 112C, Individual Return-Incomplete for Forms 1040, 1040A and 1040EZ Letter 282C, Return not Received: Copy Requested/Received, Letter 2255C, Delinquent Return (Forms 720,1041,1065 and 1120)or Letter 2284C, Delinquent Return (Forms 940,941,942, and 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.

    Includes tax liability for Multiple Tax Periods or Types of Tax No
    • Numbered returns route to Rejects.

    • Unnumbered returns, prepare a dummy return if possible; otherwise correspond.

    Other Tax Returns (original signature) Yes
    1. Edit received date to the detached return.

    2. Route to appropriate function unless specifically directed otherwise.

    Exception:

    Returns attached to a consolidated return will NOT be detached.

    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 Avenue, NW
    Washington, DC 20224
    State Tax Returns, original or copy, with an original signature Yes Route to Receipt & Control.
    State Tax Returns (Photocopy, facsimile or no signature) No Leave attached.
    Statement establishing Reasonable Cause for delinquent filing No
    1. Issue Letter 1382C, Penalty Removal Request Incomplete

    2. Continue editing the return.

    Remittance found No Immediately hand-carry return and remittance to supervisor.
    Request for Acknowledgement No No action required.
    Request for information or inquiries Yes
    1. Photocopy any data necessary to process the return.

    2. Attach the photocopy to the return.

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

    Requests for Installment Agreement Yes Ogden - route to Collections.
    Cincinnati - route to Receipt and Control, (R&C.)
    Kansas City - route to Mail Stop P4 5000.
    Request for adjustment to another document Yes Route to appropriate function. Attachment must contain Name, Address, EIN and IRS Received Date. Edit if missing.
    Request for money transfer No/Yes No - Form 1066, Real Estate Mortgage Investment Conduit (REMIC) notates transfer of money TO the return you are processing:
    1. Prepare Form 3465, Adjustment Request, 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 - Form 1066 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, Adjustment Request, and:

      1. Indicate in the Routing box "Adjustments" .

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

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

    5. Continue editing the return.

    Request for Forms or Schedules No If requesting current year forms:
    1. Prepare Form 4190, Order Form for Tax Form and Publications.

    2. Forward to National Distribution Center (NDC) for processing.


    If Requesting prior year forms:
    1. Prepare Form 6112, Prior Year Tax Products Order Form.

    2. Forward to National Distribution Center (NDC) for processing.

    Note:

    Form 4190, Order Form for Tax Form and Publications, and Form 6112, Prior Year Tax Products Order Form, are generally used for IMF requests. Therefore, enter all BMF requests for forms and/or schedules in the "Write-In" portion of the forms.

    Form 433-B, Collection Information Statement for Businesses Yes Ogden - route to Collections.
    Cincinnati - route to Receipt and Control, (R&C).
    Kansas City - route to Mail Stop P4 5000.
    Form 433-D, Installment Agreement Yes Ogden - route to Collections.
    Cincinnati - route to Receipt and Control, (R&C).
    Kansas City - route to Mail Stop P4 5000.
    Form 926, Return by a U.S. Transfer or of Property to a Foreign Corporation. No Edit Audit Code 2 preceded by 8- in the left margin of the Deductions Section.
    Form 1065X, Amended Return or Administrative Adjustment Request (AAR) No Route Form 1066, Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return and Form 1065X, Amended Return or Administrative Adjustment Request (AAR), to Accounts Management.
    Form 2848, Power of Attorney and Declaration of Representative 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
    Form 3520-A, Annual Information Return of Foreign Trust with a U.S. Owner> Yes Forward to Ogden Submission Processing Campus (OSPC) via Form 4227, Intra-SC Reject or Routing Slip.
    Form 3753, Manual Refund Posting Voucher No Edit Computer Condition Code 0 to the dotted portion of Section 1, Line 1.
    Form 3949, Information Report Referral. Yes
    • Route Form 3949, Information Report Referral, according to page 2 of Form 3949, Information Report Referral, to CI, Exam, Disclosure, etc., following local procedures.

    • Continue processing the return.

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

    • Continue processing the return.

    Form 4797, Sales of Business Property (Also Involuntary Conversions and Recapture Amounts) No No action required.
    Form 5471, Information Return of U.S. Persons with Respect to Certain Foreign Corporations. No Edit Audit Code 2 preceded by 8- to the left margin of the Deductions Section.
    Form 5713, International Boycott Report. Yes
    1. Forward original to Ogden Submission Processing Center, Statistics of Income (SOI), Mail Stop 6112.

    2. Leave copies attached and edit Audit Code 2 preceded by 8- to the left margin of the deductions Section if attached or there is a yes answer to the Foreign Trust Question 1, Page 4, Additional Information. See IRM 3.11.213.22, Audit Codes.

    Form 6252, Installment Sale Income No Edit Installment Sale Indicator in the left margin of the Deductions Section preceded by 9-.
    See IRM 3.11.213.23, Installment Sale Indicator.
    Form 7004, Application for Automatic Extension of Time to File Certain Business, Income Tax, Information, and Other Returns. Yes/No Yes - If Form 7004, Application for Automatic Extension of Time to File Certain Business, Income Tax, Information, and Other Returns, is for other than the tax return or Tax Period being filed, route to Receipt & Control.
    No- If Form 7004 is for the tax return it is attached to.
    Request for Form 8109, Deposit Slips or Coupon Books. No No action required.
    Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR) No Edit Audit Code 1 preceded by 8- to the left margin of the Deductions Section.
    Form 8271, Investor Reporting of Tax Shelter Registration Number No No action required.
    Form 8275, Disclosure Statement No Edit Audit Code 1 preceded by 8- to the left margin of the Deductions Section.
    Letter 8275-R, Regulation Disclosure Statement No Edit Audit Code 1 preceded by 8- to the left margin of the Deductions Section.
    Form 8821, Tax Information Authorization. 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
    Form 8822, Change of Address or Form 8822-B, Change of Address - Business Yes/No Yes - If the information is different from the return, route to Entity Control.
    No- If the information is the same as on the return. Refer to IRM 3.11.213.6.4(3)Form 8822, Change of Address or Form 8822-B, Change of Address - Business
    Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b) No Edit CCC L to the dotted portion of Section 1, Line 1.
    Form 9465, Installment Agreement Request Yes Ogden - route to Collections.
    Cincinnati - route to Receipt and Control.
    Kansas City - route to Mail Stop P4 5000.
    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
    Form SS-4, Application for Employer Identification Number. Yes/No YES - If Entity Control has assigned an EIN to the Form SS-4, Application for Employer Identification Number, route to Entity Control.
    NO - If Entity Control has not assigned an EIN to the Form SS-4, Application for Employer Identification Number, route the Form 1066, Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, and Form SS-4, Application for Employer Identification Number, to Entity Control for EIN assignment.

