3.12.14 Income Tax Returns for Estates and Trusts (Forms 1041, 1041-QFT, and 1041-N)

Manual Transmittal

November 17, 2017

Purpose

(1) This transmits revised IRM Section 3.12.14, Error Resolution, Income Tax Returns for Estates and Trusts (Form 1041, Form 1041-QFT, and Form 1041-N)

Material Changes

(1) Made various editorial changes throughout the IRM, including tax years, line numbers, and tax rate changes.

(2) IRM 3.12.14.1 Added required Internal Controls data.

(3) IRM 3.12.14.1.1 Added required Background

(4) IRM 3.12.14.1.2 Added required Authority

(5) IRM 3.12.14.1.3 Added required Responsibilities

(6) IRM 3.12.14.1.4 Added required Program Management and Reviews

(7) IRM 3.12.14.1.5 Added required Program Controls.

(8) IRM 3.12.14.1.6 Added required Terms/Definitions

(9) IRM 3.12.14.1.7 Added required Related Resources

(10) IRM 3.12.14.1.8 Added Acronyms and Abbreviations.

(11) IPU 17U0008 issued 01-03-2017 IRM 3.12.14.1.10 Changes to Criminal Investigation Referrals.

(12) IRM 3.12.14.2.1 Revised TAS wording.

(13) IRM 3.12.14.2.3 Revised Fax instruction wording.

(14) IRM 3.12.14.9.20 Deleted entire subsection on missing schedule codes. Correspond for missing schedules and forms needed to substantiate credits.

(15) IRM 3.12.14.10.4(4)(2) Added Form 13394 for routing to Entity.

(16) IRM 3.12.14.12.1 Added row for new Field 052BV - Verify Field for Schedule G, Line 2B - ERS Input Only.

(17) IRM 3.12.14.12.8(2)(2) Removed missing schedule code and replaced with correspond.

(18) IRM 3.12.14.12.9 Added subsection for new Field 052BV.

(19) IRM 3.12.14.12.13(2)(2)(3) Removed missing schedule codes and replaced with correspond.

(20) IPU 17U0008 issued 01-03-2017 IRM 3.12.14.14.19 Updated Credit Reduction States for tax year 2016.

(21) IRM 3.12.14.20.2 Re-activated Field 2401T for Form 3800, Part III, Line 1t, Enhanced oil recovery credit.

(22) IRM 3.12.14.20.2.9 Added subsection for Field 2401T.

(23) IRM 3.12.14.22.42.2 Removed table for exemption amounts and replaced with If no additional error ripple TPNC.

(24) IRM 3.12.14.22.46 Added new Field 052BV to EC 866.

(25) IRM 3.12.14.22.46.2(5) Added instructions for Field 052BV and removed (12) work around instructions. Added (8)(12) Field 2401T.

(26) IRM 3.12.14.46.2(9) Removed missing schedule codes and replaced with correspond.

(27) IPU 17U0008 issued 01-03-2017 IRM 3.12.14.22.47.2(6) Provided literal for TPNC 90 use instead of TPNC 54 due to late changes by OTC.

(28) IRM 3.12.14.22.51.2(2) Added instructions to ripple previous TPNC is no additional error causes EC 881.

(29) IRM 3.12.14.22.53.2.3(2) Removed unnecessary paragraph in EC 887.

(30) IPU 17U0008 issued 01-03-2017 IRM 3.12.14.22.57.2(2) Removed TC 660 and 700.

(31) IPU 17U0793 issued 5-3-2017 IRM 3.12.14.57.2(4) Added instructions for Line 24b is blank and either Lines 24c or 25 show a reduction in payments.

(32) IPU 17U0008 issued 01-03-2017 Exhibit 3.12.14-33 Updated Credit Reduction States for tax year 2016.

Effect on Other Documents

IRM 3.12.14 dated October 13, 2016 (effective January 1, 2017) is superseded. This IRM also incorporates the following IRM Procedural Updates (IPUs) - 17U0008, and 17U0793.

Audience

Wage and Investment (W&I) Error Resolution

Effective Date

(01-01-2018)

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

Program Scope and Objectives

  1. IRM 3.12.14 provides instructions for correcting errors on the Error Resolution Systems, made by taxpayers as well as those made during Submission Processing Campus operations for all the following Business Master File (BMF) forms:

    • Form 1041 (U.S. Income Tax Return for Estates and Trusts).

    • Form 1041-QFT (U.S. Income Tax Return for Qualified Funeral Trusts).

    • Form 1041-N (U.S. Income Tax Return for Electing Alaska Native Settlement Trusts).

  2. Purpose: The Error Resolution System (ERS) is a means to resolve errors made by taxpayers and correct errors made during campus processing.

  3. Audience: This IRM is used by the following employees:

    • Supervisory Tax Examining Assistant

    • Lead Tax Examining Technician

    • Tax Examining Technician.

  4. Policy Owner: Director, Submission Processing.

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

  6. Primary Stakeholders: Accounts Management (AM), Small Business/Self-Employed (SBSE), Large Business and International (LB&I), Chief Financial Officer (CFO), Taxpayer Advocate Service (TAS), Chief Counsel, Information Technology programmers, Statistics of Income (SOI), Tax Exempt/Government Entities (TEGE), Compliance, Modernized E-file (MeF), and Submission Processing (SP).

  7. Form 1041 is used by a fiduciary of a domestic estate, trust, or bankruptcy estate to report the following:

    • Income received by the estate or trust.

    • Income that is either accumulated, held for future distribution, or is distributed currently to the beneficiaries.

    • Any applicable tax liability of the fiduciary.

    Note:

    Only foreign trusts can claim Form 1042-S, Form 8288-A, and Form 8805 withholding credits. They should be filed on 1040-NR returns with an EIN and processed in Cincinnati on NMF.

  8. Form 1041-QFT was added to the Internal Revenue Code by the Taxpayer Relief Act of 1997 to permit certain trusts which previously filed Form 1041 as Grantor Trusts to elect Qualified Funeral Trust status.

    • All domestic Form 1041-QFT are processed at the Cincinnati Submission Processing Campus (CSPC) only.

    • All foreign Form 1041 returns (including 1041-QFT) are processed at the Ogden Submission Processing Campus (OSPC) only.

    • If Form 1041-QFT is received at any Submission Processing Campus (SPC) other than above, process as follows:

      If... Then...
      Unnumbered Form 1041-QFT Detach and forward to CSPC. (OSPC if foreign)
      Numbered Form 1041-QFT SSPND 640 and attach Form 4227 with the notation "FORWARD TO CINCINNATI SUBMISSION PROCESSING CAMPUS"
      Internal Revenue Service
      Cincinnati, OH 45999.

      Note:

      If foreign send to OSPC with Form 4227 annotated appropriately.
      Department of Treasury
      Internal Revenue Service
      Ogden, UT 84201

  9. Form 1041-N was added to the Internal Revenue Code by the Economic Growth and Tax Reconciliation Act of 2001. All Form 1041-N are processed at the Ogden Submission Processing Campus (OSPC) only.

    • If Form 1041-N is received at any Submission Processing Campus other than OSPC, process as follows:

      If... Then...
      Unnumbered Form 1041-N. Detach and forward to OSPC.
      Numbered Form 1041-N. SSPND 650 and attach Form 4227 with the notation "Forward to Ogden Submission Processing Campus"
      Department of Treasury
      Internal Revenue Service
      Ogden, UT 84201.
  10. The Return Due Date for Forms 1041, 1041-QFT, and 1041-N is the fifteenth day of the fourth month after the Tax Period Ending (April 15 for calendar year returns).

  11. This IRM cannot address every possibility that may arise while correcting Forms 1041. Taxpayer intent must be taken into consideration. In some cases, it may be necessary to refer the issue to your Subject Matter Expert (SME), lead and/or manager to determine the proper corrective action.

  12. Employees must be able to use sound judgement in some instances, i.e., when determining which Taxpayer Notice Code (TPNC) is the most appropriate to send, or determining when to correspond for clarification. If the judgement is made in the taxpayer's best interests and the reasoning is sound, no error should be charged.

Background

  1. The purpose of Error Resolution is to resolve validity errors, field errors, consistency errors, and math errors in returns and other documents for posing to the Master File. Records fall out in ERS due to the Generalized Mainline Framework (GMF). The entries from transcription are transferred to ERS fields.

  2. The GMF programming causes record to fall out to the Error Resolution System (ERS) if they fail to meet certain criteria, including:

    • invalid characters in a field, i.e. numeric instead of alpha.

    • invalid length of field, i.e. EIN with 8 digits instead of 9.

    • invalid codes in field. (Valid Action Codes, Audit Codes, etc. are programmed in GMF.)

    • consistency errors - Any valid field used in any computation where the result is inconsistent with (or contradictory to) any other valid field.

    • math errors - computer does math computation and it differs from the taxpayer’s amount.

    • invalid tax periods and eligibility for certain credits.

  3. Employees use the ERS system and the return to correct these conditions and when necessary use IDRS to research.

Authority

  1. The Internal Revenue Code of 1986 or more commonly known as the Internal Revenue Code (IRC) is the authority for these procedures. Treasury/IRS rules and regulations interpret the law. The IRC has been amended by acts and public laws such as the following:

    • The Protecting Americans from Tax Hikes (PATH) Act

    • Hiring Incentives to Restore Employment (HIRE) Act

    • Consolidated Appropriations Act (Extenders)

    • American Taxpayer Relief Act (ATRA)

    • Health Care and Education Reconciliation Act

    • Patient Protection and Affordable Care Act (ACA)

    • Foreign Account Tax Compliance Act (FATCA)

    • Revenue Reconciliation Act of 1998 (RRA 98)

    • Section 2006(a) of the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015, Public Law (PL) 114-41, changed the return due dates for returns of partnerships, and C corporations

    Note:

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

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

Responsibilities

  1. The Director of the Submission Processing Campus (SPC) is responsible for monitoring operational performance for that SPC.

  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 Goals: Correct any errors that are identified using the Error Resolution System (ERS).

  2. Program Reports: See IRM 3.12.38, Error Resolution, BMF General Instructions.

  3. Program Effectiveness: is measured by the following:

    • Embedded Quality Submission Processing (EQSP)

    • Balanced Measures

    • Managerial reviews

  4. Program Reports: See IRM 3.12.38, Error Resolution, BMF General Instructions.

  5. Annual Review: Federal Managers Financial Integrity Act (FMFIA)

Program Controls

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

Terms/Definitions

  1. The following is a list of words in this IRM that may need clarification:

    Interpretation Words

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

     

  2. There are specific terms used when dealing with estates and trusts. See below:

    Description Definition
    Beneficiary A person designated as the recipient of funds or other property under a trust or an estate.
    Corpus The principal sum or capital of a trust or an estate, as distinguished from interest or income.
    Decedent Estate A legal entity created as the result of a person's death. The estate consists of the real and/or personal property of the deceased person. The estate pays any debts owed by the decedent and then distributes the balance of the estate's assets to the beneficiaries of the estate.
    Exemption Amounts Determined based on whether the fiduciary is filing for a decedent's estate or trust. Exemption amounts are claimed on Line 20 of Form 1041.
    Fiduciary Trustee of a trust; or executor, executrix, administrator, administratrix, personal representative, or person in possession of property of a decedent's estate.
    Maker, Grantor, etc. The person/organization to the extent such person /organization either creates a trust, or directly or indirectly makes a gratuitous transfer to the trust.
    Trust A legal entity created under state law and taxed under federal law. The trust can be created either under a will or inter vivos action.
  3. There are many types of trusts as shown in the following:

    Description Definition
    Simple Trust When the trust instrument requires that all income be distributed currently, with no authority to make charitable contributions or distribute amounts allocated to the corpus of the trust.

    Note:

    A trust is a Simple Trust only for the year in which it distributes income and makes no other distributions to beneficiaries. For a year when the trust does not meet these requirements, it is a "Complex Trust" .

    Complex Trust A trust which, for the taxable year, does not qualify as a Simple Trust
    Grantor Trust A trust in which the grantor retains certain powers of ownership or benefits. In general, a grantor trust is ignored for tax purposes and all income, deductions, etc. from the trust is taxable Income of the grantor.
    Grantor Trusts (Non-Taxable) Report Income, Deductions, and Credits on Form 1040
    Grantor Trusts (Partially Taxable) Report Income, Deductions, and Credits on Form 1041
    Ancillary and Domiciliary Trust A trust which exists in a foreign state because the grantor is domiciled (resides) in another state.
    Clifford Trust A grantor type trust where the assets are placed in a trust but there is still some ownership taxable to the grantor.
    Conservatorship A trust (not an estate) which is usually set up for an incompetent person. (Not necessarily a trust for tax purposes)
    Generation Skipping Trust A trust with beneficiaries who are more than one generation younger than the grantor's generation.
    Guardianship/Custodianship A trust usually set up for a minor. (Not necessarily a trust for tax purposes)
    Inter Vivos Trust Established by a grantor during the grantor's lifetime.
    Irrevocable Trust The grantor or non-adverse party does not have power to revoke the trust. The trust will pay all taxes unless the grantor retains other powers of ownership or benefit. The trust cannot be revoked or amended
    Non-Explicit Trust An arrangement that has substantially the same effect as a trust will be treated as a trust even though it is not an explicit trust. Examples of such arrangements are insurance and annuity contracts, arrangements involving life estates and remainders. Non-Explicit Trusts do not include Decedent's Estate.
    Pooled Income Fund A fund maintained by a public charity which provides contributors to the fund with an income interest for life with remainder to the public charity.
    QTIP Trust A trust established, whether during life or at death, for the benefit of the grantor's or decedent's spouse that qualifies for the gift or estate tax marital deduction as qualified terminable interest property described in IRC §2523(f) (gift tax) or IRC §2056(b)(7) (estate tax).
    Qualified Disability Trust A qualified disability trust is normally a trust set up for a person that qualifies under the Social Security Act as being 100% disabled. The trust is entitled to a larger exemption than a simple or complex trust
    Qualified/Pre-Need Funeral Trust A trust which has elected to be taxed as a qualified funeral trust. Normally, one Form 1041-QFT will be filed in lieu of one or more Forms 1041. However, if Form 1041 is received with the notation Qualified Funeral Trust, Pre-need Funeral Trust, etc., process as a Form 1041 filed for a Grantor Trust
    Residual Trust Established under the terms of the will to receive that part of an estate that remains after the payment of all debts, charges, devises, and specific and pecuniary bequests.
    Revocable Trust The grantor or a non-adverse party has power to revoke the trust. The grantor of the trust will pay the taxes of the trust on their Form 1040 return. The trustee will file Form 1041 return for Information Only purposes, unless they select an optional filing method.
    Testamentary Trust Set forth or contained in a Will or a formal declaration of a person's wishes as to the disposition of the property after their death. A paper, instrument, document, gift, appointment, etc., is said to be testamentary when it is written or made so as not to take effect until after the death of the person making it, and to be revocable and retain the property under their control during his or her life, although they may have believed that it would operate as an instrument of a different character.
    Trust Under the Will The same as a Testamentary Trust.
  4. There are many types of estates, as shown below:

    Description Definition
    Ancillary Estate A supplementary or secondary estate situated in a foreign state where the deceased person owned assets, often real property. For federal tax purposes, there is a single estate but probate may be required in more than one state if the decedent owned property in multiple states at the time of death.
    Bankruptcy Estate A separate and distinct taxable entity from the individual debtor created when an individual debtor files for bankruptcy under Chapter 7 or 11. This creates a separate estate consisting of property that belongs to the debtor prior to the filing date.
    Decedent's Estate Estate of a deceased person that is a taxable entity separate from the decedent. It exists until the final distribution of the assets are made to the heirs and other beneficiaries.
    Domiciliary Estate Estate situated in the state of the deceased person’s permanent residence.
    Probate Estate The same as an Estate entity. Probating an estate in court is done to establish that the Will is authentic or valid.
  5. See Exhibit 3.12.14-34, Acronyms and Abbreviations.

Related Resources

  1. The following is a list of resources available:

    • Servicewide Electronic Research Program (SERP)

    • Submission Processing Design Center (SPDC)

    • Integrated Automation Technologies (IAT)

    • Integrated Data Retrieval System (IDRS)

Acronyms and Abbreviations

  1. See Exhibit 3.12.14-34.

♦Frivolous Returns and Claims♦

  1. A frivolous argument is used for the purpose of expressing dissatisfaction with the substance, form or administration of the tax laws by attempting to illegally avoid or reduce tax liabilities. Recognized frivolous arguments made by businesses include, but are not limited to, the examples in IRM 25.25.10, Frivolous Return Program (FRP), shown in Exhibit 3.12.14-29, Potential Frivolous Arguments for Examination Review.

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

    If... Then...
    The return meets any of the conditions identified as a frivolous return. See Exhibit 3.12.14-29, Potential Frivolous Arguments for Examination Review.

    Exception:

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

    SSPND 331, attach routing slip marked FRP, and place the return in the locally designated basket for Examination, Frivolous Return Program (FRP) for review.
    Examination has selected the return as frivolous, e.g., indicated by an Action Code 331, and a Form 4227 with the remarks "Refer to Exam FRP for audit after process" , but sends the return for processing. Continue processing the return using procedures in IRM 3.12.14. However, do not circle or void the Action Code indicating a frivolous return.

    Note:

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♦Criminal Investigation (CI) Referrals♦

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

  2. For returns with refund claims of $100,000,000 or more, do the following:

    Caution:

    If there is no indication Code and Edit (C&E) made a copy and sent to CI Referral, then see below.

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

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

  3. Any return identified as having any CI Referral criteria found in Exhibit 3.12.14-30, Criminal Investigation (CI) Referrals Criteria, do the following:

    Caution:

    If there is no indication Code and Edit (C&E) made a copy and sent to CI Referral, then see below.

    1. Make a copy of the return.

    2. Attach Form 4227 to the copy.

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

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

    5. Continue processing the return.

    .

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

  5. 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 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 questions returns other than what is currently identified in various IRMs.

  2. Some returns will need special care. If the withholding is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , attach Form 4227 and place in the locally designated basket for Examination, Frivolous Return Program (FRP) for review. Pay particular attention to returns with Form 1099-OID attached.

♦BMF Identification (ID) Theft♦

  1. BMF Identification Theft is increasing. If a tax examiner in Submission Processing (SP) Error resolution System (ERS) finds a case with attachments or correspondence indicating the taxpayer is a victim of ID Theft:

    1. SSPND 360 to route the return to Planning & Analysis (P&A).

    2. Attach Form 4227 (or other appropriate routing slip) with the notation “ID THEFT”.

    3. Provide the entire case to your senior/lead.

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

♦BMF Consistency♦

  1. The purpose of this initiative is to achieve consistency in the Business Master File (BMF) Error Resolution System (ERS) processing IRMs.

  2. Topics for BMF Consistency have been identified and developed as a coordinated effort between Cincinnati, Ogden and Paper Processing Branch BMF Code & Edit/ERS Section.

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

  4. The 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.

♦Taxpayer Advocate Service (TAS)♦

  1. Per the Taxpayer Bill of Rights (TBOR), taxpayers have the right to expect a fair and just tax system which provides taxpayers with the opportunity to have their facts and circumstances considered when it might affect their underlying liabilities, ability to pay, or ability to provide information timely.

  2. Taxpayers have the right to receive assistance from the Taxpayer Advocate Service (TAS) if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through normal channels. For additional information on the Taxpayer Bill of Rights, visit http://taxpayeradvocate.irs.gov/About-TAS/Taxpayer-Rights.

  3. Refer taxpayers to TAS when the contact meets TAS criteria (see IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria), or when Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), is attached and steps cannot be taken to resolve the taxpayer's issue the same day.

  4. "Same day" includes cases that can be resolved in 24 hours, as well as cases where steps can be taken within 24 hours to begin resolving the issue. (See also, IRM 13.1.7.4, Same Day Resolution by Operations.)

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

♦TAS - Service Level Agreement (SLA)♦
  1. The National Taxpayer Advocate has reached agreements with the Commissioners of the Wage & Investment (W&I) Division, Small Business/Self-Employed (SB/SE) Division, Tax Exemption & Government Entities (TE/GE) Division, Criminal Investigation (CI), Appeals and Large Business and International (LB&I) Division, that outline the procedures and responsibilities for the processing of Taxpayer Advocate Service (TAS) casework when either the statutory or delegated authority to complete a case transaction rests outside of TAS.

  2. The SLAs are located at http://tas.web.irs.gov/policy/sla/default.aspx under the heading "Policy/Procedures/Guidance" .

♦IRM Deviation Procedures♦

  1. IRM deviations must be submitted in writing following instructions from IRM 1.11.2.4, When Procedures Deviate from the IRM, and elevated through appropriate channels for executive approval.

♦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.

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

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

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

    • IRM 21.1.3.2.3, Required Taxpayer Authentication

    • IRM 21.1.3.2.4, Additional Taxpayer Authentication

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

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

    • IRM 11.3.1.11, Facsimile Transmission of Tax Information

♦IRS Employee Contacts - RRA98 IRC §3705(a)♦
  1. The Restructuring and Reform Act of 1998 (RRA98), IRC §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 representative, on tax-related matters are required to provide (at a minimum) the following information:

    1. Telephone Contact - Their title (e.g., Mr., Mrs., Ms., Miss), 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 where the taxpayer's question can be answered. In addition, manually generated and handwritten correspondence must have their 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 resolve, the employee should refer the inquiry using established procedures to his or her manager.

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

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

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

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

    Note:

    The Taxpayer Bill of Rights adopted by IRS in June 2014 provide 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.

♦CADE 2♦

  1. The Customer Account Data Engine (CADE) 2 Program Office in Headquarters, is charged with the primary goal to implement a single, modernized programming solution which provides daily processing of taxpayer accounts.

  2. The CADE 2 solution is comprised of several components, to modernize the IRS to a daily processing environment with several Transition States.

  3. The BMF campus cycles are:

    • Campus Cycle: Thursday - Wednesday

    • Master File Processing: Friday - Thursday

    • Notice Review Saturday: Monday (8+ days)

    • Unpostables: New available Tuesday; Closing Tuesday

  4. BMF transaction posting time frames are outlined as follows:

    1. Transactions will be viewable using CFOL command codes on Saturday following the weekly Master Files processing run on Thursday.

    2. Transactions will be viewable as posted transactions using IDRS command codes on Monday, following the weekly Master File processing run on Thursday.

      Note:

      With the acceleration of the IDRS weekly analysis being performed the weekend directly after the Master File processing on Thursday, transactions will be posted instead of in pending status on Monday.

  5. Transaction posting dates will reflect a format of YYYYCCDD. YYYY will indicate the year. CC will indicate the posting cycle. For IMF transactions, the following values for DD are defined:

    • 01 = Friday

    • 02 = Monday

    • 03 = Tuesday

    • 04 = Wednesday

    • 05 = Thursday

      Note:

      BMF cycle posting dates on BMFOL will continue to reflect YYYYCC. YYYY will indicate the year. CC will indicate the posting cycle. BMF posting cycles in TXMOD will reflect a format of YYYYCCDD. The DD value will be 08.

