3.12.15 Return of Partnership Income

Manual Transmittal

November 17, 2017

Purpose

(1) This transmits revised IRM 3.12.15, Return Resolution - Return of Partnership Income.

Material Changes

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

(2) IRM 3.12.15.1 - Program Scope - Added Internal Controls to Section 1. As a result, some information may have been moved or rearranged.

(3) IRM 3.12.15.1.10(1) - IRM Deviation Procedures - Corrected the title per feedback during IRM Review.

(4) IRM 3.12.15.1.11(1) and (2) - Taxpayer Advocate Service (TAS) - Moved information from paragraphs (1) and (2) into paragraphs (1) through (5).

(5) IRM 3.12.15.1.20.2 (3) - Use of Fax for Taxpayer Submissions - Changed "Caution" to Paragraphs (4) and (5) and added bullet lists.

(6) IRM 3.12.15.3.4(3) - Field 01EIN - Employer Identification Number - Revised list of invalid Employee Identification Numbers (EIN)s.

(7) IRM 3.12.15.3.6(1) - Field 01RCD - Received Date - Deleted duplicate bullet.

(8) IRM 3.12.15.3.7(4) Table - Field 01CCC - Computer Condition Code - Added: "Taxpayer writes Section 6114 Election on the return" to Computer Condition Code (CCC) "L" . (IPU 17U0403 issued 03-01-2017)

(9) IRM 3.12.15.3.7(4) Table - Field 01CCC - Computer Condition Code - Changed instruction to include prior year returns for Form 8938/CCC "2" . (IPU 17U0460 issued 03-08-2017)

(10) IRM 3.12.15.3.11(4)c - Field 01NOP - Number of Partners - Revised instructions for corresponding for Schedules K-1 and Number of Partners. (IPU 16U1568 issued 10-21-2016)

(11) IRM 3.12.15.13.5(5) 6. - Error Code 005 - Invalid Tax Year or Received Date - Removed "Current Date minus 10 days" per feedback from IRM 3.12.217.

(12) IRM 3.12.15.13.7(3) - Error Code 007- Received Date Earlier Than Tax Year - If/And/Then Table - Last Row of boxes - Removed last row of information per feedback from IRM 3.12.217.

(13) IRM 3.12.15.13.19(3) - Error Code 725 - Number of Partners and Total Assets Same - "Caution" added to Table in Paragraph (3). (Start-Up IPU 17U0004 issued 01-02-2017)

(14) IRM 3.12.15.13.20(3) - Error Code 726 - Number of Partners and Date Business Started Same - "Caution" added to Table in Paragraph (3). (Start-Up IPU 17U0004 issued 01-02-2017)

(15) IRM 3.12.15.13.21(3) - Error Code 727 - Number of Partners and NAICS Code Same- "Caution" added to Table in Paragraph (3). (Start-Up IPU 17U0004 issued 01-02-2017)

(16) IRM references updated throughout the IRM.

(17) Figures revised throughout the IRM.

(18) Exhibits revised throughout the IRM.

Effect on Other Documents

IRM 3.12.15, dated October 17, 2016, (effective January 1, 2017) is superseded. This IRM also incorporates the following IRM Procedural Updates (IPUs) - 16U1568 (issued 10-21-2016), 17U0004 (issued 01-03-2017), 17U0403 (issued 03-01-2017), and 17U0460 (issued 03-08-2017).

Audience

Wage and Investment (W&I), Campus Input Correction Operation

Effective Date

(01-01-2018)

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

Program Scope and Objectives

  1. This IRM section provides instructions for Wage and Investment Error Resolution Tax Examiners to correct errors for Form 1065U.S. Return of Partnership Income, and Form 1065-B, U.S. Return of Income for Electing Large Partnerships.

  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: Tax Examiners in the Input Correction Operation and Error Resolution Section, including:

    • Tax Examining Technicians

    • Lead Tax Examining Technicians

    • Supervisory Tax Examining Assistants

  4. Policy Owner: Director, Submission Processing.

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

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

    • Accounts Management (AM)

    • Chief Counsel

    • Compliance

    • Information Technology (IT) Programmers

    • Large Business and International (LB&I)

    • Small Business Self-Employed (SBSE)

    • Statistics of Income (SOI)

    • Submission Processing (SP)

    • Taxpayer Advocate Service (TAS)

    • Tax Exempt and Government Entities (TEGE)

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

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 posting to the Master File. Records fall out in Error Resolution System (ERS) due to the Generalized Mainline Framework (GMF). The entries from transcription are transferred to ERS fields. The GMF programming causes a record to fall out to ERS if it fails to meet certain criteria, including:

    • Invalid characters in a field (e.g., numeric instead of alpha).

    • Invalid length of field (e.g., 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.

  2. Employees use ERS to correct these conditions and when necessary use Integrated Data Retrieval System (IDRS) to research.

Authority

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

    • IRC 6031(a)

Responsibilities

  1. The Campus Director is responsible for monitoring operational performance for their campus.

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

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

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

Program Management and Review

  1. Program Reports: System control reports are on the Control-D WebAccess (CTDWA) and a general listing of the reports are located in IRM 3.12.38, Error Resolution, BMF General Instructions.

  2. Program Effectiveness is measured using the following:

    • Embedded Quality Submission Processing (EQSP)

    • Balanced Measures

    • Managerial reviews

Program Controls

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

Terms/Definitions/Acronyms

  1. For Terms, Definitions and Acronyms See Exhibit 3.12.15-10

Related Resources

  1. The following table lists related sources:

    Resource Link/Title
    Submission Processing Design Center (SPDC) http://coursebooks.enterprise.irs.gov/
    Servicewide Electronic Research Program (SERP) http://serp.enterprise.irs.gov/
    Integrated Data Retrieval System (IDRS)  
    Integrated Automation Technologies (IAT)  
    IRM 3.11.15 Returns and Documents Analysis - Return of Partnership Income
    IRM 3.24.15 ISRP System - Partnership Return of Income
    IRM 3.12.38 BMF General Instructions

General Information

  1. Form 1065, U.S. Return of Partnership Income, is an information return used to report the income, deductions, gains, losses, etc., from the operation of a partnership. A partnership does not pay tax on its income but "passes through" any profits or losses to its partners. Partners must include partnership items on their tax returns.

    Exception:

    Partnership returns identified as a "Publicly Traded Partnership" (PTP) will pay a tax on income derived from the active conduct of all trades and businesses of the partnership. These returns will have the annotation "3.5% GROSS INCOME TAX" on Line 22 of the Form 1065 (above or below the Ordinary Business Income (Loss) amount) and the amount of tax owed. These returns are processed in the Ogden Submission Processing Center (OSPC). See IRM 3.12.15.1.22.4, Publicly Traded Partnerships (PTP).

  2. Certain partnerships who received a Qualifying Therapeutic Discovery Project grant under Section 9023 of the Affordable Care Act (ACA), and need to recapture part of the grant, will use Form 4255 to report the increase in tax along with filing Form 1065. The Form 1065 should have a notation "QTDP" and money amount in the margin near Line 22. If Form 4255 is attached process as follows:

    1. Verify the Employer Identification Number (EIN) and name on return with Form 4255.

    2. Detach Form 4255.

    3. Edit CCC ""X" " and action trail on Form 1065.

    4. Photocopy front page of Form 1065.

    5. Route photocopy of return and Form 4255 to Accounts Management.

    6. Continue processing Form 1065.

  3. Form 1065-B, U.S. Return of Income for Electing Large Partnerships, was created as a result of the Tax Reform Act (TRA) of 1997 to reduce the burden for the partners and increase the IRS' ability to match income and deduction amounts reported to individual partners on their individual income tax returns. These returns are processed in the Ogden Submission Processing Campus.

    1. A partnership may elect to file Form 1065-B if the partnership had 100 or more partners during the preceding tax year.

    2. A partnership cannot make the election to file Form 1065-B for its "first tax year" .

  4. This IRM cannot address every possibility that may arise while correcting returns or documents. 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.

♦IRS Employee Contacts - RRA98, Section 3705(a)♦

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

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

    1. Telephone Contact -Their title (e.g., Mr., Mrs., Ms., Miss), last name and badge identification (ID Card) number.

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

    3. Correspondence- All correspondence must include a telephone number that taxpayers can call for answers to any questions they may have. In addition, manually generated and handwritten correspondence must have the employee’s title (e.g., Mr., Mrs., Ms., Miss), last name, and IDRS (Integrated Data Retrieval System), letter system, 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 asks to speak with a specific employee who previously handled the inquiry or request, or complains about the level of service previously provided, every attempt should be made to resolve the taxpayer's inquiry. If the issue cannot be resolved, the employee should refer the inquiry using established procedures to his or her manager.

    7. Correspondence letter 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 that 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 taxpayer contact, when the nature of an employee's work involves multiple contacts, with the same taxpayer and the employee has given the taxpayer (either by telephone or in-person) his or her badge identification (ID Card) number on the first contact.

    Note:

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

♦IRM Deviation Procedures♦

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

♦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.

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

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

♦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, shown in Exhibit 3.12.15-9, Potential Frivolous Arguments for Examination Review.

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

    If... Then...
    The return meets any of the conditions identified as a frivolous return, (See Exhibit 3.12.15-9, Potential Frivolous Arguments for Examination Review)

    Exception:

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

    Remove return from the batch and place the return in the locally designated basket for Examination, Frivolous Return Program (FRP) for review.
    Examination has selected the return as frivolous, indicated by Action Code 331 and a Form 4227 with the remarks, "Refer to Exam FRP for audit after processing" but sends the return for processing, Continue processing the return using procedures in IRM 3.12.15. However, do not circle or void the Action Code indicating a frivolous return.

    Note:

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Error Correction Process

  1. All Form 1065 Error Screen displays will appear as follows:

    • Tax Class - 2

    • Document Code 65 - Form 1065

    • Document Code 67 - Form 1065 (Publicly Traded Partnerships or "PTP" )

    • Document Code 68 - Form 1065-B

♦Business Master File (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 the BMF Consistency have been identified and developed as a coordinated effort between Cincinnati, Ogden, and Paper Processing Branch BMF Code and Edit/ERS section.

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

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

Inventory/Reports

  1. Records will be placed into the Error Inventory or the Workable Suspense Inventory for correction. Once the Error Resolution Tax Examiner accesses the record and it is displayed on the screen, it must be:

    1. Corrected in full by correcting errors in editing or transcription and/or correcting math errors.

    2. Placed in suspense for additional information.

    3. Rejected from pipeline processing.

  2. Each day the Error Inventory Report will be furnished showing:

    1. Blocks, by the block control number, and block Document Locator Number (DLN) in DLN order.

    2. Each batch will be on a separate page.

    3. Blocks received from Block Out of Balance (BOB) Correction will be listed separately.

    4. A copy of the report must be on the carts of documents and used as a charge-out to determine when a cart is completed.

    5. The first line of the Error Inventory Report will show the number of working days the records on that page have been in the Error Inventory. This will enable work left from a previous day to have priority.

Workable Suspense Inventory Report

  1. Each day the Workable Suspense Inventory Report will be furnished showing the records by Program in DLN order for various status situations. Separate pages for each program, with totals, will be provided.

  2. The first line of the report will show the number of working days that the records have been in the Workable Suspense Inventory. This will allow priority to be given to the older work.

Error Displays and Corrections

  1. All Form 1065 and Form 1065-B Error Screen Displays will display as follows:

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

    • Fields are displayed with no breaker.

    • Negative values are indicated by a minus (-) sign following the amount.

    • Decimal points are displayed beginning in the left position.

    • 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 units positions are aligned beneath one another.

    • Sufficient leading blanks are displayed preceding the shorter amounts so that the unit position of these amounts are directly in line with the unit position of the longest amount.

    • The cents digits are not displayed for "Dollars Only" fields. So that the unit position will remain in line with the other fields of the section, two asterisks (**) are displayed in the cents position of the dollars only field.

  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. If the decimal point is entered, it will be ignored.

    • A minus sign (-) must be entered as the last numeric 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 Taxpayer Identification Number (TIN), name and address.

  4. Corrections can be made to a displayed field by overlaying only the digits in error and not re-entering 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 Headquarters.

      Reminder:

      When transmitting corrections to 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 it is determined during the course of correcting a Priority II, III or IV Error, that additional information or research is necessary to resolve the error (or if the error is rejected), enter the appropriate Action Code with either Command Code SSPND or RJECT.

Command Codes

  1. The Command Codes needed for correcting the Error Inventory and the Workable Suspense Inventory are briefly described below. Any Command Code in the Employees Security Profile will be available:

    Command Code Description
    ACTVT Used to transfer unworkable suspense records to workable suspense inventory.
    CRECT
    • Used to enter a correction.

    • Valid only after an error has been displayed in response to the GTREC command.

    DLSEC Used to delete a section within the record in progress.
    ENMOD Used to research a name control.
    ERINV Used to research a DLN or TIN on the ERS Control File.
    ERVOL
    • Used with a Status Code to display the number of ERS records in the current Workable Inventory.

    • Used to obtain the actual count of records to be worked.

    • Printed reports for ERS are updated nightly.

    FRM49 Used to input a fact of filing when an unnumbered return is withdrawn from normal processing, i.e., correspondence.
    GTREC
    • Used to access the first error record in an ERS error block.

    • Used to access a specific record in the Workable Suspense Inventory.

    GTRECQ Used to access a worked record that has been held for Quality Review.
    GTRECW
    • Used to recover an ERS data record that has already been worked.

    • Can be used at any time on the same processing day.

      Note:

      Errors discovered on subsequent days must be corrected by using Notice Review and Adjustment procedures.

    GTSEC
    • Used to obtain the display of any data section within the record in progress.

    • Response is the display of all correctable fields of the requested section, including blank fields.

    • Computer generated fields and error indicators will not be shown.

    • If no data is present in the specified section, the empty format of the requested section is displayed.

    INOLE Used to access the National Account Profile (NAP) which contains selected entity information for all Master File accounts.
    MFTRA Used to request a hard copy transcript for a specific TIN.
    NAMEE
    • Used to research a missing or incomplete Employer Identification Number (EIN)/TIN.

    • Name and address data is input to search the Key Index File.

    NWDLN Used to assign a renumbered DLN on an ERS record.
    RJECT Used to delete a record from ERS.
    SINOF
    • Used to Sign Off the computer.

    • SINOF is used by all terminal users, including ERS, Generalized Unpostable Framework (GUF) and IDRS.

    • SINOF is displayed, but must be keyed onto the screen when signing off.

    • Response is "Request Completed"

    SINON
    • Used to Sign On to the computer.

    • SINON is displayed but must be keyed onto the screen when signing on.

    • Password is entered but does not appear on the screen.

    SSPND
    • Used with an ERS Action Code to place a record into Suspense status.

    • SSPND is valid for Error Correction and Suspense Correction.

    TRDBV Tax Return Data Base
    • Used to access 100% of return data as well as all subsequent corrections entered via ERS and GUF.

    • Used to verify specific line items (including any correction activity), resolve taxpayer inquiries, identify refund issues, and verify filing and return status.

Action Codes

  1. The ERS Action Code indicates that specific information is missing or that the record is to be rejected from processing. The code will have sufficient detail to indicate if correspondence is to be sent to the taxpayer or specific in-house research or action(s) required.

  2. For a listing of valid ERS Action Codes, See Exhibit 3.12.15-1, Action Codes.

  3. Document Perfection Tax Examiners will assign a three digit code to numbered returns when they determine that the document is unprocessable in its present form either by needing additional information or some manual intervention is required. This code will be entered in the bottom left margin of the return.

  4. A Correspondence Action Sheet is used for initiating correspondence. This form is attached by Document Perfection. When routing within the campus (in-house research), an explanation concerning the missing information will need to be attached to the return.

  5. The Action Code assigned by Document Perfection will be transcribed into the record of the Form 1065 or Form 1065-B.

  6. The presence of a valid Action Code other than 001 will place the record in the Suspense Inventory, either Workable or Unworkable.

  7. If the Action Code assigned by Document Perfection is invalid or incomplete, the record will be assigned to the Error Inventory for correction or deletion of the code.

  8. Only one Action Code may be assigned at one time to a record. The priority of the Action Codes will be 320, 4XX, 6XX, 3XX, 2XX.

  9. An ERS Tax Examiner may:

    1. Enter an Action Code on a record.

    2. Delete or correct an invalid code.

    3. Overlay the present Action Code with another to either resuspend or reject from ERS. This is done by entering a valid Action Code with a Command Code SSPND, RJECT or NWDLN. See IRM 3.12.38, Error Resolution System (ERS), BMF General Instructions for additional information.

    4. Enter a valid Action Code with the SSPND Command Code to clear the record from the screen and place the record in either Workable Suspense or Unworkable Suspense.

    5. Enter a valid Action Code with the RJECT Command Code to reject the record from ERS. Generally the Service Center Control File (SCCF) will be automatically updated for the rejected records.

Correspondence

  1. DO NOT correspond with the partnership when there is an indication on the return that no transactions transpired during the tax year.

    Reminder:

    A partnership is not considered to engage in a trade or business and is therefore not required to file for any tax year in which it neither receives income nor incurs any expenditures treated as deductions or credits for federal income tax purposes.

  2. 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 OR COLLECTIONS" or reprocessable/reinput returns identified as "CIS" returns.

    See IRM 3.12.15.1.20.1, Correspondence Imaging System (CIS) Returns for correction procedures for "CIS" returns.

  3. As an ERS tax examiner issuing correspondence you may either:

    1. Use the IDRS Correspondence feature Command Code LETER, or

    2. Initiate correspondence by using a Correspondence Action Sheet. An IDRS operator or typist will use the form in issuing the actual correspondence.

  4. No reply to correspondence requires a Computer Condition Code (CCC) "3" in Field 01CCC. See specific IRM procedures and No Reply Procedures in Exhibit 3.12.15-11.

  5. Most correspondence is either computer generated notice, computer generated letter or preprinted letter. All correspondence now reflects a response period within 30 days and the consequence for not replying.

  6. If special notes or letters are developed, conform to the language and response periods that are used in (4) above. Use the following guidelines:

    1. All correspondence to the partnership requesting information should indicate that a response is required. Specify the length of time the partnership has to respond (generally 30 days) and include a statement on the action IRS will take if the response is not received timely. Be sure to include the following statement:
      "WHEN YOU REPLY, PLEASE INCLUDE YOUR TELEPHONE NUMBER AND THE MOST CONVENIENT TIME FOR US TO CALL SO WE MAY CONTACT YOU IF WE NEED ADDITIONAL INFORMATION" .