Entity Perfection - General

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

    1. Employer Identification Number (EIN)

    2. Name

    3. "In-care-of" name

    4. Address

Bankruptcy

  1. If the Form 1066 indicates bankruptcy (e.g., shows RECEIVER, TRUSTEE, or DEBTOR IN POSSESSION) in the entity area or on an attachment, route to Entity Control using local procedures.

Entity Perfection - Employer Identification Number (EIN)

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

  2. Determine the EIN as follows: The EIN is located in the upper right of the form ("Employer Identification Number" box).

  3. Determine the EIN as follows:

    1. If And Then
      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 Practitioners Tax Identification Number (PTIN) or Individual Taxpayer Identification Number (ITIN), Unnumbered/Numbered
      • Unnumbered:

        1. Remove return from batch.

        2. Forward to Entity Control following local procedures for EIN assignment.

      • Numbered:

        1. Edit Action Code 320.

        2. Leave return in batch.

      Multiple EINs are present, Unnumbered/Numbered
      • Unnumbered:

        1. Remove return from batch.

        2. Forward to Entity Control following local procedures for EIN assignment.

      • 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; or

      • All nines

      Unnumbered/Numbered
      • Unnumbered:

        1. Research IDRS.

        2. If found, edit to the proper location.

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

      • Numbered:

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

        2. Edit Action Code 320.

        3. Leave return in batch.

      "Pending" , "applied for" , etc., is indicated in the EIN area, Unnumbered/Numbered
      • Unnumbered:

        1. Research IDRS.

        2. If found, edit to the proper location.

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

      • Numbered:

        1. Edit Action Code 320.

        2. Leave return in batch.

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 more than one word follows. See Figure 3.11.213-4. The Figure provides an example of editing the Name Control without using the word The.

      Note:

      If an individual and a trade name are present and it can be determined that the trade name is for a corporation or a 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 individual owner's name is listed.

  2. The name control for an estate is derived from the surname of the decedent. If a "GNMA" pool number is present, use the first four digits of the pool number except do not include any leading zeros or trailing alphas. If there are fewer than four numbers, use the "GNMA" to complete the Name Control.

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

    Figure 3.11.213-4

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    Please click here for the text description of the image.

  4. If box "Name Change" on Form 1066, Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, is checked, route the return to Entity Control following local procedures.

  5. Edit the Name Control as follows:

    1. If And Then
      Able to determine the Name Control   Underline the Name Control.
      Unable to determine the Name Control, Unnumbered/Numbered
      • Unnumbered:

        1. Research IDRS.

        2. If found, edit to the proper location.

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

      • Numbered:

        1. Edit Action Code 352 (Name Research).

        2. Leave return in batch.

      A return indicates the taxpayer has filed bankruptcy (e.g., shows "RECEIVER" , "TRUSTEE" , OR "DEBTOR IN POSSESSION" ) in the entity area or on an attachment,   Route to Entity Control following local procedures.
Entity Perfection - "In Care Of"
  1. An "in-care-of" name can be identified by the words "in care of" or the symbols "c/o" or "%" (percent).

  2. Ensure the "in-care-of" name is located in the proper location.

    If Then
    The "in-care-of" name is located on the street address line preceding the street address, No editing is required.
    The "in-care-of" name is located above the first name line or below the street address, Arrow the "in-care-of" name so it appears below the first name line and above the street address.
    The "in-care-of" name is shown on an attachment, Edit the "in-care-of" name above the street address beginning with the "%" or "c/o" in the first position.
    The street address for the "in-care-of" name is different from the street address of the REMIC,
    1. Arrow the "In-care-of" street address below the "In-care-of" name or edit the "In-care-of" street address below the "In-care-of" name if located on an attachment.

    2. Circle the REMIC street address and input TC 014. (See IRM 3.11.213.6.4, Entity Perfection - Domestic Addresses.)

    Note:

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

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

    • A check mark in the "Name change" box (Page 1, Item D, Box 2), or

    • A check mark in the "Address change" box (Page 1, Item D, Box 3), or

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

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

    2. Continue editing the return.

    An "in-care-of" name is present and the "Address change" box (Page 1, Item D, Box 3) is checked (or there is an indication of an address change),
    1. Edit the in-care-of name as shown above.

    2. Correct the address (see IRM 3.11.213.6.4, Entity Perfection - Domestic Addresses).

    3. Continue editing 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.

    Exception:

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

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

  3. The procedures for perfection of addresses are as follows:

    If And Then
    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 or Responsible Party - Business is attached, All of the following applies.
    • Mailing address information is the same,

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

    • No entry on Form 8822-B, Lines 8 or 9

    Take no action.
    Form 8822, Change of Address, or Form 8822-B, Change of Address or Responsible Party-Business, is attached, Any of the following applies.
    • Mailing address information is different,

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

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

    Detach Form 8822, Change of Address, or Form 8822-B, Change of Address or Responsible Party-Business, and route to Entity Control following local procedures.
    Both a P.O. Box and a street address are shown,  
    1. Notate TC 014 in the upper left margin.

    2. Input TC 014.

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

    2. Notate TC 014 in the upper left margin.

    3. Input TC 014.

    One street address is shown, The Form 1066 changed the address to a P.O. Box,
    1. Notate TC 014 in the upper left margin.

    2. Input TC 014.

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

    Note:

    Edit the three digits followed by "01" of the first Zip Code listed for the applicable state (e.g., "99501" for Alaska).

    Only the first three digits of the ZIP Code can be determined,   Edit "01" for the fourth and fifth digits.
    The "Form 1066" Address Change box is checked. An "in care of name" is present,
    1. Edit the "%" (percent sign) or "c/o" to the left of the "in care of" name (in the first position) followed by the appropriate name.

    2. Correct the address.

    The National Change of Address (NCOA) label is present,   Underline the Name Control.
    It is necessary to edit the street address,   See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, for current Address/Street Abbreviations.
    The address contains information other than a street address or P.O. Box,   No perfection is necessary Integrated Submission and Remittance Processing.(ISRP) will enter the complete address.

    Note:

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

  4. The U.S. Postal Service established new address requirements for APO/DPO/FPO addresses. If the old address appears, convert it to the new State Code abbreviation based on the ZIP Code (e.g., APO New York, NY 091XX would be converted to APO AE 091XX). See Figure 3.11.213-5, Form 1066 with APO Address,. APO/DPO/FPO addresses are considered domestic addresses. Refer to APO/DPO/FPO Conversion Chart below:

    ZIP Code State Code
    34000 AA
    090–098 AE
    962–966 AP

    Figure 3.11.213-5

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    Please click here for the text description of the image.

