3.12.23 Excise Tax Returns

Manual Transmittal

November 19, 2018

Purpose

(1) This transmits revised Internal Revenue Manual (IRM) 3.12.23, Error Resolution - Excise Tax Returns.

Material Changes

(1) Minor editorial changes have been made throughout this IRM.

(2) IRM 3.12.23.1.10(1) - Updated cross reference for IRM deviation procedures.

(3) IRM 3.12.23.1.23(3) - Caution was updated to reflect the correct cross reference to use of facsimile transmission.

(4) IRM 3.12.23.4.1.2(4) - Corrected cross reference to suppressing erroneous notices.

(5) IRM 3.12.23.5.2.2(5) - Updated instructions for Form 8822 and Form 8822-B to make consistent with other programs.

(6) IRM 3.12.23.5.3(3) - Updated instructions for Form 8822 and Form 8822-B to make consistent with other programs.

(7) Exhibit 3.12.23-4 - Updated frivolous return chart to make consistent with other programs.

Effect on Other Documents

This IRM supersedes IRM 3.12.23 dated November 17, 2017 (effective January 1, 2018).

Audience

Wage and Investment Submission Processing Error Resolution Tax Examiners

Effective Date

(01-01-2019)

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

Program Scope

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

  2. Audience: These procedures apply to Wage and Investment (W&I) Submission Processing (SP) Error Resolution System (ERS) personnel such as the following: Supervisory Tax Technicians, Lead Tax Examining Technicians, Tax Examining Technicians, Supervisory Clerks, Lead Clerks, and Clerks.

  3. Policy Owner: Director, Submission Processing

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

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

    • Accounts Management (AM)

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

    • Taxpayer Advocate Service (TAS)

    • Chief Counsel

    • Information Technology (IT) Programmers

    • Electronic Products and Services Support (EPSS)

    • Submission Processing (SP)

Background

  1. The purpose of Error Resolution SCRS 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 on paper register in ERS due to the Generalized Mainline Framework (GMF). The GMF programming causes a record to fall out to ERS/SCRS if it fails to meet certain criteria, including but not limited to:

    • 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 (Action Codes, Computer Condition Codes, etc.)

    • 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, and invalid tax periods and eligibility for certain credits

  2. Employees use the paper register and the return 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 (IRC) and their corresponding Treasury Regulations.

    • IRC 6201(a)

    • IRC 6213(b)

Responsibilities

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

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

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

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

Program Objectives and Review

  1. Correct any errors that are identified using the SCRS paper register, the filed return, and IDRS research.

  2. Program effectiveness is measured by using the following:

    • Embedded Quality Submission Processing (EQSP)

    • Balanced Measures

    • Managerial Reviews

  3. Annual Reviews may be performed by the Team Manager and/or Team Lead.

Acronyms, Terms and Definitions

  1. An acronym is a word formed from the initial letter or letters of each of the successive parts or major parts of a compound term such as IDRS for Integrated Data Retrieval System.

  2. Acronyms used in this IRM will be identified and explained in each subsection. After the acronym is identified and explained then only the acronym will be used throughout the rest of the subsection. Some acronyms are used universally throughout the IRS and identifying and explaining these in multiple subsections would be unnecessary. Some examples of these universal acronyms are IRM, IRC and IDRS.

  3. The following is a list of acronyms commonly used throughout this IRM:

    • AM: Accounts Management

    • BMF: Business Masterfile

    • C&E: Code and Edit

    • CI: Criminal Investigation

    • CIS: Correspondence Imaging System

    • CSPC: Cincinnati Submission Processing Campus and/or Cincinnati Submission Processing Center

    • DLN: Document Locator Number

    • ERS: Error Resolution System

    • ID: Identification or Identity

    • IDRS: Integrated Data Retrieval System

    • ISRP: Integrated Submission and Remittance Processing

    • IRC: Internal Revenue Code

    • MeF: Modernized e-File

    • MFT: Master File Tax

    • MMDDYYYY: Month Month Day Day Year Year Year Year

    • R&C: Receipt and Control

    • SB/SE: Small Business/Self-Employed

    • SP: Submission Processing

    • TAS: Taxpayer Advocate Service

    • TC: Transaction Code

    • W&I: Wage and Investment

    • ZIP: Zone Improvement Plan

    Note:

    The above list is just a sampling of acronyms and terms commonly used throughout this IRM and is not intended to be all inclusive.

Related Resources

  1. The following is a list of some of the resources available to assist in performing the work as outlined in this IRM:

    • Integrated Data Retrieval System (IDRS)

    • Servicewide Electronic Research Program (SERP)

    • Submission Processing Design Center (SPDC)

    • Integrated Automation Technologies (IAT)

    • Excise Tax e-File and Compliance (ETEC)

Overview

  1. This section contains instructions for correcting validity check errors detected by the computer and resolving math errors resulting from differences in the taxpayer’s computations and the computer computations.

  2. Report time spent and volume completed under the following program codes for reviewing and correcting records on error registers:

    1. Form 11-C, Occupational Tax and Registration Return for Wagering, use 270-12701.

    2. Form 730, Monthly Tax Return for Wagers, use 270-12702.

General

  1. 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.

  2. This book provides procedures for correcting records that are printed on the error registers. Specific procedures that pertain to Form 730, Monthly Tax Return for Wagers, and Form 11-C, Occupational Tax and Registration Return for Wagering.

    Note:

    In the case of a conflict of instructions between general and specific, follow the specific procedures.

  3. The tax examiners applying these instructions must be familiar with the editing procedures in IRM 3.11.23, Returns and Document Analysis - Excise Tax Returns, and the general procedures in IRM 3.12.38, Error Resolution - BMF General Procedures. The telephone may be used, at the discretion of management, to resolve questions pertaining to returns that are on the Error Register in lieu of rejecting those returns for subsequent correspondence action.

  4. You are not expected to review or redo the work of Code and Edit. However, if an error or omission made by the examiner is noticed while working the error register, enter the correct information on the return and the error register. A complete review of the return is not required. If this section instructs you to do something without telling you how, refer to IRM 3.11.23, Returns and Document Analysis - Excise Tax Returns.

♦ Business Master File (BMF) Consistency ♦

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

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

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

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

♦ 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.

♦ IRS Employee Contacts with Taxpayers (TP) - RRA 98 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 matter.

  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), provide as appropriate during the conversation, their last name and badge identification (ID Card) number.

    3. Correspondence - All correspondence must include a telephone number where the taxpayer's question can be answered. In addition, manually generated and handwritten correspondence must have their title (e.g., Mr., Mrs., Ms., Miss), last name, and Integrated Data Retrieval System (IDRS) number, letter system number, or their badge identification (ID Card) number.

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

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

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

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

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

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

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

    Note:

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

♦ Taxpayer Advocate Service (TAS) ♦

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

  2. Refer taxpayers to the Taxpayer Advocate Service (TAS) (see IRM 13, Taxpayer Advocate Service) when the contact meets TAS criteria (see IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria) or has Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), attached, and you can't resolve the taxpayer's issue the same day. The definition of "same day" is within 24 hours. "Same day" cases include cases you can completely resolve in 24 hours, as well as cases in which you have taken steps within 24 hours to begin resolving the taxpayer's issue. Do not refer these cases to TAS unless they meet TAS criteria and the taxpayer asks to be transferred to TAS. Refer to IRM 13.1.7.4, Same-Day Resolution by Operations. When referring cases to TAS, use Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance order), and forward to TAS in accordance with your local procedures.

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

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

♦ Business Masterfile (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. Enter Action Code 3 to route the return to Planning and Analysis (P&A).

    2. Attach Form 4227, Intra-SC Reject or Routing Slip, (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 clearly state that they are a victim of "ID Theft" ; do not send cases that are subject to "Funny Box" or "Fraud" review.

♦ Frivolous Returns and Claims ♦

  1. A frivolous argument is used for the purpose of expressing dissatisfaction with the substance form or administration of the tax laws by attempting to illegally avoid or reduce tax liabilities. Recognized frivolous arguments made by businesses include, but are not limited to the examples in IRM 25.25.10, Frivolous Return Program (FRP), shown in Exhibit 3.12.23-4, Potential Frivolous Return Chart.

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

    If: Then:
    The return meets any of the FRP conditions identified as a frivolous return. (See Exhibit 3.12.23-4).

    Caution:

    If the return shows Action Code (AC) 331, a Computer Condition Code (CCC) X and has a Form 10886, Reject Routing Slip, attached with the remarks, "Refer to Exam FRP for audit after processing" , continue to next procedure.

    Remove return from the batch and place the return in the locally designated basket for Examination, Frivolous Return Processing (FRP) for review.

    Note:

    IRM 25.25.10, Frivolous Return Program (FRP), requires Examination to expedite the return and make a determination whether it qualifies as a frivolous return within two (2) business days. If a determination is not made within the allowed time frame, the Examination examiner will edit Action Code 331.

    Examination has selected the return as frivolous, indicated by an Action Code 331, a CCC X and a Form 10886, Reject Routing Slip, with the remarks, "Refer to Exam FRP for audit after processing" , but send the return for processing. Continue processing the return. However, do not circle or void the Action Code or CCC X indicating a frivolous return.

    Note:

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Excise Tax Codes

  1. Chart of Tax Class, Document Codes (Doc Codes), and Master File Tax (MFT) for excise taxes.

    Form Tax Class Doc Code MFT Code
    Form 11-C 4 03 63
    Form 730 4 13 64

Definitions

  1. Action Codes - A number that is coded to notify the computer what action should be taken.

  2. Alpha Field Designation - The first field of each section is identified as the "A" field, and subsequent fields in that section are assigned alpha letters in sequence.

  3. BMFOL - provides nationwide Business Master File (BMF) entity and tax data information online for tax accounts that are in credit or debit status, contain freeze conditions or open IDRS control bases. It will also display a list of accounts moved to the retention register. Other accounts that are not on the retention register will be available online within 24 hours upon request.

  4. BRTVU - Provides business return transaction information. The file consists of original input return data, including schedules. This return information includes Code and Edit, Error Resolution System (ERS), and computer generated fields.

  5. Command Code (CC) - A five character code which identifies the nature of an inquiry or update request for a real time terminal.

  6. Entity Index File (EIF) - A computer file that stores name data for each Employer Identification Number (EIN) on file. A check is made between the EIN and the name entered.

  7. Error Reason Code - A specific code explaining the reason an input document is on the error register. If the document does not have errors then this field will be blank. A maximum of nine two digit codes can be present in this field.

  8. Error Register - A listing of documents on which the entered data failed one or more of the consistency, math verification, or validity tests in the computer program. The register consists of sections and fields that are directly or indirectly related to data sections and items input to the computer.

  9. Field - A specific item input from a tax document. Each field may contain data or be blank and is prefixed by an alpha character A thru Z.

  10. Field Breakers - Used on the Error Register are @, (+) and (-). When entering field breakers use an asterisk (*) for (@), a comma (,) for (+) and a pound sign (#) for (-). They will convert to the proper sign.

  11. Generalized Mainline Framework (GMF) - The system used to process and control all documents through the Campus pipeline.

  12. INOLE - Used to research the entity module (name control, filing requirements, employment codes and addresses).

  13. IRPOL - Provides two payee addresses if present, filing status, one payer name and address, cross reference information, and summary of up to 36 Information Returns Processing (IRP) money amounts by income type.

  14. ISRP - Integrated Submission and Remittance Processing (ISRP) replaced the previous Distributed Input System (DIS) and Remittance Processing System (RPS) systems. The Excise tax processing system is now referred to as "DIS/ISRP" The ERS function has access to the system via a terminal in their area.

  15. Key Index File (KIF) - A computer file of Taxpayer Identification Numbers (TINs).

  16. NAMEE - Used to research for a missing or invalid EIN.

  17. Real time - Instantaneous access to a data base which allows you to make changes to the database or just display data.

  18. RTVUE - provides online access to the Individual Return Transaction File. The file consists of original input return data, including schedules. This return information contains Code and Edit, Error Resolution (ERS), and computer generated fields.

  19. Section - A specific portion of the return input. Each section is prefixed by a two digit numeric code beginning with 01.

Action Codes (AC)

  1. A number code which signifies to the computer what action should be taken on the error record. Only one AC may be entered on the error record to correct any one section. If two are required, it must loop. No other AC can be used with AC 0, 2, 1, 3, or 7. If incorrect data is present, it must be corrected with AC 4, 5, or 6 before AC 1 is used.

  2. Action Code 0 - Used to indicate that the data on the Error Tape record is correct and the computers computation should be disregarded.

  3. Action Code 1 - Used to indicate that the data in a record on the Error Tape has been entered correctly by the key station terminal operator. The taxpayer has an error on his/her return and the computer's computation of the tax due should be accepted. This code may not be used if an amount field has a transcription error or if a field validity error is present in any field of a section. No other AC may be used in the same correction attempt. All validity errors must be corrected before this action code will clear a record from the Error Register. However, if a dummy correction will clear the record, AC 7 may also be used. A Taxpayer Notice Code (TPNC) must be used with an AC 1.

  4. Action Code 2 - To delete a record from Campus processing. (Rejects Only).

  5. Action Code 3 - Used to reject a record on the Error Tape which is not processable to BMF or is a Non Automated Data Processing (ADP) Record. Notate action on Form 1332, Block and Selection Record, and remove document from the pack and sign out. This creates a working trail. Use Form 10886, Reject Routing Slip, and route to rejects.

  6. Action Code 4 - Used to delete a section from a record on the Error Tape. Section 01 of each record cannot be deleted. Do not delete with AC 4 any section with an asterisk appearing before the section number.

  7. Action Code 5 - Used to add a section to a record on the Error Tape. Enter the field designation followed by field data and field breaker for all significant fields. If the field is insignificant (does not contain data), it is not necessary to enter the field at all, not even the field designation or breaker.

  8. Action Code 6 - Used to change a field or fields (excluding remittance). To correct a field the incorrect field data must be lined out and the corrected data entered above it. Any number of fields may be changed during one correction cycle. When blanking or correcting the name control field, always enter the encircled number of positions prescribed for the field which will not contain significant data. In other words, if the prescribed number of characters for the field is "7" , and only "3" significant characters will be input, encircle "4" to show the number of blanks; if the entire field will be blank, encircle "7" .

  9. Action Code 7 - No change required. Used to clear a record which has been sent to the register for one time review. May not be used simultaneously with any other AC. If information for a particular section was not input, the section may be generated for review with an asterisk before the section number. Use AC 7 to clear this item if no error exists.

