3.12.213 Form 1066, U.S. REMIC Income Tax Return

Manual Transmittal

November 17, 2017

Purpose

(1) This transmits revised IRM 3.12.213, Error Resolution, Form 1066, U.S. Real Estate Mortgage Investment Conduit Income Tax Return.

Material Changes

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

(2) Removed Symbols on each title. The symbols were not necessary.

(3) Removed Italic on Forms placed all forms into Citation and placed all titles into Italics.

(4) IRM 3.12.213.1 Added, Program Scope - Added Internal Controls information as outlined in The Heightened Awareness, Sensitivity, and Understanding of Internal Controls Memo dated September 14, 2016. Renamed Introduction to the Error Correction Program - Service Center Replacement System (SCRS) to General Information

(5) IRM 3.12.213.1.1 Added Background - Added Internal Controls information as outlined in The Heightened Awareness, Sensitivity, and Understanding of Internal Controls Memo dated September 14, 2016.

(6) IRM 3.12.213.1.2 Added Authority - Added Internal Controls information as outlined in The Heightened Awareness, Sensitivity, and Understanding of Internal Controls Memo dated September 14, 2016

(7) IRM 3.12.213.1.3 Added Responsibilities - Added Internal Controls information as outlined in The Heightened Awareness, Sensitivity, and Understanding of Internal Controls Memo dated September 14, 2016

(8) IRM 3.12.213.1.4 Added Program Management and Review - Added Internal Controls information as outlined in The Heightened Awareness, Sensitivity, and Understanding of Internal Controls Memo dated September 14, 2016

(9) IRM 3.12.213.1.5 Added Program Controls information.

(10) IRM 3.12.213.1.6 Added Terms/Definitions/Acronyms - Added Internal Controls information as outlined in The Heightened Awareness, Sensitivity, and Understanding of Internal Controls Memo dated September 14, 2016

(11) IRM 3.12.213.1.7 Added Interpretation Chart - Added Internal Controls information as outlined in The Heightened Awareness, Sensitivity, and Understanding of Internal Controls Memo dated September 14, 2016

(12) IRM 3.12.213.1.8 Added Related Resources - Added Internal Controls information as outlined in The Heightened Awareness, Sensitivity, and Understanding of Internal Controls Memo dated September 14, 2016

(13) IRM 3.12.213.2 - Corrected the IRM title per feedback during IRM Review. IPU 17U1172 issued 07-21-2017

(14) IRM 3.12.213.2.2 Moved information from paragraphs (1) and (2) into paragraphs (1) through (5). IPU 17U1172 issued 07-21-2017

(15) IRM 3.12.213.2.3 Updated form to match BMF Consistency. IPU 17U1172 issued 07-21-2017

(16) IRM 3.12.213.2.14.1.1 If and Then chart. Updated instructions for working CIS Returns.

(17) IRM 3.12.213.2.14.1.2 Removed Caution added paragraph 4 and 5. IPU 17U1172 issued 07-21-2017

(18) IRM 3.12.213.2.17 Updated (2) If/Then Table - First Then box - Corrected acronym for (FRP) from Frivolous Return Processing to Frivolous Return Program. IPU 17U1172 issued 07-21-2017

(19) IRM 3.12.213.2.18 (4)(3) Added Kansas City CI Mail Stop information.

(20) IRM 3.12.213.5.2(2) Added 69, 70, and 96 as invalid EIN Prefixes.

(21) IRM 3.12.213.6.5 Changed steplist to alphalist. IPU 17U1172 issued 07-21-2017

(22) IRM 3.12.213.6.5.1 Updated If/Then Tables to comply with BMF consistency - Added And to tables. IPU 17U1172 issued 07-21-2017

(23) IRM 3.12.213.8.1 Changed steplist to alphalist. IPU 17U1172 issued 07-21-2017

(24) IRM 3.12.213.8.5 Removed Current Date minus 10 days per feedback. IPU 17U1172 issued 07-21-2017

(25) IRM 3.12.213.8.7 Removed last row of information per feedback from IRM 3.12.217 If/And/Then Table - Last Row of boxes. IPU 17U1172 issued 07-21-2017

(26) Exhibit 3.12.213-3 Updated Title. IPU 17U1172 issued 07-21-2017

(27) Exhibit 3.12.213-5 Updated incorrect spelling of Province, State and Territory Abbreviations.

