3.12.38  BMF General Instructions (Cont. 2) 
Error Resolution System (ERS) Tax Examiner Guidelines 
Types of Error Resolution System (ERS) Errors 
Priority IV Errors—Math/Consistency Errors Screen  (01-01-2015)

  1. Priority IV errors will be displayed with the Error Code for the specific error determined by each return program.

  2. The screen display will show the error code assigned and the fields needed to make the necessary correction.

    • The first correction that must be made for each generated Error Code is to compare the displayed fields with the return.

    • If edited or transcribed incorrectly, follow Form specific instructions in the 3.12 IRMs SC Error Resolution.

  3. For all math error codes, a field labeled "NC" followed by XX will generate.

    • BMF can generate maximum of 3 TPNCs; the third TPNC must be TPNC 90.

    • Each math error code will have limited TPNCs which will be valid.

    • If an invalid TPNC is entered, the same math error code will re-display.

    • The entry of a "TPNC" in the Taxpayer Notice Code Field will prevent any other correction on the same screen display.

  4. Previously assigned TPNC(s) will be displayed on line 3 preceded by literal "NC" .

  5. If determined that the generated math error code was the direct result of a previous error (resolved by a TPNC), Any previously assigned TPNC may be entered.

    1. Note:

      It is important that the taxpayer be advised of all errors that are present on the return. Precaution should be used when entering any previously assigned TPNC.

  6. A field labeled "CL" will be displayed for the entry of a Clear Code on records where the possibility exists that a change or correction may not be needed. Clear codes are only available on error codes that do not accept TPNC(s).

    • This field is located on line 4 to the right of CRECT.

    • All coding and transcription errors displayed must be corrected and IRM procedures for each field shown on the screen display MUST be applied before entering a "C" in the Clear Code Field.

    • The entry of a C in the Clear Code Field will prevent any other correction on the same screen display.  (01-01-2015)

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

  2. If a correction causes an Error Code with a higher priority than the previous Error Code, all Clear Codes and TPNCs already entered for lower priority Error Codes will be deleted.

    • All lower priority error codes still present in the record will be re-displayed for resolution, even if previously cleared with a TPNC or Clear Code.

  3. If a correction causes a cleared Error Code to no longer be in error, the TPNC or Clear Code for that Error Code will be deleted and all TPNCs and Clear Codes assigned to all lower priority (higher numeric) Error Codes will also be deleted.

    • Any remaining Error Codes, previously cleared but now no longer cleared, will be re-displayed.

  4. Error or Suspense records from a previous day's workload that are unfinished or suspended will have all previously assigned TPNCs and Clear Code eliminated.  (01-01-2015)
Refund Returns 45 Day Jeopardy and $10 Million or more Refunds

  1. Document Perfection and ERS are responsible for identifying refunds and for initiating requests for manual refunds.


    Expeditious processing of refund returns is critical if the 45 day period is about to expire.

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

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


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

    Enter Action Code 341 and route to ERS/Rejects for manual refund.
    The refund is $10,000,000 or more, Enter Action Code 341 and route to ERS/Rejects for manual refund.  (01-01-2015)
Service Center Replacement System (SCRS) Tax Examiner Guidelines

  1. This section of the manual lists the procedures that are to be performed by the SCRS Tax Examiners.  (01-01-2015)
Return Register Format

  1. This section of the manual lists the procedures related to the Error Register. Information in this section includes the following:

    • General Error Register information

    • Error Register title line

    • Error Register ID line

    • Error Register document sections

    • GMF 61-41 Interest Reduction Initiative Report  (01-01-2015)
General Error Register Information

  1. The Error Registers are listings of document records that failed the validity, consistency, or math verification tests of the Submission Processing Campus computer.

    • The Error Register is printed in the order requested by each campus on the Error Sort Card from Form 6826. The registers may be sorted in any of five sequences, see IRM for clerical instructions.

    • Each SPC should select the sequence best suited for its operations. The sort sequence is not required to be the same for every Master File.  (01-01-2015)
Error Register Title Line

  1. The Error Register Title Line identifies the Run Number and Master File, type of record, type of register, and source of the error register, program, form number, Format Code, date, and page number. It will appear as the first printed line at the top of each page.

  2. The Generalized Mainline Framework (GMF) processes all Master Files on one file but the error registers will be printed separately for each Master File listed below.

    • IMF - Individual Master File

    • BMF - Business Master File

    • IRP - Information Returns Program

    • EPMF - Employee Plans Master File

  3. The title line designates that the register is raw or loop.

  4. For loop registers, the correction loop counter specifies which loop may be contained on the page.

    • If loop errors have been sorted separately, this field will be a one-digit number (for example, "1" , "2" , etc.).

    • If some or all loop errors have been sorted separately, this field will be the range of loop registers printed (for example, "1-6" , "2-6" , or "3-6" )  (01-01-2015)
Error Register Identification (ID) Line

  1. The Error Register ID Line will identify each document on the error register and, sometimes, why the document is on the error register.

    • The Error Register ID Line is always the first printed line for each document on the error register.


      If an error document is too long to fit on one page, the ID line for this split record is repeated on the next register page.

  2. The Correction ABC and SN are present when requested on the Error Sort Card.

    • See IRM for procedures for assignment of the ABC/SN.

    • When the generated ABC/SN is not selected, each error record is preceded by "@@" .

  3. The IRP error register may contain a "$$" or "%%" to the right of the generated SN.

    • "%%" indicates that a correction record is needed but should not contain data for associated data errors.

    • See IRM 3.12.8, Information Returns Processing for specific information regarding this field.