    1. Enter an AC 0, 2, 1, 3, and 7 on the Error Register to the left of Section 01.

    2. Enter AC 4, 5, and 6 to the left of the appropriate section number.

Taxpayer Notice Codes (TPNC)

  1. A two digit numeric code is used when a math error is present involving the tax liability or settlement amounts. This Taxpayer Notice Code (TPNC) is entered, on the register to the right of AC 1, preceded by a dash (-).

    1. Enter the code in the upper left corner of the return.

    2. A maximum of three codes may be entered for each correction record.

  2. TPNC 90 is actually a "fill in" and should be used when no other TPNC fully explains the correction(s) made.

    1. When TPNC 90 is generated, Notice Review will type the Math Error explanation on the notice before mailing to the taxpayer.

    2. When using TPNC 90, do not use any other taxpayer notice code(s).

  3. Field 01L (Form 730) and Field 01P (Form 11-C) will contain data only on a Loop Register and if AC 1 did not resolve the initial error. Correct any other invalid conditions but not this field. The use of AC 1 and the proper TPNC on a subsequent loop will be sufficient.

Error Correction Rules

  1. Make certain that all correction entries are legible.

  2. When Action Code 3 is used, Form 3177, Notice of Action for Entry on Master File, and/or Form 10886, Reject Routing Slip, must be prepared and attached to the return with a notation of the reason for the action taken. Charge the return out of the block as a Reject "U" with the date. It is not necessary to prepare Form 3177 on any timely filed "first" return when:

    • A substitute return is prepared by Examination/Collections

    • A new EIN is assigned through IDRS

    • A return is processed through the ISRP/RPS

Error Register Coding

  1. If an action code (AC) has been entered on the Error Register after all necessary corrections, no further action is necessary.

  2. If an action code has not been entered on the Error Register after all necessary corrections,≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ code for a taxpayer error.

    1. Mark an "X" to the left of the taxpayer’s incorrect figures and enter the computer generated figures.

    2. Enter AC 1 and the appropriate TPNC on the Error Register.

  3. If an AC has not been entered on the Error Register and the balance due field does not have an underprint, enter AC 7.

Correction of Invalid Correction Attempt

  1. An Error Reason Code "AA" is printed on the Loop Error Register when an invalid correction attempt is detected by the computer processes.

  2. Correct the Error Register as if no attempt has been made to correct it before.

Unprocessable Returns

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

    • Taxpayers Identification Number (TIN)

    • Legible name (for name control)

    • Valid tax period

    • Legible tax data, if tax liability is indicated

    • Signature

  2. Conditions that make a document unprocessable include:

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

    2. Employer Identification Number (EIN) is other than 9 numeric digits and cannot be perfected from information on the return or attachments.

    3. The document has two or more different EINs.

    4. Taxpayer has stated on the document or attachment that they have combined liability for more than one tax period.

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

    6. The document has been mis-blocked.

    7. Any condition set forth as unprocessable in the sections on processing specific documents.

    8. The return is unsigned.

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

  3. During the processing of a return, if a correction cannot be made because of illegible or missing data, enter AC 3 and:

    If: Then:
    The name and/or address is illegible or missing and cannot be perfected through research Prepare Form 10886, Reject Routing Slip, attach to the return and route to Entity.
    The name and address are legible or can be corrected through research Correspond for missing or illegible data.

    Note:

    Never send an excise tax return back to the taxpayer.

  4. Reject Correction will do the following:

    If: Then:
    Perfection can be made through research, Field Office contact, or taxpayer contact Perfect any document entries which are erroneous, incomplete, or missing. Then, continue processing.
    Perfection is not possible
    1. Initiate action to have Document Locator Number (DLN), voided and return "Canceled to Files."

    2. If a remittance is involved, transfer to the "Unidentified Remittance File."

    EIN, Name Control, MFT, and Tax Period are present Input correct Transaction Code (TC) 599xx using CC FRM 49 and the following transaction codes:
    1. TC 599 Closing Code (cc) 17 Unprocessable return, or

    2. TC 599 Closing Code 18 Unprocessable return (more than ten weeks past the due date).

    Note:

    It is not necessary to input TC 599xx if the return is a timely filed "first" return, a substitute return prepared by Examination/Collections, when the EIN is newly assigned on IDRS, or if the return was processed through RPS, Remittance Processing System.

♦ 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://win.web.irs.gov/SP/News/Updates/Scanned_Revision_of_Policy_for_Use_of%20Fax_in_Taxpayer_Submissions.pdf#search=Revision%20of%20Policy%20for%20Use%2.

  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 options to fax their response.

    Caution:

    Before disclosing any tax information, you must be sure you are speaking with the taxpayer or authorized representative. See the Taxpayer Authentication guidelines in IRM 21.1.3.2.3. Required Taxpayer Authentication, and IRM 21.1.3.2.4, Additional Taxpayer Authentication. Also, before leaving any messages on a taxpayer's answering machine, review IRM 11.3.2.6.1, Leaving Information on Answering Machines/Voice Mail. Fax procedures contained in IRM 11.3.1.14, Facsimile (FAX), Electronic Facsimile (E-Fax), and IRS Internal Enterprise Electronic Facsimile (EEFAX) Transmission of Tax Information, must be reviewed prior to faxing confidential information to the taxpayer.

♦ Correspondence Imaging System (CIS) Returns ♦

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

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

  3. Follow the correspondence instructions below for "CIS" returns.

    If: And: Then:
    The "CIS" return has a Form 13596, Reprocessing Returns, or Form 3893, Re-Entry Document Control, 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. Continue Processing.

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

    2. Use AC 3 to send return to rejects to void the DLN.

    3. Attach Form 4227, Intra-SC Reject or Routing Slip, to the return and route to Accounts Management to secure missing information.

    Note:

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

    The "CIS" return does not have a Form 13596 or Form 3893 attached The return is not complete (e.g. missing signature, schedules, or forms), Research for prior posting (TC 150 posted)
    1. If TC 150 is present and the information is the same, cancel the DLN and treat as classified waste.

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

    Note:

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

Pre Computed Penalty

  1. If a penalty other than a delinquency, late payment, failure to deposit (FTD), or failure to pay (e.g., negligence or fraud) is shown on a return, and the notation "3465 Prepared" , does not appear on the return, then computation of penalty must be done by Excise Operations. Route as follows:

    1. Photocopy return.

    2. Prepare Form 3465, Adjustment Request, to request an assessment of the penalty. Notate in remarks, "Photocopy - Do Not Process" .

    3. Enter CCC R on the return and error register if fraud penalty is assessed.

    4. Enter CCC X on the return and on the register to freeze the module from refunding or offsetting.

    5. Indicate on Form 3465 the portion of the remittance that is available for application to the penalty assessment if the return remittance includes an amount applicable to all or part of the penalty.

    6. Note on the return "3465 Prepared" .

    7. Prepare Form 3465 with remarks.

    8. Route Form 3465 with photocopy of the return to Excise Program area.

Suppression of Erroneous Balance Due and Return Delinquency Notices - Reject/Suspense Correction

  1. Any returns received within the specified accounting period which cannot be processed by the Program Completion Date (PCD) as established in IRM 3.30.123, Processing Timeliness: Cycles, Criteria, and Critical Dates, a TC 599 Closing Code (cc) 18 must be input (see IRM 3.30.123.2.4, Acceptable Inventory and Aged Criteria for Submission Processing Databases). This includes block deletes, nullified unpostable and rejects suspense/correction. Input of TC 599 - 18 does not need to be completed until 3 weeks prior to delinquency checks. However, checks can begin as soon as three weeks after the return’s PCD.

    Note:

    Paper registers must have the fact of filing (TC 599) input manually to prevent erroneous notices. Automatic generation if a TC 599 is done only by the Error Resolutions System (ERS).

  2. Whenever a return or payment must be withdrawn from the work flow, immediate consideration must be given to the possibility that erroneous balance due or return delinquency notices may be issued. This includes block deletes, nullified unpostable, and rejects suspense/correction.

  3. If notices would be sent erroneously, IDRS action must be input to the correct account by the first person identifying any of the following conditions:

    1. If the return is more than ten weeks past the due date, input CC FRM49 with TC 599, cc 18.

    2. Any subsequent payment transaction (Doc. Code 17, 18, 19) requires input of CC STAUP for six cycles.

    3. Annotate the document with "TC 599 cc 18" or "STAUP 6" in the upper margin.

      Note:

      If the document has already been annotated, no further action is required.

  4. A TC 599 is not necessary when:

    1. An Error Resolutions System (ERS) action Code is entered. A fact of filing (TC 599) is automatically generated on IDRS to prevent delinquency notice issuance; therefore, a TC 599 is not necessary.

    2. Returns processed through the ISRP/RPS. The payments have already posted as a TC 610 and this satisfies the BMF delinquency check.

      Exception:

      If the ISRP/RPS return is unprocessable because it has been mis-blocked and processed under the wrong MFT, Master File Transaction Code, input TC 599 cc 17, for the correct MFT.

    3. Returns processed through a Collection Function will show a TC 59X in the middle of the left margin.

Internal Revenue Code (IRC) 6020(b) Returns

  1. The Internal Revenue Service has the authority under IRC 6020(b) to prepare a substitute for return from personal knowledge or from other information for any person who fails to file a return or files a false or fraudulent return. A Form 5604, Section 6020(b) Action Sheet, may be attached to a IRC 6020(b) return.

  2. A substitute for return generated under IRC 6020(b) must contain taxpayer identifying information (including taxpayer's name, address, and identifying number), must contain sufficient data to compute the taxpayer's liability, and must be signed by the Secretary of the Treasury or his delegate. A IRC 6020(b) return is not necessarily contained in a single document, but may consist of several documents that together satisfy the three requirements.

  3. If the IRS does not have sufficient data to compute the taxpayer's tax liability, the IRS may instead prepare a "dummy return." A "dummy return" contains taxpayer identifying information only and is used to open up an account for the taxpayer on the Master File. A dummy return does not constitute a valid IRC 6020(b) return unless it is accompanied by other documents that satisfy the three requirements listed above.

  4. You can identity IRC 6020(b) returns by the presence of the notation "Return prepared under IRC 6020(b)" . This notation is usually on or near the signature line. The return must be signed by the preparer (a revenue officer/agent or a Campus Collection/Examination manager) or must be attached to another document that is signed by the preparer.

    Note:

    If the return is not signed or is completely unprocessable, route the return to your Planning and Analysis analyst who will forward it to the National Office Compliance (Field) analyst.

  5. Process the return:

    1. Based on the information shown so that the return will settle on the figures submitted by the preparer. CCC 4 must be present on all IRC 6020(b) returns. CCC C, R, or Z must not be used with CCC 4.

    2. If the preparer requests that no penalty be assessed, edit CCC D, and enter in the appropriate field.

    3. DO NOT correspond with the taxpayer for any unprocessable condition.

    4. DO NOT send a TPNC. If a TPNC would be necessary, reject the return with AC 3 and attach Form 10886 , Reject Routing Slip, with an explanation.

Statute Control Documents

  1. Any original return that has a due date or received date, whichever is later, (disregarding extensions of time to file) as much as two years and nine months before the current processing date constitutes a statute control document.

  2. An amended return which has a due date as much as two years and nine months before the current processing date constitutes a statute control document.

  3. All statute control documents must be cleared by the Statute Control Unit. See instructions under each document for correction procedures.

  4. See IRM 25.6.1, Statutes of Limitations Processes and Procedures, for further 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 new 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 cycle posting dates in TXMOD will reflect a format of YYYYCCDD. The DD value will be 08.

Integrated Submission and Remittance Processing (ISRP) Error

  1. This is an error that has been identified by the ISRP edit run.

  2. The ISRP Error Indicator is printed to the left of the section number. This error will appear on the error register as follows (see Figure 3.12.23-1):

    ISRP Error Indicator: Description:
    " #1" - Split screen transmission. Key Verifier attempted to change 4 or more digits of TIN, or the Original Entry (OE) operator entered a required section as "missing" .
    "#2" - Invalid section ending point. Invalid section ending point.
    "#3" - Invalid field length. Invalid field length.
    "#4" - Questionable section. The ISRP operator input the same section more than once. The computer program will drop all duplicate sections and display the first one encountered on the error register.

    Figure 3.12.23-1

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    Please click here for the text description of the image.

  3. All fields of a section must be examined when this condition exists. If section 01 of a return is error coded, examine the tax based data section for errors to ensure the return data is for the taxpayer name in section 01.

  4. Even though one or more sections of a record are error coded, the validity and consistency checks necessary for the record are made for all sections. Be sure to:

    1. Line out each incorrect field.

    2. Enter the correct data. Use AC 6.

    3. Enter AC 7 if the record is correct as it appears on the Error Register.

Terminus Error

  1. A terminus error results when:

    • A non numeric character appears in a numeric field, or

    • The format of the section is incorrect. See Figure 3.12.23-2.

    Figure 3.12.23-2

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  2. A terminus error is present and is shown as two asterisks printed to the left of the selection number.

  3. Correct a terminus error as follows:

    1. Assure that any fields containing data are correct. Correct or reject as applicable.

    2. Enter data in any blank fields that should contain data.

Field Validity Error

  1. An invalid field is identified by an asterisk (*) before the field. See Figure 3.12.23-3.

    Figure 3.12.23-3

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    Please click here for the text description of the image.

  2. All fields will be printed on the Error Register, but if a math error is not present, there will be no underprint.

  3. Some fields must contain data, and if they are blank, they are invalid. To correct:

    1. Compare the return with the Error Register.

    2. Line out the incorrect field.

    3. Enter the correct data directly above the lined out data.

    4. Enter AC 6.

  4. There are some fields which have asterisks "on the raw only" for a cursory review. These may be cleared with AC 7 if there are no other errors present.

Field 01 - A Remittance Received

  1. The field cannot be changed in error resolution.

  2. If the amount is incorrect:

    • Treat the return and error register as unprocessable,

    • Reject with AC 3,

    • Prepare Form 10886, Reject Routing Slip, to explain the error.

  3. The Reject Function will prepare Form 3893, ReEntry Document Control, after corrective action has been taken.

Field 01 - A Remittance With No Liability
  1. A non G coded remittance return with no tax liability will not post to the Master File (i.e., Unpostable Code 331).