    2. Provide for a purge date at least 10 days after the date provided in the letter.

    3. Whenever possible, form letter should be used to correspond with the partnership. If a C-NOTE or QUICKNOTE is used, be sure that it clearly communicates the message in simple language and contains the required information.

    4. When partnerships make errors that cause delays, advise the partnership that they made the error and explain what the error was that caused the delay.

    5. Specific turnaround times for working correspondence as outlined in IRM 3.30.123.5, Taxpayer Correspondence, Central Authorization File (CAF), Statutes, Taxpayer Advocate, RAIVS Photocopies, and Files, must be followed and monitoring reports must be instituted to ensure that these guidelines are met.

♦Correspondence Imaging System (CIS) Returns♦
  1. Correspondence Imaging System (CIS) is an inventory system for scanning all Accounts Management (AM) receipts (including Form 1065 and Form 1065-B) 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 correspondence instructions below for "CIS" returns:

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

    Note:

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

      Note:

      If the return comes back from AM with the information still incomplete, send the return to AM again to secure all the missing information. Indicate "Additional information needed to process incomplete CIS return" on Form 4277 or other appropriate routing slip.

    2. Void the DLN.

    3. Attach Form 4227 to the return and route to Accounts Management to secure missing information.

    Note:

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

    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 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.

♦Use of Fax for Taxpayer Submissions♦
  1. Tax return information can be received via fax as part of return perfection even if a taxpayer signature is required. In circumstances where contact with the taxpayer has been made and documented, fax signatures are acceptable. For more information about accepting signed taxpayer documents by fax, see the most recent revision of the IRS Policy for Use of Fax, available at http://irweb.irs.gov/AboutIRS/co/dese/memo/48254.aspx.

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

  3. 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 21.1.3.2.4Additional Taxpayer Authentication

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

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

    • IRM 11.3.1.11, Facsimile Transmission of Tax Information

♦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:

    1. Campus Cycle: Thursday - Wednesday

    2. Master File Processing: Friday - Thursday

    3. Notice Review Saturday: Monday (8+ days)

    4. Unpostables: New available Tuesday; Closing Tuesday

  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

    .

Perfection of Attachments

  1. Review all attachments to determine proper disposition:

    If... Then...
    Unrelated, unanswered partnership correspondence is attached and no action has been taken, Detach and route to the appropriate area using Form 4227.
    Unanswered partnership correspondence relating to the Form 1065 or Form 1065-B is attached,
    1. Make a photocopy of the attachment, and

    2. Forward to the appropriate area using Form 4227.

  2. Any attachment or photocopy of an attachment that is routed elsewhere must contain name, address, EIN and received date.

Special Conditions

  1. The following instructions are provided for these special condition returns:

    • Short Length Records

    • Non-ADP (Automatic Data Processing) Return

    • Section 6020(b) Returns

    • Publicly Traded Partnerships (PTP) (Ogden Submission Processing Campus)

    • Amended Returns

Short Length Records
  1. The following types of return are processed as Short Length Records:

    • Common Trusts. See IRM 3.12.15.3.7(4) CCC 5 for definition.

    • Nominee returns (IRM 3.12.15.1.22.1.1).

    • IRC 761(a) Elections (IRM 3.12.15.1.22.1.2)

    • Inactive returns (returns with no income or deductions on page 1 and no dollar entries on pages 4 and 5 of Form 1065, Form 1125-A, Line 18a, Form 8825 (Rental Real Estate Income and Expenses of a Partnership or an S Corporation) and Line 9 on Schedule F (Profit or Loss From Farming).

      Note:

      An inactive return with an Audit Code, correspondence received date or nonrecourse loan present is processed as a long record.

  2. Only the following fields may be present on short length records:

    Fields Title
    01NC Name Control
    01EIN Employer Identification Number
    01TXP Tax Period
    01RCD Received Date
    01CCC Computer Condition Code
    01NOP Number of Partners (except Amended Returns)
    Section 05 Address (only if address has changed) on Form 1065
    Section 06 Address (only if address has changed) on Form 1065-B

    Note:

    On short length records, do not correspond for missing information or attachments and do not apply missing schedule codes.

  3. Code and Edit (C&E) must edit "SR" in the top margin between the form number and form title for all Short Record returns except amended returns.

Nominee Return
  1. Partnerships that are formed solely for the purpose of acting as a "Nominee" or "Agent" are not required to file a partnership return. They are required to file Form 1099 showing the actual owner of the income.

  2. Although they are not required to do so, some of these partnerships may file Form 1065 solely for the purpose of telling IRS that they are not required to file.

  3. These returns will usually contain only partnership entity information and a statement that the partnership is a nominee and is not required to file.

  4. Process nominee returns as "Final" , Short Record returns.

  5. CCC "F" is required.

IRC 761(a) Return/Election
  1. The term "partnership" includes a syndicate, group, pool, joint venture or other unincorporated organization through or by means of which any business, financial operation or venture is carried on, and which is not a corporation, trust or estate.

  2. Under IRC 761(a), certain arrangements treated as partnerships (investing partnerships and operating agreements) may elect to be excluded from the partnership rules. Form 1065 need only be filed for the year of the election and a statement of the election should be attached to the return. If the return shows any tax data relating to an entity level computation of income, it cannot be treated as a Section 761(a) election.

  3. Returns can be identified as potential Section 761(a) elections if the return contains all of the following:

    • Name, address, and EIN but no tax data entries

    • An attachment listing the names and addresses of all the members of the organization

    • A statement to elect not to be treated as a partnership

    • CCC "8" is present

  4. Or, the partnership has referenced one of the following on the return or attachments:

    • Section 761(a) or Treas. Reg. 1.761-2 annotated;

    • Rev. Proc. 2002-68 (for tax years beginning before 01/01/2004);

    • Rev. Proc. 2003-84 (for tax years beginning after 01/01/2004);

    • Publication 541 (Partnerships) or Publication 550 (Investment Income and expenses)

    • Lottery Club

    • Exclusion filed under Subchapter K

    • The joint purchase, retention, sale or exchange of investment property

    • The joint production, extraction or use of property

  5. C & E is instructed to refer the return to Examination. Examination will determine if the election is accepted, rejected, or selected for Examination. After Examination has made their determination, process each return as directed.

    If... Then...
    The election is "Accepted" by Examination,
    1. Complete the processing of the return as a "Short Record" .

    2. Edit CCC "F" and CCC "8" .

    3. Edit the number of partners to "2" on the return and enter in Field 01NOP.

    Examination determines that the response is less than satisfactory, but does not request additional information to be obtained from the partnership,
    1. Consider the election "Rejected" .

    2. Process as a Form 1065 long record.

    Examination determines the return is "Selected for Examination" , Document Perfection will complete the processing of the return by deleting any money amount in Sections 02, 03, 04 and 05 and editing Audit Code "1" .
    Examination determines correspondence is require, Issue Letter 1355C.
Non-ADP Return
  1. When a Form 1065 is for a Non-ADP period, reject the record from ERS, and process as Non-Master File.

    1. Use RJECT Command Code and reject the record with Action Code 620.

    2. If RJECT Command Code is not in your profile, use SSPND Command Code and suspend the record with Action Code 620.

  2. For NMF items with payment:

    1. Follow instructions in Error Resolution System (ERS), BMF General Instruction, IRM 3.12.38, Error Resolution System (ERS), BMF General Instructions.

    2. Use Action Code 343 and suspend to Accounting for research.

    3. Reject from ERS.

    4. Transfer to Non-Master File (NMF) or Unidentified, dependent upon instruction from Accounting.

  3. For International Returns - with and without remittance - follow instructions in IRM 3.12.38, Error Resolution System (ERS), BMF General Instructions.

IRC 6020(b) Returns
  1. When the partnership fails to file a return, IRC 6020(b) of the Internal Revenue Code is the authority for the IRS to prepare a return.

  2. CCC "4" is required.

  3. The return must be signed by a Revenue Officer or Revenue Agent.

    Note:

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

  4. If the return is not signed by a Revenue Officer or Revenue Agent, return the document to Collections using Form 4227.

Publicly Traded Partnerships (PTP)
  1. All coding and correction of Form 1065 with Doc. Code 67 (Publicly Traded Partnerships) is worked in Ogden Submission Processing Center (OSPC).

  2. Publicly traded partnerships (Document (Doc.) Code 67) are corrected using the same correction procedures as Form 1065 and Form 1065-B.

  3. See IRM 3.12.15.13.25 for correction procedures for Error Code 737 that, if generated, applies only to these PTP returns.

♦Criminal Investigation (CI) Referral♦

  1. Criminal Investigation (CI) investigates potential criminal violations of the Internal Revenue Code (IRC) and related financial crimes. Criminal violations of the IRC include 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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  3. Other CI Referral Criteria:

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  4. For all other CI Referral criteria listed in paragraph (3), 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. Continue processing the return.

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

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

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

♦Examination (Exam) "Funny Box" Criteria♦

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

♦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.

Types of Errors

  1. This section provides a description of the types of errors generated during Form 1065 and Form 1065-B processing.

  2. The Error Resolution System (ERS) will identify errors according to type and priority. This will show in the record heading:

    • Action Code Error (Priority I)

    • Section Error (Priority II) - Includes terminus error and ISRP (Integrated Submission and Remittance Processing) problem code.

    • Validity Error (Priority III)

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

  3. There may be records where the tax examiner finds that programming has not supplied a section or a field that is needed to solve an error. In this event, the tax examiner can use command code GTSEC. (See IRM 3.12.15.1.18). This should be reported to Headquarters 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 will be placed in the Error Inventory and will be displayed as a Priority I Error.

    • All records with a valid Action Code will be assigned to a Suspense Inventory and will be 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. Correction Procedures - 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 Field (CL) Field.

    Note:

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

  4. See IRM 3.12.38, BMF General Instructions, 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 the ISRP system. 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 will be coded as follows:

    • Code 1 - Split screen transmission, key verifier attempted to change Check Digit, key verifier changed 4 or more digits of TIN, or the original entry operator indicated that a required section is missing.

    • Code 2 - CATCH-ALL ISRP ERROR: Any error attributed to ISRP that is not described below, such as invalid characters in a field, or a combination of errors listed below.

    • Code 3 - Invalid section ending point.

    • Code 4 - Invalid field length.

    • Code 5 - Questionable section - the ISRP operator input the same section more than once. The computer program will drop all duplicate sections and display on the error screen the first one encountered.

      Note:

      When displayed, this type of error will display all input fields, except for the Remittance in Section 01 of the section in error. Transcribed data will be present. Computer generated data will not be present.

  3. Correction Procedures:

    • Check all fields of the section when this condition exists verifying that fields are entered as coded.

    • If no correction is needed, or once the section is correct, transmit from the bottom of the screen.

    • If the section needs to be deleted, enter Command Code DLSEC with the section number.

  4. Terminus Error - This error is caused by a section with variable length input fields containing an erroneous size field.

    • When displayed, this type of error will show all input fields of the terminus section. Transcribed data will be present. Computer generated fields or Remittance field for Section 01 will not be present.

    • All fields present for the section must be examined and the necessary correction(s) made to all the fields.

  5. Correction Procedures:

    • Command Code CRECT will be displayed. If the section needs to be deleted, use Command Code DLSEC to delete the section.

    • If no corrections are needed, transmit from the bottom of the screen.

Priority III - Field Errors

  1. Definition - Any field that does not meet the requirement(s) for that field will be shown as a Priority III error. Consistency and or relationships with other fields will not be a factor.

  2. Some reasons for this type of error are:

    • Non-numeric character in a numeric field.

    • Non-alphabetical character in an alpha field.

    • Blank space in a numeric field.

    • Blank in the first position of an alpha field if followed by significant data.

  3. Display - Every field displayed is in error.

    • All fields with a Priority III error will be 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.

  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.

    5. Transmit.

Priority IV Errors - Consistency/Math Errors

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

  2. Display - These errors will be displayed with the Error Code assigned to them for the specific error in ascending numerical order. The screen display will show the error code assigned and the fields needed to make the necessary correction.

    1. The blank field "CL" will be displayed for the entry of a Clear Code on records where the possibility exists that a change or correction may not be needed.

    2. All errors must be resolved by either eliminating the error or entering a Clear Code.

  3. Correction Procedures:

    • Correct all coding and transcription errors.

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

Section 01 Errors

  1. This section provides instructions for correcting Section 01 error conditions.

General Information

  1. Section 01 contains entity data and codes for returns and is required for every record.

Remittance (RMIT)
  1. This entry represents prepayment of a penalty.

  2. It must be blank or numeric.

  3. If a numeric amount is present, it must be dollars and cents.

  4. The Remittance field cannot be changed by ERS.

Error Record Format

  1. Listed below are the fields contained in Section 01 of Form 1065 and Form 1065-B. See Exhibit 3.12.15-2, Form 1065, U.S. Return of Partnership Income and Exhibit 3.12.15-3, Form 1065-B, U.S. Return of Income for Electing Large Partnerships.

  2. The Field Designator, Field Length (maximum length for variable fields), Title, and Location where the data is obtained on the return is shown below:

    Field Field Length Title Location on Form 1065 or Form 1065-B
    01NC 4 Name Control/Check Digit First Name line Form 1065 or Form 1065-B, page 1
    01EIN 9 Employer Identification Number Form 1065 or Form 1065-B, page 1, Box "D"
    01TXP 6 Tax Period Form 1065 or Form 1065-B, page 1, between form Title and OMB Number
    01RCD 8 Received Date Form 1065 or Form 1065-B, page 1, Deduction Area
    01CCC 10 Computer Condition Code Form 1065, page 1, dotted portion of Line 1a or Form 1065-B, page 1, dotted portion of Line 3
    01TXB 8 Tax Period Beginning Form 1065 or Form 1065-B, page 1, Left of field 01TXP
    01NAI 6 North American Industry Classification Code System (NAICS) Form 1065 or Form 1065-B, page 1, Box "C"
    01DOB 6 Date Business Started Form 1065 or Form 1065-B, page 1, Box "E"
    01NOP 6 Number of Partners Form 1065 or Form 1065-B, page 1, Line I
    01IRC 1 Initial Return Code Form 1065, page 1, to the left of Box "G"
    01TT 1 Technical Termination Form 1065, page 1, Box "G(6)"
    01AMC 1 Accounting Method Code Form 1065 or Form 1065-B, page 1, Box "H"
    01M3 1 Schedule M-3 Form 1065 or Form 1065-B, page 1, Box "J"
    01LPC 1 Limited Partnership Code Form 1065 or Form 1065-B, page 2, Schedule B, Line 1
    01DPC 1 Dual Partner Code Form 1065 or Form 1065-B, page 2, Schedule B, Line 2
    01MPC 1 Multi Partner Code Form 1065-B, page 2, Schedule B, Line 3
    01FDC 1 Foreign/Domestic Corporation Code Form 1065, page 2, Schedule B, Line 3a
    01INE 1 Individual/Estate Ownership Code Form 1065, page 2, Schedule B, Line 3b
    01PCS 1 Ownership of Foreign or Domestic Corporation Code Form 1065, page 2, Schedule B, Line 4a
    01DPT 1 Ownership of Foreign Partnership or Trust Code Form 1065, page 2, Schedule B, Line 4b
    01PTT 1 Partnership Level Tax Treatment Election Code Form 1065, page 2, Schedule B, Line 5
    01DPA 1 Distribution of Property Code Form 1065, page 3, Schedule B, Line 12a
    01DRE 6 Number of Form 8858 attached Form 1065, page 3, Schedule B, Line 15
    01FPI 6 Number of Form 8805 attached Form 1065, page 3, Schedule B, Line 16
    01FPC 1 Foreign Partner Code Form 1065, page 3, Schedule B, Line 16 (Form 1065-B, page 2, Schedule B, Line 4)
    01NFC 3 Number of Form 5471 attached Form 1065, page 3, Schedule B, Line 19
    01IR1 6 Number of Form 8865 attached Form 1065, page 3, Schedule B, Line 17 (Line 9 on Form 1065-B)
    01ADC 9 Audit Code Form 1065, page 1, left margin next to Line 9. Form 1065-B, page 1, left margin next to Line 12.
    01SIC 1 Special Income Code Form 1065, page 1, left margin next to Line 9. Form 1065-B, page 1, left margin next to Line 12.
    01CRD 8 Correspondence Received Date N/A, no longer edited by C & E
    01ISI 1 Installment Sales Indicator Form 1065, page 1, left margin next to Line 9. Form 1065-B, page 1, left margin next to Line 12
    01NRL 1 Nonrecourse Loan Code Form 1065, page 1, left margin next to Line 9. Form 1065-B, page 1, left margin next to Line 12
    01MSC 2 Missing Schedule Code Form 1065, page 1, left margin next to Line 9. Form 1065-B, page 1, left margin next to Line 12
    01HSC 1 Historic Structure Code Form 1065, page 1, left margin next to Line 9. Form 1065-B, page 1, left margin next to Line 12.
    01SWC 1 Salary and Wage Code Form 1065, page 1, right margin next to Line 9. Form 1065-B, page 1, right margin next to Line 12
    01EP 1 EPMF (Employee Plans Master File) Code Form 1065, page 1, right margin next to Line 19. Form 1065-B, page 1, right margin next to Line 22
    01PSN 9 PTIN (Preparer Tax Identification Number)

    Note:

    For Tax Year 2009 and prior, field may indicate Preparer SSN (Social Security Number)

    Form 1065 and Form 1065-B, page 1, Preparer PTIN area
    01PEN 9 FIRM's Employer Identification Number Form 1065 and Form 1065-B, page 1, Preparer EIN area
    01CBI 1 Paid Preparer Checkbox Indicator Form 1065 and Form 1065-B, bottom page 1 to the right of signature date
    01PTN 10 Paid Preparer Phone Number Form 1065 and Form 1065-B, bottom page 1 below preparer EIN

Field 01NC - Name Control/Check Digit

  1. Description - Field 01NC is located in the entity section of Form 1065 and Form 1065-B.

  2. Valid Condition - Field 01NC has four positions and the valid characters are alpha, numeric, hyphen, ampersand and blank.

    • If a check digit is present, the computer makes an additional mathematical test of the EIN.

    • A check digit must have blanks in the first 2 positions and a letter other than "E" , "G" or "M" in the last 2 positions.

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

    • The first position is blank.

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

    • There are any intervening blanks between significant characters.

  4. Correction Procedures:

    1. Correct coding and transcription errors.

    2. Correct using the Check Digit, if present. Delete the entry in Field 01NC and enter the correct Check Digit.

    3. If the correct Check Digit cannot be determined, enter the Name Control.

    4. If the Name Control cannot be determined, research following instructions in Document 7071-A, Name Control Job Aid - For Use Outside of the Entity Area.