Schedules Found in Form 1041

  1. The following schedules are found within Form 1041:

    • Schedule A, Charitable Deductions - Used by a trust or estate that claims a contribution deduction under IRC §642(c), or by a trust described in IRC §4947(a)(2).

    • Schedule B, Income Distribution Deduction.

    • Schedule G, Tax Computation

  2. Listed below are additional schedules and forms which may be filed with Form 1041:

    • Schedule C, Business Income or Loss

    • Schedule D, Capital Gains and Losses - Used to report details of gain or loss, from the sales or exchanges of capital assets.

    • Schedule E, Supplemental Income and Loss

    • Schedule F, Farm Income or Loss

    • Schedule H (Form 1040), Household Employment Taxes

    • Schedule I, Alternative Minimum Tax

    • Schedule J, Accumulation Distribution for Certain Complex Trusts - Used by domestic complex trusts to report accumulation distributions.

    • Schedule K-1, Beneficiary's Share of Income, Deductions, Credits, etc. - Used to report each beneficiary's share of the Income, Deductions, Credits, and Alternative Minimum Taxable Income from the estate or trust.

    • Form 1041-A, U.S. Information Return - Trust Accumulation of Charitable Accounts - Used by a trust that claims a contribution deduction under IRC 642(c), or by a trust described in IRC 4947(a)(2).

    • Form 1041-ES, Estimated Income Tax for Fiduciaries - Used to figure and pay Estimated Tax for trusts or estates..

    • Form 1041-T, Transmittal of Estimated Tax Credited to Beneficiaries - Used by an estate or trust to make an election under IRC 643(g) to allocate an Estimated Tax payment to beneficiaries.

    • Form 3800, General Business Credits

    • Form 8938, Statement of Foreign Financial Assets

    • Form 4136, Computation of Credit for Federal Tax on Fuels

    • Form 4797, Sale of Business Property

    • Form 8948, Preparer Explanation for Not Filing Electronically

    • Form 4952, Investment Interest Expense Deduction

    • Form 5884-B, New Hire Retention Credit - 2011 tax year only.

    • Form 8913, Credit for Federal Telephone Excise Tax Paid - 2006 tax year only.

    • Form 8941, Credit for Small Employers Health Insurance Premiums

    • Form 8960, Net Investment Income Tax - Individuals, Estates, and Trusts.

    • Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness

Organization, Function and Program (OFP) Codes

  1. The organization for the ERS processing is "3X000" . Consult local management for the correct code.

  2. To record the time spent reviewing and correcting the screen displays, use the following function and program codes:

    Item Form 1041 Form 1041-QFT Form 1041-N
    Function 340 340 340
    Program 11900 11910 11910
    Tax Class 2 2 2
    Document Code 44 (Paper)
    and
    36 (Electronic)
    39 39
    MFT 05 05 05
    Blocking Series 400-499 400-499 (Remit.)
    and
    500-999 (Non-Remit.)
    400-499 (Remit.)
    and
    500-999 (Non-Remit.)
    Processing Site All Campuses CSPC Only (domestic) OSPC Only
    Audit Code    
    IMPORTANT: Always enter Audit Code "8" on all Form 1041–N.

Related Forms

  1. The following forms are referred to in this IRM:

    Form Title Use
    3465 Adjustment Request To request transfer of credits.
    3696/3696A Correspondence Action Sheet To initiate correspondence to taxpayers through the Typing function or via IDRS.
    4227 Intra-SPC Reject To identify the reason for Routing Slip using the Action Code.
    8161 ERS Return Charge-Out To charge out returns on the Suspense List, Reject Records List and Duplicate Document DLN Register. Also, Input Perfection Branch will use as a routing slip and history item.

    Note:

    Sites may use locally approved correspondence action sheets.

Reserved

  1. IRM 3.12.14.6 is reserved for future use.

General Information

  1. IRM 3.12.14.7 provides definitions and terms for the issues applicable to the processing of Form 1041, Form 1041-QFT, and Form 1041–N.

General Correction Procedures

  1. IRM 3.12.14.7.1 provides general correction procedures for perfecting Form 1041.

    Note:

    Quality Review reports many errors charged to ERS Tax Examiners are due to uncorrected transcription errors. Always verify transcription and editing for errors, unless the error code specifically tells you to drop and transmit.

    Exception:

    Electronically submitted returns can’t have transcription errors

Perfecting Form 1041 and Error Screen Displays
  1. Form 1041 Error Screen Displays shows the following data as part of the standard display heading:

    • Document Locator Number (DLN).

    • Employer Identification Number (EIN).

    • Check Digits/Name Control (NC).

    • Current processing date.

    • ERS Status Code.

      Note:

      Previously assigned Taxpayer Notice Codes are displayed in the upper right corner (beneath the header information).

  2. Before making corrections to the Error Screen Displays, ensure that the DLN of the screen display matches the DLN of the document. If one field in the display heading is incorrect, correct as follows:

    If... Then...
    DLN is incorrect
    1. Stop processing

    2. Give the block to your manager.

    EIN is incorrect
    1. GTSEC 01.

    2. Enter the correct data to Section 01.

      Note:

      The original error condition should be displayed.

    Name Control is incorrect
    1. GTSEC 01.

    2. Enter the correct data to Section 01.

      Note:

      The original error condition should be displayed.

    Current Processing Date is incorrect
    1. Stop processing.

    2. Give the block to your manager.

  3. Returns may be in error due to a "mixed data situation" . This occurs when information from two taxpayers' returns appears on the error record under one DLN or the DLN does not match the return on the screen display. If this occurs:

    1. Stop processing.

    2. Give the block to your manager to determine if the mixed data can be corrected via the terminal screen displays or will take action to have the blocks deleted and reinput.

  4. Determine if taxpayer entries are on the appropriate lines of Form 1041.

    • Correct all misplaced entries, coding errors and transcription errors in each section and field of the screen display.

    • Follow specific instructions for each section and field.

    • Make certain all sections and fields were transcribed.

    • Check all fields leading to the field you're working. Also, check Form 1041 for any schedules or attachments that the taxpayer may have used in arriving at the amount in the field before assigning a TPNC.

  5. When making corrections to the Error Screen Display:

    Note:

    Be sure money amounts within a section have been transcribed in dollars–only or in dollars and cents according to the requirements shown in the instructions for each section

    .

  6. Missing Signature - A signature is required on most returns. If no signature is present:

    • If a signature is not present in the Signature Section of Form 1041 (below Line 29), SSPND 225 and correspond. (If multiple issues SSPND 211).

    • If no reply, follow "No Reply" procedures. See Exhibit 3.12.14-27, No Reply Procedures.

    • For additional instructions for processing missing signatures, see IRM 3.11.14.27, Returns and Documents Analysis, Income Tax Returns for Estates and Trusts (Forms 1041, 1041-QFT, and 1041-N).

    Exception:

    Do not correspond for a signature on "CIS" returns with Form 13596 attached. Route reinput/reprocessable "CIS" returns missing a signature to Accounts Management. IRM 3.12.14.7.2.1., Correspondence Imaging System (CIS) Returns.

  7. Error Inventory Listing -This report is printed daily, and lists each Block DLN in the Error Inventory. It is used to assign work to tax examiners, to associate documents with the error records and to release documents from previous days’ workload. Unworked records will remain on the list.

  8. Change of Address -Tax Examiners may input Entity changes whenever clear and concise written notification is received from a taxpayer (i.e., a statement signed by the taxpayer informing the Service that the taxpayer wishes their address of record to be changed to a new address).

    • If correspondence (including notices) sent by the Service is returned by the taxpayer with corrections marked on the taxpayer's address information, the correspondence will constitute written notification of a change of address. The taxpayer's signature on the correspondence is not required.

    • A return (including an amended return) filed by a taxpayer with new address information is written notification of a change of address. The proper processing of the return will update the taxpayer's address of record.

    • Form 8822 (Change of Address) and Form 8822-B (Change of Address or Responsible Party) are also available for taxpayers to furnish a change of address to the Service.

  9. Cellulosic Biofuel Credit refund or CBR - May be notated on the top of some 2009 tax year returns as an indicator of the Qualified Cellulosic Biofuel Credit refund. If Form 6478, Alcohol and Cellulosic Biofuel Fuels Credit, has an amount on Line 5 and/or Line 7 (2010 version - Line 5 and/or Line 8, 2008 version - Line 5 and/or Line 9). The credit will roll up to Form 3800, General Business Credits, Line 29c. These returns should be coded in C&E with an Action Code 343, which will cause the returns to fall out in ERS/Rejects for a special review.

    Caution:

    These instructions apply to 2009 tax year only, including fiscal year filers (200901 through 201011)

Error Displays and Corrections
  1. All Form 1041 Error Screen Displays will display as follows:

    • Each field is identified by an Alpha/Numeric Field Designator (AFD) before the field.

    • Fields are displayed with no breaker. Negative values are indicated by a minus (–) sign following the amount.

    • Decimal points are displayed for dollars and cents.

      Exception:

      The cents digits are not displayed for "dollars–only" fields. Two asterisks (**) are displayed in the cents position of the dollars–only field.

    • Leading zeroes in amount fields are suppressed and the significant digits are displayed beginning in the left position.

    • If more than one amount field of a record is to be shown, the fields are aligned beneath one another.

  2. Corrections are entered starting with the left-most position of the field. Blank-out unused positions.

    • If fewer than the maximum number of positions is required, the program will automatically move to the right of the digits.

    • It is not necessary to enter the decimal point.

    • A minus sign must be entered last, if the amount is negative.

  3. Be careful not to enter more than the number of positions allowed for a particular field. If more data is entered, the overflow characters will display on the screen but are dropped when the field is added to the record. This is especially important for the EIN, name, and address.

  4. Corrections can be made to a displayed field by overlaying only the digits in error and not reentering the entire field. It is not necessary to eliminate the decimal point when correcting in this manner.

  5. If it is necessary to add a missing section:

    1. Transmit with Command Code GTSEC, followed by the desired Section Number.

    2. When the empty section format is displayed, enter the missing data in the proper fields and transmit with Command Code CRECT.

  6. If it is necessary to see a field or section of the record other than that shown in the display:

    1. Enter Command Code GTSEC, followed by the desired Section Number.

    2. If a correction is not made to the section, drop to the bottom of the screen and transmit.

    3. Any error display not showing all fields necessary for resolution should be reported to the National Office.

      Reminder:

      When correcting a screen display, move the cursor below the last field containing data before transmitting.

  7. If it is necessary to delete a section of the record, enter Command Code DLSEC, followed by the desired Section Number.

  8. If determined that additional information or research is necessary to resolve a Priority II, III, or IV Error (or if the error is rejected), enter the appropriate Action Code with either Command Code SSPND or RJECT.

    Note:

    For additional information on Priority Errors, IRM 3.12.14.8, Types of Errors.

Correspondence

  1. Correspondence records with Action Code 21X will be automatically suspended for a predetermined number of days or until the taxpayer replies, whichever is earlier.

    Note:

    Do not correspond for information on any return "SECURED BY EXAMINATION" . If unprocessable, follow "No Reply" procedures.

  2. ERS tax examiners issuing correspondence may perform either of the following:

    • Command Code LETER.

    • Initiate correspondence by using the Form 3696, Correspondence Action Sheet, Form 3696-A, IDRS Correspondence Action Sheet or other locally approved Correspondence Action Sheet (CAS).

  3. Most correspondence is either a computer-generated notice, a computer-generated letter or a pre-printed letter.

    Note:

    All correspondence now reflects a response period within 30 days and the consequences for no reply.

  4. If special notes or letters are developed, ensure that the following guidelines are used:

    • All correspondence to taxpayers requesting information should indicate that a response is required.

    • Specify the length of time the taxpayer has to respond.

    • Include a statement about the action the IRS will take if the response is not received timely.

    • Be sure to include the following statement:
      "When you reply, please send us your telephone number and the most convenient time for us to call so we may contact you if we need additional information" .

    • Provide for a purge date at least 10 days after the date provided in the letter to the taxpayer.

    • Whenever possible, form letters should be used to correspond with taxpayers. If a CNOTE or QUICKNOTE is used, be sure that it clearly communicates the message in simple language and contains the required information.

    • When taxpayers make errors that cause delays, advise the taxpayer that they made the error and explain what the error was that caused the delay.

    • Before initiating manual correspondence on an account dealing with anything other than a recently filed return, check the Centralized Authorization File (CAF) to ensure that the information will be mailed to the taxpayer's representative (if one is on record).

♦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. Follow the instructions below for processing "CIS" returns:

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

    Note:

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

    The return is not complete (e.g., missing signature, schedules or forms),
    1. Remove the return from the batch

    2. Void the DLN.

    3. Attach Form 4227 to the return and route to AM, to secure missing information.

    Note:

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

    The "CIS" return does not have a Form 13596 attached, The return is not complete (e.g., missing signature, schedules or forms), Research for prior posting (TC 150 posted),
    1. If TC 150 is present and the information is the same, cancel the DLN and treat as classified waste.

    2. If TC 150 is not present, follow normal correspondence procedures.

    Note:

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

Action Codes

  1. The ERS Action Codes (AC) are used to indicate whether correspondence, research or some other action is necessary. These codes reject or suspend records, placing them in Suspense Inventory (either Workable or Unworkable) and identify the specific action taken. A listing of valid ERS Action Codes is available, see Exhibit 3.12.14-25, ERS Action Code.

  2. Action Code 001 occurs when the Block out of Balance (BOB) Resolution Function has added a missing document by only inputting the Taxpayer Identification Number (TIN) and the Name Control for the missing document. For procedures for determining and correcting Priority I Errors, IRM 3.12.14.8.2., Priority I Errors - Action Code/Unpostable Code Errors.

    Exception:

    AC 001 does not place the record in the Suspense Inventory.

  3. Code & Edit assigns Action Codes to numbered returns if the document is unprocessable. This code is edited in the lower left margin of the return and the letters "AC" may precede the code."AC" may be omitted at the option of the Campus.

  4. Correspondence Action Sheets are used for initiating correspondence and are attached by the Tax Examiner suspending the document. The Action Codes and descriptions should be sufficient for routing these returns within the Campus.

    • If Code & Edit has not assigned an Action Code (or if Integrated Submission and Remittance Processing [ISRP] did not transcribe the AC), enter the AC on Form 1041 and on the Screen Display.

  5. If the AC assigned by Code & Edit is invalid, incomplete, or is "001" , the record is assigned to the Error Inventory for correction or deletion of the code.

  6. Only one AC can be assigned to a record at one time. Assign Action Codes in the following priority order:

    1. AC 310.

    2. AC 320.

    3. AC 4XX.

    4. AC 6XX.

    5. AC 3XX.

    6. AC 2XX.

      Note:

      If multiple conditions are present and one of them is an entity condition, enter C 320 (Entity) as the primary code, except when AC 310 (Statute Control) is also needed. Action Code 310 will always have first priority.

  7. If more than one Action Code of the same priority is required (i.e., 342 and 355), use the code with the shortest suspense period and attach Form 4227 to indicate the second unprocessable condition.

  8. An ERS Tax Examiner may enter an Action Code on a record, correct or delete an invalid code or overlay the present AC with another to re-suspend or reject from ERS.

    • Enter a valid Action Code with a Command Code (CC) SSPND, RJECT, or NWDLN.

  9. CC SSPND -When entered by an ERS Tax Examiner, SSPND clears the record from the screen and places it in either Workable or Unworkable Suspense.

  10. CC RJECT -When entered by a Rejects Tax Examiner, RJECT rejects the record from ERS. Generally, Service Center Control File (SCCF) is automatically updated for the rejected record.

  11. CC NWDLN -When entered by a Rejects Tax Examiner, NWDLN rejects the record from ERS and establish the new DLN under which the record is to be input.

  12. Management Suspense -Management may direct that certain documents be held for further processing instructions. Some reasons for such a suspension are:

    • A computer program bug exists for a particular type record.

    • Master File programs are not yet available or are incorrect for a specific type of document.

    • These documents will remain in the Unworkable Suspense Inventory until requested to be placed in the Workable Suspense Inventory (via the ERS Control File or until the Workable Suspense period expires, whichever comes first).

Command Codes

  1. The Command Codes needed for correcting the Error Inventory and the Workable Suspense Inventory are briefly described below. They are also explained in IRM 3.12.38, ERS, General Instructions. Any Command Code permitted by the Employees Security File is available.

  2. Command Codes are used to tell the system which function to perform.

  3. Command Codes must be entered in a valid format. Otherwise, a field error displays.

    • Correct the data entered using the applicable Command Code (CC).

  4. The valid Command Codes are:

    Command Code Description
    ACTON To establish control bases, to update or close control bases that are open, to correct name controls on dummy accounts, to append history items to modules on IDRS, and to generate TC 902 to secure tax modules and their related entity data from the Master File.
    BMFOL To research entity and/or tax data which may or may not be available on IDRS. This command code allows several screen displays based on the definer code input. It should be used in lieu of the Command Code MFTRA.
    BRTVU To access data that was transcribed from line items and/or computer generated transactions from BMF returns and their schedules. It can be used in researching original returns.
    CRECT Displayed with all error displays.
    DLSEC To delete a section of a record.
    ENMOD To research for name control and transaction code information.
    ENREQ Entered (with a blank definer) after a response to ENMOD indicates that the entry is on the file.
    ERINV To research a DLN or TIN on ERS.
    ERVOL Used with a Status Code to display the number of records in the current Workable Inventory.
    GTREC To access the first error in a block in the Error Inventory or a specific record in the Workable Suspense Inventory.
    GTRECW To retrieve and correct an error record that has been previously worked. Can be used only on the day that the record block was worked.
    GTSEC To obtain the display of any section of an error record in process.
    INOLE To research the entity module. This information includes name lines, name control, address, employment codes, filing requirements, etc.
    MFREQ To request an entity module or a tax module and its related entity data from Individual Master File (IMF), BMF, Individual Retirement Account (IRA), or Employee Plan Master File (EPMF) when case control is not required.
    NAMEB/NAMEE To research for a missing TIN. A name is required to be input to research the Names Search Facility (NSF).
    NWDLN To change (renumber) the DLN and MFT of the record and reject the record.
    RJECT To reject a record from ERS.
    SSPND To assign an Action Code when placing a record in suspense.
    TERUP To allow an employee to delete his/her erroneous entry on the day of input. An employee can only delete his/her own entries.
    TRDBV Tax Return Data Base—To access 100% of return data as well as all subsequent corrections entered via ERS and Generalized Unpostable Framework (GUF). This command code can be used to verify specific line items (including any correction activity), resolve taxpayer inquiries, identify refund issues, and verify filing and return status. Also, available is Command Code TRERS, which will link the DLN entered with Command Code GTREC to Command Code TRDBV.
    TRERS Is an extension of CC TRDBV developed for ERS processing and acts like TRDBV. It allows the TE to select a return based on the DLN of the latest GTREC command executed.

Taxpayer Notice Codes (TPNC) – 6 Positions

  1. This code is used when a math error is present involving Tax liability or Tax Due/Overpayment. Each math error display requires a correction to a field or the assignment of a TPNC.

    • TPNCs are entered on the terminal screen following the literal "NC" and also in the upper left corner of Form 1041.

      Reminder:

      The transmission of a TPNC cannot be accompanied by any other correction.

  2. A TPNC is entered only after determining that no other corrections to the record can be made. Prior to assignment of a TPNC:

    • All corrections must be entered and transmitted for each error condition.

    • A working trail showing the changes made must be edited on the return at the point of error.

    • The Total Tax (Line 23) must be present.

    Caution:

    If a math error ripples to another error code, verify the tax, using the spreadsheets on SERP, before rippling the TPNC.

  3. Each math error has certain TPNCs that are valid to clear that error. If an invalid code is assigned, the error will re-display.

  4. Each Form 1041 can have a maximum of three TPNCs.

    • If more than three TPNCs are needed, assign TPNC 90 as the third notice code and list the errors for Notice Review to type and send to the taxpayer.

  5. TPNC 90 is actually a "fill-in" and should be used when no other TPNC fully explains the correction(s) made or when more than three or more notice codes are necessary. In January 2014, The Taxpayer Notice Code (TPNC) 90 Math Error (ME) Code literals were programmed into the OnLine Notice Review (OLNR) Retype Application for Notice Review (NR). This addition will eliminate the need for the NR tax examiner to manually type the notice literal and reduce potential copying/typing incorrect paragraphs/messages in the notices. For a full listing of the programmed TPNC 90 Math Error Codes, see TPNC 90 Math Error Code Job Aid, http://serp.enterprise.irs.gov/databases/portals.dr/sp-portal/bmf.dr/bmf_ers/job_aid.dr/TPNC-90-Math-Error-Code-Job-Aid.doc

  6. When the ERS tax examiner sends a TPNC 90, he/she will do the following:

    • Write on the returns "TPNC 90 - ##" (where ## represents the programmed TPNC 90 Math Error Code number.

    • Notate TPNC 90 (or similar language) and the date of Form 1332, Block and Selection Record or Form 813, Document Register.

    • Place the return in the TPNC 90 designated area (basket/tub).

  7. If there is not an applicable TPNC 90 Math Error Code, then the ERS tax examiner will do the following:

    • Attach the applicable TPNC 90 slip of paper to the front of the return, after completing applicable fields.

    • Notate TPNC 90 (or similar language) and the date of Form 1332, Block and Selection Record or Form 813, Document Register

    • Place the return in the TPNC 90 designated area (basket/tub).

  8. Make sure that the return needing a TPNC 90 leaves Error Resolution System (ERS) with the correct TPNC 90 language for the applicable form. For questions, please contact your Lead and/or Manager.

  9. Once a TPNC is transmitted to the record, it may be changed or removed in the following manner:

    • For records which have not cleared the terminal (errors remain after transmitting the TPNC), create an error with a higher priority.

      Note:

      This causes all clear codes and any TPNCs previously assigned to a lower priority error, to be deleted from the record. TPNCs are deleted from the header display. Beginning with the higher Priority IV error created, all subsequent Error Codes are displayed for resolution, even though they may have been displayed previously.

    • For records which have cleared the terminal, the "C" or TPNC on this error and all subsequent Error Codes are displayed for resolution whether or not they were displayed previously. TPNCs previously assigned for this error and subsequent Error Codes will be deleted from the screen.

    • Records which have been worked may be reworked using Command Code GTRECW. See IRM 3.12.38, BMF General Instructions, for further details.

  10. All TPNCs are erased when a record is suspended with Command Code SSPND.

  11. Unfinished records from the previous day will contain none of the TPNCs that were assigned to the records that were not completely worked.

  12. For a listing of valid TPNCs and the information communicated to the taxpayer, Exhibit 3.12.14-24, Taxpayer Notice Codes for Form 1041.

    Note:

    A TPNC assigned to a math error is displayed on subsequent displays for the record. The field is used for display purposes only and is not correctable.