Effect on Other Documents

IRM 3.12.213, dated November 11, 2016, (effective January 01, 2017) is superseded. The following IRM Procedural Updates (IPUs) are incorporated in this revised IRM: IPU 17U1172 dated 7/21/2017

Audience

Wage and Investment, Submission Processing

Effective Date

(01-01-2018)

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

Program Scope and Objectives

  1. Error Resolution System for Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, corrects errors made by taxpayers as well as those made by submission processing campus operations

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

  3. Audience:

    • Error Resolution: Supervisory Tax Examining Assistant

    • Lead Tax Examining Technician

    • Tax Examining Technician

    • Rejects: Supervisory Tax Examining Technician

    • Lead Tax Examining Technician

    • Tax Examining Technician

  4. Policy Owner: Director, Submission Processing.

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

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

    • Accounts Management (AM)

    • Small Business (Self-Employed (SBSE)

    • Large Business and International (LB&I)

    • Chief Financial Officer (CFO)

    • Tax Payer Advocate (TAS)

    • Statistics of Income (SOI)

    • Tax Exempts/Government Entities (TEGE)

    • Compliance, Modernized E-File (MEF)

    • Submission Processing (SP)

Background

  1. Records will be placed in the Error Inventory or the Workable Suspense Inventory for correction. Once the Error Resolution tax examiner accesses the record and it is displayed on the screen, it must either be fully corrected, placed in suspense for additional information, or rejected from pipeline processing. Corrections will include correcting errors in editing or transcription and correction of math errors.

  2. This manual is your main source of information in correcting the record on the screen and the related return. You will also find procedures in the following Internal Revenue Manuals:

    • IRM 3.12.38, Error Resolution–Business Master File (BMF) General Instructions, containing instructions for correcting records on the screen, document control, inventories and management reports

    • IRM 3.11.213, Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, Returns and Document Analysis, which provides instructions for coding and editing of Form 1066.

Authority

  1. Title 26 of the United States Code (USC) or more commonly known as the Internal Revenue Code (IRC). The IRC has been amended by acts, public laws, rules and regulations such as the following:

    • Foreign Account Tax Compliance Act (FATCA)

    • Revenue Reconciliation Act of 1998 (RRA 98)

      Note:

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

Responsibilities

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

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

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

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

Program Management and Review

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

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

  3. Program Effectiveness:

    • Embedded Quality Submission Processing (EQSP)

    • Balance Measures

    • Managerial Reviews

    • Annual Review: Review the processes included in this manual annually to ensure accuracy and promote consistent tax administration.

Program Controls

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

Terms/Definitions/Acronyms

  1. The table lists commonly used acronyms and abbreviations and their definitions.

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

    Note:

    The above list may not be all inclusive.

Interpretation Words

  1. The table lists Interpretation Words and their definitions.

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

    Note:

    This column is for illustration purposes only.

    Fair Provide accurate and professional service to all persons without regard to personal bias. For example: Per the Taxpayer Bill of Rights (TBOR), taxpayers have the right to expect a fair and just tax system which provides taxpayers with the opportunity to have their facts and circumstances considered when it might affect their underlying liabilities, ability to pay, or ability to provide information timely.
    Significant Entry Any entry other than zero or blank. For example: Copy any significant amount on Line 1d to Line 2d, when the amount on Line 2d is blank and the Common Parent’s Name and EIN are blank.
    Timely Provide the time frame to consider what is or is not timely. For example: A Final return is received after the short period due date but received timely.

Related Resources

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

    • Servicewide Electronic Research Program (SERP)

    • Submission Processing Design Center (SPDC)

General Information

  1. The purpose of this section is to provide instructions for general required processing actions on Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, to eliminate repetition of the same instructions in different subsections.

  2. In case of a conflict of instruction between this general subsection and the subsequent specific subsection, the specific subsection will govern.

IRM Deviations

  1. IRM deviations must be submitted in writing following instructions from IRM 1.11.2.2, When Procedures Deviate from the IRM, and elevated through appropriate channels for executive approval.

Taxpayer Advocate Service

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

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

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

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

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

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

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

BMF Identity Theft

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

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

    2. Attach Form 4227, 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 indicate that they are a victim of "ID Theft" ; do not send cases that are subject to "Criminal Investigation (CI)" , "Examination (Exam)" or "Fraud" review.

Related Forms

  1. The following forms are referenced in this section. The chart below shows the form number, form title and use:

    Form Title Use
    Form 3465 Adjustment Request To request transfer of credits.
    Form 3696 Correspondence Action Sheet To initiate correspondence to the taxpayer through the ♦Suspense Unit.
    Form 4227 Intra–SC Reject or Routing Slip To identify the reason for using the Action Code.
    Form 8161 Error Resolution System (ERS) Return Charge-out To charge out returns on the new Suspense List, Rejected Records List and Duplicate DLN Register. Input Perfection will also use as a routing slip and history item.

Customer Account Data Engine (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. With CADE 2 there will be changes to campus cycles which will begin with cycle 201201.
    The new Business Master File 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. Business Master File transaction posting timeframes are outlined as follows:

    • Transactions will be viewable using CFOL command codes on Saturday following the weekly Master File processing run on Thursday

    • Transaction 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. Cycle posting dates will reflect a format of "YYYYCCDD" . "YYYY" will indicate the year and "CC" will indicate the posting cycle. For Individual Master File (IMF) transactions, the following values for DD are defined:

    • 01 = Friday

    • 02 = Monday

    • 03 = Tuesday

    • 04 = Wednesday

    • 05 = Thursday

    Note:

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

Error Inventory Report

  1. Each day, the Error Inventory Report will be furnished showing the blocks by the block control number and block Document Locator Number (DLN) in DLN order.