  4. The Error Sequence Number (ESN) is assigned to each raw input document that is determined to be in error.

    • This number remains the ESN of the error document until the record is corrected or rejected from the Error File Tape.

    • The ESNs will not be in sequence on the error registers.

    • The first four positions of the ESN are the year digit and Julian date.

    • ESNs are assigned to all Error and BOB Records as they are entered on the files, whereas Error Records are sorted in various sequences prior to being printed on the Error Register.

  5. The Service Center Block Control Number is a three-digit alpha-numeric assigned to a block of documents and input by ISRP for control purposes. It is used to associate error registers with blocks or documents.

  6. The Batch Number is a four-digit number assigned to a group of blocks which have been associated for document control purposes and which have identical program code, tax class, document code, and other specific record criteria.

  7. The Document Locator Number (DLN) is a unique 14 digit number assigned to each document within a block.

  8. The Block Header MFT is a two position numeric code, which is used to further identify the types of documents in a block.

  9. The Invalid Correction Error Reason Code is a code indicating that the last error register correction attempt was invalid.

    • This invalid correction attempt will be identified by Error Reason Code AA for all Master Files.

    • See IRM for a list of the various invalid correction attempt conditions.

    • This field will be blank if an invalid condition is not identified.

  10. The Error Reason Codes are document specific codes explaining the reason an input document is on the error register.

    • The Error Reason Codes and their related explanation and correction procedures will be included in the IRM 3.12 chapter for each document.

    • If the document does not have Error Reason Code, this field will be blank.

    • If an Error Reason Code is valid for a document, a maximum of nine two-digit Error Reason Codes can be present in this field.

  11. The Math Status Code is a one-digit numeric code that indicates whether a return is mathematically correct, or in error within tolerance, or in error out of tolerance. If this Math Status Code is not utilized for a document then the field is blank. The valid code values and meanings are as follows:

    • Blank - not relevant

    • "0" - non-money return

    • "1" - no math error

    • "2" - math error within tolerance

    • "3" - math error out of tolerance

  12. The XXX (Specific Document) Error Reject Document Identification Data provides specific document identification data for additional information regarding the records.

    • This ID data should not duplicate any information already provided in the Document ID Line or the Error Register Title Line.


      The Block Header Transaction Code for Revenue Receipt Documents will be reflected in this field.

  13. The Correction Loop Counter is a two-digit numeric field that provides the number of times a particular record has appeared on a Loop register.

  14. The Correction Match Counter is a two-digit numeric field that provides the number of times that a document on the error register has had a correction matched to it.

  15. The Last Action Code Used is a code identifying the correction action code applied to an error document to resolve an error condition.


    When more than one action code is present in the matching correction record, the first action code in the correction record is considered to be the last action code used.

  16. The Error Register Consecutive Counter is an ascending and consecutive count of error records as they appear on the error register.

    • The counter is reset to "00001" with each change of Master File and each change of raw to loop register.

    • This counter should be used to determine the number of registers in a block of work.  (01-01-2015)
Error Register Document Sections

  1. Each error register document record contains one or more sections of data.

    • The section number is displayed to the left of the first line of each section.

    • The first section number for each document is 01.

    • Other sections may follow, always in ascending order but not necessarily consecutively.

  2. The fields of each section begin on the same line as the Section Number.

    • Each field is identified on the Error Register by an Alpha Field Designation printed before the field.

    • The sign of the field is also printed on the Error Register for variable length input fields.

    • When required, the sign of a field is printed after the field.

    • If the field in error is one normally designated by an asterisk, the asterisk is printed in the first space immediately to the left of the field designator.

    • The fields of a section must always be in the same sequence and must be corrected in that sequence.

    • For correction purposes, each field is referred to by its Alpha Field Designation.

    • The first field of each section is designated as the "A" field and letters are assigned in alphabetic sequence for the rest of the fields in the section.

    • Corrections must be transcribed in alphabetical order.  (01-01-2015)
Types of Errors

  1. Types of errors are:

    • Character

    • Field

    • Terminus

    • Edit

    • Validity

    • Relationship

    • Math

    • Missing Section

    • Extraneous Section  (01-01-2015)
Character Errors

  1. Character Errors include the following:

    • A non-numeric character in a numeric field

    • A non-alpha character in an alpha field

    • A blank space in a numeric field

    • A blank in the first position of an alpha field  (01-01-2015)
Field Errors

  1. A Field Error in a specific Alpha Field Designation indicates the field, or characters within the field, that failed a validity test.

    • Correct by entering the correct data.

  2. Field Errors include the following:

    • A non-numeric character in a numeric field

    • A non-alpha character in an alpha field

    • Blanks in a must enter field

  3. The error indicator for a Field Error is an asterisk (*) printed to the left of the Alpha Field Designation. Such fields contain valid alpha or numeric characters, but the field content is invalid.


    Only digits 1, 2, or 3 are acceptable to the program and 0, 4, 5, 6, 7, 8, or 9 has been transcribed, or a return period is prior to the acceptable ADP period. The specific validity tests for each type of document are listed in the various chapters of IRM 3.12.

  4. An overflow field for a Field Error is identified by all question marks for a money field or a single pound sign in the last position of a name line.  (01-01-2015)
Terminus Errors

  1. A Terminus Error is indicated by two asterisks (**) printed to the left of the Section Number. This indicates that there is a non-numeric character in a numeric field or that the format of the section is incorrect.

    • In case of a Terminus error, check that all necessary fields and sections are present.

    • If they are not present, enter the missing section with Action Code "5" and the fields with Action Code "6" .