    If: Then:
    There is a math error Resolve it by using AC 1 to send the appropriate TPNC.
    There is no math error Transfer the payment of the return per IRM 3.12.38.5.5, Credit Transfers, or IRM 21.5.8, Credit Transfers, for credit transfer procedures.
    The RPS indicator is 2 and there is no remittance with the return Use AC 3 and send it to be reinput as non-remit.
    A remittance amount is shown on a nontaxable return An asterisk will appear before this field.
    An examination reveals that it is taxable Enter the missing amounts above the applicable fields; enter the amounts on the applicable line of the return if they are not already shown; and enter AC 6.
    You are unable to determine the tax liability of the return Treat the return as unprocessable. Reject the return with AC 3. Rejects will research to determine the liability.
Field 01 - A Excess Remittance Returns
  1. The Rejects Unit will determine the proper application of an excess remittance through research, correspondence, or other existing procedures.

  2. When Rejects determines that the remittance should be applied to a different tax class or module they will transfer the credit(s) per IRM 3.12.38.5.5, Credit Transfers, or IRM 21.5.8, Credit Transfer. Remember to freeze the tax module from refunding or offsetting by generating a TC 570.

  3. To prevent the issuance of erroneous notices, follow normal procedures when a math error is also present, or when the indicated credit transfer will place the module in debit status.

    Note:

    Paper register must have the TC 599 or STAUP input manually to prevent erroneous notices. Automatic generation is done only by the Error Resolutions Systems (ERS).

  4. See IRM 3.12.38 Exhibit 3.12.38-24, Suppressing Erroneous Notices, if additional information is required.

Field 01-B Name Control

  1. This field must have 1 to 4 characters.

  2. If there are fewer than 4 characters every position must be accounted for by editing the number of blanks and encircling it.

Field 01-B Correction Procedures
  1. A name control is invalid if:

    1. The 1st position is other than a letter or number.

    2. The 2nd, 3rd and 4th positions contain characters other than letters, numbers, ampersands (&), hyphens (-), or blanks.

    3. Any character follows a blank.

  2. Correct by lining through the entry in Field 01-B. Enter the correct name control above it. If the name control contains fewer than 4 characters enter and circle the number of positions remaining.

  3. When the transcribed name control does not match the name control for the transcribed EIN on the Entity Index File (EIF), there will be an underprint to Field 01-B. See IRM 3.12.23.4.9(1), Entity Underprint Code (EUC), for Field 01-O (Form 11-C) and 01-K (Form 730).

  4. The name control underprint will be removed when:

    1. The name control underprint and the entry in Field 01-B agree.

    2. The entity underprint field contains a "1" .

  5. When the name control on the return does not match the name control on the EIF, one of the following has occurred:

    1. The EIN was entered wrong, either by the taxpayer or the IRS.

    2. The name control was edited, or transcribed incorrectly.

    3. The name control on the EIF is incorrect.

    4. The taxpayer altered the order of the name on the return. Thus, the name control no longer agrees with the BMF.

    5. The taxpayer’s name changed.

    6. The taxpayer’s identity has changed. For example, a change from a partnership to a corporation.

  6. Compare the entries in Fields 01-B and 01-C to the name control and EIN on the return.

    If: Then:
    EIN on the return and the EIN in Field 01-C do not agree Correct Field 01-C to agree with the return.
    The correct name control is in Field 01-B Enter a "1" in the entity underprint code field.
    Name control in Field 01-B is not correct according to the information on the return Change Field 01-B.
    The correction does not agree with the name control underprint Enter a "1" in the entity underprint code field.
    The money has posted to the wrong module Send request to the Excise function to transfer the money.
    EIN on the return agrees with the EIN in Field 01-C Determine why the name control underprint is present.
    Name control edited on the return agrees with the name control in Field 01-B
    1. Compare the name control underprint with Field 01-B and the name on the return.

    2. If the underprint is the correct name control and it was edited wrong on the document, change Field 01-B to agree with the underprint.

  7. If it is not an obvious error, request research using IDRS Command Codes:

    1. NAMEE, NAMEB, NAMES, and NAMEI for the name on the return.

    2. ENMOD or ENMODA for the EIN on the return.

    3. INOLE to research the entity module (name control, filing requirement(s), employment code(s) and addresses).

    4. BMFOL for the EIN on the return and/or EIN found on CC NAMEE, request the entity module from the BMF.

    If: And: Then:
    Taxpayer used a Social Security Number (SSN) and you are researching for a name control, You find a cross reference EIN on CC INOLE Change the SSN to the EIN.
  8. Determine the correct EIN and name control from the research, and:

    If: Then:
    Another EIN is found for the entity on the return Change Field 01-C to the correct EIN and follow the procedures in (6) above.
    EIN on the return is correct and the taxpayer rearranged the name(s) on the return Change Field 01-B to agree with the name control on the EIF.
    EIN on the return is correct but the name control on the EIF does not meet name control guidelines
    1. Reject with AC 3.

    2. Attach Form 10886, Reject Routing Slip.

    3. Forward the case along with any research to Entity Control

    EIN on the return and in Field 01-C agree, but the name control does not agree with the name on the EIF
    1. Reject with AC 3.

    2. Attach Form 10886, Reject Routing Slip.

    3. Forward the case along with any research to Entity Control. See Figure 3.12.23-4.

    Figure 3.12.23-4

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  9. If the EIN is changed from the one the taxpayer used by more than 3 digits, issue Letter 3875C, Missing or Incorrect EIN on Return, as a non-suspense letter to the address on the return. Continue processing the return.

    Note:

    Obvious transposed or missing digits can be excluded as criteria for sending the Letter 3875C.

Field 01-C Employer Identification Number (EIN)

  1. This field has nine positions. It is invalid if:

    • It is not nine numeric characters,

    • It is all nines or all zeros, or

    • The first two digits are 00, 07, 08, 09, 10, 12, 17, 18, 19, 20, 26, 27, 28, 29, 30, 32, 40, 49, 50, 60, 69, 70, 78, 79, 80, 89, or 90.

  2. If the EIN is invalid, take the following action:

    1. Compare with the EIN on the return, and correct the Error Register with AC 6, if the number has been incorrectly transcribed.

    2. Search the return and any attachments for a valid EIN if transcribed correctly. If one is found, enter the number on the return, and correct the Error Register with AC 6.

    3. If no valid EIN is found, reject with AC 3 and route to Entity Control using Form 10886, Reject Routing Slip.

  3. If the EIN is changed from the one the taxpayer used by more than 3 digits, issue Letter 3875C as a non-suspense letter to the address on the return. Continue processing the return.

    Note:

    Obvious transposed or missing digits can be excluded as criteria for sending the Letter 3875C.

  4. Reject Correction:

    If: Then:
    Entity Control has found the correct EIN, Enter it in Field 01-C.
    Entity Control has assigned an EIN,
    • Enter it in Field 01-C, enter the entity assignment date, in the CRD Field.

    • The date is found in the left hand margin with an edited "E" or "A" .

Field 01 Tax Period

  1. The fields for Tax Period are:

    Form Type: Field:
    Form 11-C 01-E
    Form 730 01-D
  2. Tax period information is listed under each individual return section.

    1. For Form 11-C, see IRM 3.12.23.8.3.2, Form 11-C Section 01 Field E - Tax Period.

    2. For Form 730, see IRM 3.12.23.7.2.1, Form 730 Corrections Section 01 Field D - Tax Period.

Field 01 Computer Condition Codes

  1. The fields for CCC are:

    Form Type: Field:
    Form 11-C 01-F
    Form 730 01-E
  2. Computer Condition Codes (CCC) are edited to the right of the name and address area of the document being examined.

  3. Below are the definitions of each CCC used on excise tax returns. For the invalid conditions.

    1. "D" - Reasonable Cause for Failure To Pay timely. (All Excise forms). CCC D is no longer a requirement of Code and Edit if a taxpayer requests a waiver for Failing to Pay Timely when the return is submitted. The Code and Edit examiner should send Letter 1382C, Penalty Removal Request Incomplete, which will inform the taxpayer of the proper procedure to follow to request abatement, if and when a penalty is assessed. For IRC 6020(b) returns, continue to edit the Computer Condition Code, if the revenue officer designates that the filed return should not be liable for the assessment of a penalty for Failure To Pay timely. In cases of disaster, the examiners will be provided with coding procedures.

    2. "F" - Final Return(Form 11-C and Form 730). Enter the code on return and the error register if the taxpayer gives positive indication that this is the final return from the taxpayer, (e.g., "Final" , "Out of Business" , "No longer Liable" , etc.). Do not finalize if the taxpayer says "not wagering at this time" .

    3. "G" - Amended Return (All Excise forms). Enter the code on a return (either a photocopy or an original) which clearly indicates "Amended" , "Superseding" , "Tentative" ," Supplemental" , "Duplicate" , or any other statement that the return is not the first one filed for the same tax period. If the return has both a TC 59X (notated on the return by the Collection function), and no indication of a potential duplicate condition (e.g., "Duplicate" etc.) process the return as an original.

      Note:

      Conditions or restrictions have been placed on the use of the CCC G. One, the return must be perfected for Name Control, EIN, Tax Period, and Received Date, and two the CCC G code may not be used with any other CCCs except 3, U or W.

    4. "O" - Module Freeze (All Excise forms). Enter to indicate that a pre-settlement manual refund was made. If a completed Form 3753, Manual Refund Posting Voucher, Form 5792, Request for IDRS Generated Refund (IGR), or Form 12857, Refund Transfer Posting Voucher, is attached to the return, verify that the Name Control, EIN, and Tax Period on the return is the same as the data on the form. Research to determine if TC 840 (Manual Refund Transaction) has posted. If the TC 840 has posted, enter CCC O and continue processing. If the TC 840 has not posted, enter AC 344 in the left margin of the return to issue a manual refund.

    5. "R" - Reasonable Cause for Failure To File timely (All Excise forms). CCC R is no longer a requirement of Code and Edit examiners, if the taxpayer requests abatement for Failure To File timely when the return is submitted. The Code and Edit examiner should have sent Letter 1382C, which will inform the taxpayer of the proper procedure to follow to request abatement, if, and when a penalty is assessed. In the cases of disaster, the examiners will be provided with coding procedures.

    6. "U" - Unprocessable Return (All Excise forms). If present, reject the return with AC 3. Prepare a Form 10886, Reject Routing Slip, to reject within the Campus, to correspond with the taxpayer. See IRM 3.12.23.1.22, Unprocessable Returns, for further details.

    7. "W" - Return Cleared by Statute (All Excise forms). Enter if the return is stamped "Cleared by Statute" . This code will prevent the validity check on returns which are filed two years and nine months after the due date if it has been previously cleared by Statute Control. Also, enter the code on a statute return that bears a TC 59X indicating that the return was secured or prepared as a result of a Delinquency Investigation, whether or not cleared by Statute Control.

      Note:

      Enter CCC W only when the above conditions apply and the return processing date is two years and nine months after the return due date or received date, whichever is later and the "Cleared by Statute" stamp is less than 90 days old. If more than 90 days return to the Statute function.

    8. "X" - Refund Freeze Code (All Excise forms). Enter on the return and the register when the Rejects examiner determines that an excess remittance should be applied to a different tax, class or module, or when there is no reply to correspondence and a refund is due. This CCC will freeze the tax module from refunding or offsetting by generating a TC 570.

    9. "1" - Wagers Authorized by the laws of the State in which accepted. This designates that a lower amount of tax is due with Form 11-C. Use on Form 11-C when the tax is $50.00 per year.

    10. "3" - Correspondence Received Date. Enter when the taxpayer fails to respond to correspondence, or when the correspondence is undeliverable. Suppresses credit interest from generating at the Master File level.

    11. "4" - Return Prepared by IRS under IRC 6020(b) (All Excise forms). If Collection employee prepares a return under IRC 6020(b) after the taxpayer fails to file a return. It is signed by the revenue officer on or near the signature line mentioning IRC 6020(b). Always enter this code on these returns.

      Note:

      Do not correspond with taxpayer. CCC 4 cannot be used with CCC R. IRM 3.12.23.1.27, IRC 6020(b) Returns for further information.

    12. "7" - Reasonable Cause Statement Denied (All Excise forms) -This Computer Condition Code is not used by Code and Edit. Code and Edit examiners are no longer responsible to make penalty or interest determinations on taxpayer requests, except for returns indicating a disaster. In cases of a disaster, the examiners will be provided with coding procedures.

CCC Chart
  1. The following chart shows the invalid conditions for these Computer Condition Codes on excise tax returns:

    Computer Condition Code Invalid Condition for Form 730 Invalid Condition for Form 11-C
    D No longer a requirement for Code and Edit when the taxpayer requests abatement of Failure to Pay Timely penalty when the return is submitted. Instead, send a Letter 1382C letter (if Code and Edit has not done so) to inform the taxpayer of the proper procedure to follow to request the abatement, if, and when a penalty is assessed.
    Examiners will be provided with proper procedures, when such a penalty is due to a declared disaster.
    No longer a requirement for Code and Edit when the taxpayer requests abatement of Failure to Pay Timely penalty when the return is submitted. Instead, send a Letter 1382C letter (if Code and Edit has not done so) to inform the taxpayer of the proper procedure to follow to request the abatement, if and when a penalty is assessed.
    Examiners will be provided with proper procedures, when such a penalty is due to a declared disaster.
    F No validity checks No validity checks
    G
    1. Date is not present.

    2. Extraneous fields present.

    3. CCCs other than 3, W or U are present.

    1. Date is not present.

    2. Extraneous fields present.

    3. CCCs other than 3, W or U are present.

    O No validity checks No validity checks
    U Present on correction processing Present on correction processing
    W
    1. Must be present if processing date is more than 2 years and 9 months after the Return Due Date on "G" coded returns.

    2. On all other returns, if it is more than 2 years and 9 months after the later of the Return Due Date or Received Date, or the processing date must be equal to or greater than 2 years after Return Due Date.

    1. Must be present if processing date is more than 2 years and 9 months after the Return Due Date on "G" coded returns.

    2. On all other returns, if it is more than 2 years and 9 months after the later of the Return Due Date or Received Date, or the processing date must be equal to or greater than 2 years after Return Due Date.

    X No validity checks No validity checks
    1 N/A Tax period is prior to 8307
    3
    1. CRD is prior to received date.