Clear Codes

  1. IRM 3.12.14.7.6.1 provides procedures for entering Clear Codes when perfecting Form 1041.

Clear Code "C"
  1. A "C" is used as a Clear Code for the Error Codes (consistency errors) where the error condition is such that the resolution does not require a change or correction to the record as displayed.

    • The Screen Display includes a clear field, labeled "CL" to indicate the possible use of a Clear Code.

    • The Clear Field is always located to the right of CRECT on the screen display.

  2. Error Codes indicating the possible use of a Clear Code are cleared by either correcting the condition or entering a "C" to indicate no correction is needed. If corrections are required:

    1. Enter and transmit prior to entry of the Clear Code "C" .

    2. Assure that all corrective procedures have been input as shown under each individual Error Code before entering a "C" in the Clear Code Field.

  3. Clear Code "C" is also used for clearing the action code from the screen after corrections for the action code have been completed or, as with Action Codes 410 and 700, the action code must be cleared initially so other errors in the record can be resolved.

    • The presence of the "C" with a Priority I Error indicates that you have made the corrections to the action code and now wish to have any other errors on the record displayed.

  4. Command Code SSPND causes all "C" Clear Codes for Error Codes to be erased.

  5. The program erases all "C" Clear Codes for Error Codes and action codes for the new day's Error Inventory and Workable Suspense Inventory. Unfinished records from the previous day will contain none of the "C" Clear Codes assigned to a record that was not completely worked.

  6. The "C" Clear Code cannot accompany any corrections to the record. If a correction must be entered and the record has already been transmitted:

    • Enter Command Code GTRECW to retrieve the record and make all corrections.

Error Codes
  1. Error Codes (including those which may require a "C" Clear Code) are numbered consecutively for correction.

  2. There may be instances when an ERS Tax Examiner creates an Error Code with a higher priority than the Error Code that has already cleared with a TPNC or "C" Clear Code.

    • If this occurs, the program deletes all "C" Clear Codes and TPNCs for Error Codes with a lower priority than the one created.

    • Beginning with the higher priority Error Code created, the program continues to display Error Codes for the record. Displays using the corrected data are apt to be different from those previously displayed.

  3. There may be instances when an ERS tax examiner makes a correction that erases an Error Code which was previously cleared with a "C" and now the error condition no longer exists.

    • If this occurs, the program deletes the "C" Clear Codes and TPNCs for all subsequent errors in the record.

    • If there are errors remaining on the record after deleting the "C" and TPNCs, the program continues to display Error Codes for the record whether or not they were previously displayed.

Clear Code 000
  1. Clear Code 000 is used when deleting an action code.

    • Only use Clear Code 000 for invalid or erroneous Action Codes when you have determined that there is no reason to suspend the record.

      Note:

      The "000" cannot be used in suspense correction.

Transshipment of Returns to OSPC (Form 4720, Form 5227, and Form 99X)

  1. If Form 1041 with Form 4720, Form 5227, and/or any Form 990 Series return attached is received at any Submission Processing Campus other than OSPC, process as follows:

    1. Detach Form 1041 from Form 4720, Form 5227, and/or Form 99X.

    2. Copy the Received Date from Form 1041.

    3. If not already present, copy the EIN from Form 1041 to each detached document.

    4. Prepare Form 4227 and notate "Form 1041 – Exempt Organization – Transfer To Ospc" .

    5. Transfer all credits to the correct Tax Period and MFT before forwarding to OSPC.

    6. Route Form 4720, Form 5227, and/or Form 99X to OSPC.

    7. Continue normal processing of Form 1041.

  2. If Form 1041 with Form 4720, Form 5227, and/or any Form 990 Series return attached is received at the Ogden Submission Processing Campus (OSPC), process as follows:

    1. Detach Form 1041 from Form 4720, Form 5227, and/or Form 99X.

    2. Copy the Received Date from Form 1041 to each detached document.

    3. If not already present, copy the EIN from Form 1041 to each detached document.

    4. If Reasonable Cause For Failure To Pay Taxes Timely has been granted for Form 1041, notate "Reasonable Cause Granted" on each detached document. For instructions for determining Reasonable Cause, see IRM 3.11.14.20.1 and 3.11.14.20.6.

    5. Route Form 4720, Form 5227, and/or Form 99X to the function responsible for processing.

    6. Continue normal processing of Form 1041.

  3. For additional procedures for processing Split-Interest Trusts, see IRM 3.12.14.22.11.2, Correction Procedures - Error Code 026.

Working Trail

  1. Working Trail – It is important to leave a legible "working trail" for those who may work with the return later. If your Campus has written "in-house" agreements which vary from the instructions below, you may follow them. However, the following procedures have been coordinated with appropriate areas in the National Office.

  2. A "Working Trail" is to be left at the point of error on the return or schedule for each correction made in the areas specified below in blue erasable ink. Place an "X" beside the incorrect data and write the correct data to the left or above the "X" . However, If the information is available on the page, you may use an arrow to move the information to the correct line.

  3. Enter the following transcribed items when making a change to the return:

    • Tax Period (Field 01TXP).

    • Name Control (Field 01NC).

    • Employee Identification Number (Field 01EIN).

    • Correspondence Received Date (Field 01CRD).

    • Action Code (bottom left corner of the return, unless otherwise instructed).

    • Taxpayer Notice Code (TPNC).

    • Transaction Code (e.g., TC 013).

    • Non-Suspense Letters (e.g., 3875C).

    • Form 3465 (Adjustment Request).

IRC §6020(b) Returns

  1. If the return has a statement that it was "Secured Under The Authority Of Section 6020(B)" :

    1. GTSEC 01.

    2. Enter "4" in Field 01CCC.

    3. If the return is stamped "Do Not Assess Failure To Pay" , GTSEC 01 and enter "D" and "4" in Field 01CCC.

  2. If any unprocessable conditions exist contact the Revenue Officer (RO) that prepared and signed the return. Use Discovery Directory to email the RO and SSPND AC 360. Do not contact the taxpayer on any secured return.

Streamlined Filing Compliance Process (Ogden Only)

  1. Only decedent estate 1041 returns, both original and amended can participate in this program.

  2. Returns are identified by the taxpayer writing "Streamline" on the top of the return. There will also be an audit trail notated that the package was complete.

  3. Streamline original 1041 returns will have the following CCCs:

    • D,

    • P,

    • R, and

    • 8

  4. Streamline amended 1041 returns will not be processed by SP, if found in the pipeline SSPND 640, so ERS/Rejects can void the DLN and route to ICT for scanning with a special cover sheet. They will be scanned into CIS and worked by specific people in AM.

Refund Returns 45 Day Jeopardy and $100 Million or more Refunds

  1. Document Perfection and ERS are 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.

  2. Action Code 341 should be input by Code & Edit to show that a manual refund is needed. If these conditions are not identified in Code & Edit, ERS must follow the following criteria:

    If... Then...
    The processing date is more than 20 days after the Received Date or the Return Due Date (whichever is later) and the 45 day interest free period is in jeopardy and the refund amount is $25,000 or more,

    Note:

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

    Enter Action Code 341 and route to ERS/Rejects for manual refund.
    The refund is $100,000,000 or more, Enter Action Code 341 and route to ERS/Rejects for manual refund.

Types of Errors

  1. IRM 3.12.14.8 provides a description of the types of errors generated during Form 1041 processing.

General

  1. The Error Resolution System identifies errors according to type and priority. The record heading shows the type of error:

    • Action Code Error (Priority I).

    • Section Error (Priority II) – Includes Terminus and ISRP errors.

    • Validity Error (Priority III).

    • Math/Consistency Error (Error Codes) (Priority IV).

  2. There may be records where the tax examiner finds that programming has not furnished a section that is needed to solve an error. If this occurs:

    1. Enter Command Code GTSEC.

    2. Report to the National Office for correction of the display.

Priority I Errors – Action Code/Unpostable Code Errors

  1. Description:

    • All records with an invalid Action Code assigned by Document Perfection, are placed in the Error Inventory and displayed as a Priority I Error.

    • All records with a valid Action Code, are assigned to a Suspense Inventory and displayed as a Priority I Error.

  2. Display – The Action Code for the record with the literal description of the action or unpostable condition will be shown.

  3. Error Correction – Process Priority I errors as follows:

    If... Then...
    Suspense action is required Enter CC "SSPND" with the correct Action Code.
    Suspense action is not required Enter "000" in the Clear Code (CL) field.

    Note:

    Except for priority statute and manual refund cases, do not remove the document from the block.

  4. Action Code 001 is a Priority I error. This condition occurs whenever the BOB Resolution function has added a document to a block by entering only the Name Control and TIN. The remainder of the record must be added by ERS.

    • Enter Command Code GTSEC for each record section that should contain data.

    • Add the required data.

    • When all the sections have been entered, enter "C" in the Clear Field.

  5. See IRM 3.12.38, BMF General Instructions, for procedures for correcting Priority I Action Code errors in Suspense and Unpostable Code Correction.

Priority II Errors – Section Errors

  1. Most edit, missing section, and terminus errors should be eliminated by Integrated Submission and Remittance Processing (ISRP). However, edit errors and/or terminus errors may be present if normal ISRP validity checks have been bypassed.

  2. Edit Error - A section with an error detected by ISRP. Edit errors are coded as follows:

    • Code 1 - Split-screen transmission. Occurs when the Key Verifier attempted to change the Check Digit or changed four or more digits of the Primary TIN. Also, occurs when the Original Entry Operator indicates that a required section was missing.

    • Code 3 - Invalid section ending point.

    • Code 4 - Invalid field length.

    • Code 5 - Questionable section. Occurs when a section is entered twice or is entered out of sequence by ISRP.

  3. Terminus Error - A section with variable length fields containing an erroneous size field or otherwise being of erroneous size.

  4. Display - All fields except the ERS Action Code and the Remittance (Payment Received) fields are displayed in columnar format with or without data. The error type is indicated for ISRP Problem Code errors. Only one section (error) is displayed at a time.

  5. Content - Any individual section excluding computer-generated fields and the Action Code. The Action Code is an uncorrectable field, except as defined for SSPND and RJECT.

  6. Correction Procedures:

    • ISRP Errors - All fields in the section must be examined when a ISRP error is present. If Section 01 of a return is coded, examine the section for an error to ensure that the return is for the taxpayer whose name is in Section 01. Correct the section and transmit.

    • Terminus Errors - All fields of the section must be examined when a terminus error is present. Correct the section and transmit.

    • Questionable Section - Verify and enter all the data for the displayed section. Transmit when all the data is correct.

Priority III Errors – Field Errors

  1. Definition - Any field failing to meet the requirements for that field (and that field only) is shown as a Priority III error. Consistency and/or relationships with other fields are not a factor. Individual field validity errors to be bypassed after initial consideration, are shown as Priority IV Errors.

  2. Some reasons for field errors include the following:

    • Non-numeric character in a numeric field.

    • Non-alphabetic character in an alpha field.

    • Blank space in a number field.

    • Blank in the first position of an alpha field.

  3. Display - Every field displayed is in error.

    • All fields with a Priority III error are displayed in columnar format in the order encountered in the record.

    • An overflow field is identified by all question marks for a money field or a single pound sign in the last position of a Name Line.

    Note:

    The Action Code and Taxpayer Notice Codes are never displayed as a Priority III Error.

  4. Correction Procedures:

    1. Correct every error field displayed using the specific instructions within each section for the field in error.

    2. Check the information on the source document to determine if each displayed field has been correctly coded and transcribed.

    3. Enter the correct data for each field displayed.

    4. If no data is to be in a displayed field, blank the field.

Part IV Errors – Consistency/Math Errors

  1. Definition - Any valid field used in any computation where the result is inconsistent with (or contradictory to) any other valid field, will have Error Code 001–999 assigned and be shown as a Priority IV Error.

    • If the result of the computer computation of an amount differs from the record, the computation fields are shown as a Priority IV Error.

  2. Display - Priority IV errors are displayed with the Error Code for the specific error. The screen display shows the Error Code assigned and the fields needed to make the necessary correction.

    1. Compare the displayed fields with the return. If the field was coded or transcribed incorrectly, overlay the screen display with the correct data.

    2. For those amounts entered from ERS Input Only Fields (e.g., Field 05GVT), the first corrections will be entered to the taxpayer's amount.

    3. For all math Error Codes, a field labeled "NC" followed by "XX" will generate. The "NC" field is located on Line 4 of the screen display (to the right of CRECT). Multiple TPNCs may be entered when multiple XXs are shown.

    4. Previously assigned TPNCs are displayed on Line 3 preceded by the literal "NC" .

    5. If determined that the generated Math Error Code was the direct result of a previous error, any previously assigned TPNC may be entered.

    6. A field labeled "CL" is displayed for the entry of a Clear Code on records where the possibility exists that a change or correction may not be needed. The "CL" field is located on Line 4 of the screen display (to the right of CRECT). All coding and transcription errors displayed must be corrected and IRM procedures for each field shown on the screen display must be applied before entering a "C" in the Clear Field.

    7. All errors must be resolved by eliminating (or suspending) the error, entering the Clear Code, or entering a Taxpayer Notice Code.

  3. Correction Procedures:

    If... Then...
    Clearable consistency errors
    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. If the data in the field is correct, enter a "C" in the Clear Code field.

    Non-clearable consistency errors Correct all misplaced entries, coding errors, and transcription errors.
    Math errors
    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. If no editing or transcription error is present or the error is the fault of the taxpayer, issue the appropriate Taxpayer Notice Code (TPNC).

      Note:

      Once a TPNC is assigned to the record, it will be displayed in all subsequent displays for the record unless a higher Priority IV Error is created.

    A correction causes a clear Error Code to no longer be in the error
    • The TPNC or Clear Code for that Error Code is deleted.

    • All TPNCs and Clear Codes assigned to all lower priority (higher numeric) Error Codes are deleted also.

    • Any remaining Error Codes previously cleared are re-displayed.

  4. For specific correction instructions for each Error Code, see IRM 3.12.14.22.

Section 01 – Entity Remittance and Miscellaneous Information

  1. IRM 3.12.14.9 provides instruction for perfecting Section 01 error conditions.

General Information

  1. Section 01 contains entity data, remittance, fields for codes, Received Date, and miscellaneous information.

  2. The Remittance field cannot be changed by ERS.

    • Non-Remittance Returns -This field must be blank.

    • Remittance Returns -This field must be present and all numeric.

Error Record Format - Section 01

  1. Listed below are the fields contained in Section 01. Data in this section is obtained from Form 1041, Form 1041-QFT, and Form 1041-N:

    Field Designator Maximum Length Title Location
    01NC 4 Name Control/ Check Digit First Name Line, Forms 1041, 1041-QFT, and 1041-N.
    01EIN 9 Employer Identification Number Box "C" , Form 1041.
    Line 2, Form 1041-QFT and Form 1041-N.
    01TXP 6 Tax Period Upper Right Corner, Forms 1041, 1041-QFT, and 1041-N.
    01FID 1 Fiduciary Code Right of the "Simple Trust" box, Form 1041.
    01TRC 1 Trust Code Right of the "Pooled Income Fund" box, Form 1041.
    01CCC 10 Computer Condition Code Center of Line 1 (dotted area), Forms 1041.
    Center of Line 1a (dotted area),of Forms 1041-QFT, and 1041-N.
    01RCD 8 Received Date Center of Forms 1041, 1041-QFT and 1041-N.
    01FIN 9 Fiduciary EIN Form 1041, Right of Fiduciary's Signature.
    01CBI 1 Paid Preparer check box Indicator Forms 1041, 1041-QFT, and 1041-N, Right of Fiduciary EIN.
    01PSN 9 Paid Preparer SSN/PTIN Forms 1041, 1041-QFT, 1041-N, Right of Paid Preparer Signature.
    01PEN 9 Paid Preparer EIN Forms 1041, 1041-QFT, and 1041-N, Right of Paid Preparer Signature.
    01PTN 10 Paid Preparer Telephone Number Forms 1041, 1041-QFT, and 1041-N, below Paid Preparer EIN.
    01CRD 8 Correspondence Received Date  
    01ADC 3 Audit Code Form 1041, page 1, left margin next to Line 10. (Also, on Form 1041-N.) Shown as "1 -" followed by audit code(s).
    01ESB 1 ESBT Indicator Form 1041, page 1, left margin next to Line 10. Shown as "2 - 1" .
    01PII 1 Pooled Income Fund Indicator Form 1041, page 1, left margin next to Line 10. Shown as "3 - 1" .
    01PIC 1 Penalty and Interest Code Form 1041, page 1, left margin next to Line 10. Shown as "4 - 1" .
    01MSC 4 Missing Schedule Code Reserved.

    Note:

    No longer valid.

    01ISI 1 Installment Sale Indicator Form 1041, page 1, left margin next to Line 10. Shown as "6 -" followed by appropriate code.
    01HSC 1 Historic Structure Code Form 1041, page 1, left margin next to Line 10. Shown as "7 - 3" .
    01QNT 6 Form 1041-QFT – Number of Trusts Form 1041-QFT, Line 4 (Part I).
    01EWI 1 E-file Mandate Waiver Indicator Form 1041, page 1, bottom center margin

Field 01NC - Name Control (4 Positions)

  1. Description - Field 01NC is located in the entity section of Form 1041.

    • Valid characters are alpha, numeric, hyphen, ampersand, and blank.

  2. Invalid Condition - Field 01NC is invalid if any of the following conditions are present:

    • The first position is not alpha or numeric.

    • The second, third, or fourth position is not an alpha, numeric, hyphen, ampersand, or blank.

    • There are any intervening blanks between characters.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. If the Name Control cannot be determined, research ENMOD or INOLE to secure the Name Control.

      If... Then...
      Able to locate Enter the correct Name Control in Field 01NC.
      Unable to locate SSPND 320.

      Note:

      If IDRS is not available, SSPND 351/352.

  4. For information on determining the Name Control for an Estate or Trust, refer to Document 7071-A, BMF Name Control Job Aid.

Field 01EIN - Employer Identification Number (9 Positions)

  1. Description - Field 01EIN is located in the entity section of Form 1041/1041-QFT/1041-N.

    • Only numeric characters are valid.

  2. Invalid Condition - Field 01EIN is invalid if any of the following conditions are present:

    • The EIN is not numeric.

    • The EIN is less than nine characters.

    • The first two digits of the EIN are: 00, 07, 08, 09, 17, 18, 19, 28, 29, 49, 78, 79, or 89.

    • The EIN is all zeros or all nines.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

      If... Then...
      The EIN was transcribed correctly Research for another EIN on the return or attachments and enter in Field 01EIN.
      The EIN can’t be determined Research IDRS for the correct EIN using CC NAMEB/NAMEE, ENMOD, or INOLE. If located, enter the correct EIN. If more than one EIN is located or the correct EIN cannot be located, SSPND 320.

      Note:

      If research command codes are not available, SSPND 351.

      No EIN can be found SSPND record with Action Code 320. Route to Entity Control using Routing Slip notated "NO RECORD FOUND" .
    2. If the EIN is changed from the one the taxpayer used, issue Letter 3875C as a non-suspense letter to the address on the return. Continue processing the return.

      Note:

      Do not send Letter 3875C: if 3 or less digits of the EIN are transposed, different, missing, when INOLES indicates the account has been merged, or If the EIN on the return is the taxpayer's SSN and research shows there is a valid EIN for that taxpayer.

  4. Suspense Correction:

    1. Enter the EIN assigned by Entity in Field 01EIN and the entity assignment date in Field 01CRD.

    2. If the EIN is changed from the taxpayer's entry and Entity has not already issued Letter 3875C, issue Letter 3875C as a non-suspense letter to the address on the return.

      Note:

      Do not send Letter 3875C: if 3 or less digits of the EIN are transposed, different, missing, when INOLES indicates the account has been merged, or when an SSN is used on a BMF return and research has shown there is no entity on Master File when the number is in EIN format.

Field 01TXP - Tax Period (6 Positions)

  1. Description - Field 01TXP is located in the upper right corner of Page 1 of Form 1041. The pre-printed calendar year Tax Period is located in the top center margin of Form 1041. If other than the pre-printed calendar year, the Tax Period is indicated under the heading "U.S. Income Tax Return for Estates and Trusts" .

    • The Tax Period will be shown in "YYYYMM" format.

      Example:

      Tax Period 0812 will display as 200812.

    • Only numeric characters are valid.

    • The Tax Period is the basis for all Tax Period related mathematical comparisons and validity checks.

  2. Invalid Condition - Field 01TXP is invalid, if any of the following conditions are present:

    • The Tax Period is not all numeric.

    • The month (last two digits) is not 01 through 12.

    • The Tax Year (first four digits) is after the current year.

    • The Tax Year is equal to the current year but the month is after the current processing month.

    • Form 1041 - The Tax Period is prior to 196112.

    • Form 1041-QFT - The Tax Period is prior to 199708.

    • Form 1041-N - The Tax Period is prior to 200312

  3. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. Determine the correct Tax Period from Form 1041 and attachments.

    Note:

    See IRM 3.12.14.23.3, 52-53 Week Tax Period Filers.

    If... Then...
    The Tax Period cannot be determined Enter the current year
    A Final return and the Tax Period Ending is the same as or later than the Received Date Change the Tax Period to the month preceding the Received Date.
    A non-final return and the Tax Period Ending is less than four months after the processing date

    Example:

    A return with a Tax Period Ending of 9/10/2008 that is being processed on 6/15/2008

    SSPND 480 and attach Routing Slip notated "EARLY FILED"
    A non-final return and the Tax Period Ending is four months or more after the processing date

    Example:

    A return with a Tax Period Ending of 11/30/2008 that is being processed on 6/15/2008

    SSPND 211 and initiate correspondence requesting confirmation of the Tax Period Ending (or follow local procedures for confirmation of the Tax Period Ending).

    Note:

    When confirmed, the return will be processed after the end of that Tax Period. If no reply, use current processing year.

    The Tax Period Ending is later than the current year-month combination by one year or more Reduce the Tax Period Ending to the lowest number of full years that make it valid.
    The Tax Period begins and ends in the middle of the month SSPND 211 and correspond to request confirmation of the Tax Period.

    Exception:

    If the return is for a Decedent's estate, use the end of the month for the Tax Period, for example a return ending December 21, 2008 would be 200812.

    Form 1041 -The Tax Period Ending is prior to 196112 (Non-ADP) SSPND 620 and attach Routing Slip notated "PRE-ADP" .
    Form 1041-QFT -The Tax Period Ending is prior to 199708 SSPND 211 and correspond to determine the correct Tax Period. If no reply, use current processing year.
    Form 1041-N -The Tax Period Ending is prior to 200312 SSPND 211 and correspond to determine the correct Tax Period. If no reply, use current processing year.
  4. The following applies to all returns if Field 01TXP has been changed or needs to be changed:

    If... Then...
    The Tax Period is changed and prepaid credits are present SSPND 342 and attach Routing Slip and notate "Verify Credits" .
    Payments are posted to an incorrect Tax Period SSPND 351 and attach Routing Slip notated "Credit Transfer" .