    • If the data is correct, it will be necessary to re-enter a field using Action Code "6" to send the record to good tape.  (01-01-2015)
Edit Errors

  1. The Edit Error Indicator is printed to the left of the Section Number. This error will be shown on the error register as follows:

    Error Indicator Description
    "#1" Split screen transmission
    • Key Verifier attempted to change Check Digit or,

    • Key Verifier changed 4 or more digits of TIN or,

    • the OE operator entered a required Section as "missing" ,

    • the depositor account number (DAN) in Section 06 (which is input twice) was not entered the same way both times

    "#2" A mixed condition exists caused by back-to-back returns with the same data
    "#3" Invalid Section ending point
    "#4" Invalid field length
    "#5" A section was entered twice or entered out of sequence by ISRP
  2. All fields of a section must be examined when the Edit Error Indicator is present.

    1. Note:

      If Section 01 of a return is coded, also examine the tax base data section for error to ensure the return data is for the taxpayer whose name is in Section 01.

  3. Even though one or more sections of a record are coded, the validity and consistency checks necessary for the record are made for all sections.

    If the record is correct as it appears on the Error Register, use Action Code "7" to send the record to Good Tape.

  4. Normal corrective action for fields in error is to be taken as instructed in the applicable chapter of IRM 3.12.


    An Action Code "4" , "5" , or "6" must be used for each section coded in error, unless Action Code "7" is used.  (01-01-2015)
Validity Errors

  1. Data within the field is invalid and error indication has an asterisk (*) before the field.  (01-01-2015)
Relationship Errors

  1. Relationship Errors involve more than one field of the error record.

  2. The Error indicator is the Error Reason Code and/or asterisks printed before the fields involved.

  3. If an Exempt Organization (EO) entity change and the error code is "01" , a pound sign (#) will be shown before the invalid field.  (01-01-2015)
Math Errors

  1. Math Errors result when the computer computation differs from taxpayer on IRS computation, of the transcribed amount.

  2. The Error indicator is the computer computation amount printed on the Error Register under the transcribed amount.  (01-01-2015)
Missing Section Errors

  1. Missing Section errors will be indicated by a single asterisk (*) to the left of the section number, indicating a missing required section.

    • Use Action Code "6" to enter the missing data.  (01-01-2015)
Extraneous Section Errors

  1. Extraneous Section errors are indicated by a pound sign (#) to the left of the Section Number, that is invalid.

    • Use Action Code "4" to delete an unnecessary section.  (01-01-2015)
Error / Reject Register Action Codes

  1. This section of the manual provides information on Error/Reject Register Action Codes. Information in this section includes the following:

    • Action Codes "0" through "9"

    • Invalid correction attempts  (01-01-2015)
Action Code "0"

  1. Never use Action Code "0" unless the error register already contains the correct tax data.

  2. When Action Code "0" is used, no other Action Code is valid.  (01-01-2015)
Action Code "1"

  1. Action Code "1" is entered to the left of Section 01 with a taxpayer notice code to indicate that the taxpayer has made a math error if:

    • The computer has computed the tax correctly and the tax computation per computer should be accepted by the Master File, and

    • All taxpayer entries have been transcribed correctly but the total tax due or overpayment is in error.

  2. Action Code "1" must be followed by a TPNC that is valid for the type of return and correctly advises the taxpayer of the reason for the error.

  3. When Action Code "1" is used, no other Action Code is valid.  (01-01-2015)
Action Code "2"

  1. Action Code "2" is used to delete, re-enter, or renumber records on Service Center Control File (SCCF).

  2. Action Code "2" is entered to the left of Section 01 and must be accompanied by a Reject Disposition Code. The valid Reject Disposition Codes are as follows:

    • 2-D - delete the document from the Reject inventory

    • 2-R - re-enter the document with the current DLN

    • 2-N - renumber the document

  3. Be sure to maintain an audit trail of deleted documents. Notate on the register the reason for Action Code "2" .

  4. Action Code "2" is valid for IRP and Reject Register only.

  5. When Action Code "2" is used, no other Action Code is valid.  (01-01-2015)
Action Code "3"

  1. Enter Action Code "3" to the left of Section 01 for any record that is unprocessable.

  2. Some of the reasons for using Action Code "3" are:

    • A return or other document with illegible or missing necessary data which requires additional research or, taxpayer or area office contact.

    • A return/document that cannot be processed by the program under which it was blocked and must be processed with a DLN or Block Header for a different program.

    • A return or other document that has data incorrectly transcribed in a field that cannot be changed by an Error Register Correction.

  3. Action Code "3" is valid for Error Registers only.


    (Information Return Program IRP)

  4. Attach a Correspondence Action Sheet or Reject Routing Slip to the document to explain the invalid condition or intended corrective action.

  5. Immediate action may be necessary to suppress generation of erroneous balance due or delinquency notices before rejecting a payment/delinquency return to be renumbered/re-entered.

  6. When Action Code "3" is used, no other Action Code is valid.  (01-01-2015)
Action Code "4"

  1. Action Code "4" is used to delete a section from a register.

    • This code is valid for any section that is considered optional by the return program.

    • Section 01 can never be deleted.

  2. This code should not be used to delete a section identified as "missing" (a single asterisk in front of the section number). A missing section will be dropped automatically, if no data is entered in it.  (01-01-2015)
Action Code "5"

  1. Action Code "5" is used to add a section to a record on the register.

  2. Action Code "5" is followed by the number of the section being added and the alpha field designator(s) and the data for the section being added.

    • This code is invalid for a section already on the register or a section that is not valid for the type of document being processed.