  2. Each batch will be on separate pages. Blocks received from Blocks out of Balance (BOB) will also be on separate pages.

  3. A copy of the Error Inventory Report can be placed on the carts of documents and used as a charge-out. This will help to determine when a cart is completed.

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

Workable Suspense Inventory Report

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

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

Types of Errors

  1. The Error Resolution System (ERS) will identify errors according to type and priority. The record heading will show the type of error.

  2. This IRM will furnish the solution for the displays of the errors. There may be records where the examiner finds that programming has not furnished a section that is needed to solve an error. In this event, the tax examiner can use Command Code (CC) GTSEC. Following are the types of errors that might be displayed in priority rank:

    1. Action Code Error (Priority I);

    2. Section Error (Priority II) - includes terminus error and Integrated Submission and Remittance Processing (ISRP) problem code;

    3. Validity Error (Priority III);

    4. Math/Consistency Error (Priority IV).

Status Codes

  1. Records for the documents in the Error Resolution System (ERS) are controlled by Status Codes. The status is updated when the record is placed in a specific inventory.

  2. Below is a list of the status codes and a brief explanation:

    Status Code Description
    Status 100 1. Error awaiting correction.
    2. Records are in the Error Inventory.
    Status 2XX 1. Record awaiting information.
    2. Records are in the Unworkable Suspense Inventory.
    Status 3XX 1. Suspense period expired - no response.
    2. Records are in the Workable Suspense Inventory.
    Status 4XX 1. Record with information, awaiting correction.
    2. Records are in the Workable Suspense Inventory.
    Status 900 Record is on the Unselected Inventory.
  3. The final two positions of the Status Code will consist of the first two positions of the Action Code. This will put similar work together on the Workable Suspense Inventory. For example: 321 - Suspense period expired, no response to taxpayer correspondence. If a record has been selected to be held for Quality Review, the positions two and three will be "QA" .

  4. Records for which the suspense period has expired before being activated are automatically moved from Status 2XX to Status 3XX.

Command Codes

  1. The Command Codes (CC) needed for correcting the Error Inventory and the Workable Suspense Inventory are briefly described below. They are also explained in IRM 3.12.38, Error Resolution, General Instructions. Any Command Code permitted by the Employees Security File is available. CCs are used to tell the system which function to perform.

  2. CCs must be entered in a valid format. Otherwise, a field error displays.

  3. Correct the data entered using the applicable CC.

  4. The valid CCs are:

    Command Code Description
    ACTON
    • Establish control bases

    • Update or close control bases that are open

    • Correct name controls on dummy accounts

    • Append history items to modules on IDRS

    • Generate Transaction Code (TC) 902 to secure tax modules and their related entity data from the Master File

    ACTVT Used to transfer an Unworkable Suspense record to the Workable Inventory.
    BMFOL To research entity and/or tax data which may or may not be available on IDRS. This command code allows several screen displays based on the definer code input. It should be used in lieu of the Command Code MFTRA.
    BRTVU To access data that was transcribed from line items and/or computer generated transactions from BMF returns and their schedules. It can be used in researching original returns.
    CRECT Used to enter a correction. CRECT will be valid only after an error has been displayed in response to the GTREC command. The Remittance field in a record is not correctable with the Command Code CRECT.
    DLSEC Used to delete a section of the record.
    ENMOD To research for name control and transaction code information.
    ENREQ Entered (with a blank definer) after a response to ENMOD indicates that the entry is on the file. Used to generate CC BNCHG.
    ERINV Used to research a Document Location Number (DLN) or Taxpayer Identification Number (TIN) on the Error Resolution system.
    ERVOL Used with a Status Code to display the number of records in the current Workable Inventory.
    GTREC Used to access the first error record in an Error Resolution error block or access a specific record in the Workable Suspense Inventory.
    GTRECW Used to recover an Error Resolution data record that was already worked. This Command Code can be used at any time on the same processing day. If an error is discovered on a subsequent day, the record must be corrected using Notice Review and Adjustment procedures.
    GTSEC Used to obtain the display of any data section within the record in progress. The response will be the display of all correctable fields of the requested section, including blank fields. No computer generated fields or error indicators will be shown. If no data is present in the specified section, the format of the requested section will be displayed.
    GTRECQ Used to access a worked record that was held for Quality Review.
    INOLE To research the entity module. This information includes name lines, name control, address, employment codes, filing requirements, etc.
    MFREQ To request an entity module or tax module and its related entity data from Individual Master File (IMF), Business Master File (BMF), Individual Retirement Account (IRA), or Employee Plan Master File (EPMF) when case control is not required.
    NAMEB/NAMEE To research for a missing TIN. A name is required to be input to research the Names Search Facility (NSF).
    NWDLN Used to assign a renumbered DLN on an ERS record.
    RJECT Used to delete a record from Error Resolution.
    SSPND Used with an Error Resolution Action Code to place a record into suspense status. SSPND is valid for Error Correction and Suspense Correction.
    TERUP To allow an employee to delete his/her erroneous entry on the day of input. An employee can only delete his/her own entries.
    TRDBV Tax Return Data Base - To access 100 percent of return data as well as all subsequent corrections entered via Error Resolution and Generalized Unpostable Framework (GUF) This command code can be used to verify specific line items (including any correction activity), resolve taxpayer inquires, identify refund issues, and verify filing and return status. Also available is Command Code TRERS, which will link the DLN entered with Command Code GTREC to Command Code TRDBV.
    TRERS Is an extension of CC TRDBV developed for Error Resolution processing and acts like TRDBV. It allows the tax examiner to select a return based on the DLN of the latest GTREC command executed.