Field 01EIN - Employer Identification Number

  1. Description - Field 01EIN is located in the entity section of Form 1065 and Form 1065-B, Box "D" .

  2. Valid Condition - Field 01EIN must contain nine numeric digits.

  3. 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 zeroes or nines.

  4. Correction Procedures:

    1. Correct coding 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 cannot be determined,
      1. Research IDRS for the correct EIN using Command Code NAMEE/NAMEB.

      2. If located, enter the correct EIN. (See Figure 3.12.15-1)

      No EIN can be found,
      1. SSPND record with Action Code "320" .

      2. Route to Entity Control using Form 4227.

      3. Notate Form 4227"ASSIGN EIN" . (See Figure 3.12.15-1)

      Caution:

      Always ensure that the Name Control matches the Master File record whenever you change an EIN.

    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 when: three or less digits of the EIN are transposed, different, or missing; or INOLES indicates the account has been "Merged To" or "Merged From" ; or the EIN on the return is the taxpayer’s SSN and research shows there is no valid entity on Master File for that EIN.

Field 01EIN - Suspense Correction
  1. Determine if Entity Control has found the correct EIN.

    If... Then...
    Entity located the correct EIN, Enter in Field 01EIN
    Entity assigned an EIN,
    1. Enter in Field 01EIN.

    2. GTSEC 01 and enter the Entity Assignment Date (from the lower left corner of the return) in Field 01CRD if it is after the Return Due Date.

    Figure 3.12.15-1

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    Please click here for the text description of the image.

Field 01TXP - Tax Period

  1. Description - Field 01TXP is located on page 1, between Form Title and OMB Number of Form 1065 and Form 1065-B. Tax Period ending is printed in year (YYYY), month (MM) format e.g., Dec. 31, 2017 is printed 201712.

  2. Valid Condition - The Tax Period must be present and contain six numeric digits.

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

    • The Tax Period is not all numeric.

    • The last two digits (month) are not 01-12.

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

    • The Tax Year is equal to the current year (i.e., 2017), but the month is after the current processing month.

  4. Correction Procedures:

    1. Correct coding and transcription errors.

    2. Determine the correct Tax Period from Form 1065 and attachments.

    If... Then...
    The Tax Period cannot be located, Enter the current year.
    A non-final return and the tax period ending is equal to or later than the current year-month by not more than four months,
    1. SSPND 480.

    2. Attach Form 4227 and notate "EARLY FILED" .

    A non-final return and the Tax Period ending is later than the current year-month by four months or more,
    1. SSPND 211.

    2. Attach Form 3696 or other approved Correspondence Action Sheet and request confirmation of the Tax Period ending.

      Note:

      When confirmed, the return will be processed after the end of that Tax Period.

    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.

Field 01RCD - Received Date

  1. Description - Field 01RCD is a numeric field that is either the date stamped by Receipt and Control or edited by C & E.

    • The legal due date is the 15th day of the third month after the Tax Period ending.

    • Partnerships whose partners are all Nonresident Aliens must file their return by the 15th day of the sixth month following the close of the year.

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    • When the due date falls on a weekend or legal holiday, the return is timely if postmarked by the first business day following the due date.

  2. Consider the return timely if:

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

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ the postmark is on or before the legal due date.

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

  3. Valid Condition - Field 01RCD must be present and entered in "YYYYMMDD" format.

  4. 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 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)
  5. Correction Procedures:

    1. Correct coding and transcription errors.

      If... Then...
      The Received Date is invalid and it appears that the incorrect year was used (i.e., 20160115 instead of 20170115), and other information (Julian date, postmark date, and/or signature date) indicates that the Received Date should be a current year, Change the Received Date year to the current year.
      Multiple Received Dates are present,
      1. Use the earliest IRS stamped Received Date.

      2. Circle out all other dates.

      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. (See Figure 3.12.15-2)
      The Received Date cannot be determined, Determine the entry to Field 01RCD using the following priority order:
      1. Earliest legible postmark (e.g., U.S. Post Office, foreign postmark, or Private Delivery Service).

        Note:

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

        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. Revenue Officer's or other IRS official's signature date

      4. Signature date if within the current year (unless other information indicates signature date is invalid).

      5. DLN Julian date minus 10 days.

      6. Current date minus 10 days.

      Figure 3.12.15-2

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      Please click here for the text description of the image.

    2. A private delivery service (PDS) is a business that delivers packages. The "Timely Mailing as Timely Filing" rule now applies to some PDS. When the rule applies to a PDS, it is referred to as a "Designated" PDS. See IRM 3.10.72, Receiving, Extracting and Sorting for a list of designated private delivery services.

      Note:

      Private delivery services do not deliver to P.O. Boxes. Partnerships must use the U.S. Postal Service to mail items to an IRS P.O. Box address.

Field 01CCC - Computer Condition Code

  1. Description - Field 01CCC is an alpha or numeric field edited on the dotted portion of Line 1a, Form 1065 and Form 1065-B.

  2. Valid Condition - Valid characters are "A" , "B" , "D" , "F" , "G" , "I" , "L" , "O" , "Q" , "R" , "S" , "T" , "W" , "X" , "Y" , "1" , "2" , "3" , "4" , "5" , "6" , "7" , "8" and "9" .

  3. Correction Procedures - Correct Field 01CCC using the following procedures:

    If... Then...
    Field 01CCC was transcribed incorrectly, Enter the correct Computer Condition Code from the dotted portion of Line 1a on Page 1.
    The Computer Condition Code was edited incorrectly,
    1. Examine the document to determine the correct CCC.

    2. Enter the correct code in Field 01CCC and on the return. (See Figure 3.12.15-3)

    The Computer Condition Code(s) edited on Form 1065 or Form 1065-B is illegible or invalid,
    1. Examine the document to determine the correct CCC.

    2. Enter the correct code in Field 01CCC and on the return.

    No reply to correspondence or the correspondence was undeliverable, Enter "3" in Field 01CCC and on the return.
    CCC "G" is deleted from Field 01CCC,
    1. GTSEC to review all sections.

    2. Enter data where necessary.

    CCC "5" is present with a Computer Condition Code other than A, B, F, R, W, 4, 6 and/or 9, Delete the invalid Computer Condition Code(s).
    CCC "6" is present with a Computer Condition Code other than A, B, F, R, W, 4, 5, 8 and/or 9, Delete the invalid Computer Condition Code(s).

    Note:

    CCC "6" is not necessary if Computer Condition Codes F, 4, 5, or 8 are present. These Computer Condition Codes will also suppress the "Failure to File on Correct Media Penalty."

    CCC "8" is present with a Computer Condition Code other than A, B, F, R, W, 4, 6 and/or 9, Delete the invalid Computer Condition Code(s).
  4. Computer Condition Codes (CCCs) are assigned by tax examiners or are computer generated. Presence of one of the following Computer Condition Codes initiates action as explained below. Listed below are the valid Computer Condition Codes for Form 1065 and Form 1065-B.

    CCC Description
    A Date Business Started is blank.
    B Schedule M-3 is attached or Line J is checked "YES" .
    D Partnership provided Reasonable Cause for Failure to Pay Penalty

    Note:

    C & E has been instructed not to edit this Computer Condition Code unless instructed by Compliance on a Secured or Prepared return, or from Form 13133, Expedite Processing Cycle.

    F
    • Final return (Line J on Form 1065 or Form 1065-B is checked)

    • Nominee return

    • Accepted Section 761(a) election

    • Deceased

    • Dissolved

    • Liquidation

    • Out-of-Business

    • IRC 501(c)(3)

    • IRC 708(b)(1)(B)

    • Filed in accordance with Rev. Proc. 2003-84

    G Amended, corrected or superseding return.

    Note:

    CCC G is invalid if any other CCC is present exceptSTW and/or 3 and must have a Received Date.

    I Tax Period is 198106 or later andForm 6781, Gains and Losses from Section 1256 Contracts and Straddles, is attached.
    L Taxpayer writes Section 6114 Election on the return or Form 8833, Treaty-Based Return Position Disclosure Under IRC 6114 or IRC 7701(b), is attached.
    O Manual Refund/Settlement Freeze
    Q Return filed claiming Telephone Excise Tax (TETR) Only (Form 8913, Credit for Filing Telephone Excise Tax Paid)
    CCC "Q" is no longer edited by C & E. If CCC "Q" is edited in error by C & E, remove CCC "Q" .
    R
    • There is an indication such as "DO NOT ASSESS FAILURE TO FILE PENALTY " on a secured return annotated with "599"

    • "IRC 6032" or "Common Trust" is notated by the partnership

    • Partnership's electronic return was rejected and the postmark on the mailed is within 10 calendar days of rejection notification

    • The return is not received by the original return due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and there is no indication of any income, deductions or credits or partnership states it's inactive

    • Form 13133, Expedite Processing Cycle, is attached and Examination indicates application of the Condition Code

      Note:

      If Rev. Proc. 84-35 (10 or fewer partners) is notated on the return or on an attachment to the return, treat as a reason given by the partnership for delay in filing the return, 1382C should be issued.

    Reminder:

    All returns with an "R" Code must have an IRS Received Date. If not present, enter the IRS Received Date.

    S Form 8883, Asset Allocation Statement Under Section 338, is attached.
    T Form 8886, Reportable Transaction Disclosure Statement, is attached. Form 8886 is valid for Tax Periods 201301 and subsequent.

    Note:

    Form 8886 replaces Form 8271, Investor Reporting of Tax Shelter Registration Number. Form 8271 was valid for Tax Periods 200711 and prior.

    W Record cleared by Statute Control Unit.
    X
    • Prevents the refund of prepaid credits or credit offset on publicly traded partnerships.

    • Prevents the refund if Form 8697 or Form 8866 is attached and a dollar amount (interest due) is written by the Taxpayer in the bottom margin of Form 1065.

    • Prevents the refund of repayment of the Qualified Therapeutic Credit (QTDP). If Form 4255 is attached, See IRM 3.12.15.1

    Y Return was filed for a Short Period due to a change in accounting period.
    1 Form 8824, Like-Kind Exchanges, is attached.
    2 Form 8938, Statement of Specified Foreign Financial Assets, is attached. t
    3 Correspondence Received Date - reply is missing, incomplete or notice was undeliverable.
    4 IRC 6020(b)
    5 Common Trusts, IRC 6032
    • Box A, Principal Business Activity is notated with COMMON TRUST FUND, COMMON TRUST or NAICS Code 525920

    • IRC 6032 Common Trust Fund or similar notations marked within margins of Form 1065.

    Note:

    CCC "5" is valid with CCC "A" , "B" , "F" , "R" , "W" , "4" , "6" and/or "9" only.

    6 Suppresses the Failure to File on Correct Media Penalty when a Form 1065 is filed with 100 partners or more and any of the following conditions are present:
    • Inactive return

    • IRC 501d religious organization

    • Nominee Return

    • Substitute for Return (SFR)

    • Re-entry/re-input returns that have previously been e-filed.

    Note:

    CCC "6" is valid with CCC A, B, "F" , "R" , "W," "4" , "5" , "8" and/or "9" only.

    Note:

    CCC "6" is not necessary on MEF/e-filed returns.

    7 Reasonable Cause for failure to file a delinquent return was considered and denied.
    8 IRC 761(a)

    Note:

    CCC "8" is valid with CCC "A" , "B" , "F" , "R" , "W" , "4" , "6" and/or "9" only.

    9 Foreign Partnership (OSPC only)

    Note:

    Address on the return is foreign.

    Figure 3.12.15-3

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    Please click here for the text description of the image.

Field 01TXB - Tax Period Beginning

  1. Description - Field 01TXB is located to the left/near the title of Page 1, Form 1065 or Form 1065-B. The Tax Period Beginning Date is printed in YYYYMMDD format, e.g., September 1, 2017 is printed 20170901.

  2. Valid Condition - The Tax Period Beginning Date must be present if the return is a "Final" or a "Short Period" . The Tax Period Beginning date must be eight numeric digits.

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

    • The Tax Period beginning date is not all numeric.

    • The last two digits (month) are not 01-12.

    • The Tax Period beginning date is later than Tax Period end date (e.g., if tax period is 201212 and Tax Period beginning date is 1/1/2013 or later).

    • The Tax Period beginning date is earlier than 12 months before Tax Period end date (e.g., if tax period is 201712, and Tax Period beginning date is 11/01/2016 or earlier)

  4. Correction Procedures:

    1. Correct coding and transcription errors.

    2. Determine the correct Tax Period beginning from Form 1065 or Form 1065-B. If its an "Initial return" , use the Date Business Started from the face of the Form 1065 entered in box E located to the right of the entity. For "Final" or "Short Period" returns, refer to the IF/THEN table in Error Code 008 for resolution.

      Reminder:

      An "Initial Return" cannot be filed using Form 1065-B.

Field 01NAI - North American Industry Code System (NAICS)

  1. Description - Field 01NAI is a numeric field located on page 1, Box "C" of Form 1065 and Form 1065-B. The NAICS code identifies the partnership Principal Business Activity.

  2. Valid Condition:

    • Six numeric digits within a range of 000001-999000 on all full length records.

    • Blanks on all short length records. (See IRM 3.12.15.1.22.1)

  3. Invalid Condition:

    • Not numeric

    • Entry not within range of 000001-999000 for full length records.

    • Entry present and Section 02 is not present.

    • Entry contains six of the same digit.

  4. Correction Procedures - Determine the correct NAICS Code in the following order:

    1. Form 1065 or Form 1065-B, Box "C" , Business Code Number.

    2. Form 1065 or Form 1065-B, Box "A" , Principal Business Activity.

    3. Form 1065 or Form 1065-B, Box "B" , Principal Product or Service.

    If... Then...
    The box "C" is complete, Enter the NAICS Code if present.
    The correct code cannot be determined on a full length record,
    • If you cannot make the determination enter "999000" in Field 01NAI. (Figure 3.12.15-4)

    Field 01NAI is present on Short Record returns (Section 02 is not required), Delete the entry.
    Return is a Prior Year return with a Principal Industry Activity (PIA) Code or a PIA code with leading zeroes,
    1. If the NAICS Code cannot be determined, edit NAICS Code "999000" in Field 01NAI.

    Field 01NAI is present and Section 02 was not entered when required, Enter Section 02.

    Figure 3.12.15-4

    This is an Image: 33655004.gif
     

    Please click here for the text description of the image.

Field 01DOB - Date Business Started

  1. Description - Field 01DOB is a numeric field located on page 1, Box "E" of Form 1065 and Form 1065-B.

    • Date Business Started is entered in year (YYYY), month (MM) format e.g., Dec. 31, 2013 is printed 201312.

  2. Valid Condition:

    • Valid characters are numeric only.

    • Field 01DOB may be blank.

  3. Invalid Condition:

    • The Date Business Started is not all numeric or blank.

    • The last two digits (month) are not 01-12.

  4. Correction Procedures:

    If... Then...
    Field 01DOB was transcribed or coded incorrectly, Enter the correct date from page 1, Box "E" . (Figure 3.12.15-5)
    A month is present but a year is not present, Enter "1950" for the year.
    A year is present but a month is not present, Enter "01" for the month.
    A year and month is not present in Box "E" or cannot be determined, DO NOT enter any data in Field 01DOB. Enter Computer Condition Code "A" in Field 01CCC.
    The partnership enters a future date as Date Business Started, DO NOT enter any data in Field 01DOB. Enter Computer Condition Code "A" in Field 01CCC.

    Figure 3.12.15-5

    This is an Image: 33655005.gif
     

    Please click here for the text description of the image.

Field 01NOP - Number of Partners

  1. Description - Field 01NOP is located on page 1, Line I on Form 1065 and Form 1065-B.

    • This entry consists of the number of Schedules K-1 attached to the return.

    • It can be used to determine the number of partners in the partnership.

  2. Valid Condition:

    • Must be numeric, 2 through 999,999. See Figure 3.12.15-6.

  3. Invalid Condition:

    • Not numeric.

  4. Correction Procedures:

    1. Correct coding and transcription errors.

    2. If Form 1065, Line I (i) is zero or blank, check the return and attachments for any indication of the number of partners and enter in Field 01NOP.

    3. If the number of partners is not found, follow the procedures below:

      If... And... Then...
      Amended return ("G" Coded),   GTSEC 01 and enter "G" in Field 01CCC.
      "Final" return,  
      1. GTSEC 01 and enter "F" in Field 01CCC.

      2. Enter "2" in Field 01NOP.

      IRC 736 or Treas. Reg. 1.736-1 (Payment to a retiring partner),   Enter "2" Field 01NOP.
      Reinput/Re-entry document,   Enter "2" in Field 01NOP.
      Returns filed for Tax Periods prior to 200812,   Enter "2" in Field 01NOP.
      IRC 501(d) return (Religious and Apostolic Organizations),   Enter "2" in Field 01NOP.
      IRC 6020(b),  
      1. GTSEC 01 and enter "4" in Field 01CCC.

      2. Enter "6" in Field 01NOP.

      Short Record return, See IRM 3.12.15.1.22.1 for a description of a Short Record,   Enter "2" in Field 01NOP.
      Form 1065, Line 22 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Form 8825 is attached, and Line 21 on Form 8825 falls between $400 negative (-) and $400 positive (+), Enter 2 in Field 01NOP.
      Form 1065, Line 22 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , Form 8825 is not attached, Enter "2" in Field 01NOP.
      ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ (1) If Schedule K-1s are attached, enter the number of Schedule K-1s to Field 01NOP and continue processing.
      (2) If Schedule K-1s are not attached, and there is no indication C&E issued Letter 1355C for the missing Schedule K-1s, then:
      • GTSEC 01 and enter "33" in Field 01MSC.

      • enter "2" in Field 01NOP.

      Form 1065, Line 22 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , Form 8825 is not attached,
      1. Review the return and attachments for Schedule K-1s or an indication C&E issued Letter 1355C for missing Schedule K-1s. and/or missing Form 8825, if needed, etc.

        Note:

        C&E is instructed to notate in the lower right hand corner of Form 1065 or Form 1065-B if they issue Letter 1355C

      2. If Schedule K-1s are attached, enter the number of Schedule K-1s to Field 01NOP and continue processing.

      3. If there is no indication Letter 1355C was sent, then:

        • GTSEC 01 and enter "33" in Field 01MSC.

        • enter "2" in Field 01NOP.

      Form 1065, Line 22 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , Form 8825 is attached,
      1. Review the return and attachments for Schedule K-1s or, an indication C&E issued Letter 1355C, e.g. for missing Schedule K-1s. and any other condition, such as missing schedule, missing signature, etc.

        Note:

        C & E is instructed to notate in the lower right hand corner of Form 1065 or Form 1065-B if they issue Letter 1355C

      2. If there is no Schedule K-1s and no indication Letter 1355C was sent, then:

        • GTSEC 01 and enter "33" in Field 01MSC.