Entity Perfection - Foreign Addresses

  1. A foreign (international) address is any address that is not in the 50 states or the District of Columbia.

  2. Returns with APO, DPO or FPO addresses are considered domestic addresses. See IRM 3.11.213.6.4, Entity Perfection-Domestic Addresses.

  3. Route returns with a foreign address to the Ogden Submission Processing Campus (OSPC) for processing. Prepare Letter 86C, Referring Taxpayer Inquiry/Form to Another Office, informing the taxpayer that the return has been sent to Ogden.

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

    1. A two-character alpha code must be edited for the Possession/Territory name.

      U. S. Possession/Territory Abbreviation
      American Samoa AS
      Federated States of Micronesia FM
      Guam GU
      Marshall Islands MH
      Northern Mariana Islands MP
      Palau PW
      Puerto Rico PR
      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 Document 7475, State and Address Abbreviations, Major City Codes (MCC's), Zip Codes and Countries.

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

    1. The foreign country must be the last entry in the address.

    2. Circle the foreign country and edit the country code preceded by a "/" and followed by a "/$" (e.g., "/GM/$" is edited for Germany). See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries for official foreign country codes.

    3. A unique country code will be edited for returns filed with an address in Canada. See IRM 3.11.213.6.5.1, Country Code - Canada.

      Note:

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

    4. If the foreign address is from Australia, Brazil, Canada, Cuba, Italy, Mexico or The Netherlands, check if the address contains a province, state, or territory. See Exhibit 3.11.213-3, Province, State, and Territory Abbreviations.

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

      2. Edit the appropriate abbreviation. See Exhibit 3.11.213-3, Province, State and Territory Abbreviations.

      A province, state, or territory name is not present, Continue editing the return.
      A province, state, or territory is shown in abbreviated format, Continue editing the return.
  6. A ZIP Code or state is not required on a foreign address. Foreign addresses use a postal code that is entered before the city or foreign country and is part of the address.

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. Circle the country name.

    2. Edit the appropriate country code for 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. Circle the country name.

    2. Edit the country code "/CA/$" as the last entry in the address.

    Canadian Province/Territory Province Abbreviation Country Code
    Alberta AB XA
    British Columbia BC XB
    Manitoba MB XM
    New Brunswick NB XN
    Newfoundland and Labrador NL XL
    Northwest Territories NT XT
    Nova Scotia NS XS
    Nunavut NU XV
    Ontario ON XO
    Prince Edward Island PE XP
    Quebec QC XQ
    Saskatchewan SK XW
    Yukon YT XY
  2. The rest of the foreign address is edited using procedures in IRM 3.11.213.6.5, Entity Perfection - Foreign Addresses.

Tax Period

  1. Edit the Tax Period to the right of the form title in YYMM format if the year ending is other than the current processing year (e.g., 201312). See Figure 3.11.213-6, Example of Editing the Tax Period.

    Figure 3.11.213-6

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    Please click here for the text description of the image.

  2. A REMIC return must always be a calendar year return with a Tax Period ending of December 31, unless the Form 1066 is a final return.

    If Then
    The return is "final" , Edit CCC "F" to the dotted portion of Section 1, Line 1 and edit the fiscal year notated on the final return.
  3. If the taxpayer indicates the Tax Period ending date is other than 12 and it is not a final return, take the following action:

    If Then
    Unnumbered
    1. Send the return back to the taxpayer. Inform the taxpayer that all REMIC filers must file a calendar year return.

    2. Send a photocopy of Page 1, via Form 4227, Intra-SC Reject or Routing Slip, to Entity Control to remove Form 1066, Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, filing requirements.

    Numbered
    1. Correspond with taxpayer to inform him or her a REMIC must file a calendar year return.

    2. Void the DLN, per local procedures.

    3. Photocopy Page 1 of the return and send it to Entity Control to remove the filing requirements.

Received Date

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

  2. A Received Date is required on all Form 1066, Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.

    If Then
    The return is received ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or the 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 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ of the legal or extended due date, Edit the Received Date to agree with the postmark or shipment date. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    For certified mail only - If a postmark Is not present, look for a "USPS.com Track & Confirm" record that has been attached to the return (should be before the envelope). Use the "Acceptance" date on the record to determine timeliness and follow normal editing procedures. Exhibit 3.11.213-4, USPS Track and Confirm,
    If the "USPS.com Track & Confirm" record is not attached, no action is required.

  3. When a Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, 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 stamped Received Date 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 03-22-2017 and first rejection is 03-12-2017. Change Received Date to 03-12-2017.
    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 03-23-2017 and first rejection is 03-12-2017. 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 03-22-2017, the second rejection is 03-12-2017. The first rejection is 03-09-2017 Change the Received Date to 03-09-2017.
    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 03-22-2017, the second rejection is 03-12-2017. The first rejection is 03-01-2017, change the Received Date to 03-12-2017.
    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 03-23-2017, the second rejection is 03-12-2017. The first rejection is 03-01-2017. 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 functional area within one of these sites (e.g., Compliance Service Collections Operation (CSCO), Exam, Information and Communication Technology (ICT). Collection Information System (CIS), Accounts Management (AM), etc.).

    Exception:

    Not all IRS offices are designated places for filing, and not all IRS employees are authorized to accept a tax return for processing. If a return 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 IRS Received Date stamp is not present or the date is illegible or invalid, edit the Received Date in MMDDYY format in the middle of Page 1 of the return. Edit the Received Date according to the following priority:

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

      If Then
      An envelope is not attached, 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, Look for the "USPS.com Track & Confirm " record that has been attached of the return (should be before the envelope). Use the "Acceptance " date on the record to determine timeliness and follow normal editing procedures. See Exhibit 3.11.213-4, USPS Track and Confirm.
      If the "USPS.com Track & 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 us 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 IRS Received Date as follows:

    If Then
    A timely IRS Received Date is the only Received Date stamped on the return, No editing is required.
    Two or more dates stamped on the return,
    1. Use the earliest IRS Received Date stamped on the return.

    2. Circle all other dates.

    Note:

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

    A Federal return is addressed to the IRS, Use the postmark date as the Received Date.
    Federal return is addressed to a State agency, Use the IRS date stamp as the Received Date.
    The only Received Date on the return is a Taxpayer Advocate Service (TAS) Received Date, Edit the Received Date according to instructions.

    Reminder:

    If an envelope is attached to the return, 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.

    Note:

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

Signature

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

    • Returns prepared under IRC Section 6020(b). These returns must be signed by a Compliance Function representative. See IRM 3.11.213.12.1, IRC Section 6020(b) Prepared by Collections.