    2. CRD is later than processing date.

    1. CRD is prior to received date.

    2. CRD is later than processing date.

Field 01- Received Date

  1. The fields for Received Date are:

    Form Type Field
    Form 11-C 01-G
    Form 730 01-F
  2. The Received Date Field is invalid if:

    1. The format is not in YYYYMMDD and the month is other than 01 through 12.

    2. The day is other than 01 through 31 for the months 01, 03, 05, 07, 08, 10, or 12; 01-30 for the months 04, 06, 09, or 11: 01-28 for the month 02; or 01-29 for month 02 during leap year.

    3. It is later than the processing date.

    4. An alpha, special character, or blank is present in the field.

    5. It is blank with a CCC G, R, or D.

    6. The Penalty and Interest CCC is 1; and the Received Date is blank or greater than the due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or less than the due date.

    7. It is blank and the processing date is greater than the year-month of the tax period by more than 6 months. This condition is valid on the correction run (except on Form 730).

    8. Not in valid YYYYMMDD format.

    9. It is not present on Form 11-C and Form 730.

  3. If the Received Date Field is invalid, refer to the return and attachments to determine the correct Received Date. Determine the Received Date in the order listed below:

    • Earliest IRS stamped received date

    • Earliest legible postmark (e.g., U.S. Post Office, Foreign Postmark, or Private Delivery Service)

    • 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)

    • DLN (Document Locator Number) Julian Date minus 10 days

    • Current Date minus 10 days

    Note:

    On early filed Form 11-C only: if the received date on Form 11-C is prior to the beginning of tax period, use the return due date as the received date.

Postmarks
  1. Postmarks are used to determine the timeliness of filing IRS returns. The following guidelines and IRM figures are used to determine if postmarks have been affixed by a U.S. Postal facility, Foreign Postal facility or have been privately metered. ONLY LEGIBLE official postmark dates or Postage Validation Imprinter (PVI) Labels are accepted as proof of filing timely.

  2. Valid Samples of PVI Labels are:

    1. Affixed to letters that are first and third class, certified and registered.

    2. Used on small parcels, rolls and ordinary parcels.

    3. Affixed to flats mailed at single piece rate; both priority and third class.

  3. Metered Postmarks

    1. Arrows indicate easily identified official markings.

    2. No official markings.

  4. Using AC 6, line out the Received Date on the register and enter the correct date above the lined out date. See Figure 3.12.23-5.

    If: Then:
    The received date on Form 11-C is earlier than the due date of the return Use the due date of the return as the IRS received date.
    The received date on Form 730 is prior to the tax period ending See IRM 3.12.23.7.2.1, Form 730 Corrections Section 01 Field D - Tax Period, for determining the correct tax period.

    Figure 3.12.23-5

    This is an Image: 33675006.gif
     

    Please click here for the text description of the image.

  5. If the received date precedes the due date of the return (except Form 730) use the due date of the return as the IRS received date. For additional correction instructions, see the instructions for the field under each form.

Returns Due Date Chart
  1. The following charts show return due dates for the forms covered in this excise tax handbook.

    Form 730 Return Due Dates

    Wagers Received Return Due Date

    Note:

    Chart does not take into account the due date falling on a Saturday, Sunday, or legal holiday.

    ≡ ≡ ≡ ≡ ≡ ≡
    January February 28 ≡ ≡ ≡ ≡ ≡ ≡
    February March 31 ≡ ≡ ≡ ≡ ≡ ≡
    March April 30 ≡ ≡ ≡ ≡ ≡
    April May 31 ≡ ≡ ≡ ≡
    May June 30 ≡ ≡ ≡
    June July 31 ≡ ≡ ≡ ≡
    July August 31 ≡ ≡ ≡ ≡ ≡
    August September 30 ≡ ≡ ≡ ≡ ≡ ≡ ≡
    September October 31 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    October November 30 ≡ ≡ ≡ ≡ ≡ ≡ ≡
    November December 31 ≡ ≡ ≡ ≡ ≡
    December January 31 ≡ ≡ ≡ ≡ ≡ ≡ ≡

     

    Form 11-C Return Due Dates

    Type of Return Return Due Date

    Note:

    Chart does not take into account the due date falling on a Saturday, Sunday, or legal holiday.

    ≡ ≡ ≡ ≡ ≡
    Annual Return July 1 ≡ ≡ ≡
    First Return and application Before receiving wagers.
    See IRM 3.12.23.8.1, Due Dates and Types of Form 11-C Returns.
    ≡ ≡ ≡ ≡ ≡ ≡
    Supplemental Returns 30 days after change.
    See IRM 3.12.23.8.1, Due Dates and Types of Form 11-C Returns.
    ≡ ≡ ≡ ≡ ≡

     

Field 01 Penalty and Interest Code (P/I Code)

  1. The fields for P/I Codes are:

    Form Type Field
    Form 11-C 01-H
    Form 730 01-G
  2. This field is invalid if it is:

    1. Other than blank or "1" .

    2. "1" and the received date is not present.

    3. "1" and the received date is not within the ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

  3. To correct, refer to the received date and tax period on the return and the chart in IRM 3.12.23.4.6.2, Returns Due Date Chart, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    If: Then:
    The taxpayer has not computed penalty or interest, or if the received date is not within ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Blank the field 01
    The taxpayer has computed penalty and interest ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    1. Enter a "1" in field 01. This will cause the computer to compute penalty and interest.

    2. Enter the received date in Field 01-F for Form 730 and Field 01-G for Form 11-C if it is not present.

Correspondence Received Date (CRD)

  1. The CRD Field is found in the following fields depending on the return. Code and Edit is no longer required to edit the CRD.

    Form CRD Field
    11-C 01-N
    730 01-J
  2. The Correspondence Received Date (CRD) is invalid if:

    1. It is not numeric.

    2. Not in valid YYYYMMDD format.

    3. It is a 9.

    4. This date and a CCC 3 are both present.

    5. It is later than the processing date.

    6. It is not later than the received date.

Entity Underprint Code

  1. The field is called the Entity Underprint Code (EUC) field. It will be in section 01 immediately before the TPNC, Taxpayer Notice Code, Field on the error register.

    Form Type Field IRM Reference
    Form 11-C Field 01-O Reference: IRM 3.12.23.8.3.10, Form 11-C Section 01 Field N-O.
    Form 730 Field 01-K Reference: IRM 3.12.23.7.2.4, Form 730 Corrections Section 01 Field G-H-I-J-K.
  2. In order to clear a record to good tape:

    If: Then:
    There is no name control underprint, Leave the field blank.
    You are accepting the name control as transcribed, Enter a "1" .
  3. In all cases where there is an underprint of name control, the record will not go to good tape until the applicable code is in the EUC field, or the name control has been corrected to match the underprint.

Address Section 02 - All Forms

  1. This section contains address information. Section 02 on Form 730 and Form 11-C will be present when a change of address has been entered.

  2. Fields A through F are variable length and it is not necessary to account for every position allotted.

  3. This section should not be present on returns with CCC G.

  4. ACs 4, 5, and 6 are valid.

  5. This section should be present if a return has a street, P.O. Box Number, city, state, or ZIP code change.

    If: Then:
    A foreign address is present Check IDRS CC INOLE to see if address is the same.
    The foreign address is the same Take no action.
    The foreign address is different Update address on ENMOD.
    CCC G is present and Section 02 contains information Enter AC 4 to delete Section 02.

Field 02A - "In-Care-Of" Name Line

  1. Description - Field 02A is located in the Entity Section of both Form 730 and Form 11-C.

  2. Valid Condition - Field 02A has 35 positions and the valid characters are alpha, numeric, ampersand, dash or slash.

    Note:

    The first position must be alpha or numeric

  3. Invalid Condition - Field 02A is invalid if:

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

    • The first position is blank, or

    • The first position is not alpha or numeric, or

    • There are two consecutive blanks between significant characters

  4. Correction Procedures:

    • Correct coding and transcription errors.

    If: Then:
    A blank is in the first position
    1. Line through field.

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

    First position is not alpha or numeric
    1. Line through field.

    2. Verify in-care-of name on the return.

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

    Two consecutive blanks present between significant characters
    1. Line through field.

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

Field 02B - Foreign Address- General information

  1. The determination of a foreign address is based only on the address of the entity. A foreign (international) address is any address that is not in one of the 50 states or the District of Columbia.

    U.S. Possession Abbreviation U.S. Possession Abbreviation
    American Samoa AS N. Mariana Islands MP
    Federated States of Micronesia FM Palau PW
    Guam GU Puerto Rico PR
    Marshall Islands MH U.S. Virgin Islands VI
  2. An Army Post Office (APO), Diplomatic Post Office (DPO), or Fleet Post Office (FPO) is not a foreign address. The Postal Service established new address requirements for APO/DPO/FPO addresses. If an address appears in the old APO/DPO/FPO format, such as "APO New York, NY 091XX" , convert to the new State code based on the ZIP Code as follows: "APO AE 091XX" .

    ZIP Code State Code
    340 AA
    090 - 098 AE
    962 - 966 AP
Foreign Addresses
  1. A foreign address will contain:

    • Street Address or P.O. Box

    • City or town name

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

    • Postal code, if present

    • Foreign country

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

    1. A two-character alpha code must be entered in Field 02-B for the possession name.

      U.S. Possession Abbreviation
      American Samoa AS
      Federated States of Micronesia FM
      Guam GU
      Marshall Islands MH
      Northern Mariana Islands MP
      Palau PW
      Puerto Rico PR
      Virgin Islands (U.S.) VI
    2. A ZIP Code must be present.

Field 02-B Foreign Address - Processing
  1. Description - Field 02-B is located in the Entity Section of the return.

    1. This field will contain an entry when a foreign address is present on the return.

    2. Field 02-B should not be present on a return with CCC "G" .

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

  3. Invalid Condition - Field 02-B will error with an asterisk when any of these 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: Correct all coding and transcription errors.

    If: Then:
    Field 02-B is present Ensure that the field 02-B contains a foreign country code.
    A foreign address is not present on the return Continue processing the return.
  5. If Form 8822, Change of Address, or Form 8822-B, Change of Address or Responsible Party - Business, is attached to the return, compare the name and address information on the Form 8822 or Form 8822-B to the return.

    If: Then:
    The information is the same No action is needed if 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.

    The information is different Route Form 8822 or Form 8822-B to Entity if 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.

    Note:

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

Field 02C - Street Address

  1. A maximum of 35 characters may be entered in this field. This field is invalid if:

    1. The first position is blank.

    2. Any characters are other than alpha, numeric, blank, hyphen (-) or slash (/).

    3. There are two consecutive blanks followed by valid characters.

  2. CORRECTION PROCEDURES - Correct any coding and transcription errors.

    If: Then:
    The first position is blank, All positions must be blank.
    A Major City Code is present in field B, but the street address is not present, Verify the Major City Code in the field B from the return against Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.
    A valid Major City Code is present, and a valid street address is shown on the return, Enter the street address in field A.
    There is not a valid Major City Code shown for the city on the return, Enter the full name of the city in field A.
    A foreign address is shown on the return, Enter appropriate foreign country code in Field B. See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.
  3. 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 Control, EIN, Address, City, State and ZIP Code information on the Form 8822/Form 8822-B to the return.

    If: Then:
    The information is the same, No action is needed if 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.

    The information is different, Route Form 8822 or Form 8822-B to Entity if 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.

Field 02D - City

  1. A maximum of 22 characters may be entered in this field. This field is invalid if:

    1. The first position is blank.

    2. A character follows two consecutive blanks.

    3. Any character other than alpha or blank is present.

    4. The Major City Code does not match any of the valid codes in the Major City Code table.

    5. Foreign country code is not present, incorrect or contains "XX" .

  2. CORRECTION PROCEDURES:

    1. Correct coding and transcription errors.

    2. Determine if a Major City Code is used in field 02-B by referring to Document 7475, State Abbreviations, and Major City Codes (MCCs), ZIP Codes and Address Abbreviations.

  3. Correct any transcription errors by referring to the city shown on the return.

    If: Then:
    The city on the return is illegible, Refer to the envelope and attachments to determine the correct city.
    The city cannot be perfected, Delete the address section on the error register with AC 4.
  4. This field and the state code field are invalid if a Major City Code and a state code are both present in Field C.

    If: Then:
    A Major City Code and state code are present in field C, Verify the Major City Code by referring to the return and Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.
    The Major City Code is correct, Delete the state code entered in Field C.
    The Major City Code is not correct,
    1. Line through the Major City Code.

    2. Enter the full name of the city in Field B.

    3. Verify that the state code entered in Field C is correct.

    4. Enter AC 6 to the left of the address section.

  5. This field and the ZIP Code field are invalid if a Major City Code is present and the ZIP code is not valid for the city.

    If: Then:
    A Major City Code is present and the ZIP Code is not valid for the city, Refer to the return and Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, to determine the correct Major City Code and ZIP Code.
    The ZIP code and Major City Code were transcribed correctly and the ZIP code is invalid for the city,
    1. Refer to the envelope and attachments to locate a valid ZIP code.

    2. If one is located enter in Field D.

    The correct ZIP code is not available on the taxpayer’s return,
    1. Refer to Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, to determine the correct ZIP Code.

    2. Enter the correct ZIP Code in Field D.

  6. This field is invalid if the Major City Code is not valid.

    If: Then:
    The Major City Code is not valid,
    1. Refer to the return and Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, to verify the Major City Code. Correct any transcription errors.

    2. Search for a valid MCC for the city on the return.

    A Major City Code is found, Line through the entry in Field B and enter the correct code above it.
    The City on the return does not have a valid Major City Code,
    1. Line through the code in Field B.

    2. Enter the full name of the City.

    The return shows a foreign country and the foreign country code is not present, incorrect or contains "XX" , Refer to Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.

Field 02E - State

  1. This field consists of two alpha characters. This field is invalid if:

    1. It is blank and a Major City Code is not present in Field B.

    2. It contains other than a valid state code.

    If: Then:
    Field C is invalid,
    1. Refer to the return and Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, to determine the correct state code.

    2. Correct any transcription errors.

    3. Determine the correct state code and ZIP Code from Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, and enter it in Field C.

    The state cannot be perfected, Delete the address section on the error register with AC 4.
    The ZIP code is not valid for the state,
    1. Refer to the envelope and attachments to obtain a valid code.

    2. If found, enter in Field D.

    3. If not found, refer to Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, to secure the valid ZIP code, then enter in Field D.