Error Resolution Action Codes

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

  2. Document Perfection tax examiners will assign a three digit code to numbered returns when they determine that the document is unprocessable in its present form either because additional information is needed or some manual intervention is required. This code will be edited in the lower left margin of page 1. See Exhibit 3.12.213-2, Action Codes.

  3. Form 3696, Correspondence Action Sheet, used for initiating correspondence, will be attached by Document Perfection. For routing within the campus (In-House Research) an explanation concerning the missing information will need to be attached to the return.

  4. The Action Code assigned by Document Perfection will be transcribed into the record of the Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.

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

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

  7. Only one Action Code may be assigned at one time to a record. The priority of the Action Codes will be:

    1. 310

    2. 320

    3. 6XX

    4. 4XX

    5. 3XX

    6. 2XX

  8. An Error Resolution tax examiner may enter an Action Code on a record, delete or correct an invalid code or may overlay the present Action Code with another to either re-suspend or reject from Error Resolution. This is done by entering a valid Action Code with a CC SSPND, RJECT or NWDLN. See IRM 3.12.38, BMF General Instructions, for explanations of these codes.

  9. An Error Resolution tax examiner entering a valid Action Code with the SSPND CC will be clearing the record from the screen and placing the record in either Workable Suspense or Unworkable Suspense.

  10. An Error Resolution tax examiner entering a valid Action Code with the RJECT CC will be rejecting the record from Error Resolution Generally, the Service Center Control File (SCCF) will be automatically updated for the rejected records.

Computer Condition Codes

  1. Computer Condition Codes (CCC) are used to identify a special condition or computation for the computer. The valid CCC's are B, D, F, G, L, O, R, W, X, three, four, and seven.

  2. The codes are edited to the dotted portion of Section one, Line one.

  3. Below is a chart showing the Condition Codes, their definitions, and the checks.

    Code Definition Error Checks
    B Electing out of installment sales  
    D Reasonable cause for failure to pay taxes timely Must have a received date (Error Code 028). Not edited unless instructed by Headquarters.
    F Final Return Cannot be coded "G" (field error).
    G Amended Return (1) No other codes allowed except "W" or "Three" (field error).
    (2) Must have received date (Error Code 028).
    (3) All fields must be blank, except RMIT, 01CCC, 01NC, 01EIN, 01TXP, and 01RCD (Error Code 010).
    L Treaty Based Positions  
    O Module Freeze Manual Refund
    R Reasonable cause for delinquency Must have a received date (Error Code 028). Not edited unless instructed by Headquarters.
    W Return cleared by Statute Must be present on Statute Cases (Error Code 001).
    X Refund Freeze Code  
    Three No reply received for correspondence sent to taxpayer, suppress credit interest. Must not contain Correspondence Received Date (Error Code 073).
    Four Return prepared under IRC Section 6020(b)  
    Seven Reasonable cause for delinquency or late payment considered and denied. Must have a Received Date (Error Code 028). Not edited unless instructed by Headquarters.

Clear Code C and 000

  1. The letter "C" is used as Clear Code on an Error Code where the error condition is such that the resolution does not require a change or correction to the record as displayed. The display will include a clear field labeled "CL" to indicate the possible need of a Clear Code. Command Code CRECT is used to enter the "C" .

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

  3. Code "C" is also used for clearing the Action Code from the screen after corrections for the Action Code are completed, or, as with 410, the Action Codes must be cleared initially, so other errors in the record can be resolved. The presence of the "C" with Priority I Error indicates that you have made the corrections to the Action Code and now wish to have any other errors on the record displayed (allowing for suspense correction only).

  4. The "000" is also used as a Clear Code when deleting Action Codes. It will only be used for invalid or erroneous Action Codes after you have determined there is no reason to suspend the record.

  5. Programming erases all "C" Clear Codes for Error Codes when a record is suspended with Command Code SSPND.

  6. Programming erases all "C" Clear Codes for Error Codes and Action Codes for the new day’s Error Inventory and Workable Suspense Inventory. Unfinished records from the previous day will contain none of the "C" Clear Codes that were assigned to a record that was not completely worked.