      Note:

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

    • Returns prepared by Examination, for example "SFR" (Substitute for Return) or "SUBSTITUTE RETURN" . See IRM 3.11.213.12.3, Examination Prepared

    • Dummy returns prepared by IRS

    • Returns filed under IRC Section 501(d) (Religious or Apostolic Organization)

    • Correspondence containing a signature and jurat is attached showing that the taxpayer is responding to an IRS letter or notice (See paragraph (5) below.)

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

      Note:

      If the TRPRT print states "TRPRT Print Do Not Process" in the top margin, circle the words" Do Not Process"

  2. Do not correspond for a signature on "Correspondence Imaging System (CIS)" returns that have Form 13596, Reprocessing Returns, attached. See IRM 3.11.213.4.4.1, Correspondence Imaging System (CIS) Returns, for processing instructions.

  3. If a signature is missing, correspond:

    Note:

    IRM 3.11.213.4.4 Issuing Correspondence for returns that are incomplete and appear to be duplicate filings.

    If Then
    • The return is not signed on the line designated for the Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, or

    • The jurat is not present on the line designated for the Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return (non-standard return), or

    • 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. Leave in batch and continue editing.

    Note:

    Paper returns sent in by the filer that states their return was rejected through the E-File system require a signature. Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return is not an acceptable substitute for a paper return.

  4. If the jurat is altered or stricken (crossed-out), see IRM 3.11.213.15, Frivolous Arguments, for frivolous return instructions.

  5. Accept a "signature declaration" (e.g., a signature with a jurat obtained through IRS correspondence) if attached to the return.

    1. If the "signature declaration" is altered or stricken (crossed-out), see IRM 3.11.213.15, Frivolous Arguments, for frivolous return instructions.

    2. If the taxpayer 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 1066 - E-File Signature Authorization Form- is not an acceptable signature substitute for a paper return.

  6. The Following types of signature are not valid for Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return,

    • Faxed signature

    • Electronic signature

    • DocuSign digital signature

    • Typed font

  7. Since tax examiners are not expected to be handwriting experts, Section 301.6064-1 of 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 check mark or "X" used to designate where the Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, should sign the return is not considered a valid signature.

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

Paid Preparer Section

  1. The Paid Preparer Section is located below the Signature area at the bottom of Form 1066, Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.

Paid Preparer Checkbox Indicator

  1. The Paid Preparer Checkbox is located next to the taxpayer signature area. It indicates whether the taxpayer has elected to allow the Paid Preparer to answer questions about the return as it is processed.

  2. No action is required on amended returns.

  3. Take the following actions when an entry is present in the Paid Preparer Checkbox:

    1. If Then
      Only the "Yes" box is checked, Take no action.
      The "No" box is checked, neither box is checked, or both boxes are checked, Circle the Paid Preparer's telephone number, if present.

Paid Preparer’s Phone Number

  1. The Paid Preparer's Phone Number is located below the Paid Preparer's EIN at the bottom right hand corner of Form 1066, Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.

    If Then
    The return is amended, No action is required.
    The Preparer's Phone Number is more than 10 digits, No action is required.
    The Preparer's Phone Number is illegible or less than 10 digits, Circle the Phone Number.

Paid Preparer’s Tax Identification Number (PTIN)

  1. The Paid Preparer's Social Security Number (SSN) (2009 and prior revisions) or Preparer's Taxpayer Identification Number (PTIN) is located to the right of the "Preparer's signature" in the PTIN Box (Preparer's SSN or PTIN box for 2009 and prior revisions) at the bottom right of Form 1066 on Page 1.

  2. No action is required on amended returns.

  3. The Preparer's SSN is a nine digit number. Circle the SSN if all zeroes or all nines.

  4. A PTIN begins with the alpha "P" followed by an eight digit number (e.g., PXXXXXXXX). Circle the PTIN if all zeroes or all nines.

Firm’s EIN

  1. The Firm's EIN (Paid Preparer's EIN - 2009 and prior revisions) is located below the Preparer's PTIN Box (Preparer's SSN or PTIN box for 2009 and prior revisions) at the bottom right corner of Form 1066, Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, on Page 1.

  2. No action is required on amended returns.

  3. The Firm's EIN (Paid Preparer's EIN - 2009 and prior revisions) is a nine digit number. Circle the EIN if all zeroes or all nines.

Amended Returns

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

    • The Amended box is checked (2010 and prior revisions)

      Note:

      Beginning January 2012, Form 1065X, Amended Return or Administrative Adjustment Request (AAR), will be used to file an amended Form 1066, Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return. The "amended box" will not be present on the 2011 and subsequent revision of Form 1066, Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.

    • Words such as "SUPPLEMENTAL" , "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. There is an indication the return is amended and:

    If Then
    Form 1065X, Amended Return or Administrative Adjustment Request (AAR), is attached, Route Form 1066, Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, and Form 1065X, Amended Return or Administrative Adjustment Request (AAR), to Accounts Management.
    "TC 59X" or "ICS" was entered 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" by Statute, Do not edit CCC "G"
    Process the return as an original.
    Form 3893, Re-Entry Document Control, or Form 13596, Reprocessing Returns, is attached, Do not editCCC "G" . See IRM 3.11.213.14.1Form 3893 - Re-Entry Document Control and IRM 3.11.213.14.2, Form 13596 - Reprocessing Returns.
    None of the above are present, Edit CCC "G" to the dotted portion of Section 1, Line 1. No other codes may be used with CCC "G."

    Exception:

    CCC "W" , and/or "3" or other Error Resolution System (ERS) Action codes may be indicated on "G" coded returns.


    See Figure 3.11.213-7, How to edit CCC G.

    Exception:

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

    Figure 3.11.213-7

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

    1. Name Control - see IRM 3.11.213.6.3.

    2. EIN - see IRM 3.11.213.6.2.

    3. Tax Period - see IRM 3.11.213.7.

    4. CCC "G"

    5. Received Date - see IRM 3.11.213.8.

    6. Signature - see IRM 3.11.213.9.

Compliance Secured/Prepared Returns

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

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

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

IRC Section 6020(b) Prepared by Collections

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

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

    1. Returns must have a Received Date. If missing, follow the normal procedures for editing the Receive Date, see IRM 3.11.213.8, Received Date.

    2. Returns must be signed by Compliance function representatives. If not signed, route to Compliance, using Form 4227, Intra-SC Reject or Routing Slip.

      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 3.11.213.16.11, CCC "4" - (6020(b) Return).

      Note:

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

    4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " 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 Received Date is more than 2 years and 9 months after the Return Due Date. Do not send the return to Statute Control. See IRM 3.11.213.13, Statute Returns.