    A valid ZIP code cannot be found on the taxpayer’s return,
    1. Refer to Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, to secure the valid state and/or ZIP code on the error register.

    2. If found, enter in Field D.

  2. The Postal Service established address requirements for APO/DPO/FPO Addresses. If the address appears (i.e., APO New York, NY 091XX) it must be converted to the applicable state code abbreviation based on the ZIP code (i.e., the previous example would be converted to APO AE 091XX). Refer to Exhibit 3.12.23-5, U.S. Possessions State Abbreviations and ZIP Codes.

Field 02F - ZIP Code

  1. This is a 12 numeric position field which can contain 5, 9, or 12 characters. This field is invalid if:

    1. It is not all numeric or blank,

    2. There are not 5, 9 or 12 numeric characters.

    If: Then:
    There is an error in Field D,
    1. Refer to the return and attachments to determine the correct ZIP code.

    2. Correct any transcription errors.

    The correct ZIP Code is not available on the taxpayer’s return, Research for the correct ZIP code.
    The ZIP code cannot be perfected, Refer to Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, for the valid ZIP code.
    Only the first three digits of the ZIP code are present, Enter "01" for the fourth and fifth digits.

Installment Agreement Request Instructions

  1. If a request for an installment agreement is attached to any return (e.g., taxpayer(s) suggested that they be allowed to make payments on a debt), detach it and send it to the Compliance Collection Operations.

  2. Include as a working trail on attachment:

    1. EIN

    2. Name

    3. Type of return

    4. Tax period

    5. Amount due

    6. Amount paid

  3. Notate on the left margin of the return the action taken.

Processing Form 730, Monthly Tax Return for Wagers

  1. To report time spent and volume completed use Function 270, Program 12702 for reviewing and correcting records on error registers for Form 730.

  2. Any person engaged in the business of accepting taxable wagers is liable for the tax and must file this monthly form. This person is called a "Principal Operator" . Similarly, any person required to register on Form 11-C who receives taxable wagers without having properly registered is liable for the wagering tax and must also file Form 730.

    Exception:

    A person who is required to register on Form 11-C who receives taxable wagers for someone else, as an agent, is not liable for tax on Form 730. See Exhibit 3.12.23-2, Form 11-C Section 01 Field E - Tax Period.

  3. Prior to conducting this type of activity, a Form 11-C must be filed and renewed each year a person accepts taxable wagers. See IRM 3.12.23.8, Form 11-C, for further details.

  4. Form 730 is due on or before the last day of the month following the month in which the wagers were received. However, if it is determined that collection of the tax is in jeopardy, the immediate filing of a return and payment of the tax may be required.

    Note:

    Principal Operators will file Form 730 whether or not they have taxable wagers to report. Some returns will have "None" or "zero" on them when no wagers are received for that month.

  5. Laid-off wagers are wagers given to another person in the business of accepting wagers when the number of wagers made or the dollar amount wagered exceeds the risk the Principal Operator is willing to handle.

    1. If a laid-off wager is accepted from another taxpayer, the amount must be reported by both the Principal Operator and the person who receives the laid-off wager.

    2. A credit may be claimed for the tax paid or due on a wager laid off with another taxpayer who is liable for the tax on that wager. A statement fully explaining this claim for credit must be attached to the return, along with the information listed in (8) below.

    3. A credit may also be claimed for an overpayment on a previously filed return and must be substantiated by a full explanation and the information required by the regulations.

  6. No credit is allowed for a laid-off wager unless the following information is attached to the return.

    1. The certificate described in IRC 44.6419-2(d).

    2. A statement that sets forth the reason for the credit, the month in which the tax was paid, the date of the payment, and whether any previous claim covering the amount involved, or any part, has been filed.

  7. The tax rate is .0025 for wagers authorized under the laws of the state in which accepted, (line 4a). For all other wagers the rate is .02 (line 4b).

Form 730 Error Register

  1. The Error Register Fields as they appear on the Error Register with their alpha designations, length and whether fixed or variable are shown below. All money fields are dollars and cents.

    1. Section 01

      Alpha Designation Field Length Field Name Field Type
      A 11 Remittance Variable
      B 4 Name Control (Underprint generated) Fixed
      C 9 EIN Fixed
      D 6 Tax Period (YYYYMM) Fixed
      E 10 Computer Condition Codes Variable
      F 8 Received Date (YYYYMMDD) Variable
      G 1 Penalty and Interest Code Variable
      H 0 (Reserved) (Reserved)
      I 1 Centralized Authorization File (CAF) Indicator Variable

      Note:

      Code and Edit examiners are no longer required to edit this field.

      J 8 Correspondence Rec’d Date (YYYYMMDD) Variable

      Note:

      Code and Edit examiners are no longer required to edit this field.

      K 1 Entity Underprint Code Variable
      L 6 Taxpayer Notice Codes Variable
      M 11 Total Tax Taxpayer - Total Tax Settlement (Underprint generated) Variable
      N 11 Wagers Accepted Variable
      O 11 Lay-Off Wagers Accepted Variable
      P 11 Zero Filled Field (Underprint generated-Total Wagers) Variable
      Q 11 Layoff Credit Variable
      R 11 Authorized Wagers Accepted Variable
      S 11 Other Wagers Accepted Variable
      T 9 Preparer SSN Variable
      U 9 Preparer EIN Variable
      V 10 Preparer Phone Number Variable
    2. Section 02

    Alpha Designator Field Length Field Name Field Type
    A 35 In-Care-of Variable
    B 35 Foreign Address Variable
    C 35 Street Address Variable
    D 22 City Variable
    E 2 State Variable
    F 12 ZIP Code Variable

Form 730 Corrections Section 01 Fields A - B - C (Remittance, Name Control, and Employer Identification Number)

  1. Field A - Remittance - See IRM 3.12.23.4.1, Field 01-A Remittance Received, for details.

  2. Field B - Name Control - See IRM 3.12.23.4.2, Field 01-B Name Control, for details.

  3. Field C - EIN - See IRM 3.12.23.4.3, Field 01-C Employer Identification Number (EIN), for details.

Form 730 Corrections Section 01 Field D - Tax Period
  1. Field D - Tax Period - Each Form 730, Monthly Tax on Wagering, reports the wagering activity for one month. The tax period is entered in YYYYMM format for the month being reported. This field is invalid if:

    1. It is not numeric.

    2. The year is greater than the current year.

    3. The month is less than 01.

    4. The month is greater than 12.

  2. Use the following priority to determine the correct tax period. Make any necessary changes to the error register and to the return.

    1. The month and year shown in the "For month of" box to the left of the entity area on the return.

    2. The month preceding the month in the signature date.

    3. The month preceding the received date.

  3. Use the procedures below to correct Tax Period errors.

    If: Then:
    Return is for two or more tax periods and the information necessary for the preparation of the individual returns is present,
    1. Reject with AC 3 and prepare Form 10886, Reject Routing Slip.

    2. Rejects will change the numbered Form 730 to reflect the tax for the tax period on the Error Register.

    3. If the return is a RPS return and you can determine that the money received with it now exceeds the tax reported on the return, enter CCC X in Field 01-E and on the return.

    4. Prepare a dummy Form 730 for each of the remaining tax periods and send it to the Receipt and Control Batching Function.

    5. Prepare a Form 3465, Adjustment Request, request that available money be transferred from the tax period shown on the error register to the tax period to which the dummy will post.

    6. Notate on the Form 3465 that a CCC X has been entered and must be released when the money is moved.

    7. Attach a copy of the Form 3465 to the dummy Form 730.

    Return is for two or more tax periods, and the information necessary for preparing the individual returns is not present or shows a liability for only one tax period,
    1. Correspond to request the information from the taxpayer and reject the return with AC 3.

    2. If the taxpayer does not respond, Rejects will process all liability and remittance to the earliest tax period shown.

    3. Photocopy the front of the return and notate "Photocopy, do not process."

    4. Prepare a Form 10886, Reject Routing Slip, and indicate "Multiple Period Case."

    5. Route Form 10886, photocopy of return, all research and correspondence to the Excise Operations.

    6. Enter CCC 3 in Field 01-E.

    CCC W is not present and if the processing date is more than 2 years and 9 months after either the return due date on CCC G returns or the later of the return due date or received date on non-G coded returns this field is invalid:
    1. Check to see if the return has been cleared by Statute Control.

    2. If it has, enter CCC W in Field 01-E.

    3. If it has not, reject with AC 3, attached Form 10886 and route to Statute Control.

    CCC W is present and the processing date is less than 2 years after the due date of the return, this field and the CCC Field 01-E are invalid:
    1. Compare the code with the one placed on the Form 730 by Code and Edit.

    2. If it is a transcription error, line out the CCC W in Field 01-E and enter the correct code above it.

    3. If the tax period is incorrect, correct Field 01-D.

    Form 730 is not a statute control document, but is CCC W coded, Delete code on the return and on the error register.
Form 730 Corrections Section 01 Field E - CCC
  1. Field E - Computer Condition Code -

    1. The valid codes are D, F, G, O, R, U, W, X, 3, and 4.

    2. The field is invalid if any code other than those listed above is used.

  2. To correct, compare the code with the one edited on the Form 730.

    If: And: Then:
    Transcription error,   Line out Field 01-E and insert the correct code above it.
    Coded incorrectly,   Correct return and error register data by referring to IRM 3.12.23.4.5, Field 01 Computer Condition Codes.
    CCC G is present and the return is an amended return
    1. There are entries past Field 01-F (except Fields 01-J and 01-K),

    2. Field 01-F is blank, or

    3. Field 01-E contains entries other than CCC G, 3, or W,

    • Delete all fields in Section 01 past Field F (except 01-J and 01-K).

    • If Section 02 is present, delete it with AC 4.

    • Enter the correct received date. See IRM 3.12.23.4.6(3), Field 01 - Received Date.

    • If Section 02 is present, delete it with AC 4.

    • Delete all CCCs except G, 3, and W in Field 01-E.

    • If Section 02 is present delete it with AC 4.

    CCC G is present and the return is not an amended return,  
    • Line through the CCC G code in Field 01-E.

    • Verify the remaining fields for correct data, enter any missing data and correct any erroneous data.

    CCC 4 and R are both present. Refer to tax period, CCCs and received date on the return, Return was prepared under IRC 6020(b), Delete CCC R.
    CCC 4 and R are both present. Refer to tax period, CCCs and received date on the return, Return was not prepared under IRC 6020(b), Delete CCC 4.
    CCC U is present note: U code is used by code and edit when a return must be rejected,   Code AC 3 if necessary to still reject the return in Error Correction.
Form 730 Corrections Section 01 Field F - Received Date
  1. Field F - Received Datemust be present and cannot precede the first day of the tax period.

    Note:

    See IRM 3.12.23.7.2.1, Form 730 Corrections Section 01 Field D - Tax Period for additional guidelines for determining tax period.

    1. For the invalid conditions and correction procedures which are common to all excise tax returns, see IRM 3.12.23.4.6, Field 01 - Received Date.

Form 730 Corrections Section 01 Fields G - H - I - J - K
  1. Field G - Penalty and Interest Codes - Same as IRM 3.12.23.4.7, Field 01 Penalty and Interest Code (P/I Code).

  2. Field H - Reserved.

  3. Field I - CAF Indicator - Not edited by Code and Edit.

  4. Field J - Correspondence Received Date (CRD) see IRM 3.12.23.4.8, Correspondence Received Date (CRD).

  5. Field K - Entity Underprint Code - See IRM 3.12.23.4.9, Entity Underprint Code (EUC).

Form 730 Corrections Section 01 Field L - TPNC
  1. Field L - Taxpayer Notice Codes (TPNC). Taxpayer Notice Codes are entered to the right of AC 1 and are preceded by a dash (-). If invalid, use AC 1 and the appropriate TPNC. The following are the valid TPNCs:

    Tax Payer Notice Explanation
    Code 01 We found the computation of tax was not correct.
    Code 07 We found the amount of wagers and laid-off wagers were not added correctly.
    Code 08 Credit cannot be allowed because a statement was not submitted as prescribed by instructions on the Form 730.
    Code 09 We found an error when your credits were subtracted from your tax.
    Code 90 Use this code when no other code explains the adjustment. Notice Review will type in the explanation before mailing the notice to the taxpayer. Do not use any other TPNC with Code 90. Write the explanation on a 3 × 5 card and attach it to the return.
Form 730 Corrections Section 01 Field M - Total Tax TP/Settlement
  1. Field M - Total Tax Taxpayer (TP)/Total Tax Settlement - If there is a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ computation and the taxpayer’s entry, the computer amount will appear as an underprint in Field M.

  2. The following fields are used to determine the tax. Verify that they were transcribed correctly on the Form 730.

    1. Wagers Accepted (Field 01-N) - Refer to line 1 of the Form 730.

    2. Laid-off Wagers Accepted (Field 01-O) - Refer to line 2 of the Form 730.

    3. Tax on Wagers Authorized under laws of the state in which Accepted (Field 01-R) - Refer to line 4a of the Form 730.

    4. Tax Wagers Accepted (other that reported on line 4a (Field 01-S) - Refer to line 4b of the Form 730.

    5. Credit (Field 01-Q) - Refer to line 5 of the Form 730.

    6. Balance Due (Field 01- M) - Refer to line 6 of the return.

  3. If there is no tax data shown on the return reject the return with AC 3 and correspond for the missing information.

Form 730 Corrections Section 01 Fields N-O-P
  1. Field N and O - "Wagers Accepted and Laid-Off Wagers Accepted" are fields that represent data transcribed from taxpayer entered items on the return (lines 1 and 2). If a taxpayer accepts more wagers than the risk he or she is willing to assume, those excess wagers may be turned over to another taxpayer who is in the same business. These are called laid-off wagers and must be reported on the receiver’s Form 730, Monthly Tax Return for Wagers, as well as on the Form 730 of the taxpayer who turned over the wager to the receiver. See IRM 3.12.23.7, Processing Form 730, Monthly Tax Return for Wagers.

    1. Accept the taxpayer’s entry for line 2 of the return. In the Figure 3.12.23-6 example below, the taxpayer shows laid-off wagers on line 2 but has added incorrectly on line 3.

    2. Use AC 1.

    3. Send TPNC 07.

    4. Make corrections on the document as shown in Figure 3.12.23-6 below.

    Figure 3.12.23-6

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  2. Field P - Total Wagers is a generated total of Fields N and O and appears as an underprint field under a zero filled Field.