    Note:

    The "C" Clear Code will prevent any other corrections to the record. If a correction must be entered and transmitted, it must be done prior to transmitting the "C" Clear Code.

Unprocessable Returns

  1. If a return is unprocessable because of missing information that can be provided through research, then perform in-house research or, if necessary, refer the document to another area of the campus for resolution.

Correspondence Needed
  1. Unprocessable condition can be resolved with correspondence.

    If Then
    Perfection of a return is not possible and it is necessary to correspond for missing signature or attachments, Initiate correspondence by using Form 3696, Correspondence Action Sheet, to request missing information. See IRM 3.12.213.2.14.1.2, Use of Fax for Taxpayer Submissions.

    Note:

    Do not correspond for a signature on "Correspondence Imaging System (CIS)" returns that have a Form 13596, Reprocessing Returns, attached. See IRM 3.12.213.2.14.1.1, Correspondence Imaging System, for processing instructions.

    It is necessary to suspend the unprocessable record, Enter the Command Code SSPND followed by the appropriate Action Code.
    The condition is a new suspense item, A charge-out Form 8161, Error Resolution Return Charge-out, will be computer generated. The charge-out will be used for pulling documents as well as routing and controlling documents while the record is being held in suspense and for use in associating the document with the Workable Suspense Inventory when the record becomes workable.
    A record appears on the Workable Suspense Inventory, with the Action Code as first priority, The tax examiners will add the information received to the record or follow the IRM instructions for the "no reply" and clear the Action Code by entering the letter "C" in the Clear Field and transmitting. Once the Action Code is cleared, any Validity, Section or Math/Consistency errors will be displayed for correction.
    Records are unprocessable and again require suspension for additional information, A charge-out will not be generated for suspended items. The charge-out should be notated in the appropriate block by entering the Action Code and date.
Correspondence Imaging System (CIS) Returns
  1. Correspondence Imaging System (CIS) is an inventory system for scanning all Accounts Management (AM) receipts into digital images and working the cases from those images.

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

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

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

    2. Remove the return from the batch and SSPND 640 to have the DLN voided.

    3. Attach Form 4227, Intra-SC Reject or Routing Slip, (or other appropriate routing slip) to the return and route to AM to secure missing information.

    4. If the return comes back from AM with the information still incomplete, send the return to AM again to secure all the missing information. Indicate Additional information needed to process incomplete CIS return, or similar language on Form 4227 (or other appropriate routing slip).

    The CIS return has a Form 13596 attached and the return is incomplete (e.g., missing signature, schedules, or forms), There is an indication on the return that correspondence has been sent (e.g., CCC 3 is edited on the return), Do not route the return to AM. Continue processing the return.
    The "CIS" return does not have a Form 13596, Reprocessing Returns, attached, The return is incomplete (e.g., missing signature, schedules or forms), Research for prior posting (posted TC 150).
    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.

Use of Fax for Taxpayer Submissions
  1. Tax return information can be received via fax as part of return perfection even if a taxpayer signature is required. In circumstances where contact with the taxpayer has been made and documented, fax signatures are acceptable.

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

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

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

    • IRM 21.1.3.2.3, Required Taxpayer Authentication

    • IRM 21.1.3.2.4Additional Taxpayer Authentication

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

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

    • IRM 11.3.1.11, Facsimile Transmission of Tax Information

Correcting Unprocessable Conditions
  1. Some unprocessable conditions can be corrected without correspondence. Use If/Then chart below.

    If Then
    Perfection may be possible but the record may require renumbering, 1. Uncorrectable fields, such as the DLN, may need correcting and the record will require rejecting for re-entry.
    2. Reject the record by entering the Command Code RJECT followed by the Action Code 630.
    A new DLN is to be assigned, Use Command Code NWDLN with the appropriate Action Code, the new DLN, and new Master File System ID Code, if required.

    Note:

    A charge-out will be generated for all Rejected Records. The charge-out will remain in the Files function for future reference.

    The DLN was transcribed incorrectly and is incorrect on the screen. The DLN appearing on the charge-out is erroneous, The correct DLN must be noted on the charge-out for use in pulling the document.
    Inform your supervisor of the block involved, and the physical location of the document.
    Perfection is not possible, The record may be rejected from Error Resolution and action initiated to have the DLN voided.
    Remittance is involved, Transfer the remittance. If you cannot determine where to transfer the remittance, transfer it to the "Unidentified Remittance File" .
  2. Error Resolution will automatically control most of the adjustments to Service Center Control File (SCCF). When manual adjustment is required, Form 4028, Service Center Control File Adjustment Record (SCCF Format Code 216), will be used for Error Resolution. Preparation of Form 4028, Service Center Control/File Adjustment Record (SCCF Format Code 216), is explained in IRM 3.12.38, BMF General Instructions.