  3. When adding sections, be sure that all corrections are entered in the proper sequence.

    • If the document also requires Action Code "6" corrections, sections must be added in the proper sequence with respect to other corrected sections.

    • If the document requires no other corrections, sections may be added at any place on the record, provided that each new section is in the proper sequence.  (01-01-2015)
Action Code "6"

  1. Action Code "6" is used to change a field or fields of a section within the Error Record.

    • The computer identifies each field of a section with an Alpha Field Designation and prints the Alpha Field Designation before the field on the Error Register.

    • To correct a field, the incorrect field data must be lined out and the correct data entered above. Any number of fields may be changed during one correction cycle.

    • Enter Action Code "6" immediately to the left of the Section Number for the section being changed.

  2. For purposes of entering corrected information above a line out entry on an Error Register, ERS and ISRP may agree to the use of shorthand notations developed as local procedures. No shorthand should be used unless a written agreement between ERS and ISRP has been issued. One example of a shorthand notation is shown below:

    Example: Carlos Cabana Bed & Breakfast
    ERROR: An extra space has been entered between Carlos and Cabana and ERS is currently required to rewrite the entire field to show Data what to input
    Shorthand Method:     (S1) Draw a circle around the S1
    01 A123456789+ B+ CSCHO+ DCarlos Cabana Bed & Breakfast+
          (Do not line out Field D. Data needs to be able to read it to do the re-input)
    In this shorthand method, the "S" stands for space and the "1" means one extra space. "S1" with a circle around it will tell Data to re-input the line exactly as it reads but with the appropriate spaces.
  3. When a fixed-length field must be blanked out or left partially blank, special procedures are required.

    • If the fixed field requires leading blanks, always enter the number of blanks encircled, followed by the corrected data.

    • If the fixed field requires blanks after the data or if the entire field must be blanked, the spaces must be accounted for only if another field is being corrected later in the section.

  4. Action Code "6" cannot be used to add, delete, or change the remittance amount on an error register. If the remittance is incorrect, use Action Code "3" .  (01-01-2015)
Action Code "7"

  1. Action Code "7" is used to indicate that the data on the error register is correct and that no action is necessary.

  2. Use Action Code "7" to clear an error record that is on the register for a one time only validity condition.

  3. The most common use of Action Code 7 is on Loop rejects where there has been an invalid correction attempt made, identified by the "AA" . Not every invalid correction attempts appear as an error on the register. Using AC 7 will cause it to revert to the original error on the next Loop Register.

  4. Action Code "7" will not clear a math error condition even if the taxpayer was correct. Instead, use Action Code "0" .

  5. When Action Code "7" is used, no other Action Code is valid.  (01-01-2015)
Action Code "9"

  1. Use Action Code "9" to re-reject a loop register for correspondence or other suspense action.

  2. This code is used to prevent a reject loop record from reprinting each time the loop is run, if the record is not ready for correction.

    • Action Code "9" is to be used for reject loop only. Do not use for raw rejects or error registers.

  3. When Action Code "9" is used, no other Action Code is valid.  (01-01-2015)
Invalid Correction Attempts

  1. Each correction attempt is subject to tests which ensure proper correction.

    • If a correction attempt fails, the record will reappear on the Error Register with Error Reason Code "AA" .

    • When Error Reason Code "AA" is present, correct the error register as if no other correction attempt has been made.


    If you are unsure what the error is, use Action Code 7, which will allow the record to revert back to the original error on the next Loop Register. It can be easily corrected then.

  2. For a given record, any correction that precedes the invalid correction attempt will print out as a corrected field.

    • Any other corrections made after an invalid correction will not printout, an Error Reason Code "AA" will be present.


      Fields A, B, and C are to be corrected in a section and C was transcribed "Z" . "Z" is an invalid Alpha Field Designation for the Section.
      The Error Register will have the corrected Fields A and B printed out, but Field C will still be incorrect.  (01-01-2015)
Action Codes - Invalid Correction

  1. Action Codes "0" , "1" , "2" , "3" , and "7" are considered invalid correction attempts if:

    • When there is more than one section in the Correction Record for an Error Sequence Number, or

    • The Correction Record contains other than the Error Sequence Number, Section Number 01, and Error Action Code, the TPNC for Action Code 1 only, or Reject Disposition Code, Action Code 2 only.

  2. Action Code "4" is considered an invalid correction attempt if:

    • An attempt is made to delete any section with a single asterisk (*) before the Section Number.

    • An attempt is made to delete a section of an Error Record when the Error Record Section is not on the Error Tape.

    • Attempts are made to delete the only section. Section Number 01, for a record.

  3. Action Code "5" is considered an invalid correction attempt if:

    • The Alpha Field Designators are not in alphabetic sequence.

    • An attempt is made to add a section already in the error record.

    • An attempt is made to add a section that has an invalid Section Number.

    • An attempt is made to add a section with a field that has an Alpha Field Designation not possible for that section.

  4. Action Code "6" is considered an invalid correction attempt if:

    • The Alpha Field Designations are not in alphabetic sequence.

    • An attempt is made to change a field of a section with an invalid Section Number or invalid field breaker.

    • An attempt is made to change a field of a section which is not on the Error Tape.