Form 730 Corrections Section 01 Field Q - CREDIT
  1. Field Q - Credit - is transcribed from line 5 of the return. It is always entered as a positive number and is converted to a credit by the computer.

  2. This field is invalid if the credit exceeds the tax on line 4c.

    If: Then:
    Transcription errors found, Correct errors.
    Amount shown on line 5 exceeds tax on line 4c,
    1. Reduce the credit on the return (line 5) and on error register Field 01-Q so that it equals the tax.

    2. Line through the amount in Field 01-M and cross (X) out the amount on line 6 of the return (line 6 will always be $0).

    3. If the taxpayer has attached a Form 8849, Claim for Refund of Excise Taxes, photocopy the form and attach it to the original Form 730. Forward the original Form 8849 to Excise Group with remarks that a portion of the requested claim may have already been allowed as a credit on Form 730. See Figure 3.12.23-7, Form 730 Corrections Section 01 Field Q.

    4. If Form 8849 is not attached, inform the taxpayer that he/she may file a claim on Form 8849 for the remaining amount.

    Figure 3.12.23-7

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  3. All claims for credit must be supported by a full explanation of the reason the credit is being claimed and certificates to support the laid-off wagers credit. Thus, no credit is allowed for a laid-off wager unless the following information is attached to the return:

    1. The certificate described in IRC 44.6419-2(d) of the regulations.

    2. A statement explaining the reason for the credit, the month in which the tax was paid, the date of the payment, and whether any previous claim covering the amount involved, or any part, has been filed.

    If: Then:
    A claim for a credit is unsupported and has not been requested by Code and Edit,
    1. Reject the record with AC 3.

    2. Correspond using Letter 228C, Special Tax Return (Wagering) Incomplete for Processing: Form 11-C and Form 730, to request the supporting documentation.

    The taxpayer does not reply,
    1. Rejects will disallow the credit.

    2. Use AC 1.

    3. Send TPNC 08.

Form 730 Corrections Section 01 Field R and Section 01 Field S
  1. Field R - Authorized Wagers - transcribed from line 4a of the return. It is always entered as a positive number. The computer will multiply this figure by the percentage .0025 and will equal TAX-AUTH-WAGERS-COMPUTER.

  2. Field S - Other Wagers - transcribed from line 4b of the return. It is always entered as a positive number. The computer will multiply this figure by the percentage .02 and will equal TAX-OTHER-WAGERS-COMPUTER.

  3. The computer will add lines 4a and 4b to get total line 4c.

Form 730 Section 01 Field T - Preparer Tax Identification Number (PTIN)
  1. The Preparer Tax Identification Number is located to the right of the preparer's signature below the taxpayer signature line.

  2. The PTIN must be a numeric number. The PTIN cannot be all zeroes or all nines.

Form 730 Section 01 Field U - Preparer EIN
  1. The Preparer's EIN is located below the PTIN below the signature line.

  2. The Preparer's EIN must be a nine digit numeric number. The EIN cannot be all zeroes or all nines.

Form 730 Section 01 Field V - Preparer Phone Number
  1. The Preparer Phone Number is located below the paid preparer's EIN.

  2. No action is required on amended returns.

Form 730 Section 02 - Address

  1. See IRM 3.12.23.5, Address Section 02 - All Forms, for instructions.

Processing Form 11-C, Occupational Tax and Registration Return for Wagering

  1. To report the time spent and the volume completed use Function 270, Program 12701 for reviewing and correcting records on error register.

  2. Anyone engaged in the business of receiving taxable wagers is required to file Form 11-C. See Exhibit 3.12.23-2, Form 11-C and Error Register Fields.

    1. This includes organizations that are otherwise exempt from tax under IRC 501 or IRC 521.

    2. Taxable wagers include those placed on a sports event or contest with a person engaged in the business of accepting such wagers, those placed in a wagering pool with respect to a sports event or contest if the pool is conducted for profit, and those placed in a lottery conducted for profit (other than a state-conducted lottery).

  3. The dual purpose Form 11-C allows the taxpayer to:

    1. Report and pay the occupational tax under IRC 4411.

    2. Register certain information with the IRS before accepting taxable wagers.

  4. The form is filed and the tax is paid by both Principal Operators and Agents prior to conducting business. Each indicates his or her status by checking the appropriate box in Part 1, line 3.

    1. Principal operator is a person who is in the business of accepting taxable wagers on his or her own benefit. This person is at risk for the profit or loss depending on the outcome of the event or contest for which the wager was accepted.

    2. Agent is anyone who accepts taxable wagers for the principal operator.

  5. A return must be filed before taxable wagers are accepted. The First Return will cover the tax period from the start of business until June 30 of the current tax year. For subsequent years, the form is due by July 1 as long as taxable wagers are accepted.

    • If a person begins accepting taxable wagers after July 1, the annual tax is prorated for the first year. The correct tax is computed by the computer. See Figure 3.12.23-8.

      Figure 3.12.23-8

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  6. Under certain circumstances, a taxpayer must file a Supplemental Registration Return and no tax is due. A Supplemental Registration Return is filed when there has been a change of address, a change of corporate name, or a change in control for the remainder of a registered tax period. See (10) and (11) below for further information regarding a supplemental registration return.

  7. Under other circumstances, such as when a change in ownership has occurred, a taxpayer must file a first return and pay the appropriate tax for the new entity.

  8. There are two tax amounts that apply to both principal operators and agents:

    1. $50 per year if the taxable wagers are authorized under the laws of the state in which accepted.

    2. $500 for all other taxable wagers.

  9. A Supplemental Registration Return must be filed (even though no additional tax is due) within 30 days after any of the following changes in control:

    1. There is a change in business or home address of any party.

    2. The business is continued by the surviving spouse, executor, administrator or other legal representative of a deceased person who paid the occupational tax.

    3. The business is continued by an assignee for creditors.

    4. One or more members withdraws from a firm or partnership.

    5. The corporate name is changed.

  10. A Supplemental Return must be filed within 10 days after:

    1. A new agent or employee is engaged to receive wagers. The supplemental registration return is filed by the Principal Operator to report the name, address, and EIN, of each new agent or employee.

    2. A person who is hired to receive wagers for another, must file a supplemental return to report the name, address, and EIN of each employing entity.

  11. The occupational tax is due and a new Form 11-C with a different EIN must be filed within 30 days of the change when changes in ownership are due to one of the following:

    1. New members are admitted to a firm or partnership.

    2. A corporation is formed to continue the business of a partnership.

    3. A stockholder continues the business of a dissolved corporation.

Due Dates and Types of 11-C Returns

  1. A principal operator or agent will file one of three types of returns. The three types are:

    1. First return.

    2. Renewal return.

    3. Supplemental registration return.

  2. Taxpayers are instructed to check the appropriate box in Part 1, line 3. If no box is checked:

    1. Review the return and attachments to determine the type of return. Be sure to review Parts II, III, and IV for further clues that can help you.

    2. Check IDRS to see if there is a return already posted for this period. If a return is posted, this might be a supplemental registration return. If not posted this could be the first return.

    3. If still unable to determine the type of return, see IRM 3.12.23.8.3.9, Form 11-C Section 01 Field M - Tot Tax TP/Settlement.

  3. A "First Return" is due prior to accepting taxable wagers and should always be processed. It can be identified by a mark in the "First Return" box or by a written explanation or notation stating any of the following:

    • A new business is formed.

    • New members are admitted to a firm or partnership.

    • A corporation is formed to continue the business of a partnership.

    • A stockholder continues the business of a dissolved corporation.

    • Agent begins accepting taxable wagers for the first time in this fiscal year (July 1st to June 30th of the next year).

  4. A renewal return is due each year by July 1 and should always be processed.

    • It can be identified by a mark in the "Renewal Return" box or by a written explanation or notation stating something referring to annual or renewal.

  5. A Supplemental Registration Return is due and processed differently depending on the type of change that has occurred.

    • The return can be identified by a mark in the "Supplemental Registration Return" box, by an explanation in Part IV, line 7, or by an attached written explanation or letter stating any of the following:

      If: Then Return is Due:
      • A change in business or home address by principal operator, or

      • A change in business or home address by agent, or

      • A person who paid the tax dies and the business is continued by the surviving spouse, executor, administrator or other legal representative, or

      • The business continues with a receiver or trustee of Bankruptcy, or

      • One or more members withdraws from a firm or partnership (e.g., after the death of a member, etc.), or

      • The corporate name is changed,

      Within 30 days of the change even though no tax is due.
      • The principal operator engages a new agent to receive taxable wagers, a supplemental registration return is filed to report the name, address, and EIN, of each new agent, or

      • An agent who previously filed a Form 11-C for this fiscal year (July to June of next year) is engaged to receive taxable wagers for someone other than previously reported, the agent must file a supplemental registration return to report the name, address, and EIN of each new principal operator,

      No later than 10 days after agent is engaged.

Taxable and Non-Taxable

  1. Only certain activities constitute wagers subject to tax. These include:

    1. Any wager with respect to a sports event or contest placed with a person who is in the business of accepting such wagers.

    2. Any wager placed in a wagering pool with respect to a sports event or contest, if the pool is conducted for profit. A wagering pool conducted for profit includes any scheme or method for the distribution of prizes to one or more winning bettors based upon the outcome of a sports event or contest, or a combination of a series of events or contests, provided that the pool is managed or conducted for profit.

    3. Any wager placed in a lottery conducted for profit. The term lottery includes the numbers game, policy, punch boards, pull tabs, and similar types of wagers.

  2. Other activities are not wagers subject to tax if certain circumstances are met:

    1. A drawing conducted by an organization exempt from tax under IRC 501 or IRC 521 is not taxable as long as no part of the net proceeds from the drawing inures to the benefit of any individual or shareholder.

    2. A game is not taxable if it is of the type in which usually the wagers are placed, the winners are determined, and the prizes are distributed in the presence of all persons placing wagers in the game. These games generally include card games, roulette, dice games, bingo, keno, and gambling wheels.

    3. IRC 4402(1) provides exemptions for paramutual wagering, slot machines, and state operated lotteries.

Form 11-C Error Register

  1. The Error Register Fields as they appear on the Register, their alpha designations, length, and whether they are fixed or variable are shown below: (All money fields are dollars and cents.)

    1. Section 01

      Alpha Designator Field Length Field Name Field Type
      A 11 Remittance Variable
      B 4 (Underprint Computer Generated) Name Control Fixed
      C 9 EIN Fixed
      D   Reserved  
      E 6 Beginning Year/Month (Tax Period - YYYYMM) Fixed
      F 10 Computer Condition Codes Variable
      G 8 Received Date (YYYYMMDD) Variable
      H 1 Penalty and Interest Code Variable
      I 1 CAF Indicator Variable

      Note:

      Code and Edit examiners are no longer required to edit this field.

      J 0 Reserved Reserved
      K 2 Start Day Variable
      L 1 Nature of Change Indicator Variable
      M 11 Total Tax Taxpayer/Total Tax Settlement (Underprint Computer Generated) Variable
      N 8 Correspondence Received Date (YYYYMMDD) Variable

      Note:

      Code and Edit examiners are no longer required to edit this field.

      O 1 Entity Underprint Code Variable
      P 6 Taxpayer Notice Codes Variable
      Q 1 Employee Status Indicator Variable
      R 9 Preparer SSN Variable
      S 9 Preparer EIN Variable
      T 10 Preparer Phone Number Variable
    2. Section 02

    Alpha Designator Field Length Field Name Field Type
    A 35 In-Care-of Name Variable
    B 35 Foreign Address Variable
    C 35 Street Address Variable
    D 22 City Variable
    E 2 State Variable
    F 12 ZIP Code Variable
Form 11-C Correction Section 01 - Fields A-B-C
  1. Field A - Remittance - See IRM 3.12.23.4.1, Field 01-A Remittance Received.

  2. Field B - Name Control - See IRM 3.12.23.4.2, Field 01-B Name Control.

  3. Field C - Employer Identification Number - See IRM 3.12.23.4.3, Field 01-C Employer Identification Number (EIN).

Form 11-C Section 01 Field E - Tax Period
  1. Field E - Beginning Year Month (Tax Period) - The tax period will be entered in YYYYMM format using the month and year that wagers were first accepted.

  2. The field is invalid if:

    • It is not numeric,

    • The date is greater than the year and month of the process date plus 3 months,

    • The month is less than 01, or

    • The month is greater than 12.

  3. Use the following priority to determine the correct tax period and make any necessary corrections to the error register:

    1. The year and month entered by the taxpayer at the top of the Form 11-C. The tax period for annual returns is entered as July of the applicable year (i.e., 201807, 201907, etc.).

    2. The month that corresponds to the amount of tax reported on the return and the current fiscal year. Refer to Figure 3.12.23-8 to find the tax rate by month.

    3. If the correct tax period is greater than the process date plus three months, enter AC 3 to reject the return and notate "Early Filed - Hold for Appropriate Month" on the Form 10886, Reject Routing Slip. Otherwise continue processing as normal.

  4. Use the following procedures to correct tax period errors.

    If: Then:
    Return is for two or more tax periods and the information necessary for the preparation of the individual returns is present,
    1. Reject with AC 3 and prepare Form 10886.

    2. Reject will change the numbered Form 11-C to reflect the tax for the tax period on the Error Register.

    3. If the return is an RPS return and the money received with it now exceeds the tax reported on the return, enter CCC X in Field 01-F and on the return.

    4. Prepare a dummy Form 11-C for each of the remaining tax periods and send it to the Receipt and Control Batching Function.

    5. Prepare a Form 3465 request that available money be transferred from the tax period shown on the error register to the tax period to which the dummy will post.

    6. Notate on the Form 3465 that an CCC X has been entered and must be released when the money is moved.

    7. Attach a copy of the Form 3465 to the dummy Form 11-C.

    The return is for two or more tax periods, and the information necessary for preparing the individual returns is not present or shows a liability for only one tax period,
    1. Reject the return with AC 3.

    2. Correspond using Letter 228C.

    3. If the taxpayer does not respond, Rejects will process all liability and remittance to the earliest tax period shown.

    4. Photocopy the front of the return and notate "Photocopy, do not process" .

    5. Prepare a Form 10886 and indicate "Multiple Period Case" .

    6. Route photocopy of return, all research and correspondence with Form 10886 to Excise Operations.

    7. Enter CCC 3 in Field 01-F.

    CCC W is not present and if the processing date is more than 2 years and 9 months after either:
    • The return due date on CCC G coded returns, or

    • That later of the return due date or received date on non G coded returns,

    • Check to see if the return has been cleared by Statute Control.