Statute Control Cases

  1. Any return that has a processing date equal to or greater than two years and 9 months after the return due date ( "G" coded returns) or the later of the return due date or the received date ( non "G" coded returns) is a statute control document and will appear on the screen with Error Code 001, unless CCC "W" is present on the record. The "W" indicates the record has been cleared by the Statute Unit.

  2. The due date for the 2016 year and thereafter the due date for Form 1066 is the 15th day of the third month after the tax period ending. Additionally, see IRM 21.7.4.4.3.1, Business Tax Returns and Non-Master File Accounts-Income Taxes/Information Returns, for further information regarding Form 1066 due dates, payments, and extensions.

    If Then
    Return secured by Compliance (e.g., 6020(b)) or a substitute return prepared by Examination (SFR in top margin) with Form 13133, Expedite Processing Cycle, attached, Enter Computer Condition Code "W" in 01CCC and on the dotted portion of Section 1, Line 1 and continue processing.

Refund Returns - 45 Day Jeopardy and Million Dollar Refunds

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

    Note:

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

  2. Action Code (AC) 341 should be input by Code & Edit to show that a manual refund is needed.

  3. If these are not identified in Code & Edit, Error Resolution examiners need to be aware of the following criteria:

    If Then
    The processing date is more than 20 days after received date or the return due date (whichever is later) and the 45 day interest free period is in jeopardy and the refund amount is $25,000 or more

    Note:

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

    Enter AC 341 and route to Error Resolution/Rejects for manual refund
    The refund is $10,000,000 or more Enter Action Code 341 and route to Error Resolution/Rejects for manual refund.
Taxpayer Advocate Service (TAS Manual Refunds)
  1. Any return hand walked by a Wage and Investment (W and I) Submission Processing (SP) liaison for TAS as a manual refund should be processed by a lead tax examiner or designated tax examiner using the following procedures in the order listed:

    1. CCC "O" should be edited on the return and entered in Field 01CCC.

    2. Delete the CCC "Y" from Field 01CCC.

    3. Continue the process of the return according to Error Code processing.

  2. Correspondence - If the return requires correspondence for missing or incomplete information, then do the following:

    • Complete the appropriate correspondence request form and request all information that is missing or incomplete

    • Inform the W and I Submission Processing liaison of all information that is being requested

    • Suspense (SSPND) with appropriate suspense code and give the return back to the W and I Submission Processing liaison

    • Contact will be made with the Taxpayer Advocate by the W and I Submission Processing liaison to obtain the required information needed to complete the processing of the return

  3. Other Suspense Action–If the return requires other suspense action, then do the following:

    • Initiate suspense (SSPND) action according to the Error Code procedures

    • Inform the W and I Submission Processing liaison the reason of the action taken

    • Give the return back to the W and I Submission Processing liaison

    • Contact by the W and I Submission Processing liaison will be made with the Taxpayer Advocate, who in turn will take the necessary action to complete the processing of the return

  4. Assigning Taxpayer Notice Codes (TPNC)/Math Error - When a math error is identified, do the following:

    • Assign the TPNC in accordance to the Error Code procedures

    • Inform the W and I Submissions Processing liaison of the TPNCs issued after all TPNCs have been assigned

    • Suspend (SSPND) with appropriate code (suspense should be done at the generated error code) and give the return to the W and I SP liaison

    • Contact by the W and I Submission Processing liaison will be made with the Taxpayer Advocate, who in turn will take the necessary action to complete the processing of the return

  5. When Balance Due/Overpayment Math Error Code generates do the following:

    • Make a screen print of the Error Code Screen Display, highlight the Computer Generated Refund amount, and attach the print to the front of the return with the entity portion of the return visible

    • Enter the amount the taxpayer claimed as the amount they requested to be refunded back into Field 07B/R

  6. If Balance Due/Overpayment Math Error Code regenerates because the taxpayer made a math error when computing their refund, then do the following:

    • Make a screen print of the Error Code Screen Display and highlight the Computer Generated Refund Amount

    • Attach the print to the front of the return with the entity portion of the return visible

    • Assign the appropriate TPNC

  7. Once return processing is complete, give the return, Form 12412, Operations Assistance Request, and the Error Resolution screen print to the Wand I Submission Processing liaison.

  8. Rejects Suspense - Manual refunds that are hand walked by a W and I Submission Processing liaison that have been suspended should be processed as follows:

    • Follow the specific instruction given by the W and I Submission Processing liaison in regards to correspondence issues and the assignment of the TPNCs

    • Refer to instructions shown above

Frivolous Returns and Claims

  1. A frivolous argument of generally expressed dissatisfaction with the substance, form, or administration of the tax laws and attempts to avoid or reduce tax liabilities or to increase refunds by frivolous means. Recognized frivolous arguments made by business include, but are not limited to, the examples in Exhibit 3.12.213-1, Form 1066 Real Estate Mortgage Investment Conduit Income Tax. In addition see IRM 25.25.10, Frivolous Return Program, and Exhibit 3.12.213-6, Potential Frivolous Returns.