    • An attempt is made to change a field with an Alpha Field Designation not possible for that section.  (01-01-2015)
Combined Annual Wage Reporting (CAWR) Error Registers

  1. The Error Resolution (ERS) Function will resolve any errors that occur on CAWR. If ERS is unable to resolve the errors, return them to the CAWR units to be resolved.  (01-01-2015)
Reject Inventory Controls (SCRS)

  1. This section of the manual lists the procedures that are to be followed for controlling the reject inventory. Information in this section includes the following:

    • Reject Sequence Number (RSN)

    • Reject Register

    • Data Control deletes

    • Duplicate DLNs

    • Suppression of erroneous balance due and delinquency notices  (01-01-2015)
Reject Sequence Number (RSN)

  1. Rejects are maintained on a separate computer file from Errors and BOB.

  2. The Reject Sequence Number is used to access each record on the file.

  3. The Reject Sequence number is in the following format which consists of: X–XXX–XXXXXX

    • Position 1 - year digit

    • Positions 2 through 4 - Julian date plus 600

    • Positions 5 through 10 - Consecutive serial number, beginning with 000001 for all new rejects on the file  (01-01-2015)
Reject Register

  1. The Reject Register will remain in the Rejects Unit until the register is coded for transcription.

    1. If the document must be routed elsewhere, maintain a register file in DLN sequence order. Notate at the top of the register the date and area where the document was routed.

    2. Associate the document with the register when it is returned.  (01-01-2015)
Reject Register Title Line

  1. The first line of the reject register is the title line.

  2. Each register contains a literal in the title line which identifies the register as "raw" , "loop" , "re-reject" , or "special" .

  3. The Entry Source Code is located on the title line. It identifies the last status of the document before it was rejected. The Entry Source Codes, and the meaning of each, are listed below:

    • D - Raw Input - the last function handling the document was ISRP. The document was Computer Condition Code (CCC) "U" coded by Code and Edit.

    • B - Corrected Block Out of Balance (BOB) - After ISRP, the block of document was worked by the BOB Resolution function.

    • U - Unpostables - The document was nullified to Rejects by Unpostables. The "U" will be followed by the Unpostable Code.

    • E - Error - The error register was "3" coded by Error Correction.

  4. The program number is printed to left of the name of the program on the title line.  (01-01-2015)
Reject Register Identification Line

  1. The second line is the document ID line.

    • The batch number is printed between the ABC and DLN.

    • The last number on the right is the last action code used.

  2. Each Reject is matched with its corresponding document. Make sure the DLNs and TINs on the register and document match.

  3. The correction loop and correction match counter identifies the number of times a register has printed and the number of times a correction record has attempted to post to good tape.

    • The loop counter and match counter are reset for re-rejects.  (01-01-2015)
Suppression of Erroneous Balance Due and Delinquency Notices (SCRS Only)

  1. Whenever a return must be renumbered/re-input because the document had been input to the wrong MFT, tax period, or correspondence was issued, address the possibility that erroneous return delinquency notices may be issued.

  2. TC 599 with Closing Code 17 must be input all SCRS BMF returns which may not be processed prior to the return delinquency check.

  3. Notate the document with "TC 599-17" , "TC 599-18" , or "STAUP-6" in the upper margin.

    • If the document has already been notated, no further action is required.  (01-01-2015)
SCRS Aged List

  1. The SCRS Aged List is a listing of all open reject registers that have been in reject status 45 days or longer.

  2. The Aged List is divided into four different age groups.

    • The 45-59 days list is ignored for age review.

    • Rejects are not aged prior to 60 days.

    • Every aged item over 60 days old will be reviewed and annotated within one week after receipt of the list.

    • Reject items in the 90-119 days category will be given top priority.

    • All records will be resolved within 120 days.

  3. The Aged List will be printed at least once a week.

  4. Shelved and early filed returns that have been included on the aged reports may be excluded from the numbers reported on the Rejects inventories. Exclusions will be the following:

    • Returns, such as early filed Form 1120L, that must be held because programming changes necessary to process the forms are not available.

    • Returns or other documents for which delayed processing is specifically authorized by IRM 3.30.123, Processing Timeliness: Cycles, Criteria, and Critical Dates.

  5. Care must be taken to carefully monitor these early filed returns.

  6. The Reject Display Card is used to request the Aged List and should be printed at least once a week.

  7. The Aged List can be printed in DLN, Reject Sequence Number, or TIN sequence, depending on the code used in the Display Card.  (01-01-2015)
Refund Returns 45 Day Jeopardy and $10 Million or more Refunds (SCRS)

  1. Document Perfection is responsible for identifying refunds and for initiating requests for manual refunds.

  2. Expeditious processing of refund returns is critical if the 45 day period is about to expire.

    If Then
    The processing date is more than 20 days after received date or, the return due date (whichever is later) and the refund amount is $25,000 or more, 1. Enter Action Code 3 and reject the record.
    2. Attach Form 4227 (or other appropriate routing slip) and give the return to the manager.
    The refund is $10,000,000 or more,


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

    1. Do not leave the return in the block.
    2. Enter Action Code 3 and reject the record.
    3. Attach Form 12230, Expedite Processing Million Dollar Manual Refund, and give the return to the manager.  (01-01-2015)
Rejects Tax Examiner Guidelines

  1. A Reject is any document suspended from ERS processing, using CC SSPND. This removes the document from normal processing and allows other areas (e.g., Entity) to perfect and/or review the return, or to correspond with the taxpayer.

  2. This section provides general procedures for Rejects Tax Examiners.  (01-01-2015)

  1. This section of the manual lists the procedures that are to be followed for corresponding with taxpayers and working correspondence received from taxpayers.

  2. Review document prior to issuing correspondence to ensure all needed information is requested the first time. Check IDRS to see if there is already a return (TC 150) posted for that tax period, if so follow procedures for duplicate or amended returns, whichever applies.