Field 01FID - Fiduciary Code (1 Position)

  1. Description - Field 01FID is a single numeric field edited to the right of the "Simple Trust" box (Box "A" of Form 1041).

  2. Valid characters are as follows:

    Fiduciary Code Description
    1 Decedent's Estate
    2 Simple Trust or Grantor Trust (Partially Taxable)
    3 Complex Trust
    4 Grantor Trust (Non-Taxable) or Family Estate Trust
    5 Bankruptcy Estate - Chapter 7
    6 Bankruptcy Estate - Chapter 11
    8 Qualified Disability Trust (QDT)

    Note:

    "8" is valid for Tax Period 200109 and subsequent.

    9 Nonexempt Charitable and Split-Interest Trust described in IRC §4947(a)(2)

    Note:

    Always enter "9" in Field 01FID and Audit Code "6" in Field 01ADC when the "Section 4947(a)(2)" box is checked, even if another box is checked.

    Caution:

    A blank is valid only if Computer Condition Code "G" (Amended Return) is present in Field 01CCC.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. Ensure that the type of entity box checked agrees with what the name line and exemption amount indicate. If not, treat as a misplaced entry.

      Example:

      If the type of entity is checked for a decedent's estate but the name line says a trust and the exemption is for $300, then the taxpayer has checked the wrong box. The simple trust box needs to be checked and 2 entered into Field 01FID.

    3. If Field 01FID is other than "1" through "6" , "8" , or "9" , correct as follows:

      If... Then...
      The "Decedent's Estate" box is checked Enter "1" in Field 01FID.
      The "Simple Trust" box is checked Enter "2" in Field 01FID.
      The "Complex Trust" box is checked Enter "3" in Field 01FID.
      The "Qualified Disability Trust" box is checked or"Section 642(b)(2)(C)" is notated on the dotted portion of Line 20 and Field 0420 contains an entry of $4,050 or less. Enter "8" in Field 01FID.
      The "Grantor Trust" box is checked or you have determined that the return is for a Grantor Trust and the return is taxable, entries are present on any of Lines 1 through 29 of Form 1041 Enter "2" in Field 01FID and enter "3" in Field 01TRC.

      Exception:

      Process Form 1041 as a Non-Taxable Grantor Trust (a "4" in Field 01FID) if it is apparent that the return is non-taxable and the taxpayer has erroneously entered data to Lines 1 through 22.

      The "Grantor Trust" box is checked or you have determined that the return is for a Grantor Trust and the return is non-taxable, no entries on Lines 1 through 22 or the taxpayer has erroneously entered data to Lines 1 through 22 Enter "4" in Field 01FID and enter "3" in Field 01TRC.
      The "Bankruptcy Estate - Ch. 7" box is checked Enter "5" in Field 01FID.
      The "Bankruptcy Estate Ch. 11" box is checked Enter "6" in Field 01FID.
      If neither Bankruptcy box is checked Enter "5" in Field 01FID, if the return indicates it is for a "Bankruptcy Estate" .
      Only the "Pooled Income Fund" box is checked Enter "3" in Field 01FID. GTSEC 01 and enter "1" in Field 01PII.
      A 1985 or subsequent Form 1041 is received with a notation that it is for a Testamentary Trust or the Testamentary Trust box is checked on a 1984 or prior Form 1041 Enter "3" in Field 01FID.
      A current year Form 1041 is received with the Yes box checked on Line 9 of the Other Information Section (Page 2) or a notation that it is for a GENERATION SKIPPING TRUST,
      or
      A prior year Form 1041 is received with a notation that it is for a Generation Skipping Trust or the Generation Skipping Trust box is checked (Tax Year 1986 or prior)
      Enter "3" in Field 01FID and "1" in Field 01TRC.
      The Described in Section 4947(a)(2) box is checked Enter "9" in Field 01FID and enter "6" in Field 01ADC.
      No box is checked and the Name Line contains a notation that it is for Estate Trust. Enter "1" in Field 01FID.

      Caution:

      In addition to checking the applicable Type of Entity in Section A of Form 1041, taxpayers are instructed to check the ESBT (S–Portion Only) box in Section A when ESBT (Electing Small Business Trusts) tax applies (if ESBT box is checked, "1" should be in Field 01ESB). Determine the Fiduciary and Trust Code from the box checked, other than the ESBT box. If no other box is checked, follow the procedures below.

    4. If no boxes (or multiple boxes) are checked in the entity section of the return and the type of return cannot be determined from the Name line, Exemption amount, or there isn't a notation on the return indicating the entity type, or the taxpayer notates Nominee enter "3" in Field 01FID.

      Exception:

      If the taxpayer has notated "Receivership" , "Substantial Owner" , "Revocable (Living) Trust" , "Generation Skipping Trust" , or "IRC Section 671 - 678)" , code as a Grantor Trust.

      If... Then...
      Grantor Trust (Non-Taxable) Enter a "4" in Field 01FID and "3" in Field 01TRC.
      Grantor Trust (Partially Taxable) Enter a "2" in Field 01FID and "3" in Field 01TRC.

      Note:

      If Government National Mortgage Association (GNMA - Ginnie Mae) Pool is notated on Form 1041, but entries are present on any of Lines 1 through 21, and Line 22 has a positive amount, then Code & Edit (C&E) has been instructed to correspond to determine if Form 1041 is a Taxable or Non-taxable return. GNMA Pool returns are Non-taxable returns only.

    Caution:

    Amended returns (edited with CCC "G" ) do not receive either a Fiduciary Code or a Trust Code. Every other 1041 must have a Fiduciary Code and may have a Trust Code.

Field 01TRC - Trust Code (1 Position)

  1. Description - Field 01TRC is a single numeric field edited to the right of the "Pooled Income Fund" box (Box "A" of Form 1041).

  2. Valid characters are "1" , "2" , "3" , "4" , and blank:

    • Trust Code 1 - Generation Skipping Trust (should only be present with Fiduciary Code "3" ).

    • Code 2 - Reserved.

    • Code 3 - Grantor Trust (should only be present with Fiduciary Codes "2" or "4" ).

    • Code 4 - Family Estate Trust (should only be present with Fiduciary Code "4" ).

      Note:

      Use Trust Code "3" for a Family Estate Trust when the Grantor Trust box has been checked on the return.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. If Field 01TRC is other than "1" through "4" , or blank, correct as follows:

    If... Then...
    A current year Form 1041 is received with the Yes box checked on Line 9 of the Other Information Section (Page 2) or a notation that it is for a Generation Skipping Trust,
    Or
    A prior year Form 1041 is received with a notation that it is for a Generation Skipping Trust or the Generation Skipping Trust box is checked (Tax Year 1986 or prior)
    GTSEC 01 and enter "3" in Field 01FID and "1" in Field 01TRC.
    The Grantor Trust box is checked (either Taxable or non-Taxable) Enter "3" in Field 01TRC.
    A 1993 or subsequent Form 1041 is received with a notation that it is for a Family Estate Trust or the Family Estate Trust box is checked on a 1992 or prior Form 1041 Enter "4" in Field 01TRC.

    Exception:

    Enter "3" in Field 01TRC if the Grantor Trust box is checked.

    Form 1041 is received with the notation Qualified Settlement Fund or Settlement Fund SSPND 320 and attach Routing Slip notated "Possible Filing Requirement Discrepancy" .

Field 01CCC - Computer Condition Code

  1. Description - Field 01CCC is an alpha or numeric field edited in the center of Line 1 of Form 1041.

    • Computer Condition Codes post to the Master File and are used to identify a special condition or computation for the computer.

  2. Correction Procedures:

    1. When the code(s) edited on Form 1041 are illegible or invalid, examine the return to determine the correct code(s) and enter on the screen.

    2. If no reply to correspondence or if the correspondence was undeliverable, enter a "3" in Field 01CCC.

  3. Listed below are the valid Computer Condition Codes for Form 1041:

    Code Definition Error Checks Remarks
    C Invalid in service date and/or vehicle year   C&E will CCC C any return with an invalid in service date and/or vehicle year listed on the attached forms:
    • Form 8834 valid in service date after 2/17/2009, vehicle year 2009, 2010, and 2011.

    • Form 8936 valid in service date after 1/01/2009, vehicle year 2009, 2010, and 2011.

    • Form 8910 valid in service date after 2/17/2009.

      Note:

      ERS will disallow the credits and notify the taxpayer that we have disallowed the credits due to invalid in service date and/or vehicle year.

    D Reasonable Cause for Failure to Pay Taxes Timely Can be used with CCC "R" or "7" , but not both (validity check).  
    E Identity Theft   C&E will CCC E any BMF return that has been identified as ID Theft.
    F Final Return Cannot be Coded "G" (Field Error).  
    G Amended Return
    • No other codes allowed, except W, T, and 3

    • All fields must be blank except RMIT>, 01NC, 01EIN, 01TXP, and 01RCD and O1CRD (EC 010).

    If CCC "G" is deleted from Field 01CCC, GTSEC to review all sections and input data where necessary.
    I Regulated Futures Contracts and Tax Straddles (Form 6781)   No action – Information item only.
    K Qualifying Small Business Taxpayer  
    • Indicates box E checked in Part II of Form 2210, Underpayment of Estimated Tax by Individuals, Estates and Trusts, or

    • Indicates box B is checked in Part I of Form 2210-F, Underpayment of Estimated Tax by Farmers and Fishermen.

    Caution:

    Only valid after 200912 through 201011.

    N Form 8939   Indicates that Form 8939, Allocation of Increase in Basis for Property Received from a Decedent, is attached to the 1041 return.
    O Module Freeze  
    • Indicates that a pre-settlement manual refund was made or will be made.

    • Form 3753 or Form 5792 should be attached to Form 1041.

    • If TC 840 (Manual Refund) has not posted to BMFOL or TXMOD, SSPND via Action Code 341 (Manual Refund). Otherwise, continue processing.

    P Return submitted under Streamlined Filing Compliance Procedures   Returns annotated at the top with "Streamlined"
    R Reasonable Cause for Failure to File Tax Return Timely Can be used with CCC "D" or "7" , but not both (validity check).
    • A notation such as do not Assess Failure to File Penalty on an SFR,

    T Form 8886   Indicates that Form 8886, Reportable Transaction Disclosure Statement is attached to the 1041 return.

    Note:

    For 201201 and later returns.

    T Investor Reporting of Tax Shelter (Form 8271 attached to Form 1041).   No action – Information item only.

    Note:

    Only applies to 200709 returns and prior.

    V Claiming Qualifying Therapeutic Discovery Project Credit   Any return with an amount on Line 1a of Form 3800, and part of the amount is from Line 8, Form 3468.

    Note:

    Credit is not valid after 201011.

    W Return Cleared by Statute Must be present on Statute Cases (EC 001).  
    X Credit Freeze  
    • Used to freeze a credit balance, when appropriate (unsigned, refund return, and no reply).

    • Prepare Form 3465 and photocopy the return for Adjustments.

    Y Return Filed - Short Period EC 898 Computer accepts, posts, and settles on return as submitted.

    Note:

    Not used on initial or final returns.

    1 Related Party Like-Kind Exchange - Form 8824 is attached.   If Form 8824, Like-Kind Exchanges, is attached.
    2 Indicates Form 8938 is attached   If Form 8938, Statement of Foreign Financial Assets is attached.
    3 No Reply to Correspondence Cannot be present with Field 01CRD (Field 073). Prevents interest on refunds.
    4 Return Prepared Under IRC §6020(b) Cannot be used with CCC R. No action – Information item only.
    8 Waiver of Estimated Tax Penalty  
    1. When the date entity created is within two years of the tax year ending and:

      • The return is for a decedent estate or bankruptcy estate, or

      • Taxpayer notated Testamentary Trust, Tstmtry, Trust under the Will, T.U.W., or TR/W in the entity portion of the return.

    2. Form 2210 is attached and any boxes are checked, or Form 2210-F has any other boxes checked.

    3. The taxpayer notates Waiver on Line 26 of Form 1041, or on Form 2210 or 2210-F.

    4. Taxpayer provides a valid explanation for underpayment, e.g., retired or became disabled during tax year.

    5. If all the following conditions are met:

      • Schedule H is attached to the return,

      • Form 1041 does not contain withholding credit, and

      • Total tax without household employment tax is less than $1,000.

    9 Low Income Housing Credit (LIHC) Not valid before Tax Period 198701 (EC 062).
    • Form 8586, Low-Income Housing Credit

    • Form 8609, Low-Income Housing Credit Allocation and Certification, for 200412 and prior.

    • For 8609-A, Annual Statement for Low-income Housing Credit.

    • Form 8693, Low-Income Housing Credit Disposition Bond.

    Caution:

    Do not use for Form 8611, Recapture of Low-Income Housing Credit.

  4. When CCC "G" is present, no other CCC's are valid except"W" , "T" , and "3" .

    • If a CCC other than "W" , "T" , or "3" is present with CCC "G" , delete the invalid CCC.

Field 01RCD - Received Date (8 Positions)

  1. Description-– Field 01RCD is a numeric field, which is either date stamped or edited in the center of Page 1 of Form 1041.

    • Field 01RCD must be present and entered in YYYYMMDD format.

  2. Invalid Condition - Field 01RCD is invalid if any of the following conditions are present:

    • The Received Date is not present.

    • The Received Date is not in YYYYMMDD format.

    • The Received Date is later than the current processing date.

    • The Received Date is not all numeric.

    • The Received Date is prior to 19620101.

    • The Received Date is not within the valid month, day range detailed below:

    Month Day
    01, 03, 05, 07, 08, 10, and 12 01–31
    04, 06, 09, and 11 01–30
    02 01–28 (29 leap year)
  3. Correction Procedures:

    • Correct all misplaced entries, coding errors, and transcription errors.

    If... Then...
    The Received Date is invalid and it appears that the incorrect year was used (i.e., "20150115" instead of "20160115" ) and other information (Julian Date "minus 10 days" , Postmark Date, and/or Signature Date) indicates that the Received Date should be the current year Change the Received Date year to the current year.
    The Received Date cannot be determined Determine the entry to Field 01RCD using the following priority order:
    1. The earliest legible Postmark Date (U.S. Postal Service or Private Delivery Service) on the envelope. Note: If an envelope is not attached, use the postmark date stamped on the face of the return.

    2. Service Center Automated Mail Processing System (SCAMPS) digital date.

    3. The Revenue Officer's Signature Date.

    4. The Return Signature Date (if within the current year).

    5. The Julian Date in the DLN minus 10 days (on numbered returns).

    6. The Current Date minus 10 days (on unnumbered returns).

    Multiple Received Dates are present Enter the earliest Received Date in Field 01RCD.
    The Tax Period Ending is prior to 19620101 (Non-ADP) SSPND 620.
    The return was addressed to the IRS and delivered to a State agency Use the postmark date as the received date.
    The return was addressed to a State agency Use the IRS date stamp as the received date.
  4. Determining Postmark Dates:

    • Only legible official postmark date and/or label dates (Killer Bar Strips or Postage Validation Imprinted Labels) are accepted as proof of filing timely.

    • Metered Postmarks are easily identified by the official marking of arrows. These types of markings are not found on a privately metered postmark.

    • Valid official Killer Bar Strips are identified by a series of solid or broken lines containing a date, city, and state that is used to cancel postage stamps. Accept the postmark date as the Received Date.

    • For further information and procedures on Postmarks, see IRM 3.10.72, Receiving, Extracting, and Sorting.

  5. Private Delivery Services - A private delivery service (PDS) is a business, designated by the IRS (rather than by the U.S. Postal Service), to send returns to the IRS. Private delivery services do not deliver to P.O. Boxes. Taxpayers must use the U.S. Postal Service to mail items to an IRS P.O. Box address. The postmark date is the date the private delivery service records in its database or marks on the mailing label.

    1. Accept all designated PDS marks. Do not use marks from a non-designated PDS to determine the IRS Received Date.

    2. Private Delivery Services, e.g. Federal Express Corporation (FedEx) or United Parcel Service (UPS), designated by the IRS. See IRM 3.10.72, Receiving, Extracting and Sorting for a list of designated private delivery services,

      Designated PDS for FedEx and UPS

      Federal Express (FedEx):
      • FedEx First Overnight

      • FedEx Priority Overnight

      • FedEx Standard Overnight

      • FedEx 2 Day

      • FedEx International Next Flight Out

      • FedEx International Priority

      • FedEx International First

      • FedEx International Economy

      United Parcel Services (UPS):
      • UPS Next Day Air Early AM

      • UPS Next Day Air

      • UPS Next Day Air Saver

      • UPS 2nd Day Air

      • UPS 2nd Day Air A.M.

      • UPS Worldwide Express Plus

      • UPS Worldwide Express

       

    3. The "Timely Mailing as Timely Filing" rule applies only to the U.S. Postal Service and to a designated PDS. When the rule applies to a PDS, it is referred to as a "Designated" PDS.

    4. Currently, only FedEx marks airbills with the mailing date. Do not use FedEx "Power ship 3" airbills for determining the mail date. Accept all other FedEx airbills.

    5. Use the instructions in IRM 3.10.72 for determining the Received Date when the mail marks are not from a designated PDS.

Field 01FIN - Fiduciary EIN

  1. Description - Transcribed from the right of the Signature Section of Form 1041.

  2. Invalid Condition - Field 01FIN is invalid if any of the following conditions are present:

    • Field 01FIN is not nine numbers.

    • Field 01FIN is all zeros or all nines.

    • The first two digits (Area Office Code) are: 00, 07, 08, 09, 17, 18, 19, 28, 29, 49, 78, 79, or 89.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. If the Fiduciary EIN is still invalid or if the return is nontaxable, amended or for an Estate, delete Field 01FIN.

  4. Do not enter the Fiduciary EIN if any of the following conditions exist:

    • The return is for an Estate (Box A).

    • Field 0524A is blank.

    • Field 0422 is blank.

    • The Fiduciary's EIN is illegible or less than nine numeric digits.

    • The Fiduciary's EIN is the same as the Trust's EIN (Box C).

    • The fiduciary is not a trust or financial institution (i.e., bank, credit union, savings and loan).

    • The return is amended (Box F).

Field 01CBI - Paid Preparer Check Box Indicator

  1. Description -Transcribed from the right of Field 01FIN (Fiduciary EIN) in the Signature Section of Form 1041. The Paid Preparer check box is used to indicate whether the taxpayer has elected to allow the Paid Preparer to answer questions about the taxpayer's return as it is processed.

    • Valid characters are "1" and blank.

    • If the taxpayer checks only the Yes box, Code & Edit should edit a "1" in the margin to the right of the Paid Preparer check box.

  2. Invalid Condition -Field 01CBI is invalid if other than "1" or blank

  3. Correction Procedures:

    • Correct all misplaced entries, coding errors, and transcription errors.

    If... Then...
    The "Yes" box is checked Enter "1" in Field 01CBI.
    The "No" box is checked;
    Neither box is checked; or,
    Both boxes are checked
    Delete Field 01CBI and continue processing.

Field 01PSN - Paid Preparer's TIN (PTIN)

  1. Description - Transcribed from the right of the Paid Preparer's Section of Form 1041.

    • Data may or may not be present in Field 01PSN.

    • Valid characters are all blank, or with a "P" in the first character followed by eight numerics (PTIN).

      Note:

      The first character in the PTIN must begin with the alpha "P" . The range for a valid PTIN is P00000001 through P99999998. A "P" followed by all zeroes or all nines is not valid.

  2. Invalid Condition - Field 01PSN is invalid if any of the following conditions are present:

    • Field 01PSN is other than a "P" followed by eight numeric digits,

    • Field 01PSN is all zeros or all nines.

    Caution:

    Preparer's Social Security Number (SSN) is no longer acceptable.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. If "P" is missing, add to Field 01PSN.

    3. If unable to determine a valid entry, delete Field 01PSN.

Field 01PEN - Paid Preparer EIN

  1. Description - Transcribed from the right of the Paid Preparer's Section of Form 1041.

    • Data may or may not be present in Field 01PEN.

    • Valid characters are all blank or all numeric.

      Exception:

      Field 01PEN will be invalid if all nines, all zeroes, or less than nine digits.

  2. Invalid Condition - Field 01PEN is invalid if any of the following conditions are present:

    • Field 01PEN is not nine numeric digits.

    • The first two digits of the EIN are: 00, 07, 08, 09, 17, 18, 19, 28, 29, 49, 78, 79, or 89.

    • Field 01PEN is all zeros or all nines.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. If unable to determine the valid entry, delete Field 01PEN.

Field 01PTN - Paid Preparer Telephone Number

  1. Description - Transcribed from the right of the Paid Preparer's Section of Form 1041.

    Note:

    If the taxpayer has checked Yes in the Paid Preparer check box, a telephone number should be entered to allow contact, but this field is not required and may be blank.

    • Data may or may not be present in Field 01PTN.

    • Valid characters are alpha and numeric.

  2. Invalid Condition - Field 01PTN is invalid if other than alpha, numeric or blank.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. If invalid, delete Field 01PTN and continue processing.

Field 01CRD-– Correspondence Received Date (8 Positions)

  1. Field 01CRD is a numeric field edited on the front of the 1041.

    • The Correspondence Received Date (CRD) should be present when returns have been held in Suspense and the reply is received after the Return Due Date.

    • If present, Field 01CRD must be entered in YYYYMMDD format.

  2. Invalid Condition - Field 01CRD is invalid if any of the following conditions are present:

    • Not numeric.

    • Not in YYYYMMDD format.

    • Not a valid date.

  3. Correction Procedures - Correct all misplaced entries, coding errors, and transcription errors.

    • Compare the field with the return:

      If... Then...
      The Correspondence Received Date cannot be determined (i.e., illegible) Check the attached correspondence for the CRD.
      Multiple Correspondence Received Dates are present Use the CRD that made the return processable in Field 01CRD.
  4. Determining the CRD - If the reply was not date stamped, determine the CRD in the following priority order:

    1. The IRS Date Stamp - Placed on the return or reply by the Receipt and Control function when the return is received with a reply to the correspondence.

    2. The U.S. Postal Service postmark or metered date on the reply envelope.

    3. The current date.

  5. Enter the CRD (YYYYMMDD) in Field 01CRD except in the following situations:

    • Correspondence was not necessary or was issued in error.

    • The correspondence reply was received prior to the Return Due Date.

    • The correspondence was required because an IRS processing error was identified.

  6. If no reply or the correspondence was undeliverable, enter "3" in Field 01CCC.

  7. On returns, which have been sent back to the taxpayer (correspondence is attached), the original stamped Received Date should be circled-out and the date on which the correspondence is received should be entered as the Received Date in Field 01RCD and edited in the Deductions Section on Form 1041.

  8. If there is an indication that Entity has assigned an EIN to the return, enter the entity assignment date (lower left corner of Form 1041) in Field 01CRD, if the entity assignment date is later than the Received Date and Return Due Date.