    • If it has, enter CCC W in Field 01-F.

    • If it has not, reject with AC 3, attach Form 10886 and route to Statute Control.

    CCC W is present and the processing date is less that 2 years after the due date of the return,
    1. Compare the code with the one placed on the Form 11-C by Code and Edit.

    2. If it is a transcription error, line out the CCC W in Field 01-F and enter the correct code above it.

    3. If the tax period is incorrect, correct Field 01-E.

    Form 11-C is not a statute control document, but CCC W coded, Delete code on return and on the error register.
Form 11-C Section 01 Field F - CCC
  1. Field F - Computer Condition Codes - The valid codes are D, F, G, O, R, U (on DIS/ISRP input only), W, X, 1, 3, 4, and 7. See IRM 3.12.23.4.5, Field 01 Computer Condition Codes, for a brief description of the codes.

  2. The field is invalid if any code other than those listed above is used.

  3. To correct, compare the code with the one edited on the Form 11-C by code and edit.

    Field Invalid If: And/Or: Then:
    Transcription error,   Line out Field 01-F and insert the correct code above it.
    Coded incorrectly,   Determine the correct code by referring to IRM 3.12.23.4.5, Field 01 Computer Condition Codes, and correct the return and Error Register data with AC 6.
    CCC G is present and the return is an amended return,
    1. There are entries past Field 01-G (except Fields 01-N and 01-O),

    2. Field 01-G is blank,

    3. Field 01-F contains entries other than CCC G, 3 or W,

    1. Delete all fields in Section 01 past Field G (except 01-N and 01-O). If section 02 is present, delete it with AC 4.

    2. Enter the correct received date. See IRM 3.12.23.4.6, Field 01 Received Date. If Section 02 is present, delete it with AC 4.

    3. Delete all CCCs except G, 3 and W in Field 01-F. If Section 02 is present delete it with AC 4.

    CCC G is present and the return is not an amended return,   Line through the CCC G code in Field 01-F. Verify the remaining fields for correct data, enter any missing data and correct any erroneous data.
    CCC D and R are present but the received date is not (Field 01-G will also be invalid).

    Note:

    Refer to tax period, CCCs, and received date on the return.

    Return is delinquent and taxpayer has reasonable cause per criteria in IRM 20.1.1, Introduction and Penalty Relief, Then code is correct, enter the received date in Field 01-G.
    CCC U is present,

    Note:

    U code is used by code and edit when a return must be rejected.

      Code AC 3 if necessary to still reject the return in Error Correction.
Form 11-C Section 01 Field G - Received Date
  1. Field G - Received Date - The received date must be present on Form 11-C.

  2. For the invalid conditions and correction procedures that are common to excise tax returns see IRM 3.12.23.4.6Field 01 Received Date.

    Note:

    On early filed Form 11-C if the received date on Form 11-C is prior to the beginning of tax period, use the return due date as the received date.

Form 11-C Section 01 Fields H - I (Penalty and Interest Code and CAF Indicator)
  1. Field H - Penalty and Interest Codes - See IRM 3.12.23.4.7, Field 01 Penalty and Interest Code (P/I Code), for procedures.

  2. Field I - CAF Indicator - Not edited by Code and Edit.

Form 11-C Section 01 Field J - Reserved
  1. This field is reserved.

Form 11-C Section 01 Field K - Start Day
  1. Field K - Start Day - The start day indicates the first day that a change of ownership occurred. It should be edited under the words, "Return for period from" at the top of the Form 11-C.

  2. This field is invalid if:

    1. The month of the tax period is 01, 03, 05, 07, 08, 10, or 12 and the start day is not 01 through 31 or blank.

    2. The month of the tax period is 04, 06, 09, or 11 and the start day is not 01 through 30 or blank.

    3. The month of the tax period is 02 and the start day is not 01 through 28 (29 in leap years) or blank.

  3. To correct, refer to the edited start day on the return.

    If: Then:
    Transcription errors, Correct errors.
    The edited day is incorrect or not present, Enter the day of the month entered by the taxpayer on the "Return for period from" line.
    No start day is present on the face of the return, Refer to the attachments to determine the start day.
    A start day cannot be located and is required,
    • Reject with AC 3.

    • Correspond with Letter 228C.

  4. This field and the Nature of Change Indicator (NCI) field (Field L) are invalid if one is present and the other is not.

    • To correct, determine whether additional information is needed from the taxpayer by referring to the return and attachments.

      If: Then:
      There has been a change of ownership, Enter a "2" in Field 01-L and the start day in Field 01-K.
      There has not been a change of ownership, Delete the entry in either Field 01-K or Field 01-L.
Form 11-C Section 01 Field L - Nature of Change Ind.
  1. Field L - Nature of Change Indicator - A "2" in this field indicates that a change of ownership has occurred in the company accepting wagers.

  2. This field is invalid if it is not a "2" or blank.

    • To correct, refer to the return and attachments to determine if a change of ownership has occurred.

    If: Then:
    It has a change of ownership, Enter a "2" in Field 01-L and verify that the day of the change is present in Field 01-K.
    There has not been a change of ownership, Line through the entry.
Form 11-C Section 01 Field M - Tot Tax TP/Settlement
  1. Field M - Total Tax Taxpayer/Total Tax Settlement - If there is a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ computation and the taxpayer’s entry of the tax, the computer amount will appear as an underprint to Field 01-M.

  2. The following fields are used in computing the tax. Verify that they were transcribed correctly.

    1. Tax period in Field 01-E (also check for possible multiple tax periods).

    2. The CCCs in Field 01-F.

    3. The tax entered in Field 01-M.

    4. Make any necessary changes to incorrect fields by lining out the entry and inserting the correct data. Use AC 6 to make the changes. See Figure 3.12.23-9.

    Figure 3.12.23-9

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  3. Use the following to verify the applicable amount of tax:

    If: Then:
    Taxpayer used $50.00 per year,
    • Verify that CCC 1 is present in Field 01-F.

    • If it is not present, edit the 1 on the return and enter it in Field 01-F

    Taxpayer used $500.00 per year,
    • Verify that CCC 1 is not present in Field 01-F.

    • If it is present, delete the code on the return and the error register.

  4. If a Form 11-C is received with a remittance amount, the taxpayer has no tax liability listed, gives no explanation why the return is being filed, and Field 01-L is blank, process as follows:

    If: Then:
    A signature on the return or attachments,
    • Enter the remittance amount on Line 2 and in Field 01-M.

    • Continue processing return.

    No signature on the return or attachments,
    • Correspond for a signature.

    • Reject with AC 3.

    1. If reply, Rejects will:

      • Enter the remittance amount on Line 2 and in Field 01-M.

      • Continue processing return.

    2. If no reply, Rejects will:

      • Enter the remittance amount on Line 2 and in Field 01-M.

      • Edit "3" in Field 01-F.

      • Edit "1" in Field 01-J.

      • Process return.

  5. If a Form 11-C is received with no remittance, no tax liability, and no explanation as to why a return is being filed, and Field 01-L is blank, use the following table to process return.

    If: And: Then:
    A signed return is received that indicates generally that there is no liability (e.g., "$0" , "zero" , "No Wagers" , "Not Liable" , or "None" ) with no explanation as to why a return is being filed.

    Note:

    For "Exempt" , see below.

    • An organization exempt from tax under IRC 501, or

    • IRC 521 is indicated, or

    • The name of an association or organization (i.e., Veterans, Elks, Fireman, or a city, state, or federal government) is indicated, or

    • A wagering activity is represented as non-taxable,

    Process return.
    An unsigned return is received that indicates generally that there is no liability (e.g., "$0" , "zero" , "No Wagers" , "Not Liable" , or "None" ) with no explanation as to why the return is being filed.

    Note:

    For "Exempt" , see below.

     
    1. Reject with AC 3.

    2. Correspond using Letter 228C to request an explanation and signature if necessary.

    3. If no reply, Rejects will:

      • Not F code the return.

      • Enter a 1 in Field 01-J, and

      • Enter a 3 in Field 01-F.

    Return has "Exempt" and/or an explanation of why they are exempt from liability. There is no reasonable explanation why they are exempt.
    1. Reject with AC 3.

    2. Correspond using Letter 228C to request an explanation and signature if necessary.

    3. If no reply to correspondence and a signature is present on the return or attachments then:

      • Assess $500.00 tax on line 2.

      • Send TPNC 01 to the taxpayer.

      • Process return

    4. If a signature is not present on the return or attachments:

      • Reject with AC 3.

      • correspond to request the signature.

      • If no reply, edit 3 in Field 01-F.

      • Also edit 1 in Field 01-J.

      • Continue to process.

    Return has "Exempt" and/or an explanation of why they are exempt from liability.
    • The return indicates that it is an organization exempt from tax under IRC 501, or

    • IRC 521, or

    • The name of an association or organization (i.e., Veterans, Elks, Firemen, a city, state, or federal government) is indicated, or

    • A wagering activity is represented as non-taxable,

    1. Edit CCC F in Field 01-F.

    2. Edit 0 in Field 01-Q.

    3. Continue to process return.

    Note:

    Exempt organizations will file a return if they have taxable wagering activities.

  6. For all other conditions use the following table to process Form 11-C.

    If: Then:
    All fields were entered correctly and CCC 1 was used correctly and the special conditions discussed below, do not apply,
    1. The taxpayer has made an error in computing the tax.

    2. If this is the first Form 11-C filed by this taxpayer, check to see if the annual tax was correctly prorated.

    3. Use AC 1 followed by a dash (-) and the appropriate TPNC.

    4. See IRM 3.12.23.1.18, Taxpayer Notice Codes.

    A principal operator files Form 11-C, lists agents in Part II Line 5c and/or Part III, line 6 or on attachment and includes payment for agents,
    1. "0" code the return to accept the remittance as the tax liability.

    2. Prepare Form 3465 with the notation "principal operator paying for agents" .

    3. Photocopy return and attach to Form 3465.

    4. Route Form 3465 and return copy to the CSC Exam/Excise Group.

    5. Input CCC X on original document. Notate "Fee prepared" in Part III area.

    6. Route the return for processing.

    Supplemental Form 11-C is filed to notify the IRS that a change in control has been made and that there is no tax due. See IRM 3.12.23.8, Processing Form 11-C, Occupation Tax and Registration Return for Wagering, for appropriate circumstances,
    1. These returns are not to be processed.

    2. If a return was overlooked in Code and Edit, it may appear with an underprint to total tax since there should be no tax reported on the return but the computer will compute tax from the date of the change.

    3. If this should happen, reject the return with AC 3.

    4. Rejects will update the Entity module with the changes reported by the taxpayer.

    5. Delete the return from processing and route to Files to be associated with original return DLN.

    Form 11-C is stamped "Prepared by Examination" or "Prepared by Collections" ,
    1. Bring up the underprint in Field 01-M with AC 6.

    2. If the Compliance function indicates that no tax liability is due, enter AC 0. This will allow the return to post with no tax liability.

Form 11-C Section 01 Field N - O (Correspondence Received Date and Entity Underprint Code)
  1. Field N - Correspondence Received Date (CRD) - See IRM 3.12.23.4.8, Correspondence Received Date (CRD).

  2. Field O - Entity Underprint Code (EUC) - See IRM 3.12.23.4.9, Entity Underprint Code (EUC).

Form 11-C Section 01 Field P - TPNC
  1. Field P - Taxpayer Notice Codes (TPNC) - The TPNCs listed below are input on the raw or loop data run using AC 1. TPNCs are entered to the right of AC 1 and are preceded by a dash (-).

    Tax Payer Notice Explanation
    Code 01 We found the computation of tax was not correct.
    See Figure 3.12.23-10.
    Code 02 The tax rate was used incorrectly.
    Code 90 Used when no other code explains the adjustment. Notice Review will type the explanation before mailing notice to the taxpayer. Write the explanation on a 3 × 5 card and attach it to the front of the return. Do not use any other TPNC with TPNC 90.

    Figure 3.12.23-10

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Form 11-C Section 01 Field Q - Employee Status Indicator
  1. Field Q - Employee Status Indicator - A "1" indicates that the taxpayer is an agent and as such is probably not required to file a Form 730, Monthly Tax Return for Wagers. If the filing requirement for a Form 730 was opened in error, a code of "1" on Form 11-C will close it. A "0" indicates that the taxpayer is a principal operator and as such should have a Form 730 filing requirement.

  2. This field is invalid if it is not 1, 0, or blank.

    • To correct, refer to Part 1, line 3, to determine if the "Employee Agent" box is checked.

    If: And/Or: Then:
    Taxpayer checks no boxes in Part I, line 3, then research CC INOLE shows both Form 11-C and Form 730 Filing Requirements Enter a "0" in Field 01-Q.
    Taxpayer checks no boxes in Part I, line 3, then research CC INOLE shows only Form 11-C Filing Requirement
    • Reject with AC 3.

    • Correspond to request missing information.

    "No" is checked in Part II, line 5 The name, address, and EIN of the agent's principal operator is given in Part III Enter a "1" in Field 01-Q.
    "No" is checked in Part II, line 5 No information in Part III Enter a "1" in Field 01-Q.
    "Yes" is checked in Part II, line 5   Enter a "0" in Field 01-Q.
    Taxpayer has checked the "Employee Agent" box in Part I, Line 3, The name, address, and EIN of the agent's principal operator is given in Part III Enter a "1" in Field 01-Q.
    Taxpayer has checked the "Employee Agent" box in Part I, Line 3, No information is Part III Enter a "1" in Field 01-Q.
    Taxpayer has checked the "Principal Operator" box in Part I, Line 3,   Enter a "0" in Field 01-Q.
    Taxpayer checks both boxes in Part I, line 3, refer to parts II and III Only Part II is completed Enter a "0" in Field 01-Q.
    Taxpayer checks both boxes in Part I, line 3, refer to parts II and III Only Part III is completed Enter a "1" in Field 01-Q.
Form 11-C Section 01 Field R - Preparer Tax Identification Number (PTIN)
  1. The PTIN is located to the right of the preparer's signature below the signature line.

  2. The PTIN must be a nine-digit numeric number. The PTIN cannot be all zeroes or all nines.

Form 11-C Section 01 Field S - Preparer EIN
  1. The Preparer's EIN is located below the PTIN at the below the signature line.