  2. Review of the return to determine whether it appears to be a frivolous return. Using If/Then Chart below.

    If Then
    The return meets any of the conditions identified as a frivolous return, See Exhibit 3.12.213-6, IRM 11.3.1.11, Facsimile Transmission of Tax Information

    Exception:

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

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

    Note:

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

Criminal Investigation (CI) Referral

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

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

    Caution:

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

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

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    5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. Other CI Referral Criteria:

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    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
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    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    • ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

    Caution:

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

    1. Make a copy of the return.

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

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

      Cincinnati Ogden Kansas City
      Mail Stop 83G, Criminal Investigation (CI) Mail Stop 9001, Criminal Investigation (CI) Mail Stop S2 9000, Criminal Investigation (CI)
    4. Edit an action trail "Copy to CI" , or "CI Referral" , or similar language in the lower left corner going vertically up the side of the return.

    5. Continue processing the return.

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

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

Examination (Exam) Funny Box

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

Routing of Attachments

  1. The following information pertains to taxpayer correspondence:

    If Then
    Unrelated, unanswered taxpayer correspondence is attached and no action has been taken, Detach and route to Accounts Management.
    Unanswered taxpayer correspondence related to the Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, is attached, Make a photocopy of the attachment and forward it to the appropriate area.
    Installment Agreement request, Form 433-B, Collection Information Statement for Business, Form 433-DInstallment Agreement, or Form 9465, Installment Agreement. Detach and send to Collections.
    Attachment or photocopy of an attachment is to be routed elsewhere, Be sure that the attachment contains name, address, Employer Identification Number (EIN) and received date.

Internal Revenue Service (RS) Employee Contacts - 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. Internal Revenue Service (IRS) employees are required to give their name and unique identification number during taxpayer telephone, face-to-face, and written contact. In addition, a telephone number is required on all taxpayer correspondence. This will provide taxpayers with enough information to identify an IRS employee who has previously assisted with tax related matters.

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

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

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

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

    4. The Integrated Data Return System (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 employees, 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 prompts, courteous and professional assistance in their dealings with IRS. They are to be spoken to in a way that is easily understood and any correspondence from IRS must be clear and understandable. They have the right to speak to a supervisor whenever quality service is not received.

BMF Consistency

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

  2. Topics for BMF Consistency have been identified and developed as a coordinated effort between Cincinnati Submission Processing Center (CSPC), Ogden Submission Processing Center, (OSPC), Kansas City Submission Processing Center, (KCSPC), and Paper Processing Branch, BMF Code & Edit/Error Resolution Section.

  3. 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.

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

  1. Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, is used to report the income, deductions and gains and losses from the operation of a Real Estate Mortgage Investment Conduit (REMIC). Also, the form is used to report and pay taxes on net income from prohibited transactions, net income from foreclosure property, and contributions after the start up day. Form 1066 are all filed at the Ogden Submission Processing Campus (OSPC).

  2. The taxpayer is now required to file Form 1065X, Amended Return or Administrative Adjustment Request (AAR) to correct or amend Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.

  3. Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, for tax year 2012 will only contain three pages. Page two, Schedule D, no longer exists.

Section 01 - Correction Procedures General Information

  1. Section 01 contains the entity data and codes for returns. See Exhibit 3.12.213-1, Form 1066 U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, for location of field designators on Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.

  2. The field designator, maximum length for each entry, title and location where the entry can be found are listed below.

    Field Designator Max Field Length Title Location
    01NC Four Name Control Pg. one, Name Line
    >>>>   Name Control Underprint  
    01EIN Nine Employer Identification Number Pg. one, Box A, or label
    01TXP Six Tax Period Pg. one, Form 1066 (upper right corner)
    >>>>   Tax Period Underprint  
    01RCD Eight Received Date Pg. one, Form 1066 (face of return)
    01CCC 10 Computer Condition Code Dotted portion of Section one, Line one
    01DOB Six Date REMIC Started Page one, Box B
    01NOR Six Number of Residual Holders Left margin of the "Deductions" section preceded by "3-"
    01TEF One Tax Equity and Fiscal Responsibility Act (TEFRA) Left margin of the "Deductions" section preceded by "4-"
    01MSC Four Missing Schedule Code Left margin of the "Deductions" section preceded by "5-"
    01CRD Eight Correspondence Rec’d Date N/A
    (No longer edited by Code and Edit.)
    01ADC Three Audit Code Left margin of the "Deductions" section preceded by "8-"
    01ISI One Installment Sale Indicator Left margin of the "Deductions" section preceded by "9-"
    01CBI One Paid Preparer Checkbox Indicator Pg. one, Form 1066, checkbox in bottom right corner
    01PSN Nine Paid Preparer Social Security Number (SSN) or Practitioners Tax Identification Number (PTIN) Pg. one, Form 1066, below checkbox
    01PEN Nine Paid Preparer EIN Pg. one, Form 1066, below checkbox
    01PTN 10 Paid Preparer Phone Number Pg. one, Form 1066, below checkbox

Name Control - 01NC

  1. The name control is located on Page 1, entity area, first name line, or on prior years the preprinted label.

  2. 01NC has four positions and the valid characters are alpha, numeric, hyphen (-), ampersand (&), and blank.