        • enter "2" in Field 01NOP.

    4. If the partnership indicates that the number of Schedules K-1 is "1" or the attached Schedule K-1 shows 100% interest in the partnership, follow the procedures below:

      If... Then...
      Schedule K-1 shows two names in the partners' Name and Address Section, Correspond requesting Schedule K-1s for each partner using Letter 1355C.
      Partnership entity section indicates:
      • "Limited Partnership" (LP)

      • "Limited Liability Partnership" (LLP)

      • "Limited Liability Company" (LLC)

      • "Limited Liability Land Trust" (LLLT)

      • "Unincorporated Business Organization" (UBO) or

      • "2" , "3" or "4" is present in Field 01LPC,

      1. GTSEC 01 and enter CCC "F" in Field 01CCC.

      2. Enter "2" in Field 01NOP.

      3. Advise the taxpayer that we are deleting the partnership filing requirement with a non-suspense Letter 3733C.

      Partnership indicates payment to a retired or deceased partner or cites IRC 736 or Treasury Regulations 1.736–1, Enter "2" in Field 01NOP.
      The partnership indicates this is a "Final" Return,
      1. GTSEC 01 and enter CCC "F" in Field 01CCC, if necessary.

      2. Enter 2 in Field 01NOP.

      The partnership does not indicate this is a final return or does not notate:
      • IRC 736 or Treas. Reg. 1.736-1

      • "Limited Liability Partnership" (LLP)

      • "Limited Liability Company" (LLC)

      • "Limited Liability Land Trust" (LLLT)

      • "Unincorporated Business Organization" (UBO),

      Correspond informing the partnership that the partnership cannot have one partner and ask for an explanation using Letter 1355C.
      The partnership submits a response to our request for Schedule K-1s,
      1. Change the number of Schedules K-1 to the number provided by the partnership.

      2. Write the DLN of the parent return in the upper left corner of the first Schedule K-1.

      3. Place Schedules K-1 in a gusset folder.

      4. Forward the folder with the K-1s to Batching & Numbering to process the Schedule K-1s.

    Figure 3.12.15-6

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Field 01IRC - Initial Return Code

  1. Description - Field 01IRC is edited to the left of Line G, page 1 of Form 1065. (See Figure 3.12.15-7)

  2. Valid Condition - Blank or "2" .

  3. Invalid Condition - Entries other than "2" or blank.

  4. Correction Procedures -

    1. Correct coding and transcription errors. C & E will edit to the left of Line G. (See Figure 3.12.15-7)

    2. Field 01IRC must contain a "2" if any of the following conditions is present:
      • Page 1, Box E has a Date Business Started that is within 12 months from the Tax Period ending date.
      • The "Initial Return" box on Line G is checked.
      • There is a taxpayer notation of "Initial Filing" , such as, "FIRST RETURN" , "NEW PARTNERSHIP" , etc.

    Figure 3.12.15-7

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Field 01TT - Technical Termination

  1. Description - Field 01TT is located on Line G, Box (6) Technical termination - also check (1) or (2), page 1 of Form 1065.

  2. Valid Condition - Blank or "1" .

  3. Invalid Condition - Entries other than "1" or blank.

  4. Correction Procedures:

    If... Then...
    Box (6) on Line G is checked and boxes (3), (4), or (5) are not checked, Enter "1" in Field 01TT.
    Box (6) on Line G is not checked Leave Field 01TT blank.

Field 01AMC - Accounting Method Code

  1. Description -Field 01AMC is located on Line H, page 1 of Form 1065 and Form 1065-B.

  2. Valid Condition - Entry must be numeric or blank.

  3. Invalid Condition - Field 01AMC will generate as an error if the Accounting Method Code is other than "1" , "2" , "3" or blank.

  4. Correction Procedures:

    1. Correct coding and transcription errors.

    2. Code Field 01AMC as follows:

      If... Then...
      "Cash" box is checked, Enter "1" in Field 01AMC.
      "Accrual" box is checked, Enter "2" in Field 01AMC.
      "Other" box is checked, Enter "3" in Field 01AMC.
      No box is checked, Leave Field 01AMC blank.

Field 01M3 - Schedule M-3

  1. Description - Field 01M3 is located on Line J, page 1 of Form 1065 and Form 1065-B.

  2. Valid Condition - "1" or blank.

  3. Invalid Condition - Entries other than "1" or blank.

  4. Correction Procedures:

    If... Then...
    Box (J) is checked Enter "1" in Field 01M3.
    Box (J) is not checked Leave Field 01M3 blank.

Field 01LPC - Limited Partnership Code

  1. Description - Field 01LPC is located on Page 2, Schedule B, Line 1 of Form 1065 and Form 1065-B.

  2. Valid Condition - Must be blank or numeric "1" , "2" , "3" , "4" , "5" or "6" .

  3. Invalid Condition - Entry other than "1" , "2" , "3" , "4" , "5" , "6" or blank.

  4. Correction Procedures:

    1. Correct coding and transcription errors. If Field 01LPC was transcribed incorrectly, enter the correct code from Page 2, Schedule B, Line 1. (See Figure 3.12.15-8)

    2. Determine the correct code as follows:

      If... Then...
      The "Domestic General Partnership" box is checked Enter "1" in Field 01LPC.
      The "Domestic Limited Partnership" box is checked Enter "2" in Field 01LPC.
      The "Domestic Limited Liability Company" box is checked Enter "3" in Field 01LPC.
      The "Domestic Limited Liability Partnership" box is checked Enter "4" in Field 01LPC.
      The "Foreign Partnership" box is checked Enter "5" in Field 01LPC.
      The "Other" box is checked Enter "6" in Field 01LPC.
      Multiple boxes are checked Enter code for the first box checked.
      No box is checked Leave blank.

    Figure 3.12.15-8

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Field 01DPC - Dual Partner Code

  1. Description - Field 01DPC is based on the partnership response to the question on Page 2, Schedule B, Line 2 of Form 1065 and Form 1065-B.

  2. Valid Condition:

    • Blank or numeric.

    • "1" , "2" , "3" or blank on full length records.

    • Blank on short length records.

  3. Invalid Condition:

    • Other than "1" , "2" , "3" or blank on full length records.

    • Other than blank on short length records.

  4. Correction Procedures:

    If... Then...
    Field 01DPC was transcribed incorrectly, Enter the correct Dual Partner Code from Page 2, Schedule B Line 2.
    The "YES" box is checked, Enter "1" in Field 01DPC. Verify "4" is present in Field 01ADC.
    The "NO" box is checked, Enter "2" in Field 01DPC.
    Both boxes are checked, Enter "3" in Field 01DPC.
    Neither box is checked, Leave Field 01DPC blank.
    1. If Schedule B is not attached and the tax year is 1991 and subsequent, determine and correct Field 01DPC as follows:

      If... Then...
      Schedule K-1 is attached and Question I (i) indicates type of entity is "Partnership" (Question K on Tax Years 2004-2006, Question B on Tax Years 1993-2003 or Question C on Tax Years 1991-1992), Enter "1" in Field 01DPC.
      Schedule K-1 is not attached, Enter "2" in Field 01DPC.

Field 01MPC - Multi-Partner Code

  1. Description - Field 01MPC is based on the partnership response to the question on Page 2, Schedule B, Line 3 on Form 1065-B.

  2. Valid Condition:

    • Must be numeric or blank.

    • "1" , "2" , "3" , or blank for full length records.

    • Blank on short length records.

  3. Invalid Condition:

    • Not numeric or blank.

    • Other than "1" , "2" , "3" , or blank on full length records.

    • Other than blank on short length records.

  4. Correction Procedures:

    If... Then...
    Field 01MPC was transcribed incorrectly, Enter the correct Multi-Partner Code from Page 2, Schedule B, Line 3 on Form 1065-B.
    The "YES" box is checked, Enter "1" in Field 01MPC.
    The "NO" box is checked, Enter "2" in Field 01MPC.
    Both boxes are checked, Enter "3" in Field 01MPC.
    Neither box is checked, Leave Field 01MPC blank.
    1. If Schedule B is not attached and the tax year is 1991 and subsequent, examine the return and attachments for Form 8865, Information Return of U.S. Persons With Respect to Certain Foreign Partnerships. Determine and correct Field 01MPC as follows:

    If... Then...
    Form 8865 is attached, Enter "1" in Field 01MPC.
    Form 8865is not attached, Enter "2" in Field 01MPC.

Field 01FDC - Foreign/Domestic Corporation Code

  1. Description - Field 01FDC is based on the partnership response to the question on page 2, Schedule B, Line 3a of Form 1065.

  2. Valid Condition:

    • Blank or numeric

    • "1" , "2" , "3" or blank on full length records

    • Blank on short length records

  3. Invalid Condition:

    • Other than "1" , "2" , "3" or blank on full length records

    • Other than blank on short length records

  4. Correction Procedures:

    If... Then...
    Field 01FDC was transcribed incorrectly, Enter the correct Foreign Domestic Corporation Code from Page 2, Schedule B. Line 3a.
    The "Yes" box is checked, Enter "1" in Field 01FDC.
    The "No" box is checked, Enter "2" in Field 01FDC.
    Both boxes are checked, Enter "3" in Field 01FDC.
    Neither box is checked, Leave Field 01FDC blank.

Field 01INE - Individual/Estate Ownership Code

  1. Description - Field 01INE is based on the partnership response to the question on page 2, Schedule B, Line 3b of Form 1065.

  2. Valid Condition:

    • Blank or numeric

    • "1" , "2" , "3" or blank on full length records

    • Blank on short length records

  3. Invalid Condition:

    • Other than "1" , "2" , "3" or blank on full length records

    • Other than blank on short length records

  4. Correction Procedures:

    If... Then...
    Field 01INE was transcribed incorrectly, Enter the correct Individual/Estate Ownership Code from Page 2, Schedule B. Line 3b.
    The "Yes" box is checked, Enter "1" in Field 01INE.
    The "No" box is checked, Enter "2" in Field 01INE.
    Both boxes are checked, Enter "3" in Field 01INE.
    Neither box is checked, Leave Field 01INE blank.

Field 01PCS - Ownership of Foreign or Domestic Corporation Code

  1. Description - Field 01PCS is based on the partnership response to the question on page 2, Schedule B, Line 4a of Form 1065.

  2. Valid Condition:

    • Blank or numeric

    • "1" , "2" , "3" or blank on full length records

    • Blank on short length records

  3. Invalid Condition:

    • Other than "1" , "2" , "3" or blank on full length records

    • Other than blank on short length records

  4. Correction Procedures:

    If... Then...
    Field 01PCS was transcribed incorrectly, Enter the correct Ownership of Foreign or Domestic Corporation Code from Page 2, Schedule B. Line 4a.
    The "Yes" box is checked, Enter "1" in Field 01PCS.
    The "No" box is checked, Enter "2" in Field 01PCS.
    Both boxes are checked, Enter "3" in Field 01PCS.
    Neither box is checked, Leave Field 01PCS blank.

Field 01DPT - Ownership of Foreign Partnership or Trust Code

  1. Description - Field 01DPT is based on the partnership response to the question on page 2, Schedule B, Line 4b of Form 1065.

  2. Valid Condition:

    • Blank or numeric

    • "1" , "2" , "3" or blank on full length records

    • Blank on short length records

  3. Invalid Condition:

    • Other than "1" , "2" , "3" or blank on full length records

    • Other than blank on short length records

  4. Correction Procedures:

    If... Then...
    Field 01DPT was transcribed incorrectly, Enter the correct Ownership of Foreign Partnership or Trust Code from Page 2, Schedule B. Line 4b.
    The "Yes" box is checked, Enter "1" in Field 01DPT.
    The "No" box is checked, Enter "2" in Field 01DPT.
    Both boxes are checked, Enter "3" in Field 01DPT.
    Neither box is checked, Leave Field 01DPT blank.

Field 01PTT - Partnership Level Tax Treatment Election Code

  1. Description - Field 01PTT is based on the partnership response to the question on page 2, Schedule B, question 5 of Form 1065.

  2. Valid Condition:

    • Blank or numeric

    • "1" , "2" , "3" or blank on full length records

    • Blank on short length records

  3. Invalid Condition:

    • Other than "1" , "2" , "3" or blank on full length records

    • Other than blank on short length records

  4. Correction Procedures:

    If... Then...
    Field 01PTT was transcribed incorrectly, Enter the correct Partnership Level Tax Treatment Election Code from Page 2, Schedule B. question 5.
    The "Yes" box is checked, Enter "1" in Field 01PTT.
    The "No" box is checked, Enter "2" in Field 01PTT.
    Both boxes are checked, Enter "3" in Field 01PTT.
    Neither box is checked, Leave Field 01PTT blank.

Field 01DPA - Distribution of Property Code

  1. Description - Field 01DPA, Distribution of Property Code, is based on the partnership response to the question 12a on Schedule B of Form 1065.

  2. Valid Condition - Numeric or blank.

  3. Invalid Condition - Other than "1" , "2" , "3" or blank.

  4. Correction Procedures:

    If... Then...
    Field 01DPA was transcribed incorrectly, Enter the correct Distribution of Property Code from Page 3, Schedule B, Line 12a.
    The "YES" box is checked,
    1. Enter "1" in Field 01DPA.

    2. Verify "7" is present in Field 01ADC.

    3. If not present, enter "7" in Field 01ADC.

    The "NO" box is checked, Enter "2" in Field 01DPA.
    Both boxes are checked,
    1. Enter "3" in Field 01DPA.

    2. Verify "7" is present in Field 01ADC.

    3. If not present, enter "7" in Field 01ADC.

    Neither box is checked, Leave Field 01DPA blank.
    Prior to 199512, DO NOT code.

Field 01DRE - Form 8858 Attached

  1. Description - Field 01DRE is based on the partnership entry on page 3, Schedule B, Line 15 on Form 1065.

  2. Valid Condition - Numeric or blank.

  3. Invalid Condition:

    • No numeric

    • Entry other than "0" through "999999 "

  4. Correction Procedures:

    If... Then...
    Field 01DRE was transcribed incorrectly, Enter the correct number of Form 8858 attached from Page 3, Schedule B, Line 15.
    The entry is greater than "1" ,
    1. Verify "2" is present in Field 01ADC.

    2. If not present, enter "2" in Field 01ADC.

Field 01FPI - Form 8805 Attached

  1. Description - Field 01FPI is based on the partnership entry on page 3, Schedule B, Line 16 on Form 1065.

  2. Valid Condition - Numeric or blank.

  3. Invalid Condition:

    • No numeric

    • Entry other than "0" through "999999"

  4. Correction Procedures:

    If... Then...
    Field 01FPI was transcribed incorrectly, Enter the correct number of Form 8805 attached from Page 3, Schedule B. Line 16.
    The entry is greater than "1" ,
    1. Verify 2 is present in Field 01ADC.

    2. If not present, enter "2" in Field 01ADC.

Field 01FPC - Foreign Partner Code

  1. Description - Field 01FPC, Foreign Partner Code, is based on the partnership response to the question 16 on Schedule B on Form 1065 (Line 4 on Form 1065-B), "Does this partnership have any foreign partners?"

  2. Valid Condition - Numeric or blank.

  3. Invalid Condition - Entries other than "1" , "2" , "3" , or blank.

  4. Correction Procedures:

    If... Then...
    Field 01FPC was transcribed incorrectly, Enter the correct Foreign Partner Code from Page 2, Schedule B, Line 16 (Line 4 on Form 1065-B).
    The "YES" box is checked,
    1. Enter "1" in Field 01FPC.

    2. Verify "2" is present in Field 01ADC.

    3. If not present, enter "2" in Field 01ADC.

    The "NO" box is checked, Enter "2" in Field 01FPC.
    Both boxes are checked, Enter "3" in Field 01FPC.
    Neither box is checked, Leave Field 01FPC blank.

    Figure 3.12.15-9

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Field 01IR1 - Form 8865 Attached

  1. Description - Field 01IR1 is located on Page 2, Schedule B, Line 17 on Form 1065 (Line 9 on Form 1065-B).

  2. Valid Condition - Numeric or blank.

  3. Invalid Condition:

    • Not numeric.

    • Entry other than "0" through "999999" .

  4. Correction Procedures:

    If... Then...
    Field 01IR1 was transcribed incorrectly, Enter the correct number from Page 2, Schedule B, Line 17 (Line 9 on Form 1065-B).
    Field 01IR1 has an entry greater than "1" ,
    1. Verify "2" is present in Field 01ADC.

    2. If not present, enter "2" in Field 01ADC.

Field 01NFC- Form 5471 Attached

  1. Description - Field 01NFC is located on page 3, Schedule B, Line 19 on Form 1065.

  2. Valid Condition - Numeric or blank.

  3. Invalid Condition:

    1. Not numeric.

    2. Entry other than zero (0) to 999.

  4. Correction Procedures-

    If... Then...
    Field 01NFC was transcribed incorrectly, Enter the correct number from page 3, Schedule B, Line 19.

Field 01ADC - Audit Code

  1. Description - Field 01ADC is a numeric field edited in the left margin next to Line 9 of Form 1065 (Line 12 of Form 1065-B). Identified by "1 -" followed by the appropriate audit code(s). Audit Codes are used to identify specific conditions requested by Examination.

  2. Valid Condition:

    • Numeric (maximum of nine codes).

    • Must be "1" , "2" , "3" , "4" , "5" , "6" , "7" , "8" , "9" or blank.

    • Field 01ADC may be present on short length records.

  3. Invalid Condition:

    • Not numeric or blank.

    • More than nine Audit Codes used at one time.

    • A digit or character appears after the first blank.

  4. Correction Procedures:

    If... Then...
    Field 01ADC was transcribed incorrectly, Enter the correct code from the left margin next to Line 9.
    The Audit Code was coded incorrectly, Complete one of the following:
    1. Delete any invalid digits or characters.

    2. Delete any duplicate digits or characters.

    3. Delete any blanks between valid digits.

    4. Re-edit following the instructions below.

    Audit Code Enter when any of the following conditions exist
    1
    • Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR), is attached.

    • Form 8275 or Form 8275-R, Disclosure Statement, is attached or statement referring specifically to IRC 6662 (Disclosure) or IRC 707 (Disguised Sale).

    • Form 8886, Reportable Transaction Disclosure Statement, is attached.

    • Section 761(a) election that is "Selected" by Examination.

    • Form 1065 contains the notation "Disregarded Entity" in the header or entity portion of the return (on Page 1, Form 1065).

    2
    • Form 1065, page 2, Schedule B, Box 1(e), Foreign Partnership is checked.