Field 01ADC - Audit Codes (3 Positions)

  1. Description - Field 01ADC is a three-digit numeric field transcribed from the left margin next to Line 10 identified by "1 -" followed by the appropriate audit code(s). Audit Codes are used to alert Examination to a particular condition on the return.

  2. Up to three Audit Codes may be entered in Field 01ADC. If more than three Audit Codes apply, enter only the first three Audit Codes using the following priority order:

    Priority Order Audit Code Description
    1 8 Form 1041-N
    2 3 Inconsistent Treatment
    3 2 Foreign Interest
    4 1 International
    5 4 Prompt Audit Request
    6 5 Ineligible Fiscal Year Filers
    7 6 Nonexempt Charitable and Split-Interest Trusts
  3. Invalid Condition - Field 01ADC will generate as a field error, if the Audit Code is other than blank or the valid codes listed above.

  4. Field 01ADC will also generate when Audit Code "8" is present and the Document Code is not "39" .

  5. Correction Procedures Correct all misplaced entries, coding errors, and transcription errors.

  6. Determine the appropriate Audit Code as follows:

    Audit Code Description
    1 International - Enter "1" in Field 01ADC if any of the following conditions are present:
    1. Line 2a of Schedule G (Form 1116) is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    2. Line 18 (Income Distribution) or Line 22 (Taxable Income) of 1041 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and any of the following conditions are present:
      • Form 5471 is attached.
      • Form 8865 is attached.
      • Schedule K-1 (Form 1041) has a non-U.S. Address.
      • The Yes box is checked on Line 4 (Foreign Trust) of the "Other Information" section.

    2 Foreign Interest - Enter "2" in Field 01ADC if the Yes box is checked and/or a foreign country is listed on Line 3 (Foreign Interests) of the "Other Information" section of Form 1041.
    3 Inconsistent Treatment - Enter "3" in Field 01ADC if any of the following conditions are present:
    • Form 8082 is attached.

    • Form 8275/8275-R is attached.

    • Form 8886 is attached.

    • After correspondence, the taxpayer has failed to provide a Form 8824 (Like-Kind Exchange).

    • After correspondence, the taxpayer has failed to provide a Schedule K-1 or the K-1 is incomplete.

    • The taxpayer has notated that they are "Complying With Irs Regulation 1.442-1(C)" .

    4 Prompt Audit Request - Enter "4" in Field 01ADC if any of the following conditions are present:
    • Form 4810 is attached.

    • The return contains an attachment or notation of a "Request For Prompt Audit Assessment" or by citing "IRC §6501(d)" .

    5 Ineligible Fiscal Year Filers - Enter "5" in Field 01ADC if the taxpayer is filing a Fiscal Year return and the return is not for one of the following filers (qualified to file on a Fiscal Year basis):
    • Estate or a trust filing as an estate under IRC §645

    • Nonexempt Charitable Trust under IRC §4947(a)(1).

    • One of the following notations is shown on the return:
      • IRC §501(a)
      • IRC §671 through IRC §679
      • IRC §443(b)(2)

    • No reply to correspondence on unexplained short period returns.

      Caution:

      Do not use Audit Code "5" on an Initial or Final Return that has a Tax Period ending date in December (calendar year filer).

    6 Nonexempt Charitable and Split-Interest Trusts - Enter Audit Code "6" if:
    • The first box (Described in section 4947(a)(1)) or third box (Described in section 4947(a)(2)) is checked in Section E of Form 1041.

    8 Form 1041-N -Only enter "8" in Field 01ADC for all Form 1041-N (Electing Alaska Native Settlement Trusts) returns.

    Caution:

    No other Audit Codes are valid if Audit Code "8" is required.

Field 01ESB - ESBT Indicator (1 Position)

  1. Description - Field 01ESB is a numeric field edited in the left margin next to Line 10 as "2 - 1" when the ESBT (S portion only) box is checked in "Box A, Type of Entity" in the upper left on page 1.

  2. Valid characters are "1" and blank. "1" indicates the "ESBT" box is checked.

  3. Invalid Condition - Field 01ESB will generate as an error if the ESBT Indicator is other than "1" or blank.

  4. Correction Procedures:

    1. Correct all misplaced entries, coding errors and transcription errors.

    2. Compare the screen entry with the entry on the return. If the field was coded or transcribed incorrectly, correct the screen display and the return when necessary.

Field 01PII - Pooled Income Fund Indicator (1 Position)

  1. Description –- Field 01PII is a numeric field edited in the left margin next to Line 10 as "3 - 1" when the Pooled Income box is checked (upper left corner of Page 1).

  2. Valid characters are "1" and blank.

    • PII Code "1" is entered to identify when the Pooled Income Fund box is checked on Form 1041 (Box A, Type of Entity).

  3. Invalid Condition - Field 01PII will generate as a field error if the PII Code is other than "1" or blank.

  4. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. Compare the screen entry with the entry on the return. If the field was coded or transcribed incorrectly, correct the screen display and the return when necessary.

Field 01PIC - Penalty and Interest Code (1 Position)

  1. Description - Field 01PIC is a numeric field edited in the left margin next to Line 10 as "4 - 1" .

    • The Penalty and Interest Code is edited when Form 1041 is received after the Return Due Date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the taxpayer has included penalty and/or interest.

  2. Valid characters are "1" and blank.

  3. Invalid Condition - Field 01PIC will generate as a field error if the Penalty and Interest Code is other than "1" or blank.

  4. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. Compare the screen entry with the entry on the return. If the field was coded or transcribed incorrectly, correct the screen display and the return when necessary.

Field 01MSC - Missing Schedule Code (4 Positions)

  1. C&E is no longer going to edit Missing Schedule Codes in the left margin of the return. Instead, they are to correspond for the missing schedules.

  2. Correction Procedures:

    1. Delete the entry in Field 01MSC.

    2. If there is no indication C&E has requested the missing form(s)/schedule(s), SSPND and correspond if credit is ≡ ≡ ≡ ≡ ≡ ≡ ≡

Field 01ISI - Installment Sales Indicator (1 Position)

  1. Description - Field 01ISI is edited in the left margin next to Line 12 as "6 -" followed by the appropriate code when Form 6252 (Installment Sale Income) is attached.

  2. Valid characters are "1" , "2" , "3" and blank.

    ISI Code Description
    1 Indicates a Yes to Question "3" of Form 6252 (Installment Sale Income).
    2 Indicates a No to Question "3" of Form 6252.
    3 Indicates that Form 6252 is attached but there is a multiple, illegible, or no response to Question "3" .

    Caution:

    If multiple Forms 6252 are attached, enter ISI Code 1 ("Yes" ) if at least one Form 6252 has a positive response. If Form 6252 is not attached, Field 01ISI will be blank.

  3. Invalid Condition - Field 01ISI will generate as a field error if the Installment Sales Indicator Code is other than "1" , "2" , "3" , or blank.

  4. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. Correct the return when necessary.

Field 01HSC - Historic Structure Code (1 Position)

  1. Description - The Historic Structure Code applies to any return for Tax Periods 198212 and subsequent.

  2. Field 01HSC is edited in the left margin next to Line 12 as "7 - 3" when the Form 3468 (Investment Credit) has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on the following:

    • TY 2010 and subsequent: If there are entries under Part III, Line 11; specifically Lines e, f, g, h, i, or j.

    • For TY2008 and subsequent - Code 3 if an amount is present in Part III, on Line 10, e, f, g, h, i, or j.

    • For tax year 2006 - 2007 - Code "3" if an amount is present on Line 1, e, f, g, or h.

    • For tax years 1995 through 2005 - Code "3" if an amount is present on Line 1, b, or c.

  3. Valid Historic Structure Codes are "3" and/or blank.

  4. Invalid Condition - Field 01HSC will generate as a field error when the Historic Structure Code is other than "3" or blank.

  5. Correction Procedures:

    1. Correct all misplace entries, coding errors and transcription errors.

    2. Leave Field 01HSC blank if there are no entries on Lines 1a through 1d, or if question is not on Form 3468 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

  6. If a Department of Interior Certification letter or form is attached to the return, do not detach it from Form 1041.

Field 01QNT - Number of Trusts (Form 1041-QFT) (6 Positions)

  1. Description - Field 01QNT is located in the entity section (Part I) of Form 1041-QFT only. Valid characters are numeric only.

    • Form 1041-QFT - Transcribed from Line 4 (Part I).

    Note:

    Any entries in this field for other than 1041-QFTs, are invalid and were transcribed in error.

  2. Invalid Condition - Field 01QNT will generate as a field error if other than numeric.

  3. Correction Procedures -Correct all misplaced entries, coding errors, and transcription errors.

    Exception:

    If Line 4 is blank or zero on Form 1041-QFT, input a "1" in Field 01QNT.

Field 01EWI - E-file Mandate Waiver Indicator

  1. Description - will be edited on the bottom center margin of the 1041 return, page 1. It will be used whether or not the Form 8948, Preparer Explanation for Not Filing Electronically, has been attached to the 1041 return. Valid characters are the following numeric one digit code:

    • Blank - No E-file waiver Form 8948 attached.

    • 1 - Taxpayers elected to file return on paper.

    • 2 - Waiver from requirements to electronic file applied for and received.

    • 3 - Taxpayers are members of a religious group exempt from electronically filing the return.

    • 4 - Return was rejected by IRS E-File and the preparer was unable to resolve the reject condition

    • 5 - E-File software package does not support forms or schedules attached to the return.

    • 6 - Other circumstances prevented taxpayers from filing the return electronically.

    • If multiple boxes are checked the priority order would be: 6a or 6b, 3, 2, 1, 4, 5, 6c.

Section 02 - Address Fields

  1. Section 02 contains address information of the estate or trust.

    Note:

    See Document 7475, State Abbreviations, Major City Codes, and Address Abbreviations.

  2. Ogden Submission Processing Campus (OSPC) will process Foreign/International addresses and U.S. Possessions/Territories.

  3. The determination of a foreign address is based only on the address of the Trust:

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

    2. All U.S. Possessions/Territories are considered foreign.

    U.S. Possessions

    • American Samoa
    • Federated States of Micronesia
    • Guam
    • Marshall Islands
    • Northern Mariana Islands
    • Palau
    • Puerto Rico
    • Virgin Islands

     

  4. An Army Post Office (APO), Diplomatic Post Office (DPO), or Fleet Post Office (FPO) is not a foreign address. The Postal Service established new address requirements for APO/DPO/FPO addresses. If an address appears in the old APO/DPO/FPO format, such as "APO New York, NY 091XX" , convert to the new State code based on the ZIP Code as follows: "APO AE 091XX" .

    If ZIP Code is… Then convert to…
    340XX AA
    090 AE
    962-966 AP
  5. All returns with a foreign or U.S. Possession/Territory address must be shipped to OSPC.

    1. SSPND 650.

    2. Attach Form 4227 with the notation "Forward To Ospc" .

    3. Prepare Letter 86C to inform the taxpayer that the return has been sent to Ogden.

Foreign Addresses (OSPC Only)

  1. A foreign address will contain:

    • Street Address or P.O. Box

    • City or town name

    • Other principal subdivision (i.e., province, state, county, etc.)

    • Postal code, if present

    • Foreign country

  2. Returns with addresses in the U.S. Possessions/Territories are considered to be a foreign return for processing purposes, but are entered the same as domestic addresses.

    1. A two character alpha code must be entered in Field 02ST 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.

Error Record Format - Section 02

  1. Listed below are the fields contained in Section 02. Data in this section is obtained from Forms 1041, 1041-QFT, and 1041-N:

    Field Designator Maximum Length Title Location
    02CON 35 In-Care-of Name Entity section of Forms 1041, 1041-QFT, and 1041-N.
    02FAD 35 Foreign Address Entity section of Forms 1041, 1041-QFT, and 1041-N.
    02ADD 35 Address Entity section of Forms 1041, 1041-QFT, and 1041-N.
    02CTY 22 City Entity section of Forms 1041, 1041-QFT, and 1041-N.
    02ST 2 State Entity section of Forms 1041 1041-QFT, and 1041-N.
    02ZIP 12 ZIP Code Entity section of Forms 1041 1041-QFT, and 1041-N.

♦Field 02CON - In-Care-of Name (35 Positions)♦

  1. Description - Field 02CON is located in the entity section of the return.

  2. Valid Condition - Field 02CON has 35 positions and valid characters are alpha, numeric, ampersand, dash, slash, or percent (%).

    Note:

    The first character of the in-care-of name must be alpha or numeric.

  3. Invalid Condition - Field 02CON is invalid if any of the following conditions are present:

    • The first position is % (percent) and the second position is not blank, or

    • The first position is blank, or

    • The first character of the in-care-of name is not alpha or numeric, or

    • There are two consecutive blanks between significant characters.

  4. Correction Procedures - Correct coding and transcription errors.

    If... Then...
    A % (percent) is in the first position,
    1. Verify there is a blank in the second position.

    2. If not blank, enter a blank followed by the in-care-of name beginning with an alpha or numeric in Field 02CON.

    A blank is in the first position, Enter the in-care-of name beginning with an alpha or numeric in Field 02CON.
    The first character of the in-care-of name is not an alpha or numeric,
    1. Verify the in-care-of name on the return

    2. Enter the in-care-of name beginning with an alpha or numeric in Field 02CON.

    Two consecutive blanks are present between significant characters, Delete any unnecessary blanks in Field 02CON.

♦Field 02FAD - Foreign Address ♦

  1. Description - Field 02FAD is located in the entity section of the return.

    • This field will contain an entry when there is a foreign address present on the return

    • Field 02FAD should not be present on "G" coded short length returns

  2. Valid Condition - Valid characters are alpha, numeric and special characters.

  3. Invalid Condition - Field 02FAD will generate as an error when any of the following conditions are present:

    • The first position is blank.

    • Any character follows two consecutive blanks.

    • There are more than 35 characters present in the field.

      Note:

      ISRP is instructed to input a pound sign (#) as the 35th character if there are more than 35 characters present for this field on the return.

  4. Correction Procedures:

    1. Correct all coding and transcription errors.

      If… Then…
      Field 02FAD is present
      1. GTSEC 02

      2. Ensure Field 02CTY contains a foreign country code and Field 02ST contains a ". (period/space)" . See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.

        Exception:

        Use the country code based on the province in Field 02CTY if the foreign address is from Canada and the address contains a province name or abbreviation. See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.

      .
      A province abbreviation is not present for Australia, Brazil, Canada, Cuba, Italy, Mexico or The Netherlands but a province name is present, Enter the province abbreviation in the appropriate position in Field 02FAD. See Exhibit 3.12.14-32, Province, State and Territory Abbreviations.
      A foreign address is not present on the return
      1. SSPND 610

      2. Renumber return with domestic DLN.

      Caution:

      Domestic addresses are required on all 1041-N returns.

    2. If Form 8822, Change of Address, or Form 8822-B, Change of Address or Responsible Party- Business, is attached to the return, compare the name and address information on the Form 8822 or Form 8822-B to the return.

      Note:

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

      If... And... Then...
      The information is the same, 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 and continue processing.
      The information is different, 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,

      1. Enter address shown on Form 8822/Form 8822-B in Field 02FAD.

      2. Notate "Form 8822 or Form 8822-B detached" on tax return.

      3. Detach Form 8822/Form 8822-B and route to Entity Control using Form 4227Intra-SC Reject or Routing Slip, or follow local procedures (e.g., Form 13934, Merge Sheet)

      4. Notate on Form 4227, "Change Of Address Per Form 8822 or Form 8822-B" .

      Note:

      The lead tax examiner is required to batch all Form 8822 or Form 8822-B daily and hand carry to Entity Control for expedite processing.

Field 02ADD - Street Address (35 Positions)

  1. Description - Field 02ADD is located in the entity section of the return.

    • Field 02ADD should not be present if Field 01CCC contains a "G" (Amended Return).

  2. Valid Condition - Valid characters are alpha, numeric, blank, dash, or slash.

  3. Invalid Condition - Field 02ADD will generate as a field error when any of the following conditions are present:

    • Any character is present other than alpha, numeric, blank, dash, or slash.

    • The first position is blank.

    • Any character follows two consecutive blanks.

    • There are more than 35 characters present in this field.

      Note:

      ISRP is instructed to input a pound sign (#) as the 35th character if more than 35 characters are present for this field on the return.

  4. Correction Procedures:

    • Correct all misplaced entries, coding errors, and transcription errors.

    If... Then...
    The 35th character is a pound sign (#) Abbreviate to 35 characters or fewer.
    The Street Address is missing or in error and a valid Major City Code is present
    1. Enter the entire City Name (spelled out, not in Major City format) in Field 02CTY.

    2. Enter the State Code in Field 02ST.

      Note:

      For a listing of Major City Codes (listed by state), see Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries

    Unable to perfect DLSEC 02.
    A "&" or a "%" sign is present Change "&" to "and" and/or change "%" to "c/o" .
  5. If Form 8822, Change of Address, or Form 8822-B, Change of Address or Responsible Party- Business, is attached to the return, compare the name and address information on the Form 8822 or Form 8822-B to the return.

    Note:

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

    If... And... Then...
    The information is the same, All 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 and continue processing.
    The information is different, 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,

    1. Enter address shown on Form 8822/Form 8822-B in Field 02FAD.

    2. Notate "Form 8822 or Form 8822-B detached" on tax return.

    3. Detach Form 8822/Form 8822-B and route to Entity Control using Form 4227 or follow local procedures.

    4. Notate on Form 4227, "Change Of Address Per Form 8822 Or Form 8822-B" .

    Note:

    The lead tax examiner is required to batch all Form 8822 or Form 8822-B daily and hand carry to Entity Control for expedite processing.

  6. Multiple Addresses -If more than one Address is present, research INOLE and determine the correct Address as follows:

    If... Then...
    INOLE matches one of the Addresses on the return Enter the first Address found on the return to Field 02ADD.
    INOLE does not match any of the Addresses on the return Delete Section 02 and continue processing the return.

Field 02CTY - City (22 Positions)

  1. Description - Field 02CTY is located in the entity section of the return.

  2. Valid characters are alpha and blank.

  3. Invalid Condition - Field 02CTY will generate as a field error when any of the following conditions are present:

    • The first position is blank.

    • Any character is present other than blank or alpha.

    • Any character follows two consecutive blanks.

    • The Major City Code does not match any of the valid codes in the Major City Code Table.

    • The Foreign Country Code (FCC) does not match any of the valid codes in Document 7475.

  4. Correction Procedures:

    • Correct all misplaced entries, coding errors, and transcription errors.

      Note:

      For a listing of Major City Codes (listed by state) and valid Foreign Country Codes (FCC) see Document 7475,

    If... Then...
    A Major City Code is used Field 02CTY must be present.
    Field 02CTY contains an error Check to see if the Major City Code is correct.
    Field 02CTY is not valid and a Major City Code cannot be determined Input the entire city name.
    A Major City Code is not used and Field 02CTY is present Field 02ST (State) must be present.
    A foreign address is shown on the return Enter the appropriate FCC in Field 02CTY.
    See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries
    Field 02CTY contains an incorrect country code or "XX" Enter appropriate foreign country code in Field 02CTY. If there is no valid FCC, input the entire country name.
    See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries

Field 02ST - State (2 Positions)

  1. Description - Field 02ST is located in the entity section of the return.

  2. Valid characters are alpha and blank.

  3. Invalid Condition - This field is invalid if it is not contained in the State Code Table.

  4. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. For a description of valid State Codes, Document 7475.

    3. If unable to perfect, DLSEC 02.

  5. Foreign Address Processing - International Fiduciary Returns are all Form 1041 with a foreign Address in the Name and Address section of the return. All foreign/international Address returns will be processed at the Ogden Submission Processing Campus (OSPC).

    • The determination of a foreign address is based on the address of the estate or trust located on Page 1 of Form 1041.

    • A foreign address is any address that is not in one of the 50 states or the District of Columbia.

    • All returns with a foreign address must be shipped to Ogden Submission Processing Campus. SSPND 650 and attach Form 4227 with the notation "Forward To Ogden Submission Processing Center" .

  6. APO/DPO/FPO Addresses –An APO, DPO or FPO address is not a foreign address.

    • The U.S. Postal Service established new requirements for APO/DPO/FPO addresses.

    • If the old address appears (i.e., AP New York, NY 091XX), convert the address to the new state code abbreviations based on the ZIP Code:

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

Field 02ZIP - ZIP Code (9 Positions)

  1. Description -Field 02ZIP is located in the entity section of the return.

  2. Valid characters are numeric and blank.

  3. Invalid Condition -Field 02ZIP will generate as a field error when any of the following conditions are present:

    • Any character is other than numeric or blank.

    • An entry is other than five or nine positions.

    • The entry is not within the range of 00401 and 99999.

    • The first five positions are blank and an entry is present in the last four positions.

    • The entry does not match the Major City Code or State Code.

  4. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

      If... Then...
      Field 02ZIP is transcribed incorrectly. Enter the correct ZIP Code from the return. Only the first five digits are required.
      A valid ZIP Code is not available from the return or an attachment. Determine the first three digits of a valid ZIP Code for the Major City from see Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries and enter "01" for the fourth and fifth digits.
      The Major City is not listed in Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries or the first three digits cannot be determined. Enter the ZIP Code of the State shown in the address from Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries
    2. If Form 8822. Change of Address or Form 8822-B, Change of Address or Responsible Party is attached to the return, compare the Name Control, EIN, Address, City, State and ZIP Code information on Form 8822 to the information on Form 1041.

Section 04 - Income and Deductions Fields

  1. Section 04 contains the income and deductions fields from Form 1041 (Page 1), Form 1041-QFT, and Form 1041-N.

  2. Corrections should be made on the return and the screen when errors are discovered.

  3. When present, all tax amounts in Section 04 must be entered as dollars-only.

Error Record Format - Section 04

  1. Listed below are the fields contained in Section 04. Data in this section is obtained from Forms 1041, 1041-QFT, and 1041-N:

    Field Designator Maximum Length Title Location
    0401 13 + Interest Income Form 1041, Line 1.
    Form 1041-QFT, Line 1a.
    Form 1041-N, Line 1a.
    042A 13 + Total Ordinary Dividends Form 1041, Line 2a.
    Form 1041-QFT, Line 2a.
    Form 1041-N, Line 2a.
    042B2 13 + Qualified Dividends Form 1041, Line 2b(2).
    Form 1041-QFT, Line 2b.
    Form 1041-N, Line 2b.
    0403 13 + or – Business Income or Loss Form 1041, Line 3.
    0404 13 + or – Capital Gain or Loss Form 1041, Line 4.
    Form 1041-QFT, Line 3.
    Form 1041-N, Line 3.

    Note:

    Line 4 cannot have a negative entry greater than $3,000 on a non-final return.