Collection Secured

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

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

    2. Use approved Correspondence Action Sheet to correspond for conditions that cannot be processed (e.g., missing signatures, missing schedules, etc.).

      Exception:

      A taxpayer's signature on a notice with a jurat is acceptable.

    3. Edit CCC "W" if the Received Date is more than 2 years and 9 months after the Return Due Date. Do not send the return to Statute Control. See IRM 3.11.213.13, Statute Returns.

    Reminder:

    If there is an indication a penalty or penalties should be suppressed, edit the appropriate Computer Condition Code(s). Please refer to IRM 3.11.213.16for additional information.

Examination Prepared

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

    1. Return must have a Received Date. If no 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 unprocessable, edit CCC "3" and continue processing.

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

    4. Edit CCC "W" if the Received Date is more than 2 years and 9 months after the Return Due Date. Do not send the return to Statute Control. See IRM 3.11.213.13, Statute Returns.

Examination Secured

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

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

    2. Use approved Correspondence Action Sheet to correspond for conditions that cannot be processed (e.g., missing signatures, missing schedules, etc.).

      Exception:

      A taxpayer's signature on a notice with a jurat is acceptable.

    3. Edit the Computer Condition Codes that are checked on Form 13133, Expedite Processing Cycle.

    4. Edit CCC "W" if the Received Date is more than 2 years and 9 months after the Return Due Date. Do not send the return to Statute Control. See IRM 3.11.213.13, Statute Returns.

    Reminder:

    If Form 13133, Expedite Processing Cycle, (or something similar) indicates a penalty or penalties should be suppressed, edit the appropriate Computer Condition Code(s). Please refer to IRM 3.11.213.16for additional information.

Statute Returns

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

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

    Exception:

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

    • Compliance IRC Section 6020(b) returns

    • Secured by Examinations/Collections, Secured by TE/GE, Secured by TE/GE Employee Plan (EP) Exam.

    • Returns with "TC 59X" or "ICS" 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 (90) days

  3. If a Form 12412, Operations Assistance Request (OAR) is received from TAS and the return is a potential statute control return but is not stamped "Cleared by Statute" , give the return to your lead. The lead will contact the TAS employee listed in the OAR and then send 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 that expedited handling is needed. If requested by the TAS employee route the return directly to statute for clearance.

  4. Statute returns are unprocessable until they are cleared by Statute Control.

    If Then
    The return is numbered,
    1. Edit Action Code 310 to the bottom left margin of,Form 1066, Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.

    2. Leave the return in the batch and continue processing.

    The return is unnumbered,
    1. Do not continue processing.

    2. Pull the return from the batch.

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

  5. Edit CCC "W" to the dotted portion of Section 1, Line 1, if the return has been cleared by the Statute Control Unit. Statutes will stamp or indicate clearance on the front of the return.

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

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

Re-Entry Document Procedures

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

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

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

    • Form 13596, Reprocessing Returns, is used to reprocess documents to the correct account or module that had previously posted to the wrong account or module

  3. Always leave the Form 3893, Re-Entry Control Document, or Form 13596, Reprocessing Returns, on the front of the return. It must remain as a permanent part of the document.

  4. Examine 3893 Form 3893, Re-Entry Document Control, or Form 13596, Reprocessing Returns, to determine the action needed to make the return processable.

    Caution:

    If the Receive Date is 2 years and 9 months or more after the Return Due Date, refer to Statute procedures before re-entering or reprocessing the return. See IRM 3.11.213.13, Statute Returns.

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, Re-Entry Document Control, has an entry in Box 1 (Alpha/Numeric block control no.), edit all returns using current processing instructions and keep all returns clipped together.

  3. Circle the CCC "G" if present.

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

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

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

  7. If the return was edited according to current processing instructions, ensure that the information from Form 3893, Re-Entry Document Control, is edited on the return.

    Form 3893, Re-Entry Document Control Action Taken
    Box 14 Remarks Ensure that the information is edited to the return.
    Box 15 (Process as)
    1. Circle any green rocker and edit marks that may indicate a receipt of remittance.

    2. Do not change any tax due amounts.

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

    If Then
    Improper perfection, Edit the same correction in red/green (per local procedure) to the appropriate area.
    Taxpayer error, Leave the entries as shown on the document.
  9. A Received Date must be present on all re-input returns:

    If Then
    Received Date is not present, Edit a Received Date to the middle of the return.
    Multiple Received Dates are present, Circle all but the earliest date.
  10. When additional information is still needed to make the return processable, prepare approved Correspondence Action Sheet or Form 4227, Intra-SC Reject or Routing Slip, for the appropriate action (e.g., correspondence, research, etc.).

  11. When perfection is not possible, edit Action Code 640 on the return and attach Form 4227, Intra-SC Reject or Routing Slip, noting, "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. Circle CCC "G" if present.

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

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

  5. If the return 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.

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

    Form 13596Reprocessing Returns Action Taken
    TIN correction Edit correct TIN on return.
    Tax Period correction Edit correct Tax Period ending on return.
    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.

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

    If Then
    Improper perfection, Edit the same correction in red/green (per local procedure) to the appropriate area.
    Taxpayer error, Leave the entries as shown on the document.
  8. An IRS Received Date must be present on all reprocessed returns.

    If Then
    IRS Received Date is not present, Edit an IRS Received Date to the middle of the return.
    Multiple Received Dates are present, Circle all but the earliest date received by the IRS.
  9. Circle any green rocker and edit marks that may indicate a receipt of remittance.

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

Frivolous Arguments

  1. A frivolous argument generally expresses dissatisfaction with the substance, form, or administration of the tax laws and attempts to improperly avoid or reduce tax liabilities or to increase refunds by frivolous means. Recognized frivolous arguments made by businesses include, but are not limited to, the examples shown in Exhibit 3.11.213-2, Potential Frivolous Argument for Examination Review. See IRM 25.25.10, Frivolous Return Program (FRP).

  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 3.11.213-2, Potential Frivolous Arguments for Examination Review.

    Exception:

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

    Remove the return from the batch and place the return in the locally designated basket for Examination, Frivolous Return Processing (FRP) for review.
    Examination has selected the return as frivolous, e.g., indicated by an Action Code "331" and a Form 4227, Intra-SC Reject or Routing Slip, with the remarks "Refer to Exam Frivolous Return Processing (FRP), for audit after processing" , but sends the return for processing, Continue processing the return using procedures in IRM 3.11.213. However, do not circle or void the Action Code indicating a frivolous return.

    Note:

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

Computer Condition Codes

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

  2. Computer Condition Codes are edited to the dotted portion of Section 1, Line 1.

CCC "B" - Electing out of Installment Sales Method

  1. Edit CCC "B" when the taxpayer has made an entry in the margin of either Schedule D or Form 4797, Sale of Business Property electing not to report property sales on the installment basis. Taxpayer's entry will be similar to "I elect out of the installment method" .