  3. Information in the section includes the following:

    • ICO Letter Inventory Tracking System (ILITS) Tool

    • Use of Fax for taxpayers submission

    • Quick Notes (Form 5260)

    • Correspondence suspense

    • Form 4442 Referrals from Customer Service

    • Application for change in accounting period (Form 1128)

    • Second correspondence

    • Correspondence received date

    • Replies to correspondence

    • E-filed return replies to correspondence

    • No reply processing instructions  (01-01-2015)
ICO Letter Inventory Tracking System (ILITS) Tool

  1. The Input Correction Operation Letter Inventory Tracking System (ILITS) is a tool developed by IAT that is used by the correspondence function to maintain and control the letter inventory. The tool performs three primary actions:

    • Add Case Controls

    • Close Single Case Controls, and

    • Purge Expired Case Controls

  2. The LA49602 Report is a daily report on Control-D, which contains the previous days letter input data. Use the"Add Case Control" feature daily to run the LA49602 file through the ILITS tool. Case controls are added to display the Batch Number on CC ENMOD, which identifies where the document is located in the suspense file. This control will also show on the CCA4243 Overage Report with a list of the controls assigned to the employee who ran the tool.

  3. Use the "Generate Batch Sheets" feature to print all the batch sheets for that letter file. Associate each batch sheet with its related bundle and place the bundle in the suspense file in batch number order.

  4. As correspondence replies are received, associate the reply with the return. Use the "Close Single Case Control" feature and the SSN on the reply/return to close the case control on CC ENMOD and activate the return to Workable Suspense Inventory.


    Do not perform a separate action with CC ACTVT.

  5. Use the "Purge Expired Case Controls" feature to run the weekly Overage Report through the tool to close the case controls on the No Reply documents. No activation is necessary for the No Reply documents, because the suspense period has expired and automatically placed the documents in the Workable Suspense Inventory.  (01-01-2015)
Quick Notes, Form 5260

  1. Quick notes may be used instead of IDRS letters when no IDRS letter is suitable or used for a less formal request for information or action. Retain a copy of each Quick Note with the return.

  2. Mandatory review of Quick notes are required.

  3. A quick note must contain all of the following:

    • Original and 1 copy of the letter

    • Request to return one copy of the letter with the reply

    • Tax Examiners name, employee number, and phone number

    • Return envelope

    • Return Address

  4. Quick Notes should be brief and concise and written in business-like and non-threatening terms.

  5. Specify the purpose of the letter, what information is needed, and what action will be taken if no reply is received.

  6. Be sure to specify the type of document and the tax period in question.

  7. In cases where the recipient of the letter is a trustee, guardian, or other legal representative, specify the name and TIN of the return entity.  (01-01-2015)
Correspondence Suspense

  1. When the taxpayer requests a photocopy of the return or part of the return in order to answer our correspondence:

    1. Photocopy the requested return or parts of the return.

    2. Route the copies and any necessary additional letter to the taxpayer without charge.

  2. When corresponding for a missing signature only:

    1. If the return is a "refund" it must be held in suspense.

    2. For domestic correspondence, SSPND with Action Code 225.

    3. For international correspondence SSPND with Action Code 226.

    4. If there is "no reply" , CCC 3 and process the return.

    5. After the letter is input, notate on the input date on the return.

    6. When the reply is received from the taxpayer:

      If... Then...
      The correspondence reply is associated with an Exempt Organization return -
      • Form 990 - TC 4, DC 93

      • Form 990EZ - TC 4, DC 92 for 2008 and later tax years.

      • Form 990PF - TC 4, DC 91

      • Form 990T - TC 3, DC 93

      • Form 4720 - TC 4, DC 71

      • Form 5227 - TC 4, DC 83

      Rejects will forward the following responses to Imaging via the ERS clerical team:
      • Missing schedules,

      • Missing signatures, and

      • Correspondence for the Schedule B check box.

      The correspondence reply is for other than an Exempt Organization return, Route to Return Files to be associated with the original return.
    7. If corresponding for more than the signature the return must be held in suspense for the appropriate number of days.


    Or follow local procedures.

  3. Do not suspend using SSPND 225 to correspond for a missing signature if:

    • "Substitute for Return Prepared by IRS" is noted or "dummy" return.

    • "Section 6020(b)" or "prompt assessment" is notated or Form 4810 is attached.


    You are not required to inspect returns for missing signatures since no Error Code will appear for a missing signature; however, if you are led to the signature area of the return and it is not signed, you will take the appropriate actions.


    When corresponding for other missing information, you are required to correspond for a missing signature.  (01-01-2015)
Form 4442 Referrals From Customer Service

  1. Address Changes - If the return referenced on Form 4442 is in Rejects awaiting a reply to taxpayer correspondence:

    • Input the new address information from Form 4442 in appropriate fields for the type of form.

    • SSPND the return with Action Code 212 and re-send the correspondence to the new address.

    • If the return is not in Rejects when Form 4442 is received, return the Form 4442 to the originator with an indication that the return is no longer in Rejects (and the current location of the return, if known).

  2. Responses to Reject Letters - If the Form 4442 transmits a response to a letter issued out of Rejects:

    • Treat the response as if it has been received directly from the taxpayer.

    • If the return is not in Rejects when Form 4442 is received, return the Form 4442 to the originator with an indication that the return is no longer in Rejects (and the current location of the return, if known).

  3. Other Issues - If the Form 4442 does not indicate why it is being sent to Rejects, or is for a subject inappropriate for Reject action, send to the appropriate area.  (01-01-2015)
Application to Adopt, Change, or Retain a Tax Year - Form 1128

  1. For tax years beginning after December 31, 1986, the Tax Reform Act of 1986 generally requires that all partnerships, S corporations, Personal Service corporations, and certain trusts conform their tax years to tax years of their owners.