    0405 13 + or – Rents/Royalties/Partnerships/Estates/Trusts Form 1041, Line 5.
    0406 13 + or – Farm Income or Loss Form 1041, Line 6.
    0407 13 + or – Ordinary Gain/Loss Form 1041, Line 7.
    0408 13 + or – Other Income Form 1041, Line 8.
    Form 1041-QFT, Line 4.
    Form 1041-N, Line 4.
    0409 13 + or – Total Income Form 1041, Line 9.
    Form 1041-QFT, Line 5.
    Form 1041-N, Line 5.
    0410 13 + Interest Deduction Form 1041, Line 10.
    0411 13 + Taxes Form 1041, Line 11.
    Form 1041-QFT, Line 6.
    Form 1041-N, Line 6.
    0412 13 + Fiduciary Fees Form 1041, Line 12.
    Form 1041-QFT, Line 7.
    Form 1041-N, Line 7.
    0413 13 + Charitable Deduction Form 1041, Line 13.
    0414 13 + Attorney/Accountant Fees Form 1041, Line 14.
    Form 1041-QFT, Line 8.
    Form 1041-N, Line 8.
    0415A 13 + Other Deductions Form 1041, Line 15a.
    Form 1041-QFT, Line 9.
    Form 1041-N, Line 9 plus Line 11.
    0415B 13+ Net Operating Loss Deduction Form 1041, Line 15b
    not applicable to 1041-N, and 1041-QFT
    0415C 13 + Allowable Misc. Itemized Deduction (Subject to 2% Floor) Form 1041, Line 15c.
    Form 1041-QFT, Line 10.
    Form 1041-N, Line 10.
    0416 13 + Total Basic Deductions Form 1041, Line 16.
    Form 1041-QFT, Line 11.
    Form 1041-N, Line 12.
    0417> 13 +/- Adjusted total income or (loss) per computer Form 1041, Line 17.
    not applicable to 1041-N, and 1041-QFT
    0418 13 + or – Income Distribution Deduction Form 1041, Line 18.

    Caution:

    Negative amounts are only valid on Final returns.

    0419 13 + Estate Tax Deductions Form 1041, Line 19.
    0420 13 + Exemption Amount Form 1041, Line 20.
    0421 13 + or – Total Special Deductions Form 1041, Line 21.
    not applicable to 1041-N, and 1041-QFT
    0422 13 + or – Taxable Income Form 1041, Line 22.
    Form 1041-QFT, Line 12.
    Form 1041-N, Line 13.

    Note:

    Any negative entry in a "positive only" field will cause a math error. See IRM 3.12.14.22.37, Error Code 842 - Total Income Tax, and IRM 3.12.14.22.38, Error Code 845 - Basic Deductions.

Invalid Condition - Section 04

  1. Any field will be invalid if not all numeric.

Correction Procedures-– Section 04

  1. Field 0404 (Capital Gain or Loss) will be in error if the taxpayer claims a loss greater than $3,000.00 on Line 4 of Form 1041 (or Line 3 of Form 1041-QFT and 1041-N).

    Note:

    Any entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Line 4 must be supported by a Form 1041, Schedule D. If not attached, correspond.

    1. Correct this field by reducing the loss to $3,000.00.

    2. If the loss carryover will be changed ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and no math error notice will be sent to the taxpayer, prepare Letter 3833C, explain the adjustment, and specify the corrected loss carryover amount.

    Exception:

    If a "Final" Form 1041, accept the taxpayer's figures. GTSEC 01, and enter CCC "F" in Field 01CCC.

  2. Field 0408 (Other Income) -

    • Treat any amount entered from Form 982 as a misplaced/erroneous entry. Delete the entry and adjust any subsequent lines as necessary

    • Treat any amount entered from Form 4972 as a misplaced/erroneous entry. Delete the entry and adjust any subsequent lines as necessary

    .

  3. Field 0415A (Other deductions not subject to the 2% floor) - needs to be supported by taxpayer's statement listing type and amount all allowable deductions that are not deductible elsewhere on Form 1041.

  4. Field 0415B (Net operating loss deductions) - used to claim a NOL (net operating loss). It needs to be supported by a statement, or Form 1045, Schedule A and/or Schedule B.

  5. Field 0415C (Allowable miscellaneous itemized deductions subject to the 2% floor) - includes expenses for the production or collection of income, such as the cost of safe deposit boxes, and investment advisory fees that exceed the 2% floor.

  6. Field 0416 (Total Basic Deductions) - The total of Fields 0410 through 0415C.

  7. Field 0417> (Adjusted Total Income or Loss) - A computer generated field which is determined by calculating Field 0409 minus Field 0416.

  8. Field 0418 (Income Distribution Deduction) - Must be positive only unless it is the final return of the trust or estate. Taxpayers sometimes use brackets to show an amount as a deduction.

    Note:

    Taxpayer intent should be used to determine whether the entry is negative or positive.

  9. Field 0422 (Taxable income) - can be used to claim a NOL, but does not include Lines 13, 18 and 20 as part of this.

Section 05 - Tax Computation Data

  1. Section 05 contains tax computation data (Tax, Payments, and Schedule G).

  2. When present, all tax amounts in Section 05 must be entered as dollars-only, except for the fields indicated in the table, which must be entered as dollars and cents ($ and ¢).

Error Record Format-– Section 05

  1. Listed below are the fields contained in Section 05. Data in this section is obtained from Forms 1041, 1041-QFT, 1041-N:

    Field Designator Maximum Length Title Location
    05G1A 13 + Schedule G - Gross Tax Form 1041, Page 2, Line 1a, Schedule G.
    05TRS> 13 + Tax Per Tax Rate Schedule - Computer  
    05G1B 13 + Schedule G - Tax on Lump – Sum Distributions Form 1041, Page 2, Line 1b, Schedule G
    05G1C 13 + Schedule G - Alternative Minimum Tax Form 1041, Page 2, Line 1c, Schedule G.
    05G1D 13 + Schedule G - Line 1d (Total Tax) Form 1041, Page 2, Line 1d, Schedule G.
    05G2A 13 + Schedule G - Line 2a (Foreign Tax Credit) Form 1041, Page 2, Line 2a, Schedule G.
    05G2B 13 + Schedule G - Line 2b (General Business Credit) Form 1041, Page 2, Line 2b, Schedule G.
    052BV 13+ Verify Field for Schedule G, Line 2B ERS Input Only
    05G2C 13 + Schedule G - Line 2c (Prior Year Minimum Tax Credit) Form 1041, Page 2, Line 2c, Schedule G.
    05G2D 13 + Schedule G - Line 2d (Bond Credits) Form 1041, Page 2, Line 2d, Schedule G.
    05G2N 13 + Other Non-business Credits ERS Input Only
    05G2E> 13+ Total Credits Form 1041, Page 2, Line 2e, Schedule G per computer.
    05G04 13 + Net Investment Income Tax Form 1041, Page 2, Line 4, Schedule G.
    Form 1041-QFT, Line 16
    does not apply to 1041-N.
    05G05 13 + Schedule G - Line 5 (Recapture Taxes) Form 1041, Page 2, Line 5, Schedule G.
    05G06 13 + Schedule G - Line 6 (Household Employment Taxes) Form 1041, Page 2, Line 6, Schedule G.
    05QTX 13 +
    $ and ¢
    QFT Tax Form 1041-QFT, Line 13.
    Form 1041-N, Line 14.
    05QC 13 +
    $ and ¢
    QFT Credits Form 1041-QFT, Line 14.
    Form 1041-N, Line 15.
    0523 13 +
    $ and ¢
    Total Tax Form 1041, Line 23.
    Form 1041-QFT, Line 17.
    Form 1041-N, Line 18.
    0524A 13 +
    $ and ¢
    Estimated Tax Payments Form 1041, Line 24a.
    0524B 13 +
    $ and ¢
    Credit to Beneficiaries Form 1041, Line 24b.
    0524D 13 +
    $ and ¢
    Tax Paid With Extension Form 1041, Line 24d.
    0524E 13 +
    $ and ¢
    Federal Income Tax Withheld Form 1041, Line 24e.
    0524F 13 +
    $ and ¢
    Other Payments (Form 2439) Form 1041, Line 24f
    05TET 13 +
    $ and ¢
    Total Telephone Excise Tax Refund Combined Form 1041, to the left of Line 25.
    05TRV 13 +
    $ and ¢
    Total Telephone Excise Tax Refund (Verified)  
    0525 13 +
    $ and ¢
    Total Payments Form 1041, Line 25.
    Form 1041-QFT, Line 18.
    Form 1041-N, Line 19.
    0526 13 +
    $ and ¢
    Estimated Tax Penalty Form 1041, Line 26
    05B/D 13 + or –
    $ and ¢
    Tax Due/Overpayment Form 1041, Line 27/28.
    Form 1041-QFT, Line 19/20.
    Form 1041-N, Line 20/21.
    0529A 13 +
    $ and ¢
    Credit Elect Form 1041, Line 29a.
    Form 1041-QFT, Line 21a.
    Form 1041-N, Line 22a.
    0529B 13 +
    $ and ¢
    Refund Form 1041, Line 29b.
    Form 1041-QFT, Line 21b.
    Form 1041-N, Line 22b.
    05MCT 13 + Manually Corrected Tax Form 1041 (dotted portion of Line 23)
    Form 1041-QFT, Line 17.
    Form 1041-N, Line 18.

    Note:

    Field 05MCT is an ERS Input Only field. For detailed manual computation instructions, IRM 3.12.14.23, Manual Computation Instructions.

    05GVT 13 + Total Verified Tax An ERS Input Only field entered on the dotted portion of Line 1d of Schedule G (Page 2).

    Caution:

    Any negative entry in a "positive only" field will cause a math error.

Invalid Condition - Section 05

  1. Any field in Section 05 will be invalid if not all numeric.

Field 05G1A – Schedule G Gross Tax

  1. Description: Field 05G1A is transcribed from Line 1a of Schedule G (Form 1041).

    • The taxpayer must enter the Tax from either the Tax Rate Schedule or Schedule D (Line 43, Part V to Line 1a of Schedule G (Form 1041).

Field 05G1B – Tax on Lump-Sum Distributions (Form 4972)

  1. Description: Field 05G1B is transcribed from Line 1b of Schedule G (Form 1041).

Field 05G1C – Alternative Minimum Tax (Schedule I)

  1. Description: Field 05G1C is transcribed from Line 1c of Schedule G (Form 1041).

    • The Alternative Minimum Tax (AMT) - Schedule I is an additional tax on tax preference items.

    • The AMT is computed on Schedule I (Form 1041).

Field 05G1D – Total Tax

  1. Description: Field 05G1D is transcribed from Line 1d of Schedule G (Form 1041).

    • Field 05G1D is the total of Lines 1a, 1b, and 1c of Schedule G.

  2. Correction Procedures:

    • The underprint for Field 05G1D displays the computer-generated Total Tax and is determined by adding Lines 1b and 1c to the lesser of Field 05TRS> or 1043 (from Line 1 of Schedule G).
      For additional instructions, IRM 3.12.14.22.43, Error Code 860 - Alternative Minimum Tax, Field 05G1D.

Field 05G2A – Foreign Tax Credit (Form 1116)

  1. Description: Field 05G2A is transcribed from Line 2a of Schedule G (Form 1041).

    • This field must always be positive.

  2. Correction Procedures:

    • Determine the amount of the entry in Field 05G2A:

      If... Then...
      An entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ is present and no Form 1116 or other supporting statement is attached Correspond.
    • Do not delete the amount present in Field 05G2A.

Field 05G2B - General Business Credits (Form 3800)

  1. Description: Field 05G2B is transcribed from Line 2b of Schedule G (Form 1041).

    • This field must always be positive.

    • This field is supported by the General Business Credits listed on Form 3800.

    • All valid General Business Credits are claimed in Part I or Part II of Form 3800. See IRM 3.12.14.22.47.1, Invalid Condition - Error Code 868.

  2. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. If an amount is present in Field 05G2B ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , it must be supported by Form 3800.

    If... Then...
    Form 3800 is required but is not present, Correspond.
    A required credit form is not attached Correspond.

Field 052BV - ERS Input Only for Schedule G, Line 2B

  1. If the computer generated amount should be zero, enter $1 in Field 052BV, that will generate zeros as the General Business Credits generated amount. If the computer generated amount is incorrect, for EC 840 and EC 868 and the Form 8941 credit is disallowed, input the correct credit amount in the field.

Field 05G2C - Credit for Prior Year Minimum Tax (Form 8801)

  1. Description: Field 05G2C is transcribed from Line 2c of Schedule G (Form 1041).

    • This field must always be positive.

    • This field is the total from Form 8801 (Prior Year Minimum Tax Credit).

  2. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. If an amount is present in Field 05G2C ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , it must be supported by Form 8801. If Form 8801 is not present, correspond.

Field 05G2D - Bond Credit (Form 8912)

  1. Description: Field 05G2D is transcribed from Line 2d of Schedule G (Form 1041).

    • This field must always be positive.

    • This field is the total from Form 8912 (Credit to Holders of Tax Credit Bonds).

  2. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. If an amount is present in Field 05G2D ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , it must be supported by Form 8912. If Form 8912 is not present, correspond.

Field 05G04 - Net Investment Income Tax

  1. Description: Field 05G04 is transcribed from Line 4 of Schedule G, Form 1041 and Line 16 of Form 1041-QFT. Form 1041-N is not liable for this tax.

    • This field must always be positive.

    • This field is the total from Form 8960, Line 21.

    Note:

    X out any Line 4 amounts on 201311 and prior year returns and delete amounts in Field 05G04 and Section 28.

  2. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. If any amount is present in Field 05G04, it must be supported by Form 8960. If Form 8960 is not present, correspond with the taxpayer.

Field 05G05 - Recapture Taxes (Form 4255/ Form 8611)

  1. Description: Field 05G05 is transcribed from Line 5 of Schedule G (Form 1041).

    • This field is the total from Form 4255 (Recapture of Investment Credit) and/or Form 8611 (Recapture of Low Income Housing Credit).

  2. Correction Procedures:

    1. Correct all misplaced entries, coding errors, and transcription errors.

    2. If the taxpayer has checked the "Form 4255" box and claimed an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Line 5, Form 4255 should be attached.

      If... Then...
      The taxpayer has checked the "Form 4255" box and is claiming an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ but Form 4255 is not attached Correspond.
      The taxpayer has checked the "Form 4255" box and is claiming an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 4255 is attached Continue processing.
      The taxpayer has checked the "Form 4255" claiming an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ but supporting form is not attached Allow the entry and continue processing the return

      Caution:

      Do not correspond.

    3. If the taxpayer has checked the "Form 8611" box and claimed an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Line 5, Form 8611 should be attached.

    .

    If... Then...
    The taxpayer has checked the "Form 8611" box and is claiming an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ but Form 8611 is not attached Correspond.
    The taxpayer has checked the "Form 8611" box and is claiming an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8611 is attached Continue processing.
    The taxpayer has checked the "Form 8611" claiming an amount ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ but supporting form is not attached
    1. Allow the entry.

    2. Continue processing the return.

    3. Do not correspond.

Field 05G06 - Household Employment Taxes (Schedule H)

  1. Description: Field 05G06 is transcribed from Line 6 of Schedule G (Form 1041).

    • Household Employment Taxes (Schedule H, Form 1040) can be claimed on Form 1041.

  2. Schedule H must be attached to Form 1041 if an entry is present on Line 6 of Schedule G.

    • If an entry is present on Line 6 of Schedule G but a Schedule H is not present, correspond for the missing Schedule H.

  3. For instructions for processing Schedule H, see IRM 3.12.14.14.1, Section 07 - Schedule H (Form 1040).

  4. To review the valid fields for Schedule H (Form 1040), see Exhibit 3.12.14-4, Schedule H, Form 1040 (Household Employment Taxes.

Field 05QTX - QFT Tax (Form 1041-QFT and Form 1041-N)

  1. Description: Field 05QTX is transcribed (in dollars and cents) from Line 13 of Form 1041-QFT or Line 14 of Form 1041-N.

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

Field 05QC - QFT Credits (Form 1041-QFT and Form 1041-N)

  1. Description: Field 05QC is transcribed (in dollars and cents) from Line 14 of Form 1041-QFT or Line 15 of Form 1041-N.

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Field 0523 - Total Tax

  1. Description: Field 0523 is transcribed (in dollars and cents) from Line 23 of Form 1041, Line 17 of Form 1041-QFT, or Line 18 of Form 1041-N.

    • This field is equal to Field 05G1D minus the total of Fields 05G2A through 05G2D plus Fields 05G04, 05G05 and 05G06.

Field 0524A - Estimated Tax Payment

  1. Description: Field 0524A is transcribed (in dollars and cents) from Line 24a of Form 1041.

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Field 0524B - Beneficiary Allocation

  1. Description: Field 0524B is transcribed (in dollars and cents) from Line 24b of Form 1041.

    • This field displays the amount of Estimated Tax Overpayment to be allocated among the beneficiaries, under IRC 643(g).The trust or estate files Form 1041-T and the money is moved from 1041 module to the beneficiaries modules on IDRS.

    • The amount allocated must not exceed the amount in Field 0524A.

      Caution:

      This allocation can only be made by trusts, "Final" trusts, and "Final" estates.

Field 0524D - Tax Paid with Extension

  1. Description: Field 0524D is transcribed (in dollars and cents) from Line 24d of Form 1041.

    • This field is based on amounts paid with Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information and Other Returns.

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Field 0524E - Federal Income Tax Withheld

  1. Description: Field 0524E is transcribed (in dollars and cents) from Line 24e of Form 1041.

  2. Correction Procedures: The total for Line 24e should include both of the following:

    • Backup withholding on dividends.

    • Withholding on Interest income or other types of income received.

    • If ≡ ≡ ≡ ≡ ≡ ≡ , the claim must be supported by Form W-2, Form W-2G, and/or Form 1099. This includes any backup withholding claimed.

Field 0524F - Regulated Investment Company/Real Estate Investment Trust Credit (Form 2439)

  1. Description: Field 0524F is transcribed (in dollars and cents) from Line 24f of Form 1041.

    • This field is based on Copy B of Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains.

Field 0525 - Total Payments

  1. Description: Field 0525 is transcribed (in dollars and cents) from Line 25 of Form 1041, Line 18 of Form 1041-QFT, or Line 19 of Form 1041-N.

Field 0526 - Estimated Tax Penalty

  1. Description: Field 0526 is transcribed (in dollars and cents) from Line 26 of Form 1041.

  2. Correction Procedures: for Tax Period 198812 and subsequent:

    1. Correct all misplaced entries, coding errors, and transcription errors.

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

    3. Do not include any other penalty and interest in Field 0526.

Field 05B/D - Tax Due/Overpayment

  1. Description: Field 05B/D is transcribed (in dollars and cents) as follows:

    Form Line
    Form 1041 Line 27 or 28
    Form 1041-QFT Line 19 or 20
    Form 1041-N Line 20 or 21
    • This field may be a positive or negative amount.

Field 0529A - Credit Elect

  1. Description: Field 0529A is transcribed (in dollars and cents) from Line 29a of Form 1041, Line 21a of Form 1041-QFT, or Line 22a of Form 1041-N.

    • This field displays the portion of Overpayment that the taxpayer would like to have applied to the next year's Estimated Taxes.

Field 0529B - Refund

  1. Description: Field 0529B is transcribed (in dollars and cents) from Line 29b of Form 1041, Line 21b of Form 1041-QFT, or Line 22b of Form 1041-N.

    • This field displays the amount of Overpayment that the taxpayer would like to have refunded to them.

Field 05MCT - Manually Corrected Tax

  1. This field is for ERS Input Only.

    • Field 05MCT represents the Total Tax calculated on Line 7 of Schedule G (Form 1041) and forwarded to Line 23 of Form 1041.

  2. This field is used when the taxpayer has used a special computation and the computer cannot arrive at the correct Total Tax.

    Note:

    For Manual Computation Instructions, IRM 3.12.14.23

  3. After an amount has been entered in Field 05MCT, the computer will not be able to correctly calculate the Statutory Credits.

    • Ignore any erroneous underprints after Field 05MCT has been entered.

Field 05GVT - Total Tax Verified

  1. This field is for ERS Input Only.

    • Field 05GVT represents the Total Tax calculated on Line 1d of Schedule G (Form 1041).

  2. This field is used when the taxpayer has used a special computation and the computer cannot arrive at the correct Gross Tax.

Section 06 - Schedule I

  1. The fields in Section 06 are transcribed from Schedule I (Alternative Minimum Tax) and Form 4952 (Investment Interest Expense Deduction).

    • Section 06 may or may not be present for all returns.

    • If present, all tax amounts in Section 06 are entered as dollars-only.

Error Record Format - Section 06 - Schedule I, (Alternative Minimum Tax - Estates and Trusts)

  1. Listed below are the fields contained in Section 06. Data in this section is obtained from Schedule I of Form 1041 and Form 4952:

    Field Designator Maximum Length Title Location
    06I24 13 + Schedule I - Line 24 (Alternative Tax Net Operating Loss Deduction (NOLD)) Schedule I, Line 24.
    (Subtracted in Program)
    06I25 13+/- Schedule I - Line 25 Schedule I - Line 25
    06I26 13 + Schedule I - Line 26 (Income Distribution Deduction) Schedule I, Line 26
    06I53 13 + Schedule I – Line 53 (Alternative Minimum Foreign Tax Credit) Schedule I, Line 53
    06I54> 13 + Schedule I - Line 54 (Tentative Minimum Tax) Schedule I, Line 54 - Computer
    06IAV 13 + Schedule I - Alternative Minimum Tax Verified Schedule I, Line 56.
    ERS Input Only
    06I58> 13 + Schedule I - Line 58 (Enter the amount from Schedule D, Line 26, ...) Schedule I, Line 58 - Computer
    06I63> 13 + Schedule I - Line 63 ( If Line 62 is $187,800 or less, ....) Schedule I, Line 63 - Computer
    06I67> 13 + Schedule I - Line 67 (Enter the smaller of line 57 or line 58) Schedule I, Line 67 - Computer
    06I76> 13 + Schedule I - Multiply Line 75 by 15% (.15) Schedule I, Line 76 - Computer
    06I81:> 13 + Schedule I - Subtract Line 80 from Line 57 Schedule I, Line 81 - Computer
    06I82> 13 + Multiply Line 81 by 25% (.25) Schedule I, Line 82 - Computer
    06I83> 13 + Add Lines 63, 76, 79, and 82 Schedule I, Line 83 - Computer
    06D4E 13 + Line 4e of Form 4952 (Net Gain From Disposition of Property) Form 4952, Line 4e
    06D4G 13 + Line 4g of Form 4952 (Included in Investment Income) Form 4952, Line 4g
  2. Valid characters are numeric and blank.