    • Form 1065, page 3, Schedule B, Line 11 (Foreign Trust), is answered "YES"

    • Form 1065, page 3, Schedule B, Line 15 (Field 01DRE) has an entry≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • Form 1065, page 3, Schedule B, Line 16 (Field 01FPI) has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or Field 01FPC is answered "YES" .

    • Form 1065, page 3, Schedule B, Line 17 (Field 01IR1) has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    • Form 1065, page 4, Schedule K, Line 16(l) (Total Foreign Taxes) has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    • Form 1065-B, page 2, Schedule B, Box 1(e), Foreign Partnership, is checked.

    • Form 1065-B, page 2, Schedule B, Line 3, is answered "YES" .

    • Form 1065-B, page 2, Schedule B, Line 4 (Field 01FPC) is answered "YES" .

    • Form 1065-B, page 2, Schedule B, Line 8 is answered "YES"

    • Form 1065-B, page 2, Schedule B, Line 9 (Field 01IR1) is greater than 0 (zero).

    • Form 5471, Information Return of U.S. Persons with Respect to Certain Foreign Corporations, is attached.

    • Form 5472, Information Return of a 25% Foreign Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business, is attached.

    • Form 5713, International Boycott Report, is attached and both questions in 7(f) are answered "YES" .

    • Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund, is attached and Part V, Lines 15a - 16f, has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ (For Tax Year 2011 and prior, refer to Part IV, Lines 10a - 11f)

    • Form 8804, Annual Return for Partnership Withholding Tax (Section 1446), is attached.

    • Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, is attached.

    • Form 8813, Partnership Withholding Tax Payment Voucher (Section 1446), is attached.

    • Form 8832, Entity Classification Election, is attached and either box 6(d), (e) or (f) is checked.

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

    • Form 8858, Information Return of U.S. Persons With Respect to Foreign Disregarded Entities, is attached.

    • Form 8865, Information Return of U.S. Persons With Respect to Certain Foreign Partnerships, is attached.

    3 Form 1065, page 4, Schedule K, Lines 19a or 19b ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    4
    • Form 1065, page 4, Schedule K, Line 9c ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 1065, Page 4, Schedule K, Line 10 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    • Form 1065, Schedule B, Question 2 (Dual Partner Code) is present and the YES box is checked.

    5
    • Form 8283, Noncash Charitable Contributions, is attached and Page 2, Part I, Question 4, Art (contribution of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ), Box (a) (Rev 2013) is checked. (For prior year form See Page 2, Part II, Question 2, Box "1" ) or

    • Form 8283, Noncash Charitable Contributions, is attached and Page 2, Part I, Question 5, Column (c) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . (For prior year form See Page 2, Part II, Question 3, Column (c)).

    • Form 8594, Asset Acquisition Statement, is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • Form 8883, Asset Allocation Statement Under Section 338, is attached and the amount in Part IV, Box 5a, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    6 Form 3115, Application for Change in Accounting Method, is attached.
    7
    • Form 1065, page 3, Question 12a (Field 01DPA) is answered YES.

    • Form 1065, page 4, Line 16l, Total Foreign Taxes, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • Form 5713, International Boycott Report, is attached and either one or both questions in 7(f) is not answered "YES" .

    • Form 8621, Information Return by a Shareholder of a Passive Foreign Investment Company or Qualified Electing Fund, is attached and Part V, Lines 15a - 16f has an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ (For Tax Year 2011 and prior, refer to Part IV, Lines 10a - 11f.)

    8 Schedule M-3, Net Income (Loss) Reconciliation for Certain Partnerships, is attached.

    Caution:

    All returns with a Schedule M-3 attached must be sent to Ogden for processing.

    9 Schedule M-2, Line 5c (Property Distribution), ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Field 01SIC - Special Income Code

  1. Description - Field 01SIC is edited in the left margin next to Line 9 of Form 1065 (Line 12 of Form 1065-B) as "2 - 1" if any income line on the return reflects a line entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. Valid Condition - Valid characters are "1" and blank.

  3. Invalid Condition - Field 01SIC will generate as an error if the Special Income Code is other than "1" or blank.

  4. Correction Procedures:

    1. Correct coding and transcription errors.

    2. If any income line on the return reflects a line entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ the Special Income Code must be "1" .

Field 01CRD - Correspondence Received Date

  1. Description - Field 01CRD is a numeric field located on the partnership reply to correspondence.

  2. Valid Condition - Field 01CRD must be numeric and in MMDDYYYY format.

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

    • Not numeric.

    • Not in MMDDYYYY format.

  4. Correction Procedures:

    1. Correct coding and transcription errors.

    2. Determine the CRD from the date the reply was received at the campus. If the reply was not date stamped, use the U.S. Postal Service postmark date on the envelope attached to the reply.

      Note:

      For certified mail only - If a postmark is not present, look for a "USPS.com Track & Confirm" record that has been attached to the return (should be before the envelope. See Figure 3.12.15-7). Use the Acceptance date on the record to determine timeliness, follow normal editing procedures. If the "USPS.com Track & Confirm" record is not attached, no action is required.

    3. If more than one CRD is present, use the CRD that made the return complete and processable.

    4. Do not enter the CRD when any of the following conditions are present:

      Do not enter CRD
      • The correspondence was received prior to the due date of the return

      • The correspondence was required because of an IRS processing error, for example, a request for a return or schedule that we lost during processing

      • The correspondence was not necessary

      • The correspondence was issued in error

    5. If the reply was missing, incomplete or the notice was undeliverable, enter CCC "3" in Field 01CCC.

      Note:

      If there is an indication that Entity Control has assigned an EIN to the return, enter the entity assignment date found in the lower left-hand corner of the return, in Field 01CRD if it is later than the actual Correspondence Received Date.

Field 01ISI - Installment Sales Indicator

  1. Description - Field 01ISI is edited in the left margin next to Line 9 of Form 1065 (Line 12 of Form 1065-B) as "3 -" followed by the appropriate code when Form 6252, Computation of Installment Sales Income, is attached.

  2. Valid Condition - Numerics "1" , "2" , "3" or blank.

    Exception:

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

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

  4. Correction Procedures:

    1. Correct coding and transcription errors.

    2. Examine the return and attachments to determine the correct code.

    3. Delete the incorrect entry and enter the correct code on the screen and in the left margin next to Line 9 as "3 -" followed by the correct code.

    4. If a code cannot be determined, leave Field 01ISI 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" .

Field 01NRL - Nonrecourse Loan Code

  1. Description - Field 01NRL is edited in the left margin next to Line 9 of Form 1065 (Line 12 of Form 1065-B) as "4 -1" when there is an entry on Schedule L, Line 18, Columns (b) or (d) and/or Schedule K-1, Question M (Schedule L, Line 18, Columns (b) or (d) on Form 1065-B).

  2. Valid Condition - Valid entries are "1" or blank.

    • Code "1" if there is an amount other than zero on Schedule L, Line 18, Columns (b) or (d) or when there is an attachment that indicates a Nonrecourse Loan.

  3. Invalid Condition - Field 01NRL will generate as an error if the Nonrecourse Loan Code is other than a "1" or blank.

  4. Correction Procedures:

    1. Correct coding and transcription errors.

    2. Examine the return and attachments to determine the correct code.

    3. If a code is not present, delete the entry.

Field 01MSC - Missing Schedule Code

  1. Form 1065 will be charged penalties for not providing a complete return. Code and Edit (C&E) will be responsible for initiating correspondence when needed, requesting the missing information, and ERS will be responsible for coding Field 01MSC appropriately if the missing information is not received.

  2. Enter Field 01MSC whenever the taxpayer does not respond to our request for missing information. See the chart below for the correct code:

    MSC Missing Schedule(s)
    33 Schedule K-1
    34 Schedule L (Balance Sheet)
    36 Schedule K-1 and Schedule L
    45 Schedule K
    46 Schedule K and Schedule K-1
    47 Schedule K and Schedule L
    49 Schedule K, Schedule K-1 and Schedule L
  3. Invalid Condition - Field 01MSC will generate as an error when any of the following conditions exist:

    • Field 01MSC is invalid if it is not numeric and not one of the Missing Schedule Codes shown above.

    • The same Missing Schedule Code appears more than once.

    • The Missing Schedule Code does not begin in the first position of the field.

    Note:

    There is always a possibility that a Missing Schedule Code is edited by C & E. However, employees working the suspense files of the Error Resolution System (ERS) must enter the appropriate code based on the response received from the taxpayer.

  4. Correction Procedures:

    1. Correct all coding and transcription errors.

  5. Suspense Procedures:

    If... Then...
    Taxpayer responds with missing information, Enter Correspondence Received Date in Field 01CRD and continue processing.
    Taxpayer does not respond, Enter appropriate Missing Schedule Code in Field 01MSC as shown in (2) above.
    Taxpayer does not provide missing TINs on Schedule K-1, Enter Missing Schedule Code "33" in Field 01MSC and continue processing.
    Taxpayer provides missing K-1s and/or missing TINs, Write the DLN of the return on the first Schedule K-1, in the upper left hand corner, then detach and send for processing. Enter Correspondence Received Date in Field 01CRD.

    Caution:

    Enter missing TINs on each Schedule K-1 before detaching for processing.

Field 01HSC - Historic Structure Code

  1. Description - Field 01HSC is edited in the left margin next to Line 9 of Form 1065 (Line 12 of Form 1065-B) as "6 - 3" when there is an entry on Form 3468 (Investment Credit) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

  2. Valid Condition - Valid Historic Structure Codes are "3" and blank.

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

  4. Correction Procedures:

    1. Correct coding and transcription errors.

    2. Determine the correct code from the return and attachments.

      If... And... Then...
      The tax year is 2016 or subsequent, There is an amount on Form 3468, Part III, Line 11e or f, Enter 3 in Field 01HSC.
      The tax year is 2010 to 2015, There is an amount on Form 3468, Part III, Line 11e, f, g, h, i, or j, Enter "3" in Field 01HSC.
      The tax year is 2008 or 2009, There is an amount on Form 3468, Part III, Line 10e, f, g, h, i, or j, Enter "3" in Field 01HSC.
      The tax year is 2006 or 2007, There is an amount present on Form 3468, Line 1e, f, g, or h, Enter "3" in Field 01HSC.
      The tax year is 1996 to 2005, There is an amount present on Form 3468, Part I, Line 1b or 1c, Enter "3" in Field 01HSC.
      The tax year is 2008 and prior, Form 3468 is not attached, Leave Field 01HSC blank.

Field 01SWC - Salary and Wage Code

  1. Description - Field 01SWC is edited in the right margin next to Line 9 of Form 1065 (Line 12, Form 1065-B).

  2. Valid Condition - Valid entries are "1" and blank.

  3. Invalid Condition - Field 01SWC will generate as an error when the Salary and Wage Code is other than a "1" or blank.

  4. Correction Procedures:

    1. Correct coding and transcription errors.

    2. Field 01SWC must contain a "1" if any of the following conditions exist:

      • An entry is present on Page 1, Line 9, Form 1065 (Line 12 on Form 1065-B)

      • An entry is present on Form 1125-A, Line 3

      • An entry is present on Form 8825, Line 13, Columns A-H

      • An entry is present on Form 4835, Farm Rental Income and Expenses, Line 20

      • An entry is present on Schedule F, Line 22 (Rev 2011), or on Schedule F, Line 24 (Rev 2010 and prior)

      • An attachment shows an amount to support any of the above entries

    3. In all other cases, Field 01SWC is blank.

Field 01EP - EPMF Code

  1. Description - Field 01EP is edited to the right of Line 19 of Form 1065 (Line 22, Form 1065-B).

  2. Valid Condition - Valid entries are "1" and blank.

  3. Invalid Condition - Field 01EP will generate as an error when the EPMF Code is other than "1" or blank.

  4. Correction Procedures:

    1. Correct coding and transcription errors.

    2. Field 01EP must contain a "1" if any of the following conditions exist:

      • An entry on Line 18, Form 1065 (Line 21 on Form 1065-B).

      • An entry on Line 23, Schedule F (Form 1040) Farm Income and Expenses.

      • An entry on Line 21, Form 4835 (Form 1040) Farm Rental Income and Expenses

      • An entry on Line 19, Schedule C (Form 1040), Profit or Loss from Business.

      • An attachment shows an amount to support any of the above entries.

    3. If Field 01EP is blank, delete the entry on the screen.

Field 01PSN - Preparer Social Security Number
Field 01PEN - Preparer Employer Identification Number

  1. Description - Field is transcribed from the right of the Paid Preparer section of Form 1065 and Form 1065-B (below the Taxpayer Signature section). Data may or may not be present in Fields 01PSN and 01PEN.

  2. Valid Condition - Entries are blank, all numeric or a "P" for the first character followed by eight numeric characters, such as the Preparer Tax Identification Number (PTIN).

    Note:

    A Preparer Tax Identification Number (PTIN) is a valid entry in Field 01PSN. The format for a PTIN is a nine-digit number beginning with the alpha "P" (i.e., P XXXXXXXX).

  3. Invalid Condition - Fields 01PSN and 01PEN are invalid if any of the following conditions are present:

    1. Field 01PSN is other than nine numeric digits or a "P" followed by eight digits.

    2. Field 01PEN is other than nine numeric digits.

    3. Fields contain all zeroes.

    4. Fields contain all nines.

  4. Correction Procedures:

    1. Correct coding and transcription errors.

    2. If Fields 01PSN or 01PEN are invalid, determine as follows:

      If... Then...
      Only a valid PTIN is present, Enter the PTIN in Field 01PSN and on Form 1065 or Form 1065-B.
      Only a valid EIN is located, Enter the EIN in Field 01PEN and on Form 1065 or Form 1065-B.
      Only a valid SSN is located, Enter the SSN in Field 01PSN and on Form 1065 or Form 1065-B.
      A valid PTIN is present and an EIN is also present, Enter the PTIN in Field 01PSN and on Form 1065 or Form 1065-B.
      A valid PTIN is present and a SSN is also present, Enter the PTIN in Field 01PSN and on Form 1065 or Form 1065-B.
      A valid PTIN is not present but both an EIN and SSN are present, Enter the SSN in Field 01PSN and on Form 1065 or Form 1065-B.
      A valid TIN (PTIN, EIN or SSN) cannot be located, Delete Fields 01PSN and 01PEN.

Field 01CBI - Paid Preparer Checkbox Indicator

  1. Description - The paid preparer check box indicator is transcribed from the bottom of Page 1, Form 1065 and Form 1065-B, to the right of the signature date. The checkbox is used to indicate whether the partnership has elected to allow the paid preparer to answer questions about the partnership return as it is processed. Data may or may not be present in Field 01CBI.

  2. Valid Condition - Valid entries are "1" and blank.

  3. Invalid Condition - Field 01CBI will generate as an error when the Paid Preparer Checkbox Indicator is other than "1" or blank.

  4. Correction Procedures:

    1. Correct coding and transcription errors.

    2. Enter a "1" in Field 01CBI on the screen if the "Yes" box is checked.

    3. Delete Field 01CBI if "No" box is checked, both boxes are checked or there is no entry.

    4. If invalid, delete the entry on the screen.

Field 01PTN - Paid Preparer Telephone Number

  1. Description - The paid preparer telephone number is transcribed from the bottom of Page 1, Form 1065 and Form 1065-B, below the paid preparer EIN. Data may or may not be present in Field 01PTN.

  2. Valid Condition - Field 01PTN must be alpha or numeric or a combination of alpha and numeric characters, not to exceed 10 characters or blank.

  3. Invalid Condition - Field 01PTN will generate as an error when the Paid Preparer Telephone Number is other than 10 alpha/numerics.

  4. Correction Procedures:

    1. Correct coding and transcription errors.

    2. If a telephone number is invalid, delete the entry on the screen.

Section 02 Errors

  1. This section provides instructions for correcting Section 02 error conditions.

General Information

  1. Section 02 contains monetary amounts.

  2. The entries are of variable lengths.

  3. All entries are dollars only.

  4. If any income line on the return reflects a line entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , the Special Income Code must be "1" .

Error Record Format

  1. Data in Section 02 is obtained from Form 1065 and Form 1065-B. See Exhibit 3.12.15-2, Form 1065, U.S. Return of Partnership Income and Exhibit 3.12.15-3, Form 1065-B, U.S. Return of Income for Electing Large Partnerships.