CCC "D" - Reasonable Cause for Failing to Pay Timely

  1. Do not edit CCC "D" if the taxpayer requests abatement for "Failing to Pay Timely" when the return is submitted. Send Letter 1382C, Penalty to Removal Request Incomplete, to inform the taxpayer of the proper procedure to follow to request penalty 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 Returns

  1. Edit CCC "F" when the "Final Return" box is checked or there is another indication the taxpayer is not liable for filing future returns. Notations may include (but are not limited to):

    • Final

    • Deceased

    • Out-of-Business

    • Liquidation

    • Exempt under IRC Section 501(c)(3)

    • Dissolved

CCC "G" - Amended Returns

  1. See IRM 3.11.213.11, Amended Returns.

CCC "L" - Treaty Based Positions

  1. Edit CCC "L" when the taxpayer has written "Section 6114" on the top of the return, and

  2. Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), is attached to the return.

CCC "O" - Module Freeze

  1. CCC "O" is entered when a Pre-settlement Manual Refund will be made and a Form 3753, Manual Refund Posting Voucher, Form 5792, Request for IDRS Generated Refund, or Form 12857, Refund Transfer Posting Voucher is attached. Verify that the Name Control, EIN, and Tax Period on the return is the same as the data on the form.

  2. When issuing 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 Timely File

  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, Penalty Removal Request Incomplete, and continue editing the return.

  2. Edit CCC "R" on the REMIC return when any of the following condition(s) are present:

    • There is an indication such as "DO NOT ASSESS FAILURE TO FILE PENALTY" on a secured return annotated with "TC599 "

    Note:

    All "R" coded returns must have a received date. If one is not present, edit the date in the middle of the return.

    Note:

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

CCC "W" - "Cleared by Statute"

  1. CCC "W" is used when the return has been cleared by Statute Control. See IRM 3.11.213.13, Statute Returns.

CCC "X" - Refund Settlement Freeze

  1. CCC "X" - A refund freeze code to be used as the need arises.

CCC "3" - No Reply to Correspondence

  1. Edit CCC "3" when the return is unprocessable and there is an indication that correspondence has been sent and no reply received.

CCC "4" - 6020(b) Return

  1. Edit CCC "4" when the IRS Compliance Branch prepared a return and the Revenue Officer entered IRC 6020(b) Provides a way to prepare returns and secure assessments.

    Note:

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

CCC "7" - Reasonable Cause Denied

  1. CCC "7" is no longer edited by Code and Edit examiners. See IRM 3.11.213.16.2, CCC "D" - Reasonable Cause for Failing to Pay Timely and IRM 3.11.213.16.7, CCC "R" - Reasonable Cause for Failing to Timely File.

Date REMIC Started

  1. No action required.

Total Assets At The End of Tax Year

  1. The "Total Assets" is found in the upper right corner at the top of Page 1, Form 1066, Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, Box C (Enter total assets at end of tax year).

  2. Edit Box C as follows:

    If And Then
    Box C is blank, Schedule L, Line 4, Column (b) has an amount, Edit Column (b) amount to Box C (dollars only).
    Box C is blank, Schedule L, Line 4, Column (b) is blank, Edit Schedule L, Line 4, Column (a) amount to Box C (dollars only).
    Box C and Schedule L are blank,   No action necessary.

Number of Residual Interest Holders

  1. The number of Residual Interest Holders is found on Page 3, Additional Information, Question F, dotted area.

  2. The number of Residual Interest Holders must always be edited.

    1. Edit the number in the left margin of Page 1, "Deductions" section preceded by "3-" . See Figure 3.11.213-8, Example of the editing of the number of residual holders.

    2. The entry must be all numeric, 1 through 999,999.

  3. Determine the number of Residual Interest Holders as follows:

    If And Then
    A number from 1 through 999,999 is present on Question F,   Edit the number from Question F.
    A number is not present on Question F, Schedules Q are attached, Count the number of Schedules Q attached and edit the total as the number of Residual Interest Holders.
    A number is not present on Question F, No Schedules Q are attached,
    1. Edit "1" if the "Trust" or "Corporation" boxes are check on Question E.

    2. Edit "2" if the "Partnership" box is checked on Question E.

    Note:

    If no boxes are checked for Question E, edit "2" as the number of Residual Interest Holders.

    A number greater than 999,999 is present on Question F,   Edit "999999" (six nines).
    No Page 3 is present, No Schedules Q are attached, Edit a "2" as the number of Residual Interest Holders.

    Figure 3.11.213-8

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Tax Equity and Fiscal Responsibility Act of 1982 (TEFRA)

  1. This code is based on the taxpayer's response to Question "G" , Page 3, Form 1066,. If the taxpayer checks the box in Question "G" , edit "1" preceded by "4-" to the left margin of the "Deductions" section. See Figure 3.11.213-9.

    Figure 3.11.213-9

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    Please click here for the text description of the image.

Missing Schedule Codes

  1. The valid Missing Schedule Code is 35.

  2. Edit Missing Schedule Code following instructions below:

    If Then
    Form 1066, Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, Page 1, Section I, Line 4, "Ordinary gain or (loss)" , contains an entry, but Form 4797, Sale of Business Property (Also Involuntary Conversion and Recapture Amounts), is not attached or is blank, Edit code "35" preceded by "5-" to the left margin of the "Deductions" section.

Audit Code

  1. The following information pertains to the Audit Code.

    If Then
    Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR), is attached; Form 8275, Disclosure Statement, or Form 8275-R, Regulation Disclosure Statement, is attached, Edit Audit Code "1" preceded by "8-" to the left margin of the "Deductions" section.
    Form 926, Return by a U.S. Transferor of Property to a Foreign Corp., is attached, Edit Audit Code "2" preceded by "8-" to the left margin of the "Deductions" section.
    Form 5471, Information Return of U.S. Persons with Respect to Certain Foreign Corporations, is attached, Edit Audit Code "2" preceded by "8-" to the left margin of the "Deductions" section.
    Form 5713, International Boycott Report, is attached; or there is a "yes" answer to the Foreign Trust question "1" page 3, Additional Information, Edit Audit Code "2" preceded by "8-" to the left margin of the "Deductions" section.

    Note:

    Although Audit Codes 3, 4, 5 and 6 are also valid for this field, no uses for these codes were identified in Forms 1066 processing.

Installment Sale Indictor

  1. Form 6252, Installment Sale Income, is used to report the sale of property on the installment plan.

  2. Codes are based solely on the taxpayer's response to Question 3 on Form 6252, Installment Sale Income. See Figure 3.11.213-10.