Section 07 - Schedule H (Form 1040)

  1. Listed below are the fields contained in Section 07. Data in this section is obtained from Schedule H (Form 1040):

    Field Designator Maximum Length Title Location
    0701 13 + Schedule H - Total Social Security Wages Part I, Line 1.
    0702> 13 + Schedule H - Social Security Tax Part I, Line 2 - Computer
    0703 13 + Schedule H - Total Medicare Wages Part I, Line 3.
    0704> 13 + Schedule H - Medicare Tax Part I, Line 4 - Computer
    0705 13+ Schedule H - Total cash wages subject to Additional Medicare Tax withholding Part I, Line 5.
    0706 13+ Schedule H - Additional Medicare Tax withholding (multiply line 5 by 0.9% (.009) Part I, Line 6.
    0707 13 + Schedule H - Federal Income Tax Withheld Part I, Line 7.
    0797 13+ Schedule H - Advance EIC - 2010 and prior returns Part I, Line 7 ERS Input Only field.
    0708 13 + Schedule H - SS/Medicare/WH Taxes Part I, Line 8.
    0708V 13 + Schedule H - Total Non-FUTA Tax Verified Part I, Right Margin of Line 8 per computer.

    Note:

    ERS Input Only field.

    0798 13+ Schedule H - Net SS/Medicate/WH taxes - 2010 and prior returns Part I, Line 8 ERS Input Only field.
    0798V 13+ Schedule H - Net SS/Medicate/WH taxes - 2010 and prior returns Part I, Line 8 ERS Input Only field. per computer.
    07FIN 1 Schedule H - FUTA Yes/No Indicator Part II, Lines 10-12.
    07SC1 2 Schedule H - State Code 1 Part II, Lines 13-17(a).
    07SC2 2 Schedule H - State Code 2 Part II, Line 17(a)
    07SC3 2 Schedule H - State Code 3 An attachment to Part II, Schedule B when needed.

    Note:

    Field 07SC3 is an ERS Input Only field.

    07SC4 2 Schedule H - State Code 4 An attachment to Part II, Schedule B when needed.

    Note:

    Field 07SC4 is an ERS Input Only field.

    07SC5 2 Schedule H - State Code 5 An attachment to Part II, Schedule B when needed.

    Note:

    Field 07SC5 is an ERS Input Only field.

    07ASI 1 Schedule H - More Than 5 States Indicator An attachment to Part II, Schedule B when needed

    Note:

    Field 07ASI is an ERS Input Only field.

    07FCP 13 + Schedule H - Unemployment Contributions Paid Part II, Line 14 or 18(h).
    07TFW 13 + Schedule H - Total FUTA Wages Part II, Line 15 or 20.
    07FTX 13 + Schedule H - FUTA Tax Part II, Line 16 or 24.
    07FTV 13 + Schedule H - FUTA Tax Verified Part II, Line 16 or 24.

    Note:

    Field 07FTV is an ERS Input Only field.

    07CC1 2 Schedule H - Credit Reduction State 1 Part II, Lines 13 or 17(a).
    07CW1 13 + Schedule H - Credit Reduction Wages 1 Part II, Left of Line 21.

    Note:

    Field 07CW1 is an ERS Input Only field.

    07CC2 2 Schedule H - Credit Reduction State 2 Part II, Line 17(a).
    07CW2 13 + Schedule H - Credit Reduction Wages 2 Part II, Left of Line 21.

    Note:

    Field 07CW2 an ERS Input Only field.

    07CC3 2 Schedule H - Credit Reduction State 3 Part II, Line 17(a)
    07CW3 13 + Schedule H - Credit Reduction Wages 3 Part II, Left of Line 21.

    Note:

    Field 07CW3 is an ERS Input Only field.

    07CC4 2 Schedule H - Credit Reduction State 4 Part II, Line 17(a).
    07CW4 13 + Schedule H - Credit Reduction Wages 4 Part II, Left of Line 21.

    Note:

    Field 07CW4 is an ERS Input Only field.

    07CC5 2 Schedule H - Credit Reduction State 5 Part II, Line 17(a).
    07CW5 13 + Schedule H - Credit Reduction Wages 5 Part II, Left of Line 21.

    Note:

    Field 07CW5 is an ERS Input Only field.

    07TCR 13 + Schedule H - Total Credit Reduction Amount Part III, Left of Line 25.

    Note:

    Field 07TCR is an ERS Input Only field.

    07TTC 13 + Schedule H - Tentative Credit Part II, Line 19.

    See Exhibit 3.12.14-33 for Tax Years and Credit Reduction States.

Section 07 - Schedule H (Form 1040)

  1. Estates and Trusts that employ household employees must report household employment wages on Form 1041, Schedule G, Line 6 (Household Employment Taxes), see table under Field 0701.

  2. Amounts reported on Line 6 of Schedule G must be supported by a Schedule H (Form 1040).

  3. All tax amounts in Section 07 must be entered as dollars-only

  4. Schedule H issues can be difficult to correct. Resolution of fall out for Schedule H will be easier if you follow these steps first:

    • Verify the money amount on Line 26, Schedule H matches the entry on Line 6, Schedule G of the 1041 return.

    • Verify Schedule H against the screen display and correct any misplaced, transcription, coding, and/or omitted entries. If this fails to correct the error, then SSPND 410 to the SME.

    Note:

    Page 2 of the Schedule H contains much of the same information as 940 returns.

Field 0701 - Schedule H - Total Social Security Wages

  1. Field 0701 is transcribed from Line 1.

  2. Estates and Trusts that employ household employees must report household employment wages on Form 1041 if the wages exceed the minimum amount required to be reported for the Tax Year.

    • Delete the entry in Field 0701 if it contains an entry for less than the minimum reportable amount.

      Tax Period Delete Field 0701 If ...
      201612/201712 and later Less than $2,000
      201412 through 201611 Less than $1,900
      201212 through 201411 Less than $1,800
      200912 through 201211 Less than $1,700
      200812 through 200911. Less than $1,600
      200612 through 200811. Less than $1,500
  3. For additional instructions, IRM 3.12.14.22.16, Error Code 162 - Section 07 Total Wages Differ or are Below Minimum Taxable Wages ().

Field 0703 - Schedule H - Total Medicare Wages

  1. Field 0703 is transcribed from Line 3.

    • Delete the entry in Field 0703 if it contains an entry for less than the minimum reportable amount. See minimum reportable amount chart under Field 0701 (above).

Field 0705 - Schedule H - Total cash wages subject to Additional Medicare Tax withholding

  1. Field 0705 is transcribed from Line 5.

    Note:

    Line 5 on Schedule H is new for 201312.

Field 0706 - Schedule H - Additional Medicare Tax withholding

  1. Field 0706 is transcribed from Line 6

    Note:

    Line 6 on Schedule H is new for 201312.

Field 0707 - Schedule H - Federal Income Tax Withheld

  1. Field 0707 is transcribed from Line 7.

Field 0708 - Schedule H - SS/Medicare/WH Taxes

  1. Field 0708 is transcribed from Line 8.

    • If Field 0708 is blank, compute by adding Lines 2, 4, 6, and 7.

    • For additional instructions, see IRM 3.12.14.22.49, Error Code 875 - Schedule H.

Field 0708V - Schedule H - Total Non-FUTA Tax Verified

  1. This field is for ERS Input Only and is only used when the computer cannot correctly compute Field 0708.

    • For additional instructions, see IRM 3.12.14.22.49, Error Code 875 - Schedule H.

Field 0797- Schedule H - Advance EIC

  1. This field is for 2010 and prior returns, Line 7, and is an ERS Input Only field.

    Note:

    The provision expired on December 31, 2010.

  2. If field errors occur for both 01TXP and 0797, verify the tax period is correct. If the tax period is correct then delete Field 0797.

Field 0798 - Schedule H - Net SS/Medicate/WH taxes - 2010 and prior returns

  1. This field is for 2010 and prior returns, Line 8, and is an ERS Input Only field.

Field 07FIN – Schedule H – FUTA Yes/No Indicator

  1. Field 07FIN is based on the information provided in the Yes/No boxes, on Lines 10, 11, and 12 of Part II and is located under Line 12. This is used by the computer to determine whether Section A or Section B should be filled in.

    • Valid characters are "1" and blank.

  2. Determine Field 07FIN using the following guidelines:

    If... Then...
    Lines 10, 11, and 12 are all answered "Yes" Leave Field 07FIN blank.
    Any of Questions 10, 11, or, 12 are answered "No" Enter "1" in Field 07FIN.

    Note:

    If the taxpayer lists any credit reduction state, enter 1 in 07FIN.

  3. If the conditions in (2), above, are not met, determine from the information provided in Sections A and B in Part II.

    If... Then...
    Entries are present in Section A only Leave Field 07FIN blank.
    Entries are present in Section B only Enter "1" in Field 07FIN.
    Entries are present in both Section A and Section B Delete the entries in Section A and enter a "1" in Field 07FIN.
    No entries are present in either Section A or Section B Leave Field 07FIN blank.

Field 07FCP - Schedule H - Unemployment Contributions Paid

  1. Field 07FCP is transcribed from either of the following lines:

    • Line 14 of Section A, Part II; or

    • Line 17(h) of Section B.

  2. Field 07FCP is the employer's total contributions paid to the state(s) unemployment fund for the year.

  3. If the employer didn't have to make contributions, they may notate "0%" , "0% RATE" , "Zero Percent Rate" , or a similar entry.

    • Delete the entry in Field 07FCP when the filer has indicated a zero.

Field 07TFW - Schedule H - Total FUTA Wages

  1. Field 07FTW is transcribed from either of the following lines:

    • Line 15 of Section A, Part II; or

    • Line 20 of Section B.

Field 07FTX - Schedule H - FUTA Tax

  1. Field 07FTX is transcribed from either of the following lines:

    • Line 14 of Section A, Part II; or

    • Line 22 of Section B.

  2. For additional instructions, IRM 3.12.14.22.50, Error Code 878 - Schedule H.

Field 07TTC - Schedule H - Tentative Credit

  1. Field 07TTC is transcribed from Line 19 of Section B, Part II. If Line 19, Schedule H is blank and the taxpayer filled out Section B or has credit reduction states, enter .054 of Field 07TFW.

Field 07SC1 - Schedule H - State Code 1

  1. Field 07SC1 is transcribed from either of the following lines:

    • Line 13 of Section A, Part II; or

    • Row 1 of Line 17(a) of Section B.

    Note:

    Schedule H filers are instructed to complete Section "A" or"B" , not both.

  2. Field 07SC1 is the two-letter abbreviation of the state that the employer paid unemployment contributions.

    Note:

    State Code "ZZ" is valid as ERS Input Only and is used when the FUTA Section of Schedule H is nontaxable and the state is a Credit Reduction State. See IRM 3.12.14.14.19, Fields 07CC1 through 07CC5 - Schedule H, Credit Reduction States.

  3. Code & Edit will edit as follows:

    If... Then...
    More than one State Code is present on Line 13 (not Line 17) • C&E will "X" all State Codes.
    More than two State Codes are present on Schedule H or attachments • C&E will "X" all State Codes.

    Note:

    Deleting State Codes in C&E will force the return to ERS for input of State Codes.

  4. Determine the valid input to Field 07SC1 as follows:

    If... Then...
    The State Code is present on Line 13 or Line 17(a) Enter the valid State Code in Field 07SC1.
    The State Name was spelled out and not abbreviated Enter the valid State Code in Field 07SC1. Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries

Field 07SC2 - Schedule H - State Code 2

  1. Field 07SC2 is transcribed from Row 2 of Line 17(a) of Section "B" , Part II.

  2. Field 07SC2 is corrected in the same manner as Field 07SC1.

Fields 07SC3 through 07SC5 - Schedule H - State Codes 3 Through 5

  1. Field 07SC3, Field 07SC4, and Field 07SC5 are ERS Input Only fields determined from Section B, Part II. The information will be on a separate continuation sheet with all required columns from line 17, if the taxpayer needed additional space.

Fields 07CC1 through 07CC5 - Schedule H - Credit Reduction States 1 Through 5

  1. Fields 07CC1 through 07CC5 will be ISRP transcribed. All other "Credit Reduction" fields Schedule H will be ERS Input Only.

  2. These fields are only activated, if states are designated as "Credit Reduction States" by the U.S. Dept. of Labor. See Exhibit 3.12.14-33, Tax Years and Credit Reduction States.

  3. Credit reduction states for tax year 2016 are:

    • California 1.8%

    • Virgin Islands 1.8%

Fields 07CW1 through 07CW5 - Schedule H - Credit Reduction Wages 1 Through 5

  1. Fields 07CW1 through 07CW5 are ERS Input Only fields determined from information located on Line 17, column (b).

    • Employers are instructed to enter wages, that they pay state unemployment taxes on, to Line 17(b). These wages must be separated by state.

  2. Based on information input to Fields 07SC1 through 07SC5, the computer program will:

    • Determine if the state is a valid Credit Reduction State.

    • Multiply any of Fields 07CW1 through 07CW5, which are valid Credit Reduction States by the valid State Experience Rate, to determine Fields 07CR1> through 07CR5>.

      Note:

      The valid states and experience rates are programmed into the computer, after the U.S. Department of Labor designates states as "Credit Reduction States." See Exhibit 3.12.14-33, Tax Years and Credit Reduction States.

  3. Field 07TCR> will systemically generate to calculate the total of Fields 07CR1> through 07CR5> if multiple Credit Reduction States are present.

  4. For additional instructions, IRM 3.12.14.22.26, Error Code 183 - Schedule H Credits.

Field 07TCR - Schedule H - Total Credit Reduction Amount

  1. Field 07TCR is an ERS Input Only field and is the total of Fields 07CR1> through 07CR5>.

  2. Information in Field 07CW1 through 07CW5 must be associated with the proper State Code in Fields 07SC1 through 07SC5.

    Example:

    If New York is a Credit Reduction State and California is not, an employer who moved from California to New York may have a Schedule H completed with CA in Field 07SC1 and NY in Field 07SC2. Field 07CW1 will be left blank because CA is not a Credit Reduction State, but the NY wages from Line 17(b) will be entered in Field 07CW2.

  3. For additional instructions, IRM 3.12.14.22.26, Error Code 183 - Schedule H Credits.

Field 07FTV - Schedule H - FUTA Tax Verified

  1. This field is for ERS Input Only and is only used when the computer cannot correctly compute Field 07FTX.

    Caution:

    This field will only be used rarely.

Field 07ASI - Schedule H - More Than 5 States Indicator

  1. Field 07ASI is transcribed from below Row 2 of Line 17(c).

    • Valid characters are "1" and blank.

    • This field is for ERS Input Only and is only used when more than five entries are needed in the Fields 07SC1 through 07SC5.

    Note:

    Field 07ASI will be used by the FUTA Certification program.

  2. For additional instructions, IRM 3.12.14.22.29, Error Code 188 - Schedule H (07ASI without 07SC5).

Section 10 - Schedule D, (1041) (Capital Gains and Losses)

  1. Section 10 contains amounts which are transcribed from Schedule D, 1041, Capital Gains and Losses.

    • All money amounts in Section 10 must be entered as dollars-only.

  2. Only Schedule D (Form 1041) is acceptable, if required. If the taxpayer substitutes a Schedule D from any other tax return (i.e., Form 1040, Form 1065, Form 1120, etc.), correspond.

    Note:

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

  3. 201311 and prior year returns will not have page 1 of Schedule D converted, as that section was not transcribed previously.

Error Record Format - Section 10

  1. Listed below are the fields contained in Section 10. Data in this section is obtained from Schedule D (1041):

    Field Designator Maximum Length Title Position
    101AD 13 + Short Term transactions on 1099-B Proceeds (sales price) Part I, Line 1a, column D
    101AE 13 + Short Term transactions on 1099-B Cost (or other basis) Part I, Line 1a, column E
    101BD 13 + Short Term box A Proceeds (sales price) Part I, Line 1b, column D
    101BE 13 + Short Term box A Cost (or other basis) Part I, Line 1b, column E
    101BG 13 +/- Short Term box A, Adjustments Part I, Line 1b, column G
    1002D 13 + Short Term box B Proceeds (sales price) Part I, Line 2, column D
    1002E 13 + Short Term box B Cost (or other basis) Part I, Line 2, column E
    1002G 13 +/- Short Term box B Adjustments Part I, Line 2, column G
    1003D 13 + Short Term box C Proceeds (sales price) Part I, Line 3, column D
    1003E 13 + Short Term box C Cost (or other basis) Part I, Line 3, column E
    1003G 13 +/- Short Term box C Adjustments Part I, Line 3, column G
    10004 13 +/- Short Term Capital Gain or Loss from Part I, Line 4
    10005 13 +/- Net Short Term Gain or Loss from partnerships, S corps, and other estates or trusts Part I, Line 5
    108AD 13 + Long Term Transactions on 1099-B Proceeds (sales price) Part II, Line 8a, column D
    108AE 13 + Long Term Transactions on 1099-B Cost (or other basis) Part II, Line 8a, column E
    108BD 13 + Long Term box D Proceeds (sales price) Part II, Line 8b, column D
    108BE 13 + Long Term box D Cost (or other basis) Part II, Line 8b, column E
    108BG 13 +/- Long Term box D Adjustments Part II, Line 8b, column G
    1009D 13 + Long Term box E Proceeds (sales price) Part II, Line 9, column D
    1009E 13 + Long Term box E Cost (or other basis) Part II, Line 9, column E
    1009G 13 +/- Long Term box E Adjustments Part II, Line 9, column G
    1010D 13 + Long Term box F Proceeds (sales price) Part II, Line 10, column D
    1010E 13 + Long Term box F Cost (or other basis) Part II, Line 10, column E
    1010G 13 +/- Long Term box F Adjustments Part II, Line 10, column G
    1011 13 +/- Long Term Capital Gain/Loss from Forms 2439..... Part II, Line 11
    1012 13 +/- Net Long Term Capital Gain/Loss from partnerships, S corps, and other estates or trusts Part II, Line 12
    1013 13 + Capital Gain Distributions Part II, Line 13
    1016 13 +/- Net Long Term Capital Gain/Loss Part II, Line 16
    1017 13 +/- Net Short Term Gain/Loss Part III, Line 17, column 2
    1018A 13 +/- Net Long Term Gain/Loss Total for Year Part III, Line 18a, column 2
    1018B 13 +/- Unrecaptured Section 1250 Gain Part III, Line 18b, column 2
    1018C 13 + 28% Rate Gain Part III, Line 18c, column 2
    1019 13 + Total Net Gain/Loss Part III, Line 19, column 2
    1043 13 + Add Lines 37, 41, and 42 Part V, Line 43

Sections 15 through 18 - Form 4136 (Credit for Federal Tax Paid on Fuels)

  1. Sections 15 through 18 contain gas and fuel credit amounts which are transcribed from Form 4136 (Credit for Federal Tax on Fuels).

    • All money amounts in Sections 15 through 18 must be entered as dollars-only.

Error Record Format – Section 15

  1. Listed below are the fields contained in Sections 15. Data in this section is obtained from Form 4136:

    Field Designator Maximum Length Title
    15A01 10 + Amount of Claim Number 1
    15C01 3 Credit Reference Number 1
    15A02 10 + Amount of Claim Number 2
    15C02 3 Credit Reference Number 2
    15A03 10 + Amount of Claim Number 3
    15C03 3 Credit Reference Number 3
    15A04 10 + Amount of Claim Number 4
    15C04 3 Credit Reference Number 4
    15A05 10 + Amount of Claim Number 5
    15C05 3 Credit Reference Number 5
    15A06 10 + Amount of Claim Number 6
    15C06 3 Credit Reference Number 6
    15A07 10 + Amount of Claim Number 7
    15C07 3 Credit Reference Number 7
    15A08 10 + Amount of Claim Number 8
    15C08 3 Credit Reference Number 8
    15A09 10 + Amount of Claim Number 9
    15C09 3 Credit Reference Number 9
    15A10 10 + Amount of Claim Number 10
    15C10 3 Credit Reference Number 10
    15A11 10 + Amount of Claim Number 11
    15C11 3 Credit Reference Number 11
    15A12 10 + Amount of Claim Number 12
    15C12 3 Credit Reference Number 12

    Note:

    All Transcription lines are located in Column (d), "Amount of Credit" and Column (e), "CRN" .

  2. Valid Characters -Numeric and blank only. Any field will be invalid if not all numeric (or blank).

  3. Correction Procedures -

    • Correct all misplaced entries, coding errors, and transcription errors.

    • Verify the CRN is valid for the tax period. IRM 3.12.14.22.56, Error Code 894 Invalid Credit Reference Number.

Error Record Format - Section 16

  1. Listed below are the fields contained in Sections 16. Data in this section is obtained from Form 4136:

    Field Designator Maximum Length Title
    16A01 10 + Amount of Claim Number 13
    16C01 3 Credit Reference Number 13
    16A02 10 + Amount of Claim Number 14
    16C02 3 Credit Reference Number 14
    16A03 10 + Amount of Claim Number 15
    16C03 3 Credit Reference Number 15
    16A04 10 + Amount of Claim Number 16
    16C04 3 Credit Reference Number 16
    16A05 10 + Amount of Claim Number 17
    16C05 3 Credit Reference Number 17
    16A06 10 + Amount of Claim Number 18
    16C06 3 Credit Reference Number 18
    16A07 10 + Amount of Claim Number 19
    16C07 3 Credit Reference Number 19
    16A08 10 + Amount of Claim Number 20
    16C08 3 Credit Reference Number 20
    16A09 10 + Amount of Claim Number 21
    16C09 3 Credit Reference Number 21
    16A10 10 + Amount of Claim Number 22
    16C10 3 Credit Reference Number 22
    16A11 10 + Amount of Claim Number 23
    16C11 3 Credit Reference Number 23
    16A12 10 + Amount of Claim Number 24
    16C12 3 Credit Reference Number 24

    Note:

    All Transcription lines are located in Column (d), "Amount of Credit" and Column (e), CRN.

  2. Valid Characters - Numeric and blank only. Any field will be invalid if not all numeric (or blank).

  3. Correction Procedures -

    • Correct all misplaced entries, coding errors, and transcription errors.

    • Verify the CRN is valid for the tax period. IRM 3.12.14.22.56.1, Error Code 894 Invalid Credit Reference Number..

Error Record Format - Section 17

  1. Listed below are the fields contained in Sections 17. Data in this section is obtained from Form 4136:

    Field Designator Maximum Length Title
    17A01 10 + Amount of Claim Number 25
    17C01 3 Credit Reference Number 25
    17A02 10 + Amount of Claim Number 26
    17C02 3 Credit Reference Number 26
    17A03 10 + Amount of Claim Number 27
    17C03 3 Credit Reference Number 27
    17A04 10 + Amount of Claim Number 28
    17C04 3 Credit Reference Number 28
    17A05 10 + Amount of Claim Number 29
    17C05 3 Credit Reference Number 29
    17A06 10 + Amount of Claim Number 30
    17C06 3 Credit Reference Number 30
    17A07 10 + Amount of Claim Number 31
    17C07 10 + Credit Reference Number 31
    17A08 10 + Amount of Claim Number 32
    17C08 3 Credit Reference Number 32
    17A09 10 + Amount of Claim Number 33
    17C09 3 Credit Reference Number 33
    17A10 10 + Amount of Claim Number 34
    17C10 3 Credit Reference Number 34
    17A11 10 + Amount of Claim Number 35
    17C11 3 Credit Reference Number 35
    17A12 10 + Amount of Claim Number 36
    17C12 3 Credit Reference Number 36

    Note:

    All Transcription lines are located in Column (d), "Amount of Credit" and Column (e), CRN.