    • Partnerships, S corporations, and Personal Service corporations are known as pass-through entities because the income is not taxed on the entity's tax return, but is passed through to the owners to be reported on their tax returns.

    • The purpose of this legislation is to eliminate the deferral period for reporting income when the tax year of the entity is different than the tax year of the owners.

  2. Form 1128, Application to Adopt, Change, or Retain a Tax Year, is most commonly used for Form 1120 or 1120-S, but is also valid for various other forms including Form 1041, Form 1065 and Form 990.

  3. If the accounting period is changed, approval is required. An approved Form 1128 may be attached but is not mandatory. The return may refer to an approval action date and approval symbol.

  4. TC 053 on the entity identifies approved accounting period changes as a result of Form 1128.

  5. Whenever there is no indication of an approved change of accounting period, route Form 1128, suspend 320 to Entity.  (01-01-2015)
Second Correspondence

  1. Second correspondence should only be prepared if :

    • The taxpayer gave us all of the information previously requested, but we need additional information to process the return. The letter should apologize to the taxpayer.


    We no longer correspond twice on EP/EO returns.

  2. Enter Action Code 212 with SSPND for all second correspondence.

  3. The original correspondence should be reissued, if TAS or the taxpayer has indicated non-receipt of the original request. Be sure to verify the address.

  4. Never prepare additional correspondence to the same taxpayer at the same address if the original is a "no reply" . Follow form specific No Reply procedures.  (01-01-2015)
Correspondence Received Date (CRD)- 8 Positions

  1. The Correspondence Received Date (CRD) will be present if returns were held in suspense and the reply is received "after" the Return Due Date.

  2. Generally, the field designation is 01CRD but some returns have a different designation. Refer to the form specific IRM for instructions.

  3. This field must be blank or have a numeric entry in YYYYMMDD format.

  4. The field is invalid if:

    • Less than eight (8) numerics

    • Not in YYYYMMDD format

    • Not within the valid month, day range

    • Greater than the current date

  5. Determine the CRD for Fax replies, in the following priority:

    • Correspondence Received Date stamp

    • Date the reply was faxed

    • Date entered on fax cover sheet by taxpayer

    • Current date

  6. Determine all other Correspondence Received Dates in the following priority:

    • Correspondence Received Date stamp. If multiple date stamps, use the earliest date.

    • Postmark date on reply envelope.


      For certified mail only, if a postmark is not present, look for the "usps.com record" that has been attached to the correspondence right before the envelope. Use the "Acceptance" date.

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

    • Current date.

  7. Do not edit the correspondence received date when:

    • The correspondence reply was received prior to the return due date.

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

    • When the taxpayer makes a statement and/or the tax examiner determines the correspondence was not necessary or issued in error.

  8. The Entity Assignment Date will be indicated, in the left hand margin on the front of the return, by a capital E and date assigned. Rejects will input this date into field 01CRD when Entity has assigned a new EIN.

  9. If no reply or the correspondence was undeliverable, edit CCC "3" in the appropriate field, according to the return specific instructions.  (01-01-2015)
Replies to Correspondence

  1. When the reply is received from the taxpayer, you must enter the data onto the screen display/record or register including any address changes.

  2. Master File addresses should not be changed unless there is oral/written verification from the taxpayer or written information from the authorized Power of Attorney (POA).

  3. You must enter the received date of the correspondence reply in the Correspondence Received Date field.

    • It is important that the correct information is entered to prevent erroneous tax refunds.

    • Be sure to enter the missing data and Correspondence Received Date before clearing the Priority I Error.

    • Use CC GTSEC for applicable sections.

  4. Do not enter the received date in the Correspondence Received Date field in the following conditions:

    • The correspondence reply was received prior to the due date of the return ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    • The correspondence was required because of an IRS processing error, such as missing pages on Form 940 and Form 941.

    • When the taxpayer makes a statement and/or the tax examiner determines the correspondence was not necessary or issued in error.


      A statement from the taxpayer indicating that the missing schedule or form was included with his return, indicates an IRS error so we would not input a CRD.

  5. If the taxpayer submits an amended return, treat the amended return as the reply to the correspondence.

  6. For replies to multiple tax periods, take one of the following actions:

    If... Then...
    Taxpayer indicates on a non-remittance multiple period return how the data is to be divided,
    1. Prepare dummy returns for those periods.

    2. Correct the original return to reflect liability for the earliest tax period.

    3. Route the new returns to Receipt and Control for normal processing.

    Taxpayer submits returns to cover all tax periods,
    1. Correct the rejected return to reflect the tax liability for one tax period

    2. Send the additional returns to Batching and Numbering.

  7. Input FRM49 for all Form 1120 replies in which Form 851, Affiliations Schedule, is received. If Pre-Paid credits are shown:

    1. Use TC 590 with Closing Code 14 for each subsidiary. Note "590-14" on document. See IRM 3.11.16., Corporate Income Tax Returns

    2. At the option of the SPC, research for the filing requirement can be performed before inputting the TC 590-14.

    3. If the filing requirement is "14" , a TC 590-14 does not have to be input.

    4. If the reply states that the subsidiary is no longer part of a consolidated corporation, no action is required. Process the return as filed. The filing requirement will change back to "01" .


    If BMF ERS/Rejects cannot input FRM49, then send FYM mismatch between Parent and Subsidiary Corporations, to Entity.

  8. Try to process as "no reply" when the taxpayer has indicated a refusal to comply.

    • Otherwise, refer to Examination as a frivolous filer case.