  2. The Form 1065 field designators, the title and the location on the return where the data is obtained is shown below:

    Field Maximum Length Title Positive/Negative Location on Form 1065
    0201A 15 Gross Receipts or Sales (±) Form 1065, page 1, Line 1a
    0201B 15 Returns and Allowances (±) Form 1065, page 1, Line 1b
    0202 15 Cost of Goods Sold (±) Form 1065, page 1, Line 2
    0204 15 Ordinary Income (Loss) from Other Partnerships and Estates and Trusts (±) Form 1065, page 1, Line 4
    0205 15 Net Farm Profit (Loss) from Schedule F (±) Form 1065, page 1, Line 5
    0206 15 Net Gain (Loss) from Form 4797 (±) Form 1065, page 1, Line 6
    0207 15 Other Income (±) Form 1065, page 1, Line 7
    0208 15 Total Income (±) Form 1065, page 1, Line 8
    02TAS 15 Total Assets (±) Form 1065, page 1, Box "F"
    02K02 15 Net Rental Real Estate Income (Loss) (±) Form 1065, Schedule K, Line 2
    02K3A 15 Gross Income (Other Rental Activities) (±) Form 1065, Schedule K, Line 3a
    02K3C 15 Balance Net Income (Loss) (Other Rental Activities) (±) Form 1065, Schedule K, Line 3c
    02K05 15 Interest Income (±) Form 1065, Schedule K, Line 5
    02K6A 15 Ordinary Dividend Income (±) Form 1065, Schedule K, Line 6a
    02K07 15 Royalty Income (±) Form 1065, Schedule K, Line 7
    02K9A 15 Net Long Term Capital Gain (Loss) (±) Form 1065, Schedule K, Line 9a
    02K10 15 Net Gain (±) Form 1065, Schedule K, Line 10
    02K11 15 Other Income Amount (±) Form 1065, Schedule K, Line 11
    02KA1 15 Partnerships to which Section 42(j)(5) applies (+) Form 1065, Schedule K, Line 15a
    02KA4 15 Other than on Line 12a(1) (+) Form 1065, Schedule K, Line 15b
    02KB1 15 Qualified Rehab (+) Form 1065, Schedule K, Line 15c
    02FTP 15 Foreign Gross Passive Income (±) Form 1065, Schedule K, Line 16d
    02FTG 15 Foreign Gross Income - Other (±) Form 1065, Schedule K, Line 16f
    02DIN 15 Interest Expense at Partners Level (±) Form 1065, Schedule K, Line 16g
    02DED 15 Foreign Deductions at Partners Level - Other (±) Form 1065, Schedule K, Line 16h
    02DAP 15 Deductions on Foreign Source Income at Partnership Level - Passive (±) Form 1065, Schedule K, Line 16i
    02DAG 15 Deductions on Foreign Source Income at Partnership Level - Other (±) Form 1065, Schedule K, Line 16k
    02FTC 15 Total Foreign Taxes (±) Form 1065, Schedule K, Line 16l
    02FTR 15 Reduction in Foreign Taxes (±) Form 1065, Schedule K, Line 16m
    02MCV 15 Merchant Card Vendor (±) Form 1065, (Rev 2011 only), Line 1a

    Note:

    Field applicable only to Tax Year 2011

  3. The Form 1065-B field designators, the title and the location on the return where the data is obtained is shown below: (See Exhibit 3.12.15-3, Form 1065-B, U.S. Return of Income for Electing Large Partnership)

    Field Field Length Title Positive/Negative Location on Form 1065-B
    0201A 15 Gross Receipts or Sales (±) Form 1065-B, page 1, Line 1a
    0201B 15 Returns and Allowances (±) Form 1065-B, page 1, Line 1b
    0202 15 Cost of Goods Sold (±) Form 1065-B, page 1, Line 2
    0204 15 Net Income/Loss from Rental Real Estate (±) Form 1065-B, page 1, Line 4
    0205 15 Net Income/Loss from Other Rental Activities (±) Form 1065-B, page 1, Line 5
    0206 15 Ordinary Income (Loss) from Other Partnerships and Estates and trusts (±) Form 1065-B, page 1, Line 6
    0207 15 Net Farm Profit (Loss) from Schedule F (±) Form 1065-B, page 1, Line 7
    0208 15 Excess Net Short-Term Capital Gain (±) Form 1065-B, page 1, Line 8
    0209 15 Net Gain (Loss) from Form 4797 (±) Form 1065-B, page 1, Line 9
    0210 15 Other Income (Loss) (±) Form 1065-B, page 1, Line 10
    0211 15 Total Income (Loss) (±) Form 1065-B, page 1, Line 11
    02TAS 15 Total Assets (±) Form 1065-B, page 1, Box "F"
    02KB1 15 Taxable Income from Trade or Business (±) Form 1065-B, Schedule K, Line 1b(1)
    02KB2 15 Taxable Income (Loss) from Rental Real Estate (±) Form 1065-B, Schedule K, Line 1b(2)
    02KB3 15 Taxable Income (Loss) from Other Rental Activities (±) Form 1065-B, Schedule K, Line 1b(3)
    02K1D 15 Taxable Income (Loss) from Passive Loss Limitation (±) Form 1065-B, Schedule K, Line 1d
    02K02 15 Taxable Income (Loss) from Other activities (±) Form 1065-B, Schedule K, Line 2
    02K03 15 Net Capital Gain (Loss) from Passive Loss Limitation Activities (±) Form 1065-B, Schedule K, Line 4a
    02K04 15 Net Capital Gain (Loss) from Other Activities (±) Form 1065-B, Schedule K, Line 4b
    02K05 15 Net Passive Alternative Minimum Tax Adjustment (±) Form 1065-B, Schedule K, Line 5
    02K06 15 Net Other Alternative Minimum Tax Adjustment (±) Form 1065-B, Schedule K, Line 6
    02K07 15 Guaranteed Payments (±) Form 1065-B, Schedule K, Line 7
    02K08 15 Income from Discharge of Indebtedness (±) Form 1065-B, Schedule K, Line 8
    02K09 15 Tax-Exempt Interest Income (+) Form 1065-B, Schedule K, Line 9
    02K10 15 General Credits (+) Form 1065-B Form 1065-B, Schedule K, Line 10
    02K11 15 Low Income Housing Credit (LIHC) After 1989 (+) Form 1065-B, Schedule K, Line 11
    02K12 15 Rehabilitation Credit from Rental Real Estate (+) Form 1065-B, Schedule K, Line 12
    02FTP 15 Foreign Gross Passive Income (±) Form 1065-B, Schedule K, Line 14d(1)
    02FTG 15 Foreign Gross Income - Other (±) Form 1065-B, Schedule K, Line 14d(3)
    02DIN 15 Foreign Deductions - Interest Expense (±) Form 1065-B, Schedule K, Line 14e(1)
    02DED 15 Foreign Deductions at Partner Level -Other (±) Form 1065-B, Schedule K, Line 14e(2)
    02DAP 15 Foreign Deduction on Passive Income (±) Form 1065-B, Schedule K, Line 14f(1)
    02DAG 15 Foreign Deduction - Other (±) Form 1065-B, Schedule K, Line 14f(3)
    02FTC 15 Total Foreign Taxes (±) Form 1065-B, Schedule K, Line 14g
    02FTR 15 Reduction in Foreign Tax Amount (±) Form 1065-B, Schedule K, Line 14h
  4. Invalid Condition - Any field in Section 02 will be invalid if not all numeric.

  5. Correction procedures - Check for coding and transcription errors or misplaced entries.

Section 03 Errors

  1. This section identifies Section 03 field errors.

General Information

  1. Section 03 contains monetary amounts.

  2. The entries are of variable lengths.

  3. All entries are dollars only except 03TAX, 03TET and 03TRV on Form 1065 and 0326, 0327, 0328, 03TET and 03TRV on Form 1065-B which can be dollars and cents.

  4. If any income line on the return reflects a line entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ the Special Income Code must be "1" .

Error Record Format

  1. Data in Section 03 is obtained from Form 1065, Form 8825 (Rental Real Estate Income and Expenses of a Partnership or an S Corporation) and Schedule F (Profit or Loss From Farming). See Exhibit 3.12.15-2, Form 1065, U.S. Return of Partnership Income.

  2. The Form 1065 field designators, the title and the location on the return where the data is obtained is shown below:

    Field Field Length Title Positive/Negative Location on Form 1065
    0309 15 Net Salary and Wages (Other than to partners) (+) Form 1065, page 1, Line 9
    0310 15 Guaranteed Payments to Partners (+) Form 1065, page 1, Line 10
    0311 15 Repairs Deduction (±) Form 1065, page 1, Line 11
    0312 15 Bad Debts Deduction (±) Form 1065, page 1, Line 12
    0313 15 Rent Deduction (+) Form 1065, page 1, Line 13
    0314 15 Taxes/Licenses (+) Form 1065, page 1, Line 14
    0315 15 Net Interest (+) Form 1065, page 1, Line 15
    0316C 15 Depreciation Deduction (±) Form 1065, page 1, Line 16c
    0317 15 Depletion (±) Form 1065, page 1, Line 17
    0318 15 Retirement Programs (±) Form 1065, page 1, Line 18
    0319 15 Employee Benefit Plans (±) Form 1065, page 1, Line 19
    0320 15 Other Deductions (±) Form 1065, page 1, Line 20
    0321 15 Total Deductions (±) Form 1065, page 1, Line 21
    0322 15 Ordinary Income (Loss) from Business (±) Form 1065, page 1, Line 22
    03TAX 15 3.5% Tax (+) Form 1065, page 1, write-in above Line 22.
    03TET 15 Federal Telephone Excise Tax (+) Form 1065, page 1, on the dotted line to the left of Line 22
    03TRV 15 Federal Telephone Excise Tax (Verified) (+) ERS Input Only
    03A01 15 Beginning Inventory Amount (+) Form 1125-A, Line 1
    03A02 15 Net Purchases (±) Form 1125-A, Line 2
    03A06 15 Total Costs (±) Form 1125-A, Line 6
    03A07 15 Ending Inventory Amount (+) Form 1125-A, Line 7
    03H02 15 Gross Rents (+) Form 8825, Line 18a
    03FL3 15 Gross Farm Income Cash (±) Schedule F, Line 9* (dotted portion)
    *(Line 11, dotted portion for prior years)
    03FL1 15 Sale of Livestock (±) Schedule F, Line 1c
  3. The Form 1065-B field designators, the title and the location on the return where the data is obtained is shown below: (See Exhibit 3.12.15-3, Form 1065-B, U.S. Return of Income for Electing Large Partnerships)

    Field Field Length Title Positive/Negative Location on Form 1065-B
    0312 15 Net Salary and Wages (+) Form 1065-B, page 1, Line 12
    0313 15 Guaranteed Payments to Partners (+) Form 1065-B, page 1, Line 13
    0314 15 Repairs Deduction (±) Form 1065-B, page 1, Line 14
    0315 15 Bad Debts Deduction (±) Form 1065-B, page 1, Line 15
    0316 15 Rent Deduction (+) Form 1065-B, page 1, Line 16
    0317 15 Taxes/Licenses (+) Form 1065-B, page 1, Line 17
    0318 15 Net Interest (+) Form 1065-B, page 1, Line 18
    0319C 15 Depreciation Deduction (±) Form 1065-B, page 1, Line 19c
    0320 15 Depletion (±) Form 1065-B, page 1, Line 20
    0321 15 Retirement Plans (±) Form 1065-B, page 1, Line 21
    0322 15 Employee Benefit Programs (±) Form 1065-B, page 1, Line 22
    0323 15 Other Deductions (±) Form 1065-B, page 1, Line 23
    0324 15 Total Deductions (±) Form 1065-B, page 1, Line 24
    0325 15 Taxable Income (Loss) from Business (±) Form 1065-B, page 1, Line 25
    0326 13 Tax Due (+) Form 1065-B, page 1, Line 26.
    0327 15 Other Payments (+) Form 1065-B, page 1, Line 27
    03TET 15 Federal Telephone Excise Tax (+) Form 1065-B, page 1, on the dotted line to the left of Line 27
    03TRV 15 Federal Telephone Excise Tax (Verified) (+) ERS Input Only
    0328 15 Tax Due/Overpayment (±) Form 1065-B, page 1, Line 28/Line 29
  4. Invalid Condition - Any field in Section 03 will be invalid if not all numeric.

  5. Correction procedures - Check for coding and transcription errors or misplaced entries.

Section 04 Errors

  1. This section identifies Section 04 field errors.

General Information

  1. Section 04 contains monetary amounts.

  2. The entries are of variable lengths.

  3. All entries are dollars only.

  4. If any income line on the return reflects a line entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , the Special Income Code must be "1" .

Error Record Format

  1. Data in Section 04 is obtained from Form 1065. See Exhibit 3.12.15-2, Form 1065, U.S. Return of Partnership Income.

  2. The Form 1065 field designators, the title and the location on the return where the data is obtained is shown below:

    Field Field Length Title Positive/Negative Location on Form 1065
    0419D 15 Mortgages, notes, bonds payable in 1 year or more (±) Form 1065, Schedule L, Line 19b, Column (d)
    04PCA 15 Partners' Capital Account Ending (±) Form 1065, Schedule M-2, Line 9
  3. The Form 1065-B field designators, the title and the location on the return where the data is obtained is shown below: (See Exhibit 3.12.15-3, Form 1065-B, U.S. Return of Income for Electing Large Partnerships).

    Field Field Length Title Positive/Negative Location on Form 1065-B
    0401 15 Interest (±) Form 1065-B, page 2, Part II, Line 1
    0402 15 Ordinary Dividends (±) Form 1065-B, page 2, Part II, Line 2a
    0403 15 Royalties (±) Form 1065-B, page 2, Part II, Line 3
    0404 15 Excess Net Short-Term Gain Over Loss (±) Form 1065-B, page 2, Part II, Line 4
    0405 15 Other Income (Loss) (±) Form 1065-B, page 2, Part II, Line 5
    0406 15 Total Income (Loss) (±) Form 1065-B, page 2, Part II, Line 6
    0407 15 Interest Expense (+) Form 1065-B, page 2, Part II, Line 7
    0408 15 State/Local Income Tax (+) Form 1065-B, page 2, Part II, Line 8
    0409 15 Charitable Contributions (+) Form 1065-B, page 2, Part II, Line 9
    0410 15 Total Miscellaneous Itemized Deductions (+) Form 1065-B, page 2, Part II, Line 10a
    0410B 15 Deductible Miscellaneous Amount (+) Form 1065-B, page 2, Part II, Line 10b
    0411 15 Other Deductions (+) Form 1065-B, page 2, Part II, Line 11
    0412 15 Total Deductions (+) Form 1065-B, page 2, Part II, Line 12
    0413 15 Taxable Income (Loss) (±) Form 1065-B, page 2, Part II, Line 13
    04A01 15 Beginning Inventory Amount (+) Form 1065-B, page 2, Form 1125-A, Line 1
    04A02 15 Net Purchases (±) Form 1065-B, page 2, Form 1125-A, Line 2
    04A06 15 Total Costs (±) Form 1065-B, page 2, Form 1125-A, Line 6
    04A07 15 Ending Inventory Amount (+) Form 1065-B, page 2, Form 1125-A, Line 7
    04H02 15 Gross Rental (+) Form 8825, Line 18a
    04FL1 15 Sale of Livestock (±) Schedule F, Line 1c
    04FL3 15 Gross Farm Income Cash (±) Schedule F, Line *9 (dotted portion)
    *(Line 11 for prior year)
  4. Invalid Condition - Any field in Section 04 will be invalid if not all numeric.

  5. Correction procedures - Check for coding and transcription errors or misplaced entries.

Section 05 Errors

  1. This section provides instructions for correcting Section 05 error conditions.

General Information

  1. Section 05 contains address information of the partnership filing Form 1065.

  2. Section 05 will be present if any the following conditions exist:

    • Contains an address change.

    • Form 1065, page 1, Line G, Box "3" is checked to indicate an address change.

  3. This section cannot be present on a "G" Coded short length record.

  4. Section 05 can be present on other short length records.

  5. Section 05 for Form 1065-B contains monetary amounts.

    1. All entries are dollars only.

    2. If any income line on the return reflects a line entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , the Special Income Code must be "1" .

Foreign Address -
General Information

  1. Ogden Submission Processing Center (OSPC) will process returns with Foreign/International and U.S. Possessions/Territories addresses.

  2. The determination of a Foreign Address is based only on the address of the partnership.

  3. A Foreign or international address is any address that is not in one of the 50 states or the District of Columbia.

  4. The following U.S. Possessions/Territories are considered foreign.

    • American Samoa

    • Federated States of Micronesia

    • Guam

    • Marshall Islands

    • Northern Mariana Islands

    • Palau

    • Puerto Rico

    • Virgin Islands (U.S.)

  5. An Army Post Office (APO), Diplomatic Post Office (DPO) or Fleet Post Office (FPO) is not a Foreign address. The U.S. Postal Service established new address requirements for APO/DPO/ FPO addresses. If an address appears in the old APO/DPO/FPO format, convert to the new State Code abbreviation based on the ZIP Code. For example, "APO New York, NY 091XX" , would be converted to "APO AE 091XX" . Refer to the APO/DPO/FPO conversion chart below:

    If ZIP Code is... Then...
    340 AA
    090-098 AE
    962-966 AP
  6. 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 can be before or after the city, town, province, state, county, etc. name but always before the Foreign country.

    • Foreign country

  2. Returns with an address in the U.S. Possessions/Territories are considered foreign returns for processing purposes and are entered in the same way as domestic addresses.

    1. A two-character alpha code must be entered in Field 05ST for the possession/territory name.

      U.S. Possession/Territory Abbreviation
      American Samoa AS
      Federated States of Micronesia FM
      Guam GU
      Marshall Islands MH
      Northern Mariana Islands MP
      Palau PW
      Puerto Rico PR
      Virgin Islands (U.S.) VI
    2. A ZIP Code must be present for U.S. Possessions/Territories. See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries and Exhibit 3.12.15-4.

Error Record Format

  1. Listed below are the fields contained in Section 05. Data in this section is obtained from Form 1065: (See Exhibit 3.12.15-2, Form 1065, U.S. Return of Partnership Income).

    Field Designator Maximum Length Title Location on Form 1065
    05CON 35 "In-Care-Of" Name Entity section, Form 1065
    05FAD 35 Foreign Address Entity section, Form 1065
    05ADD 35 Street Address Entity section, Form 1065
    05CTY 22 City Entity section, Form 1065
    05ST 2 State Entity section, Form 1065
    05ZIP 12 ZIP Code Entity section, Form 1065

♦Field 05CON - "In Care Of" Name♦

  1. Description - Field 05CON is located in the entity section of the return.

  2. Valid Condition - Field 05CON has 35 positions and the 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 05CON 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:

    1. 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 05CON.

    A blank is in the first position,
    1. Delete blank.

    2. Enter the "In-Care-Of" name beginning with an alpha or numeric in Field 05CON.

    The first character of the "In-Care-Of" name is not alpha or numeric,
    1. Verify "In-Care-Of" name on the return.

    2. Enter the "In-Care-Of" name beginning with an alpha or numeric in Field 05CON.

    Two consecutive blanks are present between significant characters, Delete any unnecessary blanks in Field 05CON.

♦Field 05FAD - Foreign Address♦

  1. Description - Field 05FAD is located in the entity section of the return.

    1. This field will contain an entry when there is a Foreign Address present on the return.

    2. Field 05FAD should not be present on G Coded short length records.

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

  3. Invalid Conditions - Field 05FAD 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 05FAD is present,
      1. GTSEC 05.

      2. Ensure Field 05CTY contains a Foreign Country Code and Field 05ST contains a "." (period/space). See Document 7475.

      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 05FAD. See (Exhibit 3.12.15-5, Province, State and Territory Abbreviations).

      Exception:

      Use the country code based on the province in Field 05CTY if the Foreign address is from Canada and the address contains a province name or abbreviation. See Exhibit 3.12.15-5, Province/Country Code - Canada Only.

      A Foreign Address is not present on the return,
      1. SSPND 610.

      2. Renumber return with domestic DLN.

    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...
      Form 8822, Change of Address, or Form 8822-B, Change of Address or Responsible Party - Business, is attached, All of the following applies:
      • Mailing address information is the same,

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

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

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

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

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

      1. Enter address shown on Form 8822 or Form 8822-B in Field 05FAD.

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

      3. Detach Form 8822 or 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.

Field 05ADD - Street Address

  1. Description - Field 05ADD is located in the entity section of the return.

    • Field 05ADD should not be present on "G" Coded short length records.

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

  3. Invalid Condition - Field 05ADD will generate as an 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 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 coding and transcription errors.

      If... Then...
      The first position is blank, All positions must be blank.
      Field 05ADD is present, Fields 05CTY, 05ST and 05ZIP must be present.
      Street address is in error and a valid Major City Code is present, Correct by entering the entire name of the city in Field 05CTY and the State Code in Field 05ST. (See Document 7475)
      A good address is not located, Delete address and revert to INOLE.
    2. If Form 8822 (Change of Address) or Form 8822-B (Change of Address - Business) is attached to the return, compare the Name Control, EIN, Address, City, State and ZIP Code information on the Form 8822 or Form 8822-B to the return.