  3. Edit the Installment Sale Indicator preceded by "9-" to the left margin of the "Deductions" section.

  4. Valid codes for the Installment Sale Indicator are as follows:

    Code One Form 6252 Multiple Forms 6252
    1 "Yes" response to Question 3. At least one form has a "Yes" response.
    2 "No" response to Question 3. All "NO" responses, or a combination of "NO" and/or blank responses. See Figure 3.11.213-10, Example of Editing the Installment Sale Indicator.
    3 "Yes" and "No" are checked or Question 3 is blank. Question 3 is blank on all forms.

    Figure 3.11.213-10

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Tax Data Perfection of Section 1 - Computation of Taxable Income or Net Loss

  1. IMPORTANT: Do not edit Section I. Accept taxpayer's entries.

Tax Data Perfection of Section II - Tax and Payments

  1. This subsection provides instructions for the perfection of Section II, Tax and Payments, for Form 1066, Real Estate Mortgage Investment Conduit, (REMIC), Income tax Return.

Tax Data Perfection of Section II, Line 1 - Total Tax (Schedule J, Part IV, Line 12) Positive Only

  1. Perfect Form 1066, Section II, Line 1, Total Tax as follows:

    If Then
    Section II, Line 1 is blank, Edit amount from Schedule J, Part IV, Line 12.
    Section II, Line 1 and Schedule J, Part IV, Line 12 are blank, Add entries from:
    1. Line 4 If blank compute as follows:

      • Add Lines 1a, 1b, 1c, 1d and subtract Line 3

      • If sum is positive, add to the Section II, Line 1 computation

    2. Line 10

      • Add Lines 5 and 6, subtract Line 8, and multiply by 35 percent

      • If sum is positive, add to the Section II, Line 1 computation

    3. Line 11 If blank check for an attachment detailing the taxable contributions received after the Startup Date. If present, add to the Section II, Line 1 computation.

    4. Edit the sum of Lines 4, 10, and 11 to Schedule II, Line 1.

Section II, Line 2 - Tax Paid with Extension Positive Only

  1. The Tax paid with Form 7004 (Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns), must be a Positive amount.

Section II, Line 3 - Tax Due (also referred to as "Balance Due)" - "Positive Only"

  1. This should be the excess of Line 1 over Line 2. If blank, subtract Line 2 (Tax Paid with Form 7004) from Line 1 (Total Tax).

Section II, Line 4 - Overpayment (also referred to as "Refund)" - Negative only

  1. This amount should be the excess of Line 2 over Line 1. If blank, subtract Line 2 (Tax Paid with Form 7004) from Line 1 (Total Tax).

Form 1066 - U.S. Real Estate Mortgage Investment Conduit

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♦Potential Frivolous Arguments for Examination Review♦

Potential Frivolous Argument Description
Alleged Churches/First Amendment Income from non-religious sources and may claim a vow of poverty.
Altered Form Altering any or all line items with the intent of facilitating non-compliance with the tax laws.
Altered Jurat/UCC 1-207 Return contains income and deductions but the jurat has been altered or stricken. May include reference to UCC 1-207 or a statement that the return was not signed under penalties of perjury.
Amended Returns/Form 843Claim for Refund and Request for Abatement Amended return or a Form 843, Claim for Refund and Request for Abatement, filed to obtain a total refund of all taxes paid in prior years, based on a tax avoidance argument.
C-Filings This frivolous position includes the following four categories:
  1. Files a return claiming various types of deductions, credits, or overpayments/refunds that have no relation to reality and because of their outrageous character, qualify as frivolous returns.

  2. Files return containing the filers identifying information but does not request a refund, often lacking sufficient information to determine a tax liability.

  3. Files a return with various types of rambling dialogue and/or confusing arguments that no one could reasonably view as a good faith attempt to comply with the law.

  4. Files a return that attempts to send some type of message or protest to the IRS, but fails to include sufficient identifying information for the Service to either determine the identity of the taxpayer or correspondent or return address.

Challenges to Authority/Due Process Questions various administrative authorities such as delegation orders, summons authority, privacy act, etc., Argues that they must be afforded a hearing or a trial before taxes can be assessed or before property can be seized.
Challenges to Authority/Title 26 or "law" in Other Documents Argues that Title 26 of the United States Code is not law because it was never enacted as named.
Collections Issues Files frivolous documents contending that various collections issues are invalid (e.g. Offers in Compromise, Collection Due Process Requests, Installment Agreements, appeals Requests, etc.,) because they are not filed and/or signed by someone with delegated authority. They may have no certificate of assessment attached, do not comply in form or content with a State or Local law, are not in a certain format or lack a valid OMB (Office of Management and Budget) number or other frivolous positions.
Disclaimer Submits a disclaimer stating, "disclaims the liability for the tax due" , making the liability on the return zero.
Fifth Amendment Assertion of the Fifth Amendment right against self-incrimination as a basis for not providing any financial information.
Foreign Income Argues that United States citizens and residents are not subject to tax on their wages or other income derived from sources within the United States, as only foreign-based income or income received by nonresident aliens and foreign corporations from sources within the United States is taxable.
Form 1099-OID
(Original Issue Discount)
An individual files a return reporting false amounts of income (generally "Other" or "Miscellaneous" income) and all of them claim a false amount of income tax withholding approximately equal to the amount of falsely reported income. Although the returns report income, they do not calculate any tax due. Some of the returns have Form 1099-OID(Original Issue Discount) attached and some have Form 1096, Annual Summary and Transmittal of U.S. Information Returns. Other false financial instruments may be filed in the place of or in addition to the Form 1099-OID, Original Issue Discount, such as Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, promissory notes, bonds, sight drafts, etc.
IRC 861 Business
Employment Tax (BMF 861)
Argument targets employers and advises them that wages are exempt from withholding. Based on 26 CFR Section 1.861, promoters of this scheme advise employers to stop withholding and paying payroll taxes on their employee's wages. In addition, some employers file amended payroll tax returns and request refunds of previously paid payroll taxes.
IRS is a Private Organization/Collects Tribute, Not Taxes Argues that the IRS is an entity named the Internal Revenue and Tax Service, Inc., which was incorporated in Delaware in 1933, it is a collection agency for the Federal Reserve Bank, or is part of the United Nations and is clandestinely leading the tax-paying public into a "New World Order" .
Not a Person Argues that a taxpayer is not a "person" within the meaning of IRC Section 7701(a)(14).
Obscene, Vulgar, Harassing Submits documents or other materials indicating that non-filing is due to dissatisfaction with tax policies or taxation in general. Often, this argument is expressed with obscene, vulgar, or crude language and characters in an extremely demeaning manner.
Protest Against Government Action/Inaction Argues that refusal to file or pay is justified because they disagree with government policies or spending plans.
Sixteenth Amendment Argues the Sixteenth Amendment was not properly ratified and therefore the federal government does not have the legal authority to collect an income tax without apportionment.
Straw Men Argues the government has created an entity separate and distinct from the taxpayer - a "Straw Man" and any tax obligations are exclusively those of the "Straw Man" .
Taxes are Voluntary/Law Does Not Require Submits a return, amended return or correspondence that argues income taxes are voluntary.
U.S. v. Long Submits a return with zero money amounts much the same as the Zero Return category and U.S. v. Long is referenced. See NOTE in Zero returns below.
Unsigned Returns The individual completes a return but fails to sign, a statement indicating disagreement with the tax system is attached or added to the return.
Valuation Income is not taxable because of the declining fair market value of the dollar, because the dollar is not backed by gold/silver, because the value of services is offset by the value of the labor (barter income), etc.
Zero Returns Submits a return with zero money amounts on all or most of the line items on the form (e.g., IRC 861, Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, Original Issue Date (OID) and other BMF filings that claim no income and request refunds). See Rev. Rul. 2004-34. The statement may also contain arguments regarding the definition of income. There are several variations on this type of filing such as those bearing the words "nunc pro tunc" and "not liable" .