  9. If the taxpayer indicates that the response must be delayed:

    • Because of illness,

    • The preparer is out of town, or

    • Other valid reason,

    Attach the letter to the return. Resuspend the return with Action Code 212 as appropriate and leave in suspense.

  10. If the taxpayer's response is accompanied by a question/request and the information is not available to answer the question/request, send a copy to the appropriate area in the campus. Be sure that the taxpayer's name, TIN, and the received date are on any correspondence leaving the area.

  11. If additional information is provided:

    • Correct the taxpayer's record as appropriate.

    • Enter the received date of the correspondence reply in the Correspondence Received Date field,≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • Make the necessary corrections based on the new information.

    • If new issues are raised in the reply, follow procedures applicable to the original return.

    • When the taxpayer's computations on the amended return do not agree with the campus's computations, correct/process the return with the information provided by the taxpayer.  (01-01-2015)
Third Party Designee

  1. If the taxpayer wants to allow an employee of their business or an individual paid preparer to discuss their BMF tax returns they may indicate their election by checking the "YES" box in the "Third Party Designee" or "Paid Preparer" section of the return. The box is located near the signature section of the return. They also enter the name, phone number, and Preparer Tax Identification Number (PTIN).

  2. The designation must specify an individual and may not refer to their payroll office or tax preparation firm. By checking the "YES" box, they are authorizing the IRS to call the designated employee or paid preparer to answer questions that may arise during the processing of their return. The taxpayer is also authorizing the designee to:

    • Give the IRS any information that is missing from their return

    • Call the IRS for information about the processing of their return or the status of their refund or overpayments.

    • Respond to certain IRS notices that they have shared with the designee about math errors and return preparation.


    Notices will not be sent to the designees.

  3. The taxpayer is not authorizing the designee to:

    • Receive any refund checks, or obligate the taxpayer to anything (including additional tax liability).

    • Otherwise represent the taxpayer before the IRS.

  4. The authorization will automatically expire on the due date (without regard to extensions) when they file their tax return for the next year.

  5. The taxpayer or the designee may revoke the designation before the expiration date by submitting a written statement of revocation. A TC 971, with Action Code 263 changes the Third Party Designee indicator to "0" , to indicate a revocation.


    A third party indicator/check box field is shown on TXMOD (IMF and BMF), IMFOLR, BMFOLR, RTVUE and BRTVU. The field will show either:

    Field Designator Explanation
    Blank A Third Party Designee is not designated by the taxpayer.
    1 Third party designee is designated by the taxpayer.
    0 Third Party Designee is revoked.  (01-01-2015)
E-filed Return Replies to Correspondence

  1. If the correspondence was generated from an electronically filed return, a refile DLN will need to be created so information can be attached. Ensure that the DLN on the correspondence matches the electronically filed return print. Attach IDRS document input tag (Form 12773 BMF ADJ54 Adjustment Format) to each E-file/MeF reply and complete with:

    • Employee IDRS number

    • Input Date

    • TC "290"

    • Amount ".00"

    • TIN

    • Tax Period

    • Block (see (4) below

    • Remarks "Attachment Only"

    • Sequence Number - Sequence numbers for input should begin with 1 through 100 and remain in order.

  2. If the taxpayer submits a paper (duplicate) return as part of the reply, cancel DLN and leave in original batch.

  3. Input TC 290 on IDRS to generate a refile DLN to the Files area which is used to attach the reply.

    1. Access CC TXMODA, overlay with CC REQ54, Xmit. This will bring up the CC ADJ54 screen.

    2. Input the sequence number from the IDRS input tag,

    3. BLK> See (4) below,

    4. IRS-RCVD-DT> *

    5. TC> 290

    6. AMT> .00

    7. Hold-CD> 3


    9. REMARKS> ELF reply.


      If TC 150 not posted, enter the Posting Delay Code (PSTNG-DLAY-CD) as 3.

  4. Use the following blocking series:

    If MFT is... Then Blocking Series is...
    02 15
    05 17
    06 17
    10 15
    44 15
    67 10
  5. Complete routing form and send to Files within 5 days of the return going back into workable suspense.


    Form 6502 must have the IDRS input date and entire employee IDRS number.

  6. The copy of the e-filed return is classified waste. Mark with "D" and discard.  (01-01-2015)
No Reply/Incomplete Reply Processing Instructions

  1. Perfect all documents from available information.

  2. Enter CCC 3 on all no replies or incomplete replies. Ensure that the taxpayer has had ample time to reply, equal to 40 days from the date stamped on the letter, if not resuspend AC 212 to allow adequate time.


    Do not enter CCC 3 if correspondence was required due to an IRS processing error, or if correspondence was issued in error.

  3. Follow "no reply" procedures in specific 3.12 IRMs.

  4. If you are unable to identify where an excess remittance belongs, transfer it to the Unidentified Remittance File(URF). The taxpayer may be contacted by telephone, if they provided a number, to determine the correct application of the excess remittance before transferring to Unidentified. See IRM  (01-01-2015)
No Reply/Incomplete Reply Processing Instructions for E-file

  1. Enter CCC 3 on all no replies or incomplete replies.


    Do not enter CCC 3 if the correspondence was issued in error.

  2. Mark "D" on the copy of the e-file return and discard return as well as CAS as classified waste.  (01-01-2015)
Review of Aged Cases

  1. This section of the manual lists the procedures that are to be followed for reviewing aged cases. Information in this section includes the following:

    • Rejects aged list

    • ERS aged items

    • SCCF aged items

    • On-line SCCF research

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