    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 05CTY - City

  1. Description - Field 05CTY is located in the entity section of the return.

  2. Valid Condition - Valid characters are alpha and blank.

  3. Invalid Condition - Field 05CTY will generate as an 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.

      Note:

      Certain cities within each state are designated "Major Cities" and are assigned a special code of two alpha characters. ISRP will enter the Major City Code as appropriate. This code represents the city and state and is transcribed on the error record with no intervening blanks and no other characters in the City field either before or after the code.

    • Foreign Country Code is not valid or Field 05CTY contains "XX" .

  4. Correction Procedures:

    1. Correct coding and transcription errors.

    2. Determine if a Major City Code is used.

      Note:

      For a listing of Major City Codes, See Document 7475.

      If... Then...
      A Major City Code is used, Field 05CTY must be present.
      Field 05CTY contains an error, Check to see if the Major City Code is correct.
      Field 05CTY 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 05CTY is present, Field 05ST (State) must be present.
      A Foreign Address is shown on the return, Enter appropriate Foreign Country Code in Field 05CTY (See Document 7475)

      Exception:

      Use the country code based on the province in Field 05CTY if the Foreign address is from Canada and the address contains a province name or abbreviation. See Exhibit 3.12.15-5, Province/Country Code - Canada Only.

      Field 05CTY (Field 06CTY) contains an incorrect Country Code or "XX" , Enter appropriate Foreign Country Code in Field 05CTY (See Document 7475).
    3. If Form 8822 (Change of Address) or Form 8822-B (Change of Address - Business) is attached to the return, compare the Name Control, EIN, Address, City, State and ZIP Code information on the Form 8822 or Form 8822-B to the return.

Field 05ST - State

  1. Description - Field 05ST is located in the entity section of the return.

  2. Valid Condition - Valid characters are alpha and blank.

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

  4. Correction Procedures:

    1. Correct coding and transcription errors.

    2. For a list of valid State Codes, See Document 7475 and Exhibit 3.12.15-4,U.S. Possessions/Territories State Abbreviations and ZIP Codes.

    3. If unable to perfect, DLSEC 05.

    4. If Form 8822 (Change of Address) or Form 8822-B (Change of Address - Business) is attached to the return, compare the Name Control, EIN, Address, City, State and ZIP Code information on the Form 8822 or Form 8822-B to the return. See IRM 3.12.15.7.6.

Field 05ZIP - ZIP Code

  1. Description - Field 05ZIP is located in the entity section of the return.

  2. Valid Condition - Valid characters are numeric and blank.

  3. Invalid Condition - Field 05ZIP will generate as an 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 entry does not match the Major City Code or State Code.

  4. Correction Procedures:

    1. Correct coding and transcription errors.

      If... Then...
      Field 05ZIP is transcribed incorrectly, Enter the correct entry from the return. Only the first five digits are required to be entered in Field 05ZIP.
      A valid ZIP Code is not available from the return or an attachment,
      1. Determine the first 3 digits of a valid ZIP Code for the Major City. (See Document 7475 or Exhibit 3.12.15-4 for U.S. Possessions/Territories ZIP Codes).

      2. Enter "01" for the fourth and fifth digits in Field 05ZIP.

      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 in Field 05ZIP of the State shown in the address using Document 7475.
    2. If Form 8822 (Change of Address) or Form 8822-B (Change of Address - Business) is attached to the return, compare the Name Control, EIN, Address, City, State and ZIP Code information on the Form 8822 or Form 8822-B against the return.

Section 05 - Form 1065-B

  1. Data in Section 05 is obtained from Form 1065-B. See Exhibit 3.12.15-3, Form 1065-B, U.S. Return of Income for Electing Large Partnerships.

  2. The field designators, the title and the location on the return where the data is obtained is shown below:

    Field Maximum Length Title Positive/Negative Location on Form 1065-B
    0519D 15 Mortgages, notes, bonds payable in 1 year or more (±) Form 1065-B, Schedule L, Line 19, Column (d)
    05PCA 15 Partners' Capital Account Ending (±) Form 1065-B, Schedule M-2, Line 9
  3. Invalid Condition - Any field in Section 05 will be invalid if not all numerics.

Section 06 Errors

  1. This section provides instructions for correcting Section 06 error conditions.

General Information

  1. Section 06 contains the address information of the partnership filing Form 1065-B.

  2. Section 06 will be present if any of the following conditions exist:

    • Contains an address change.

    • Form 1065-B, page 1, Line G, Box "3" is checked to indicate an address change.

  3. This section cannot be present on a "G" coded short length record.

  4. Section 06 can be present on other short length records.

Error Record Format

  1. Listed below are the fields contained in Section 06. Data in this section is obtained from Form 1065-B: See Exhibit 3.12.15-3, Form 1065-B, U.S. Return of Income for Electing Large Partnerships.

    Field Designator Maximum Length Title Location on Form 1065-B
    06CON 35 "In-Care Of" Name Entity section Form 1065-B
    06FAD 35 Foreign Address Entity section, Form 1065-B
    06ADD 35 Street Address Entity section, Form 1065-B
    06CTY 22 City Entity section, Form 1065-B
    06ST 2 State Entity section, Form 1065-B
    06ZIP 12 ZIP Code Entity section, Form 1065-B

Field 06CON - "In-Care Of" Name

  1. See IRM 3.12.15.7.4 (4) for procedures to correct Field 06CON error.

Field 06FAD - Foreign address

  1. See IRM 3.12.15.7.5 (4) for procedures to correct Field 06FAD error.

Field 06ADD - Address

  1. See IRM 3.12.15.7.6 (4) for procedures to correct Field 06ADD error.

Field 06CTY - City

  1. See IRM 3.12.15.7.7 (4) for procedures to correct Field 06CTY error.

Field 06ST - State

  1. See IRM 3.12.15.7.8 (4) for procedures to correct Field 06ST error.

Field 06ZIP - ZIP Code

  1. See IRM 3.12.15.7.9 (4) for procedures to correct Field 06ZIP error.

Section 10 Errors- Schedule D (Form 1065)

  1. This section provides Section 10 error conditions.

General Information

  1. Section 10 contains money amounts in dollars and cents.

  2. Valid entries are blank, or zero (0) through "9" .

  3. There is no math check on these fields.

  4. The taxpayer performs computations on Form 8949,Sales and Other Disposition of Capital Assets and transfers the result to the appropriate column, (column (d) or column (e)) on Schedule D.

Error Format

  1. Listed below are the fields in Section 10 from Form 1065, Schedule D. Section 10 is made from the Lines 1a, 1b, 2, 3, 8a, 8b, 9, and 10, Columns (d), (e), (g) and Line 14. The field designators, title and location on the return where the data is obtained from is shown in the table:

  2. AFD Field Length Field Title Positive/Negative Location
    101AD 15 Line 1a, Short Term Proceeds (Sales price) (+) Part I, Line 1a, Column (d)
    101AE 15 Line 1a, Short Term Cost or Other Basis (+) Part I, Line 1a, Column (e)
    101BD 15 Line 1b, Short Term Proceeds (Sales price) (+) Part I, Line 1b, Column (d)
    101BE 15 Line 1b, Short Term Cost or Other Basis (+) Part I, Line 1b, Column (e)
    101BG 15 Line 1b, Short Term Adjustments to Gain or Loss (±) Part I, Line 1b, Column (g)
    1002D 15 Line 2, Short Term Proceeds (Sales price) (+) Part I, Line 2, Column (d)
    1002E 15 Line 2, Short Term Cost or Other Basis (+) Part I, Line 2, Column (e)
    1002G 15 Line 2, Short Term Adjustments to Gain or Loss (±) Part I, Line 2, Column (g)
    1003D 15 Line 3, Short Term Proceeds (Sales price) (+) Part I, Line 3, Column (d)
    1003E 15 Line 2, Short Term Cost or Other Basis (+) Part I, Line 3, Column (e)
    1003G 15 Line 3, Short Term Adjustments to Gain or Loss (±) Part I, Line 3, Column (g)
    108AD 15 Line 8a, Long Term Proceeds (Sales price) (+) Part II, Line 8a, Column (d)
    108AE 15 Line 8a, Long Term Cost or Other Basis (+) Part II, Line 8a, Column (e)
    108BD 15 Line 8b, Long Term Proceeds (Sales price) (+) Part II, Line 8b, Column (d)
    108BE 15 Line 8b, Long Term Cost or Other Basis (+) Part II, Line 8b, Column (e)
    108BG 15 Line 8b, Long Term Adjustments to Gain or Loss (±) Part II, Line 8b, Column (g)
    1009D 15 Line 9 Long Term Proceeds (Sales price) (+) Part II, Line 9, Column (d)
    1009E 15 Line 9, Long Term Cost or Other Basis (+) Part II, Line 9, Column (e)
    1009G 15 Line 9, Long Term Adjustments to Gain or Loss (±) Part II, Line 9, Column (g)
    1010D 15 Line 10 Long Term Proceeds (Sales price) (+) Part II, Line 10, Column (d)
    1010E 15 Line 10, Long Term Cost or Other Basis (+) Part II, Line 10, Column (e)
    1010G 15 Line 10, Long Term Adjustments to Gain or Loss (±) Part II, Line 10, Column (g)
    10014 15 Capital Gain Distributions (+) Part II, Line 14
  3. Correction Procedures - Correct all misplaced or transcription errors.

Section 20 Errors - TETR

  1. This section identifies Section 20 field errors.

Error Record Format

  1. Data in Section 20 was obtained from Form 8913 (Credit for Federal Telephone Excise Tax Paid).

  2. The field designators, title and location on the return where the data is obtained is shown below:

    Field Field Length Title Positive/Negative Location on Form 8913
    20TTR 15 Telephone Excise Tax Refund (+) Line 15(d)
    20TTI 15 Telephone Excise Tax Interest (+) Line 15(e)
  3. Invalid Condition - Any field in Section 20 will be invalid if not all numeric.

  4. Correction Procedure - The Statute of Limitations to file Form 8913, or a claim for the Credit for Federal Telephone Excise Tax Paid, expired July 27, 2012. If there is any entry in Field(s) 20TTR or 20TTI, blank the entry.

Section 21 Errors -
Small Employer Health Insurance Premiums (Form 8941)

  1. This section identifies Section 21 field errors.

General Information

  1. Section 21 contains a numeric entry or money amounts.

  2. Dollar and cent fields should be dollars only, and positive only.

    Note:

    Field 21LN1, 2102, 2113, and 2114 should be 4 numeric digits.

  3. Valid characters are numeric and blank only.

  4. Any entry on Line 2 with a decimal point will be rounded down, e.g., 8.5 would be 8.

  5. The credit is not valid for any tax period prior to 201012.

Error Record Format

  1. Section 21 data is obtained from Form 8941, Credit for Small Employer Health Insurance Premiums.

  2. This section is not required.

  3. All fields in Section 21 are numeric only and are transcribed as dollars only.

  4. All fields in Section 21 must be positive.

  5. Fields 21CBX and 21BXC cannot be blank, the default is zero for no boxes checked.

  6. Field 21LN1 cannot be all zeros.

  7. The field designators, title and location on the return where the data is obtained is shown below:

    Field Field Length Title Positive/Negative Location on Form 8941
    21CBX 1 SHOP checkbox indicator (+) Box A
    21LNB 9 EIN Employment report (+) Box B
    21BXC 1 Previous Forms 8941 Filed (+) Box C
    21LN1 4 Number of Full Time 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 Under Qualified Arrangement (+) Line 13
    2114 4 Number of Full Time Employees With Premiums Paid Under Qualified Arrangement (+) Line 14
    2115 15 Credit for Small Employer Health Insurance Premiums from Partnerships, S Corporations, Estates, and Trusts (+) Line 15
    2116 15 Sum of Lines 12 and 15 (+) Line 16
  8. Invalid Conditions - Any field in Section 21 will be invalid if not all numeric or a dollar amount.

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

Section 22 Errors - New Hire Retention Credit (Form 5884-B)

  1. Form 5884-B, New Hire Retention Credit, is used to figure the new hire retention credit for retained workers. This credit was enacted as part of the Hiring Incentives to Restore Employment (HIRE) Act on March 18, 2010. While the credit expired December 31, 2011, it is possible for Form 5884-B to be attached to Form 1065 (with Lines 12 and 13 completed) if the partnership claimed the credit on their year 2011 K-1 for a fiscal filed year.

General Instructions

  1. Section 22 contains numeric and money amounts.

  2. All fields should be dollars only, and positive only.

Error Record Format

  1. Section 22 data is obtained from Form 5884-B, New Hire Retention Credit.

  2. The field designators, title and location on the return where the data is obtained is shown below:

    Field Field Length Tittle Positive/Negative Location on Form 5884-B
    2210 15 Total of Line 9, columns (a) through (c) (+) Line 10
    2211 7 Number of retained workers for whom receiving credit (+) Line 11
  3. Invalid Conditions - Any field in Section 22 will be invalid if not all numeric.

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

Priority IV Errors - Error Codes 001 through 999

  1. This section provides detailed error correction procedures for Error Codes 001 through 999. These errors will be displayed with the error code assigned to them for the specific error in ascending numerical order. The screen display will show the error code assigned and the fields needed to make the necessary correction.

♦Error Code 001 - Tax Year - Invalid Entry♦

  1. Fields Displayed

    Field Designator Field Name Length
    01TXP Tax Period 6
    01RCD Received Date 8
    01CCC Computer Condition Code 10
  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 2 years and 10 months after the Return Due Date and Computer Condition Code "W" is not present.

    • "G" Coded and Non- "G" Coded 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 for clearance. Instead, enter "W" in Field 01CCC and on the return and continue processing:

      • Any return secured by Compliance (i.e., IRC 6020(b)

      • Any return secured by Examination/Collections.

      • Any return with a TC 59X (Transaction Code)

      • Any return with "ICS" (Integrated Collection System) notated on the face of the return.

      • 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. See IRM 3.12.15.3.6 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 ninety days, Enter CCC "W" in Field 01CCC and on the return.

    Note:

    Do not send the return to Statute Control.

    The return received date is two years and nine months or more after the Return Due Date and the return is stamped, "No Statute Issue, " "Statute N/A," or a similar statement indicating there is no statute issue. 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 ninety days,
    1. Suspend (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. Statute Control requests the record to be voided to them, SSPND 640.

♦Error Code 002 - Name Control Mismatch♦

  1. Fields Displayed

    Field Designator on Form 1065 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
    05CON "In-Care-Of" Name 35
    05FAD Foreign Address 35
    05ADD Street Address 35
    05CTY City 22
    05ST State 2
    05ZIP ZIP Code 12
    Field Designator on Form 1065-B 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
    06CON "In-Care-Of" Name 35
    06FAD Foreign Address 35
    06ADD Street Address 35
    06CTY City 22
    06ST State 2
    06ZIP ZIP Code 12
  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 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 002 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 of 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 IDRS using Command Code 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 IDRS using Command Code NAMEB/NAMEE for a new EIN.
    7. If a new EIN is located, verify the Name Control using IDRS Command Code (CC) INOLES.

      If... Then...
      The Name Control on INOLES matches the Name on the return or attachment,
      1. Ensure that the entity information matches the return.

      2. Overlay Field 01EIN with the new EIN from NAMEB/NAMEE. When the EIN is changed from the one the taxpayer used, issue Letter 3875C as a non-suspense letter to the address on the return. Ensure that the entity information matches the return.

        • Do not send Letter 3875C when:

          1. Three or less digits of the EIN are transposed, different or missing, or

          2. INOLES indicates the account has been "merged to" or "merged from" , or

          3. The TIN on the return is the taxpayer's SSN (check CC INOLEG).

      Multiple EINs are located,
      1. SSPND 320 to Entity Control.

      2. Prepare Form 4227 with the notation "MULTIPLE EINs" .

      INOLES indicates a "Merge To" (MT) EIN, Research the "MT" EIN on Command Codes INOLES.
      The "MT" EIN matches the entity on the return or attachment, Enter the "MT" EIN in Field 01EIN.

      Note:

      Do not send Letter 3875C on MT EIN cases.

      The "MT" EIN does not match the entity on the return or attachment, SSPND 320 to Entity Control.
    8. If the Name on the return or attachment does not agree with the Name Control on INOLES or there is an indication of a name change on Form 1065 (Line G, Box (3)) or Form 1065-B (Line G, Box (2)), research IDRS using Command Code ENMOD for a new name.

      If... Then...
      The Name Control on ENMOD matches the Name on the return or attachment, Enter "C" in the Clear Code field.
      The Name Control on ENMOD or INOLES does not match the Name on the return or attachment,
      1. SSPND 320 to route the return to Entity Control.

      2. Attach Form 4227 with the notation "NO RECORD" .

    9. If the Name change has not been made, research IDRS using Command Code ENMOD for a pending TC 013.

      If... Then...
      A pending TC 013 is present, Enter "C" in the Clear Code field.
      A pending TC 013 is not present,
      1. SSPND 320 to route to Entity Control.

      2. Attach Form 4227 with the notation "REQUEST NAME CHANGE (TC 013)" .

    10. The Name Control for EINs with the prefix 20, 26, 27, 45, 46 or 47 will be the first four characters of the Primary Name line. These EINs were assigned by the Modernized Internet EIN (MODI-EIN) application for partnerships at www.irs.gov.

  4. Suspense Correction

    1. If there is an indication that Entity Control has assigned an EIN to the return, determine the Entity Assignment Date:

      If... Then...
      The Entity Assignment Date is past the Return Due Date and IRS Received Date,
      1. GTSEC 01.

      2. Enter the Entity Assignment Date in Field 01CRD.

      The Entity Assignment Date is not past the Return Due Date and IRS Received Date, Continue processing.
    2. Research IDRS using CC BMFOL to determine if payments posted incorrectly:

      If... Then...
      The payment posted to the incorrect EIN,
      1. Prepare Form 3465, Adjustment Request, to have the payment transferred to the correct module.

      2. Notate on Form 3465, "MOVE PAYMENT TO CORRECT MODULE UPON COMPLETION AND RELEASE FREEZE" .

      3. Write "FORM 3465 PREPARED" on the return, to the left of the entity section.

      4. Enter CCC "X" in Field 01CCC.

      The payment posted correctly,
      1. Enter the correct EIN in Field 01EIN and on the return.

      2. Enter "C" in the Clear Code field.

      Payment cannot be located, Enter "C" in the Clear Code field.