  2. Valid Characters - Numeric and blank only. Any field will be invalid if not all numeric (or blank).

  3. Correction Procedures -

    • Correct all misplaced entries, coding errors, and transcription errors.

    • Verify the CRN is valid for the tax period. See IRM 3.12.14.22.56.1, Error Code 894 Invalid Credit Reference Number..

Error Record Format - Section 18

  1. Listed below are the fields contained in Sections 18. Data in this section is obtained from Form 4136:

    Field Designator Maximum Length Title
    18A01 10 + Amount of Claim Number 37
    18C01 3 Credit Reference Number 37
    18A02 10 + Amount of Claim Number 38
    18C02 3 Credit Reference Number 38
    18A03 10 + Amount of Claim Number 39
    18C03 3 Credit Reference Number 39
    18A04 10 + Amount of Claim Number 40
    18C04 3 Credit Reference Number 40
    18A05 10 + Amount of Claim Number 41
    18C05 3 Credit Reference Number 41
    18A06 10 + Amount of Claim Number 42
    18C06 3 Credit Reference Number 42
    18A07 10 + Amount of Claim Number 43
    18C07 3 Credit Reference Number 43

    Note:

    All Transcription lines are located in Column (d), "Amount of Credit" and Column (e), CRN.

  2. Valid Characters - Numeric and blank only. Any field will be invalid if not all numeric (or blank).

  3. Correction Procedures -

    • Correct all misplaced entries, coding errors, and transcription errors.

    • Verify the CRN is valid for the tax period. See IRM 3.12.14.22.56.1, Error Code 894 Invalid Credit Reference Number..

Reserved

  1. Reserved for future use.

Section 21 - Form 8941, Credit for Small Employer Health Insurance Premiums

  1. Section 21 contains the Credit for Small Employer Health Insurance Premiums.

    • All entries must be positive.

    • All money amounts in Section 21, must be entered as dollars only.

    • Valid characters are numeric and blank only. Any field will be invalid if not numeric or blank.

    • Any entry on Line 2 with a decimal point will be rounded down.

    • The credit is not valid for any tax period prior to 201012.

Error Record Format - Section 21

  1. Listed below are the fields contained in Section 21. Data in this section is from Form 8941.

    Field Designator Maximum Length Title Location
    21CBX 1 SHOP Check Box Line A
    21BXC 1 Credit Period Limitation Check Box Line C
    21LNB 9 EIN Line B
    21LN1 4 Number of employees Line 1
    2102 4 Number of Full Time Employees Line 2
    2103 15 Average Annual Wages Line 3
    2104 15 Health Insurance Premiums Paid Line 4
    2105 15 Premiums You Would Have Paid Line 5
    2110 15 Premium Subsidies Paid Line 10
    2113 4 Number of Employees with Premiums Paid Line 13
    2114 4 Number of Full Time Employees with Premiums Paid Line 14
    2115 15 Credit for small employer health insurance premiums Line 15
    2116 15 Add lines 12 and 15. Line 16
    2117 15 Amount allocated to patrons of the cooperative or beneficiaries of the estate or trust. Line 17
    2118 15 Cooperatives, Estates, Trusts Credit Line 18
    2118V 15 Verified amount of Line 18. ERS Input Only Field
  2. Correction Procedures - correct all misplaced entries, coding errors, and transcription errors.

  3. Field 21CBX and Field 21BXC - Valid entries include:

    • 0 - no boxes checked.

    • 1 -" Yes" box checked.

    • 2 - "No" box checked.

    • 3 - Multiple boxes are checked.

Section 22 - Form 5884-B, New Hire Retention Credit

  1. Section 22 contains the information transcribed from Form 5884-B. The credit was part of the HIRE Act enacted on March 18, 2010.

    • All entries must be positive,

    • All entries are numeric or blank,

    • All entries must be dollars only.

    Caution:

    This credit was valid for 2011 tax year and cannot be used for 201212 and later.

Error Record Format - Section 22

  1. Listed below are the fields contained in Section 22. Data in this section is from Form 5884-B:

    Caution:

    This credit was valid for 2011 tax year and cannot be used for tax periods 201212 and later.

    Field Designator Maximum Length Title Location
    2210 15 Total of Line 9, columns (a) through (c) Line 10
    2211 7 Number of retained workers for whom receiving credit Line 11
  2. Correction Procedures - correct all misplaced entries, coding errors, and transcription errors.

Sections 23 through 25 - Form 3800, General Business Credit

  1. Sections 23 through 25 contain the General Business Credits claimed on Form 3800:

    • All entries must be positive,

    • All entries must be numeric or blank,

    • All entries must be dollars only.

      Note:

      Prior year converted Form 3800(s) may not contain expired credits that were valid during the tax period being filed. Check the X'd original for the ERS input only fields.

  2. Math computations will be based on Part I and Part II of the Form 3800. Part III data is only for statistics and new error code 163.

Error Record Format - Section 23

  1. Listed below are the fields contained in Section 23. Data in this section is from Form 3800, Parts I, II, and a portion of Part III:

    Field Designator Maximum Length Title Location
    23001 15 General business credit Part I, Line 1
    23002 15 Passive activity credits Part I, Line 2
    23003 15 Passive activity credits allowed Part I, Line 3
    23004 15 Carryforward of general business credits Part I, Line 4
    23005 15 Carryback of general business credits Part I, Line 5
    2310B 15 Certain allowable credits Part II, Line 10b
    2316B 15 For a corporation electing to accelerate the research credit Part II, Line 16b ERS Only Input field for prior years.
    23022 15 Combined total from Boxes A, C, and D, Part III Part II, Line 22
    23024 15 Passive activity credit allowed Part II, Line 24
    23028 15 Add lines 17b and 26 Part II, Line 28
    23030 15 Enter the general business credit Part II, Line 30
    23031 15 Enter the total eligible small business credits allowed Part II, Line 31 ERS Input Only field for 201312 and later returns.
    23032 15 Passive activity credits Part II, Line 32
    23033 15 Passive activity credits allowed Part II, Line 33
    23034 15 Carryforward of business credits Part II, Line 34
    23035 15 Carryback of business credits Part II, Line 35
    2301A 15 Investment Credit Part III, Line 1a
    2301B 15 Reserved Part III, Line 1b
    2301C 15 Credit for increasing research activities Part III, Line 1c
    2301D 15 Low-Income housing credit Part III, Line 1d
    2301E 15 Disabled access credit Part III, Line 1e
  2. Correction Procedures - correct all misplaced entries, coding errors, and transcription errors.

  3. Verify the credit is valid for the tax period on the return.

Field 2301E - Disabled Access Credit - (Form 8826)
  1. Description:

    • Field 2301E is transcribed from Part III, Line 1e on Form 3800, General Business Credit.

    • Cannot be more than ≡ ≡ ≡ . See EC 163 IRM 3.12.14.22.17, Error Code 163 - GBC Claimed Exceed Limits.

Error Record Format - Section 24

  1. Listed below are the fields contained in Section 24. Data in this section is from Form 3800, a portion of Part III:

    Field Designators Maximum Length Title Location
    2401F 15 Renewable electricity production credit Part III, Line 1f
    2401G 15 Indian employment credit Part III, Line 1g
    2401H 15 Orphan drug credit Part III, 1h
    2401I 15 New markets credit Part III, Line 1i
    2401J 15 Credit for small employer pension plan startup costs Part III, Line 1j
    2401K 15 Credit for employer-provided child care facilities and services Part III, Line 1k
    2401L 15 Biodiesel and renewable diesel fuels credit Part III, Line 1l
    2401M 15 Low sulfur diesel fuel production credit Part III, Line 1m
    2401N 15 Distilled spirits credit Part III, Line 1n
    2401O 15 Non-conventional source fuel credit Part III, Line 1o
    2401P 15 Energy efficient home credit Part III, Line 1p
    2401Q 15 Energy efficient appliance credit Part III, Line 1q
    2401R 15 Alternative motor vehicle credit Part III, Line 1r
    2401S 15 Alternative fuel vehicle refueling property credit Part III, Line 1s
    2401T 15 Enhanced oil recovery credit Part III, Line 1t
    2401U 15 Mine rescue team training credit Part III, Line 1u
    2401V 15 Agricultural chemicals security credit Part III, Line 1v
    2401W 15 Credit for employer differential wage payments Part III, Line 1w
  2. Correction Procedures - correct all misplaced entries, coding errors, and transcription errors.

  3. Verify the credit is valid for the tax period on the return.

Field 2401J - Credit for Small Employer Pension Plan Startup Costs (Form 8881)
  1. Description:

    • Field 2401J is transcribed from Part III, Line 1j on Form 3800, General Business Credit.

    • The credit is valid from 200201 to present.

    • Cannot be more than ≡ ≡ ≡ ≡ . See IRM 3.12.14.22.17, Error Code 163 - GBC Claimed Exceed Limits.

Field 2401K - Credit for Employer-Provided Child Care Facilities and Services (Form 8882)
  1. Description:

    • Field 2401K is transcribed from Part III, Line 1k on Form 3800.

    • The credit is valid from 200201 to present.

Field 2401L - Biodiesel and Renewable Diesel Fuels Credit (Form 8864)
  1. Description:

    • Field 2401L is transcribed from Part III, Line 1l on Form 3800.

    • The credit is valid from 200401 to present.

Field 2401M - Low Sulfur Diesel Fuel Production Credit (Form 8896)
  1. Description:

    • Field 2401M is transcribed from Part III, Line 1m on Form 3800.

    • The credit is valid from 200401 to present.

Field 2401N - Distilled Spirits Credit (Form 8906)
  1. Description:

    • Field 2401N is transcribed from Part III, Line 1n on Form 3800.

    • The credit is valid from 200508 to present.

Field 2401O - Non-conventional Source Fuel Credit (Form 8907)
  1. Description:

    • Field 2401O is transcribed from Part III, Line 1o on Form 3800.

    • The credit is valid from 200508 to present.

Field 2401R - Alternative Motor Vehicle Credit (Form 8910)
  1. Description:

    • Field 2401R is transcribed from Part III, Line 1r on Form 3800.

    • The credit is valid from 200508 to present.

    Note:

    Valid in service dates must be after 2/17/09.

Field 2401S - Alternative Fuel Vehicle Refueling Property Credit (Form 8911)
  1. Description:

    • Field 2401S is transcribed from Part III, Line 1s on Form 3800.

    • The credit is valid from 200508 to present.

Field 2401T - Enhanced Oil Recovery Credit (Form 8830)
  1. Field 2401T is transcribed from Part III, Line 1t on Form 3800.

  2. This credit is valid for tax periods 201712 and later.

Field 2401V - Agricultural Chemicals Security Credit (Form 8931)
  1. Description

    • Field 2401V is transcribed from Part III, Line 1v on Form 3800.

    • The credit is valid from 200805 to present.

    • Cannot be more than ≡ ≡ ≡ ≡ ≡ . See IRM 3.12.14.22.17, Error Code 163 - GBC Claimed Exceed Limits.

Field 2401W - Credit for Employer Differential Wage Payments (Form 8932)
  1. Description:

    • Field 2401W is transcribed from Part III, Line 1w on Form 3800.

    • The credit is valid from 200901 to present.

Error Record Format - Section 25

  1. Listed below are the fields contained in Section 25. Data in this section is from Form 3800, a portion of Part III:

    Field Designators Maximum Length Title Location
    2501X 15 Carbon dioxide sequestration credit Part III, Line 1x
    2501Y 15 Qualified plug-in electric drive motor vehicle credit Part III, Line 1y
    2501Z 15 Qualified plug-in electric vehicle credit Part III, Line 1z
    251AA 15 New hire retention credit Part III, Line 1aa

    Note:

    Valid March 19, 2010 through December 31, 2010.

    251BB 15 General credits from an electing large partnership Part III, Line 1bb
    251ZZ 15 Other Part III, Line 1zz
    2504A 15 Investment credit Part III, Line 4a
    2504B 15 Work opportunity credit Part III, Line 4b
    2504C 15 Alcohol and cellulosic biofuel fuels credit Part III, Line 4c
    2504D 15 Low-income housing credit Part III, Line 4d
    2504E 15 Renewable electricity, refined coal, and Indian coal production credit Part III, Line 4e
    2504F 15 Credit for employer social security and Medicare taxes paid on certain employee tips Part III, Line 4f
    2504G 15 Qualified railroad track maintenance credit Part III, Line 4g
    2504H 15 Credit for small employer health insurance premiums Part III, Line 4h
    2504I 15 Increasing research activities Part III, Line 4i
    2504J 15 Reserved Part III, Line 4j
    2504Z 15 Other Part III, Line 4z
  2. Correction Procedures - correct all misplaced entries, coding errors, and transcription errors.

  3. Verify the credit is valid for the tax period on the return.

Field 2501X - Carbon Dioxide Sequestration Credit (Form 8933)
  1. Description:

    • Field 2501X is transcribed from Part III, Line 1x on Form 3800.

    • The credit is valid from 200810 to present.

Field 2501Y - Qualified Plug-in Electric Drive Motor Vehicle Credit (Form 8936)
  1. Description:

    • Field 2501Y is transcribed from Part III, Line 1y on Form 3800.

    • The credit is valid from 200901 to present.

    Note:

    Valid in service dates must be after 1/01/2009 and vehicle year 2009.

Field 2501Z - Qualified Plug-in Electric Vehicle Credit (Form 8834, Part I only)
  1. Description:

    • Field 2501Z is transcribed from Part III, Line 1z on Form 3800, General Business Credit.

    • Must have valid in service date after 2/17/2009 and vehicle year 2009, 2010, and 2011.

Field 2501AA - New Hire Retention Credit (Form 5884-B)
  1. Description:

    • Field 2501AA is transcribed from Part III, Line 1aa of Form 3800.

    • The credit is valid from 201102 through 201112.

Field 2504G - Qualified Railroad Track Maintenance Credit (Form 8900)
  1. Description:

    • Field 2504G is transcribed from Part III, Line 4g of Form 3800.

    • The credit is valid from 200501 to present.

Field 2504I - Increasing Research Activities (Form 6765)
  1. Description:

    • Field 2504I is transcribed from Part III, Line 4i of Form 3800.

    • The credit is valid from 201612 to present.

Error Record Format - Section 28

  1. Listed below are the fields contained in Section 28. Data in this section is from Form 8960, Net Investment Income Tax:

    Note:

    This section is only valid for tax periods 201311 and later. Delete Section 28 and Field 05G04 on returns prior to 201311.

    Field Designators Maximum Length Title Location
    2800A 1 Investment income check boxes Part I, check boxes.
    28001 13 + Taxable interest Part I, Line 1
    28002 13 + Ordinary dividends Part I, Line 2
    28003 13 + Annuities Part I, Line 3
    2804A 13 +/- Rental real estate, royalties, partnerships, S corporations, trusts, etc. Part I, Line 4a
    2804B 13 +/- Adjustment for Net income or loss Part I, Line 4b
    2804C> 13 +/- Combine lines 4a and 4b Part I, Line 4c - Computer
    2805A 13 +/- Net Gain or Loss from disposition of property Part I, Line 5a
    2805B 13 +/- Net Gain or Loss not subject to NIIT Part I, Line 5b
    2805C 13 +/- Adjustment from disposition of partnership or S corp stock Part I, Line 5c
    2805D> 13 +/- Combine lines 5a through 5c Part I, Line 5d - Computer
    28006 13 +/- Changes to investment income for certain CFCs and PFICs Part I, Line 6
    28007 13 +/- Other modifications to investment income Part I, Line 7
    28008 13 +/- Total investment income Part I, Line 8
    >>>>> 13 +/- Underprint - Total investment income Part I, Line 8 - Computer
    2809A 13 + Investment interest expenses Part II, Line 9a
    2809B 13 + State income tax Part II, Line 9b
    2809C 13 + Miscellaneous investment expenses Part II, Line 9c
    2809D> 13 + Add lines 9a, 9b, and 9c Part II, Line 9d - Computer
    28010 13 + Additional modifications Part II, Line 11
    28011 13 + Total deductions and modifications Part II, Line 11
    >>>>> 13 + Underprint - Total deductions and modifications Part II, Line 11 - Computer
    28012> 13 + Net investment income - Computer Part II, Line 12 - Computer
    2818B 13 + Deductions for distributions of new investment income Part III, Line 18b
    2818C> 13 + Undistributed net investment income - Computer Part III, Line 18c - Computer
    2819A 13 + Adjusted gross income tax Part III, Line 19a
    2819B> 13 + Highest tax bracket for estates and trust - Computer Part III, Line 19b - Computer

    Note:

    Amount is $12,500 for TY 2017.

    2819C> 13 + Subtract Line 19b from Line 19a - Computer Part III, Line 19c - Computer
    28020 13 + Enter the smaller of Line 18c or Line 19c Part III, Line 20
    >>>>> 13 + Underprint - Enter the smaller of Line 18c or Line 19c Part III, Line 20 - Computer
    2820V 13 + ERS Input Only For manual corrections to total income for Line 20, on Form 1041-QFT Only
    28021 13 + Net Investment Income Tax for estates and trusts Part III, Line 21
    >>>>> 13 + Underprint - Net Investment Income Tax for estates and trusts Part III, Line 21 - Computer
  2. The only fields that can contain negative amounts are:

    • 2804A

    • 2804B

    • 2805A

    • 2805B

    • 2805C

    • 28006

    • 28007

    • 28008 and the underprint.

  3. If there is a negative amount in any other field, delete them except any negative entries in Field 05G04. Change negative entry in Field 05G04 to a positive amount and send TPNC 70 when EC 861 falls out. Then ripple the TPNC 70 when the returns fall out for EC 902.

Field 2800A - Investment Income Check Boxes

  1. This field is one position and numeric only. The values are:

    • 0 - No boxes checked.

    • 1 - Section 6013(g) election checked.

    • 2 - Regulations section 1.144-10(g) election checked.

    • 3 - Both boxes checked.

Field 2819B> - Highest Tax Bracket for Estates and Trusts

  1. This field is positive only. It is computer generated based on the highest tax bracket for estates and trusts for the tax year.

    Note:

    For TY 2016 the amount is $12,500.

Priority IV Errors - Error Codes 001 Through 999

  1. IRM 3.12.14.18 provides detailed error correction procedures for Error Codes 001 through 999.

♦Error Code 001 – Tax Year - Invalid Entry♦

  1. Fields Displayed

    Field Designator Field Name Field Length
    01TXP Tax Period 6
    01CCC Computer Condition Code 10
    01RCD Received Date 8
    01RDD> Return Due Date - Computer 8
  2. Invalid Condition - Error Code 001 will generate when any of the following conditions are present:

    • Computer Condition Code "G" is Not Present - The processing date is equal to or more than two years and 10 months after the Return Due Date or the Received Date (whichever is later) and Computer Condition Code "W" is not present.

    • Computer Condition Code "G" is Present - The processing date is equal to or more than two years and 10 months after the Return Due Date and Computer Condition Code "W" is not present.

    • "G" Coded and Non-Coded "G" Returns – The processing date is less than two years after the Return Due Date and Computer Condition Code "W" is present.

  3. Correction Procedures:

    1. Correct all misplaced entries, coding and transcription errors.

    2. Do not send the following returns to Statute Control. Instead, enter W in Field 01CCC and on the return and continue processing:

        Statute Control Clearance Not Needed
      Any return secured by Compliance (i.e., IRC 6020(b)
      Any return secured by Examination/Collections, secured by TE/GE, secured by TE/GE EP Exam.
      Any return with a TC 59X (Transaction Code)
      Any return with “ICS” (Integrated Collection System) notated on the face.
      Any return that is a Substitute for Return prepared by Examination (SFR in the margin) with Document 13133 Expedite Processing Cycle attached.
      Any return with a stamp indicating a previous clearance by Statute Control within the last ninety days.
    3. Compare the displayed fields with the return and attachments. If incorrect, overlay the screen with the correct information.

      If... Then...
      Field 01RCD is blank
      1. Enter the Received Date in Field 01RCD. Use the earliest date, if multiple Received Dates are present,

      2. IRM 3.12.14.9.9., Field 01RCD - Received Date, to determine the Received Date.

      CCC W was entered incorrectly Delete CCC W from Field 01CCC.
      The return has a stamp that indicates a previous clearance by Statute Control within the last 90 days Enter CCC W in Field 01CCC and on the return.

      Note:

      Do not send the return to Statute Control.

      The return is not stamped by Statute Control within the last 90 days
      1. SSPND 310,

      2. Prepare Form 4227 to route to Statute Control.

  4. Suspense Correction:

    1. When Statute Control returns the cleared document, enter W in Field 01CCC and on the return. Continue processing.

    2. If Statute Control requests the record to be voided to them, SSPND 640.

♦Error Code 002 - Name Control Mismatch♦

  1. Fields Displayed

    Field Designator Field Name Length
    CL Clear Code 1
    01NC Name Control/Check Digit 4
    >>>> Name Control Underprint 4
    01EIN Employer Identification Number 9
    01TXP Tax Period 6
    01RDD> Return Due Date-Computer 8
    01CCC Computer Condition Code 10
    02CON In-Care-Of Name 35
    02FAD Foreign Address 35
    02ADD Street Address 35
    02CTY City 22
    02ST State 2
    02ZIP ZIP Code 12

    Note:

    The literal Section 02 Not Present will display if no entries are present.

  2. Invalid Condition - Error Code 002 will generate when the Name Control mismatched against the National Account Profile (NAP) or Entity Index File (EIF).

  3. Correction Procedures:

    1. Before taking any additional research steps to resolve Error Code 002, drop the cursor to the bottom of the screen and transmit. This will ensure that any prior changes to the Name Control have posted to the NAP. If Error Code reappears, continue with the remainder of the correction procedures.

    2. When corrections are made to Field 01NC or Field 01EIN, the computer will validate the entries with the NAP and reset the On-Line Entity (OLE) indicators as appropriate upon transmitting the ERS screen.

    3. Correct all misplaced entries, coding and transcription errors.

    4. Compare the displayed fields with the return and attachments. If incorrect, overlay the screen with the correct information.

    5. Refer to all the following research instructions in this error code before taking any action.

    6. If Field 01NC and the Name on the return or attachments are the same but differ from the underprint in Field 01NC, research INOLES to determine the correct Name.

      If... Then...
      The Name on the return or attachment matches the Name Control on INOLES, Bring up underprint.
      The Name Control on INOLES is different from the Name on the return or attachment, Research NAMEB/NAMEE for a new EIN.
    7. If a new EIN is located, verify the Name Control using Command Code (CC) INOLES.

      If...