Note:

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

Other All others including those listed in Notice 2010-33 or any subsequent superseding notice. See also http://www.irs.gov/Tax-Professionals/The-Truth-About-Frivolous-Tax-Arguments-Section-1 on irs.gov. This category includes non-filer accounts resulting from initial compliance check such as cross-reference TINs.

Note:

Frivolous arguments citing "Collection Due Process" (CDP) should be reviewed by Collections for possible referral to Appeals. Refer to IRM 5.19.8, Collection Appeal Rights, for additional information.

Province, State and Territory Abbreviations

Australia State

Australia State Abbreviation
Australian Capital Territory ACT
New South Wales NSW
Northern Territory NT
Queensland QLD
South Australia SA
Tasmania TAS
Victoria VIC
Western Australia WA
 

Brazil State

Brazil State Abbreviation
Acre AC
Alagoas AL
Amapa AP
Amazonas AM
Bahia BA
Ceara CE
Distrito Federal DF
Espirito Santo ES
Goias GO
Maranhao MA
Mato Grasso MT
Mato Grosso do Sul MS
Minas Gerais MG
Para PA
Paraiba PB
Parana PR
Pernambuco PE
Piaui PI
Rio de Janeiro RJ
Rio Grande do Norte RN
Rio Grande do Sul RS
Rondonia RO
Roraima RR
Santa Catarina SC
Sao Paulo SP
Sergipe SE
Tocantins TO
 

Canada Province/Territory

Canada Province/Territory Abbreviation
Alberta AB
British Columbia BC
Manitoba MB
New Brunswick NB
Newfoundland and Labrador NL
Northwest Territories NT
Nova Scotia NS
Nunavut NU
Ontario ON
Prince Edward Island PE
Quebec QC
Saskatchewan SK
Yukon YT
 

Cuba Province

Cuba Province Abbreviation
Camaguey CG
Ciego de Avila CA
Cienfuegos CF
Ciudad de La Habana CH
Granma (Bayamo) GR
Guantanamo GT
Holguin HO
La Habana HA
Matanzas MT
Municipio Especial Isla de La Juventud IJ
Pinar del Rio PR
Sancti Spiritus SS
Santiago de Cuba SC
(Victoria de) Las Tunas LT
Villa Clara VC
 

Italy Province

Italy Province Abbreviation
Agrigento AG
Alessandria AL
Ancona AN
Aosta/Aoste AO
Arezzo AR
Ascoli Piceno AP
Asti AT
Bari BA
Belluna BL
Beneveto BN
Bergamo BG
Biella BI
Bologna BO
Bolzano Bozen BZ
Brescia BS
Brindisi BR
Cagliari CA
Caltanissetta CL
Campobasso CB
Caserta CE
Catania CT
Catanzaro CZ
Chieti CH
Como CO
Cosenza CS
Cremona CZ
Crotone KR
Cuneo CV
Enna EN
Ferrara FE
Firenze FI
Foggia FG
Forli FO
Frosinone FR
Genova GE
Gorizia GO
Grosseto GR
Imperia IM
Isernia IS
L'Aquila AQ
La Spezia SP
Latina LT
Lecce LE
Livorno LI
Lodi LO
Lucca LU
Macerata MC
Mantova MN
Massa-Carrara MS
Matera MT
Messina ME
Milano MI
Modena MO
Napoli NA
Novara NO
Nuoro NU
Oristano OR
Padova PD
Palermo PA
Parma PR
Pavia PV
Perugia PG
Pesaro-Urbino PS
Pescara PE
Piacenza PC
Pisa PI
Pistoia PT
Pordenone PN
Potenza PZ
Prato PO
Ragusa RG
Ravenna RA
Reggio de Calabria RC
Reggio nell'Emilia RE
Rieti RI
Rimini RN
Roma RM
Rovigo RO
Salerno SA
Sassari SS
Savona SV
Siena SI
Siracusa SR
Sondrio SO
Taranto TA
Teramo TE
Terni TR
Torino TO
Trapani TP
Trento TN
Treviso TV
Trieste TS
Udine UD
Varese VA
Venezia VE
Verbania VB
Vercelli VC
Verona VR
Vibo Valentia VV
Vincenza VI
Viterbo VT
 

Mexico State

Mexico State Abbreviation
Aquascalientes AGS
Baja California Norte BCN
Baja California Sur BCS
Campeche CAM
Chiapas CHIS
Chihuahua CHIH
Coahuila COAH
Colima COL
Distrito Federal DF
Durango DGO
Guanajuato GTO
Guerrero GRO
Hidalgo HGO
Jalisco JAL
Mexico MEX
Michoacan MICH
Morelos MOR
Nayarit NAY
Nuevo Leon NL
Oaxaca OAX
Puebla PUE
Queretaro QRO
Quintana Roo QROO
San Luis Potosi SLP
Sinaloa SIN
Sonora SON
Tabasco TAB
Tamaulipas TAMPS
Tlaxcala TLAX
Veracruz VER
Yucatan YUC
Zacatecas ZAC
 

The Netherlands Province

The Netherlands Province Abbreviation
Drenthe DR
Flevoland FLD
Friesland FR
Gelderland GLD
Groningen GN
Lemburg LB
North Brabant NB
North Holland NH
Overijssel OV
South Holland ZH
Utrecht UT
Zeeland SLD

USPS Track and Confirm

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