♦Error Code 003 – Check Digit Invalid♦

  1. Fields Displayed

    Field Designator Field Name Length
    01NC Name Control 4
    01EIN Employer Identification Number 9
  2. Invalid Condition – Error Code 003 will generate when any of the following conditions are present:

    • A check digit is present but is not valid for the EIN.

    • The letters "E" , "G" or "M" (in check digit only) are present in Field 01NC.

  3. Correction Procedures:

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

    2. Compare the displayed fields with the return and attachments. If incorrect, overlay the screen with the correct information.

      If... Then...
      The check digit in Field 01NC does not match the return or is not legible, Enter the Name Control from the return in Field 01NC.
      The EIN on the return is not legible, Research IDRS using CC NAMEB/NAMEE for correct EIN.
    3. Compare the EIN from NAMEB/NAMEE to the EIN on the return.

    If... Then...
    The EIN on Form 1065 matches the EIN on NAMEB/NAMEE, Enter Name Control from NAMEB/NAMEE in Field 01NC.
    Research indicates a different EIN, Verify the EIN and name on INOLES.
    Name Control on INOLES matches the name on the return or attachment,
    1. Overlay Field 01EIN with the EIN from INOLES.

    2. Issue Letter 3875C as a non-suspense letter to the address on the return.

      • Do not send Letter 3875C when:

        1. Three or less digits of the EIN are transposed, different, or missing, or

        2. INOLES indicates the account has been “merged to” or “merged from”, or

        3. The TIN on the return is the taxpayer's SSN (check CC INOLEG).

    Unable to locate an EIN or more than one EIN is located,
    1. SSPND 320 to Entity Control.

    2. Prepare Form 4227 with the notation "NO RECORD OF EIN" .

  4. Suspense Correction:

    1. Research IDRS using CC BMFOL to determine if payments posted incorrectly:

    If... Then...
    The payment posted to the wrong EIN,
    1. Prepare Form 3465, Adjustment Request, to have the payment transferred to the correct module.

    2. Notate on Form 3465, "MOVE PAYMENT TO CORRECT MODULE UPON COMPLETION AND RELEASE FREEZE" .

    3. Write "FORM 3465 PREPARED" on the return, to the left of the entity section.

    4. Enter CCC "X" in Field 01CCC.

    The payment posted to the correct EIN, Enter the correct EIN in Field 01EIN and on the return
    Payment cannot be located, Enter "C" in the Clear Code field.

♦Error Code 004 - Name Control/EIN Validation♦

  1. Fields Displayed

    Field Designator Field Name Length
    CL Clear Code 1
    01NC Name Control 4
    >>>> Name Control Underprint 4
    01EIN Employer Identification Number 9
  2. Invalid Condition - Error Code 004 will generate when any of the following conditions are present:

    • The EIN is not present at Master File (MF)

    • The Entity Index File (EIF) and the National Account Profile (NAP) were not accessed or were not operational, causing a blank underprint in Field 01NC

    Note:

    An underprint of "XXXX" indicates that there is no account on the Master File, while a blank underprint indicates that the NAP has not been accessed or was not operational.

  3. Correction Procedures:

    1. Before taking any additional research steps to resolve Error Code 004, drop the cursor to the bottom of the screen and transmit. This will ensure that any prior changes to the Name Control/EIN have posted to the NAP. If Error Code 004 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 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 of 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 IDRS using Command Code (CC) INOLES to determine the correct Name Control:

      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 IDRS using Command Code NAMEB/NAMEE for a new EIN.
    7. If a new EIN is located, verify the Name Control using IDRS Command Code (CC) INOLES:

      If... Then...
      The Name Control on INOLES agrees with the Name on the return or attachment,
      1. Ensure that the entity information matches the return.

      2. Overlay Field 01EIN with the new EIN from NAMEB/NAMEE. When the EIN is changed from the one the taxpayer used, issue Letter 3875C as a non-suspense letter to the address on the return.

        Note:

        Do not send Letter 3875C when:
        • Three or less digits of the EIN are transposed, different, or missing, or
        • INOLES indicates the account has been “merged to” or “merged from”, or
        • The TIN on the return is the taxpayer’s SSN (check CC INOLEG).

      Multiple EINs are located,
      1. SSPND 320 to Entity Control.

      2. Prepare Form 4227 with the notation "MULTIPLE EINs" .

      INOLES indicates a "Merge To" (MT) EIN, Research the "MT" EIN on Command Code INOLES.
      The "MT" EIN matches the entity on the return or attachment, Enter the "MT" EIN in Field 01EIN.
      The MT EIN does not match the entity on the return or attachment, SSPND 320 to Entity Control.
    8. If the Name on the return or attachment does not agree with the Name Control on INOLES or there is an indication of a name change on Form 1065 (Line G, Box (3)) or Form 1065-B (Line G, Box (2)), research ENMOD for a new name.

      If... Then...
      The Name Control on ENMOD agrees with the Name on the return or attachment, Enter a "C" in the Clear Code field.
      The Name Control on ENMOD or INOLES does not agree with the Name on the return or attachment,
      1. SSPND 320 to route the return to Entity Control.

      2. Attach Form 4227 with the notation "NO RECORD" .

    9. If the Name change has not been made, research ENMOD for a pending TC 013.

      If... Then...
      A pending TC 013 is present, Enter "C" in the Clear Code field.
      A pending TC 013 is not present,
      1. SSPND 320 to route to Entity Control.

      2. Attach Form 4227 with the notation "REQUEST NAME CHANGE" .

  4. Suspense Correction:

    1. If there is an indication that Entity has assigned an EIN to the return, determine the Entity Assignment Date.

      If... Then...
      The Entity Assignment Date is past the Return Due Date and IRS Received Date,
      1. GTSEC 01.

      2. Enter the Entity Assignment Date in Field 01CRD.

      The Entity Assignment Date is not past the Return Due Date and IRS Received Date, Continue processing.
    2. Research IDRS using CC BMFOL to determine if payments posted incorrectly:

      If... Then...
      The payment posted to the incorrect EIN,
      1. Prepare Form 3465, Adjustment Request, to have the payment transferred to the correct module.

      2. Notate on Form 3465, "MOVE PAYMENT TO CORRECT MODULE UPON COMPLETION AND RELEASE FREEZE" .

      3. Write "FORM 3465 PREPARED" on the return, to the left of the Entity section.

      4. Enter CCC "X" in Field 01CCC.

      The payment posted correctly,
      1. Enter the correct EIN in Field 01EIN and on the return.

      2. Enter "C" in the Clear Code field.

      Payment cannot be located, Enter "C" in the Clear Code field.

♦Error Code 005 - Invalid Tax Year or Received Date♦

  1. Fields Displayed

    Field Designator Field Name Length
    CL Clear Code 1
    01TXP Tax Period 6
    01RCD Received Date 8
  2. Invalid Condition - Error Code 005 will generate when the year-month of the processing date is later than the Tax Period plus six months and the Received Date is not present.

  3. Correction Procedures:

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

    2. Compare the displayed fields with the return. If incorrect, overlay the screen with the correct information.

    3. A Received Date must be in Field 01RCD if the return is not timely filed.

    4. Use the earliest Received Date in Field 01RCD if there are multiple received dates on the return.

      Exception:

      Do not use a Received Date in Field 01RCD that is prior to the beginning of the tax period.

    5. Determine the Received Date using the following instruction in IRM 3.12.15.3.6(4)(1) when one is needed but is not stamped on the return or a valid handwritten Received Date is not present.

    • Earliest legible Postmark Date (e.g., U.S. Postal Service, Foreign or Private Delivery Service).

      Note:

      If an envelope is not attached, use the postmark date stamped on the face of the return.

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

    • Revenue Officer's or other IRS official's signature date.

    • Signature date, if within the current year (unless other information indicates signature date is invalid).

    • Julian Date of the Document Locator Number (DLN).

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

    Caution:

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

Error Code 006 - Remittance Without Received Date

  1. Fields Displayed

    Field Designator Field Name Length
    RMIT> Remittance Amount 15
    01TXP Tax Period 6
    01RCD Received Date 8
  2. Invalid Condition - Error Code 006 - Remittance is received with the return but a Received Date is not present.

  3. Correction Procedures:

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

    2. Compare the displayed fields with the return. If incorrect, overlay the screen with the correct information.

    3. If the Received Date is missing or illegible, determine the date as follows:
      1. IRS date stamp.
      2. Legible U.S. Post Office postmark date or foreign postmark or an acceptable designated private delivery service. See IRM 3.10.72, Receiving, Extracting, and Sorting, for further details.

      Note:

      If an envelope is not attached use the postmark date stamped on the face of the return.


      3. Service Center Automated Mail Processing System (SCAMPS) digital date.
      4. Signature (Use a signature date only for the current year return; if it is a prior year return use the DLN Julian date).
      5. DLN Julian Date minus ten days. (MeF Form 1065 use the Julian date)
      6. Current date minus ten days.

    4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ from the Return Due Date (RDD), despite Saturday, Sunday or Holiday extension dates.

    5. If both U.S. Postal Service and private meter postmarks are present, honor the U.S. Postal Service postmark.

      Note:

      Do not consider private metered mail dates as postmark dates unless there is a "PO" or "US PO" in the date circle.

♦Error Code 007- Received Date Earlier Than Tax Year♦

  1. Fields Displayed

    Field Designator Field Name Length
    01TXP Tax Period 6
    01RCD Received Date 8
    01CCC Computer Condition Code 10
  2. Invalid Condition - Error Code 007 will generate when the Received Date is earlier than the first day of the Tax Period/Year by two months or more.

  3. Correction Procedures:

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

    2. Compare displayed fields with the return. If incorrect, overlay the screen with the correct information.

    If... And... Then...
    The Received Date is invalid and it appears that the incorrect year was used (i.e., 20160115 instead of 20170115), and other information (Julian date, postmark date, and/or signature date) indicates that the received date should be a current year,   Change the Received Date year to the current year in Field 01RCD.
    The return is an early filed "Final" return,  
    1. Change the Tax Period to agree with the month before the Received Date and enter in Field 01TXP.

    2. Enter "F" in Field 01CCC.

    The return is not an early filed "Final" return, The Tax Period ending is less than four months after the Received Date,
    1. SSPND 480.

    2. Prepare Form 4227 with the notation "EARLY FILED" .

    The return is not an early filed "Final" return, The Tax Period ending is more than four months after the Received Date,
    1. Initiate correspondence for clarification of the Tax Period.

    2. SSPND 211.

  4. Suspense Correction

    If... Then...
    The taxpayer replies that the return is a "Final" ,
    1. Change the Tax Period to agree with the month before the Received Date and enter in Field 01TXP.

    2. Enter "F" in Field 01CCC.

    The taxpayer replies that the return is not a "Final" return, SSPND 480 until the end of the tax period provided by the taxpayer.
    The taxpayer fails to reply or the reply is not adequate,
    1. Enter "3" in Field 01CCC.

    2. SSPND 480 until the end of the tax period indicated on the return.

Error Code 008 - Tax Period Beginning Missing

  1. Fields Displayed

    Field Designator Field Name Length
    01TXB Tax Period Beginning 8
    01TXP Tax Period 6
    01CCC Computer Condition Code 10
  2. Invalid Condition - Error Code 008 will generate for the following conditions:

    • Tax Period Beginning is not present with a CCC "Y" or "F" ,

    • Tax Period Beginning is after the Tax Period Ending, or

    • Tax Period Beginning is earlier than 12 months prior to Tax Period Ending.

  3. Correction Procedures:

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

    2. Compare displayed fields with the return. If incorrect, overlay the screen with the correct information.

    If... And... Then...
    The return is a "Final " or "Short Period" , Tax Period Beginning is present on return, Enter Tax Period Beginning in YYYYMMDD format.
    The return is a "Final" or a "Short Period" , The day is not present in the Tax Period Beginning, Enter "01" for the day.
    The return is a "Final " or a "Short Period" , Tax Period Beginning is not present, Determine a Tax Period Beginning date from the ending Tax Period.
    The return is an" Initial " Short Period, Tax Period Beginning is not present, Use the "Date Business Started" from the face of the Form 1065 entered in Box E.
    The return is not a "Final " or "Short Period" ,   Remove CCC "Y" or "F" from field display.

♦Error Code 010 - Amended Return "G" Coded ♦

  1. Fields Displayed

    Field Designator Field Name Length
    01NC Name Control 4
    01EIN Employer Identification Number 9
    01TXP Tax Period 6
    01RCD Received Date 8
    01CCC Computer Condition Code 10
    01NAI NAICS Code 6
    01DOB Date Business Started 6
    01IRC Initial Return Code (Form 1065 only) 1
    01TT Technical Termination Code (Form 1065 only) 1
    01AMC Accounting Method Code 1
    01NOP Number of Partners 6
    01M3 Schedule - M3 1
    01LPC Limited Partnership Code 1
    01DPC Dual Partner Code 1
    01MPC Multi Partner Code (Form 1065-B only) 1
    01FDC Foreign/Domestic Corporation Code (Form 1065 only) 1
    01INE Individual/Estate Ownership Code (Form 1065 only) 1
    01PCS Ownership of Foreign or Domestic Corporation Code (Form 1065 only) 1
    01DPT Ownership of Foreign Partnership or Trust Code (Form 1065 only) 1
    01PTT Partnership Level Tax Treatment Election Code (Form 1065 only) 1
    01DPA Distribution of Property Code (Form 1065 only) 1
    01DRE Number of Form 8858 Attached (Form 1065 only) 6
    01FPI Number of Form 8805 Attached (Form 1065 only) 6
    01FPC Foreign Partner Code 1
    01IR1 Number of Form 8805 Attached 6
    01ADC Audit Code 3
    01SIC Special Income Code 1
    01CRD Correspondence Received Date 8
    01ISI Installment Sales Indicator 1
    01NRL Nonrecourse Loan Code 1
    01MSC Missing Schedule Code 2
    01HSC Historic Structure Code 1
    01SWC Salary and Wage Code 1
    01EP EPMF Code 1
    01PSN Preparer PTIN 9
    01PEN Preparer Employer Identification Number 9
    01CBI Paid Preparer Checkbox Indicator 1
    01PTN Paid Preparer Telephone Number 10
    Section 02    
    Section 03    
    Section 04    
    Section 05    
    Section 06 (Form 1065-B only)  
    Section 10 (Form 1065 only)  
    Section 21 (Form 1065 only)  
    Section 22 (Form 1065 only)  
  2. Invalid Condition - Error Code 010 will generate when Computer Condition Code "G" is present and fields other than 01NC, 01EIN, 01TXP, 01RCD, 01CCC and 01CRD contain entries.

  3. Correction Procedures:

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

    2. Compare displayed fields with the return. If incorrect, overlay the screen with the correct information.

    3. Determine if CCC "G" was input correctly:

    If... Then...
    Return indicates amended, revised, supplemental, corrected or superseding, Research the applicable Command Code(s), such as BRTVU, BMFOL, SUMRY, and/or TXMOD to determine if information is exactly the same as a posted return.
    All information is not the same,
    1. Process the return with CCC "G" .

    2. DLSEC to delete all sections except Section 01.

    3. Delete the invalid entries that are present in Section 01. GTSEC 01, if necessary.

    All information is exactly the same, Suspend 640 and route to Rejects.
    A return is not posted for the tax period and the return is an amended return, Continue processing as an amended return.
    A return is not posted for the tax period and the return is not amended (G coded in error),
    1. Enter all data in Sections 02 through 05 (02 through 06 for Form 1065-B) as needed.

    2. Ensure that the Section 01 fields are correct.

    3. Delete the "G" code in Field 01CCC.

    Note:

    When deleting CCC "G" and the sections required are shown as being present, no further verification of section entries is needed.

Error Code 012 - Short Record (Invalid Fields)

  1. Fields Displayed

    Note:

    This Error Code will generate on Form 1065 only.

    Field Designator Field Name Length
    01NC Name Control 4
    01EIN Employer Identification Number 9
    01TXP Tax Period 6
    01RCD Received Date 8
    01CCC Computer Condition Code 10
    01NAI NAICS Code 6
    01DOB Date Business Started 6
    01IRC Initial Return Code 1
    01TT Technical Termination Code 1
    01AMC Accounting Method Code 1
    01NOP Number of Partners 6
    01M3 Schedule M-3 1
    01LPC Limited Partnership Code 1
    01DPC Dual Partner Code 1
    01FDC Foreign/Domestic Corporation Code) 1
    01INE Individual/Estate Ownership Code 1
    01PCS Ownership of Foreign or Domestic Corporation Code) 1
    01DPT Ownership of Foreign Partnership or Trust Code 1
    01PTT Partnership Level Tax Treatment Election Code 1
    01DPA Distribution of Property Code 1
    01DRE Number of Form 8858 Attached) 6
    01FPI Number of Form 8805 Attached) 6
    01FPC Foreign Partner Code 1
    01IR1 Number of Form 8865 6
    01ADC Audit Code 3
    01SIC Special Income Code 1
    01CRD Correspondence Received Date 8
    01ISI Installment Sales Indicator 1
    01NRL Nonrecourse Loan Code 1
    01MSC Missing Schedule Code 2
    01HSC Historic Structure Code 1
    01SWC Salary and Wage Code 1
    01EP EPMF Code 1
    01PSN Preparer Social Security Number 9
    01PEN Preparer Employer Identification Number 9
    01CBI Paid Preparer Checkbox Indicator 1
    01PTN Paid Preparer Telephone Number 10
    Section 02    
    Section 03    
    Section 04    
    Section 05    
    Section 21    
    Section 22    
  2. Invalid Condition - Error Code 012 will generate when one of the following conditions is present:

    • Computer Condition Code "5" or "8" is present and fields other than 01NC, 01EIN, 01TXP, 01RCD, 01NOP, 01CCC and 01CRD contains entries.

    • Computer Condition Code "6" is present and fields other than 01NC, 01EIN, 01TXP, 01RCD, 01NOP, 01CCC, 01ADC and 01CRD contain entries.

  3. Correction Procedures:

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

    2. Compare displayed fields with the return. If incorrect, overlay the screen with the correct information.

    3. Determine if CCC "5" , "6" or "8" was input correctly. See IRM 3.12.15.3.7, Computer Condition Codes, for further information.

    If... Then...
    CCC "5" , "6" or "8" was input correctly,
    1. DLSEC to delete all sections except Section 01.

    2. GTSEC 01 and delete the invalid entries that are present in Section 01.

    CCC "5" , "6" or "8" was input incorrectly,
    1. Determine from Form 1065 if any fields are required in Section 02 through 08. If required, GTSEC and enter the required data.

    2. Ensure that the Section 01 fields are correct.

    3. Delete the "5" , "6" or "8" code in Field 01CCC.

♦Error Code 014 - Missing Address Entries♦

  1. Fields Displayed