  2. The Preparer's EIN must be a nine-digit numeric number. The EIN cannot be all zeroes or all nines.

Form 11-C Section 01 Field T - Preparer Phone Number
  1. The paid preparer's phone number is listed below the paid preparer's EIN.

  2. No action is required on amended returns.

Form 11-C Section 02 - Entity

  1. See IRM 3.12.23.5, Address Section 02 - All Forms, for correction procedures.

No Reply To Error Correction's Correspondence

  1. This section is a brief summary of no reply to correspondence sent by Error Correction to taxpayers regarding questions on excise forms.

  2. 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.

No Reply to Form 730 Correspondence

  1. Always enter a CCC 3 as the Correspondence Received Date when correspondence was sent and no reply is received.

  2. Possible no reply conditions are listed below.

    Item Corresponded for: No Reply Procedure:
    Missing Signature on overpaid returns Enter CCC X and treat as a dummy return for posting.
    Missing Signature on balance due or even balance returns Treat as dummy return for posting the information to Master File.
    Request for support of Layoff credit
    • Disallow the credit.

    • Adjust the tax accordingly.

    • Send TPNC 90 using AC 1.

    Tax Period Enter the months of the received date.
    Multiple tax periods
    1. Process all liability and remittance to the earliest tax period shown.

    2. Photocopy the front of the return and notate "Photocopy, do not process."

    3. Prepare a Form 10886 and indicate "Multiple Period Return."

    4. Route Form 10886, photocopy of return, all research and correspondence to the Excise Operations.

    No tax data shown on the return and it is a remittance (RPS) return Create dummy return to post to Master File. Enter CCC X to hold credit.

No Reply to Form 11-C Correspondence

  1. Always enter a CCC 3 as the Correspondence Received Date when correspondence was sent and no reply is received.

    Item Corresponded for: No Reply Procedure:
    Missing Signature on a overpaid return Enter CCC X and treat as a dummy return for posting.
    Missing Signature on a balance due return or even balance return. Treat as dummy return for posting the information to Master File.
    Tax Period Enter the year and month (tax period) that is currently being processed.
    Multiple Tax Periods
    1. Process all liability and remittance to the earliest tax period shown.

    2. Photocopy the front of the return and notate "Photocopy, do not process."

    3. Prepare a Form 10886 and indicate "Multiple Period Return."

    4. Route Form 10886, photocopy of return, all research and correspondence to the Excise Operations.

Alphabetic Index

  1. The following table provides IRM references:

    Subject: IRM Reference:
    Action Codes IRM 3.12.23.1.17, Action Codes (AC)
    Conditions Codes(CCC)
    • Chart

    • Form 730

    • Form 11-C

    • IRM 3.12.23.4.5.1, CCC Chart

    • IRM 3.12.23.7.2.2, Form 730 Corrections Section 01 Field E - CCC

    • IRM 3.12.23.8.3.3, Form 11-C Section 01 Field F - CCC

    Correspondence Received Date IRM 3.12.23.4.8, Correspondence Received Date (CRD)
    Entity Underprint Code IRM 3.12.23.4.9, Entity Underprint Code
    Error Register Coding IRM 3.12.23.1.20, Error Register Code
    Excess Remittance Returns IRM 3.12.23.4.1.2, Field 01 - A Excess Remittance Returns
    Erroneous Notices IRM 3.12.23.1.25, Pre Computed Penalty
    Field Validity Error IRM 3.12.23.4, Field Validity Error
    Foreign Address IRM 3.12.23.5.2, Field 02-B Foreign Address - General Information
    Form Processing
    • Form 730

    • Form 11-C

    • IRM 3.12.23.7, Processing Form 730, Monthly Tax Return for Wagers

    • IRM 3.12.23.8, Processing Form 11-C, Occupational Tax and Registration Return for Wagering

    In-Care-Of Field 02-A IRM 3.12.23.5.1, Field 02-A - "In-Care-Of" Name Line
    Invalid Correction Attempt IRM 3.12.23.1.21, Correction of Invalid Correction Attempt
    Name Control IRM 3.12.23.4.2, Field 01-B Name Control
    Nature of Change Indicator IRM 3.12.23.8.3.8, Form 11-C Section 01 Field L - Nature of Change Indicator
    Penalty and Interest Code IRM 3.12.23.4.7, Field 01 Penalty and Interest Code (P/I Code)
    Pre-Computed Penalty IRM 3.12.23.1.25, Pre Computed Penalty
    Received Date Field
    • General

    • Form 730

    • Form 11-C

    • IRM 3.12.23.4.6, Field 01 - Received Date

    • IRM 3.12.23.7.2.3, Form 730 Corrections Section 01 Field F - Received Date

    • IRM 3.12.23.8.3.4, Form 11-C Section 01 Field G - Received Date

    Remittance Received Field IRM 3.12.23.4.1, Field 01-A Remittance Received
    Start Day IRM 3.12.23.8.3.7, Form 11-C Section 01 Field K - Start Day
    Statute Control Document IRM 3.12.23.1.28, Statute Control Documents
    Tax Period
    • Form 730

    • Form 11-C

    • IRM 3.12.23.7.2.1, Form 730 Corrections Section 01 Field D - Tax Period

    • IRM 3.12.23.8.3.2, Form 11-C Section 01 Field E - Tax Period

    Employer Identification Number (EIN) IRM 3.12.23.4.3, Field 01-C Employer Identification Number (EIN)
    Taxpayer Notice Codes
    • General

    • Form 730

    • Form 11-C

    • IRM 3.12.23.1.18, Taxpayer Notice Codes (TPNC)

    • IRM 3.12.23.7.2.5, Form 730 Corrections Section 01 Field L - TPNC

    • IRM 3.12.23.8.3.11, Form 11-C Section 01 Field P - TPNC

    Total Tax Taxpayer
    • Form 730

    • Form 11-C

    • IRM 3.12.23.7.2.6, Form 730 Corrections Section 01 Field M - Total Tax TP/Settlement

    • IRM 3.12.23.8.3.9, Form 11-C Section 01 Field M - Tot Tax TP/Settlement

    Unprocessable Returns IRM 3.12.23.1.22, Unprocessable Returns

Form 730 and Error Register Fields

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Form 11-C and Error Register Fields

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Preparation of Form 10886, Reject Routing Slip

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Potential Frivolous Return Chart

Potential Frivolous Arguments

Potential Frivolous Arguments Description
Alleged Churches/First Amendment Income and excise tax due from non-religious sources and may claim a vow of poverty.
Altered form Altering any or all line items with the intent of facilitating non-compliance with the tax laws.
Altered Jurat/Uniform Commercial Code (UCC) I - 207 or UCC 1-308 Return contains tax and credits but the jurat has been altered or stricken. May include reference to UCC I - 207 / UCC 1-308 or a statement that the return was not signed under penalties of perjury.
Amended Returns/Form 843 Claim Amended return or a Form 843, Claim for Refund and Request for Abatement, filed to obtain a total refund of all taxes paid in prior years, based on tax avoidance arguments.
C-Filings This frivolous position includes the following four categories:
  1. Files a return claiming various types of deductions, credits, or overpayments/refunds that have no relation to reality and because of their outrageous character, qualify as frivolous returns.

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

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

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

Challenges to Authority/Due Process Questions various administrative authorities such as delegation orders, summons authority, privacy act, etc. Argues that they must be afforded a hearing or a trial before taxes can be assessed or before property can be seized.
Challenges to Authority/Title 26 or "law" in other documents Argues that Title 26 of the United States Code is not law because it was never enacted as named.
Collections Issues Files frivolous documents contending that various collections issues are invalid (e.g., Offers in Compromise, Collection Due Process Requests, Installment Agreements, Appeals Requests, etc.) because they are not filed and/or signed by someone with delegated authority. They may have no certificate of assessment attached, do not comply in form or content with a State or Local law, are not in a certain format or lack a valid OMB (Office of Management and Budget) number or other frivolous positions.
Disclaimer Submits a disclaimer stating, "disclaims the liability for the tax due" , making the liability on the return zero.
Fifth Amendment Assertion of the Fifth Amendment right against self-incrimination as a basis for not providing any financial information.
IRS is a Private Organization/Collects Tribute, Not Taxes Argues that the IRS is an entity named the Internal Revenue and Tax Services Inc., which was incorporated in Delaware in 1933, it is a collection agency for the Federal Reserve Bank, or is part of the United Nations and is clandestinely leading the tax paying public into a "new world order" .
Not a Person Argues that a taxpayer is not a "person" within the meaning of IRC 7701(a)(14).
Obscene, Vulgar, Harassing Submits documents or other materials indicating that non-filing is due to dissatisfaction with tax policies or taxation in general. Often, this argument is expressed with obscene, vulgar, or crude language and characters in an extremely demeaning manner.
Protest Against Government Action/Inaction Argues that refusal to file or pay is justified because they disagree with government policies or spending plans.
Sixteenth Amendment Argues the Sixteenth Amendment was not properly ratified and therefore the federal government does not have the legal authority to collect tax without apportionment.
Straw Man Argues the government has created an entity separate and distinct from the taxpayer - a "straw man" and any tax obligations are exclusively those of the "straw man" .
Taxes are Voluntary/Law Does Not Require Submits a return, amended return, or correspondence that argues taxes are voluntary.
U.S. vs. Long Submits a return with zero money amounts. To explain the zeroes inserted on the form the individual references "U.S. vs. Long" .
Unsigned Returns The individual completes a return but fails to sign. A statement indicating disagreement with the tax system is attached or added to the return.
Zero Returns Submits a return with zero money amounts on all or most of the line items on the form (e.g., IRC 861, Form 2439, OID, and other BMF filings that claim no income and request refunds). See Rev. Rul. 2004-34. A statement is attached claiming there is no section of the Internal Revenue Code that established an income (excise) tax liability. The statement may also contain arguments regarding the definition of tax. There are several variations on this type of filing such as those bearing the words "nunc pro tunc" and "not liable" .

Note:

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

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

Note:

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

U.S. Possessions City ZIP Codes and Province, Foreign State, and Territory Abbreviations

American Samoa (AS)

American Samoa (AS) City American Samoa (AS) ZIP Code
Faga'itua 96799
Leone 96799
Olosega Manua' 96799
Pago Pago 96799
 

Federated States of Micronesia (FM)

Federated States of Micronesia (FM) City Federated States of Micronesia (FM) ZIP Code
Chuuk 96942
Kosrae 96944
Pohnpei 96941
Yap 96943
 

Guam (GU)

Guam (GU) City Guam (GU) ZIP Code
Agana 96910
Inarajan 96917
Merizo 96916
Tamuning 96931
Umatac 96915
Yona 96915
 

Marshall Islands (MH)

Marshall Islands (MH) City Marshall Islands (MH) ZIP Code
Ebeye 96970
Majuro 96960
 

Northern Marianna Islands (MP)

Northern Marianna Islands (MP) City Northern Marianna Islands (MP) ZIP Code
Capitol Hill 96950
Rota 96951
Saipan 96950
Tinian 96952
 

Palau (PW)

Palau (PW) City Palau (PW) ZIP Code
Koror 96940
Palau 96940
 

Puerto Rico (PR)

Puerto Rico (PR) City Puerto Rico (PR) ZIP Code
Adjuntas 00601
Aquada 00602
Aquadilla 00603
Agnes Buenas 00703
Aguirre 00704
Aibonito 00705
Anasco 00610
Angeles 00611
Arecibo 00612
Arroyo 00714
Bajadero 00616
Barceloneta 00617
Barraquitas 00794
Barrio Obrero Station 00935
Bayamon 00956
Boqueron 00622
Cabo Rojo 00623
Caguas 00725
Camuy 00627
Canovanas 00729
Caparra Heights 00920
Carolina 00982
Catano 00962
Cayey 00736
Ceiba 00735
Cero Gordon 00754
Ciales 00638
Cidra 00739
Coamo 00769
Comerio 00782
Condado 00907
Corozal 00783
Coto Laurel 00780
Culebra 00775
Dorado 00646
Ensenada 00647
Esperanza 00765
Fajardo 00738
Fernandez Juncos 00936
Florida 00650
Fort Buchanan 00934
Garrachales 00652
Guanica 00653
Guayama 00784
Guayanilla 00656
Guaynabo 00965
Gurabo 00778
Hatillo 00659
Hato Rey 00936
Harmingueros 00660
Humacao 00791
Isabela 00662
Juyaya 00664
Juana Diaz 00795
Juncos 00777
La Cumbre 00926
Lajas 00667
Laplata 00786
Lares 00669
Las Marias 00670
Las Piedras 00771
Levittown 00949
Loiza 00772
Loiza Street Station 00936
Loquillo 00773
Manati 00674
Maricao 00606
Maunabo 00707
Mayaquez 00680
Mercedita 00715
Minillas Center 00936
Moca 00676
Morovis 00687
Naguabo 00718
Narajito 00719
Orocovis 00720
Palmer 00721
Patillas 00723
Penuelas 00624
Ponce 00731
Puerta de Tierra 00936
Puerta Real 00740
Punta Santiago 00741
Quebradillas 00678
Ramey 00603
Rincon 00677
Rio Blanco 00744
Rio Grande 00721
Rio Piedras 00927
Rosario 00636
Sabana Grande 00637
Sabana Hoyos 00688
Sabana Seca 00952
Saint Just 00978
Salinas 00751
San Antonio 00690
San Francisco 00927
San German 00683
San Juan 00936
San Lorenzo 00754
San Sebastian 00685
Santa Isabel 00757
Sanrurce 00936
Toa Alta 00953
Toa Boa 00949
Trujillo Alto 00976
University 00936
Utuado 00641
Vega Alta 00692
Vega Baja (Box 1 - 9049) 00694
Vieques 00765
Villalba 00766
Yabucoa 00767
Yauco 00698
 

Virgin Islands - U.S. (VI)

Virgin Islands - U.S. (VI) City Virgin Islands - U.S. (VI) ZIP Code
Charlotte Amalie 00802
Christiansted 00820
Cruz Bay 00830
Downtown 00840
Frederiksted 00840
Kingshill 00850
Saint Croix 00820
Saint John 00830
Saint Thomas 00805
Sunny Isle 00850
Veterans Annes 00820
 

Australia State

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

Brazil State

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

Canada Province/Territory

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

Cuba Province

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

Italy Province

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

Mexico State

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

The Netherlands Province

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