Name Control Invalid Condition
  1. The name control field is invalid if any of the following situations occur:

    1. The first position is not alpha or numeric.

    2. The first position is blank or there are intervening blanks between characters.

    3. The second, third, and fourth positions are not alpha, numeric, ampersand, hyphen or blank.

Correction Procedures
  1. Check the field with the return, Use If/Then Chart below for Correction Procedures.

    If Then
    The data was transcribed incorrectly, 1. To determine the correct name control, see Document 7071-A, Name Control Job Aid.
    2. If name control is unavailable, research using Command Code ENMOD or INOLE to secure the name control.
    Name control is found, Enter the correct name control in Field 01NC and on the return.
    Unable to determine the name control, 1. Suspend the record with Action Code 320.
    2. Route to Entity Control.

Employer Identification Number (EIN) - 01EIN

  1. The data for this entry is located in Box A on the return or on the preprinted label.

  2. The entry must contain nine numeric digits and cannot begin with 00, 07, 08, 09, 17, 18, 19, 28, 29, 49, 69, 70, 78, 79, 89, or 96.

    If Then
    The EIN has any of the numbers shown above in the first two positions, or is other than nine numeric characters, Compare 01EIN with the EIN on the return and correct any transcription errors.
    The EIN was transcribed correctly, 1. Search the return and attachments and IDRS for another EIN. If one is found, enter it on the return and on the screen.
    2. If the EIN is changed from the one the taxpayer used, issue Letter 3875C, Missing or Incorrect EIN on Return - BMF/EPMF, as a non-suspense letter to the address on the return. Continue processing the return.

    Note:

    Do not send Letter 3875C, Missing or Incorrect EIN on Return - BMF/EPMF when:

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

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

    • The EIN on the return is the taxpayer's SSN and research shows there is no valid entity on Master File for that EIN.

    There is no record of an EIN, Suspend the record with Action Code 320 and route to Entity Control for an EIN to be assigned.
    Entity Control has found the correct EIN, Enter it in Field 01EIN.
    Entity Control has assigned an EIN, Enter it in Field 01EIN. Enter the entity assignment date, found in the lower left hand corner of the return in Field 01CRD if it is after the due date of the return.

Tax Period - 01 TXP

  1. The tax period is printed in year (YYYY), month (MM) format (e.g., December 31, 2012 will be displayed as 201212). The tax period is located above the first name line, to the right on the return.

  2. The tax period must be present and contain six numeric digits.

  3. The last two digits must be 12, unless the Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, is a final return. Valid entries for tax period month on final returns are 01 through 12.

  4. The year (first four digits) must not be greater than the current year.

  5. The tax period cannot be earlier than 198712.

Correction Procedures
  1. The following information pertains to correction procedures for the tax period:

    If Then
    The correct tax period cannot be determined from the return, Process for the current year.
    Multiple tax periods are on the return, Correspond with the taxpayer and suspend the record with Action Code 21X.

Received Date - 01RCD

  1. The received date appears on return in MMDDYY format, but will be displayed in YYYYMMDD format. It must be eight numerics. The fifth and sixth digits (month) must be 01-12, and the seventh and eighth digits (day) must be 01-31.

  2. The received date must be equal to or greater than the tax period ending date and equal to or earlier than the current date.

Correction Procedures
  1. The following information pertains to correction procedures for received date.

    If Then
    The received date was transcribed incorrectly, Enter the date from the return.
    The received date was edited incorrectly, Enter the date as determined in the following order of priority:
    • Earliest legible postmark date of the U.S. Post Office, foreign, or a Private Delivery Service.

      Note:

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

    • 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 Julian Date.


    1. Earliest legible postmark date (U.S. Post Office, or Private Delivery Service postmark. If both present, use USPS postmark.) See "Note" above regarding certified mail.
    2. Revenue Officer’s signature date.
    3. Taxpayer’s signature date (only if within current year).
    4. Julian control date.

Computer Condition Code - 01CCC

  1. The valid computer condition codes are B, D, F, G, L, O, R, W, X, Three, Four and Seven.

    Computer Condition Code Definition
    B The REMIC has made an election out of the installment sale method notated on the margin of Form 4797, Sales of Business Property, or Schedule D.
    D The taxpayer has established reasonable cause for failure to pay taxes timely.
    F Final Return.
    G Amended or superseding return - Computer Condition Code "G" is invalid if any other Computer Condition Code is present except "W" or "Three" is present.
    L "Section 6114 Election or Treaty- Based Position Returns" - Taxpayer writes either "Section 6114" or "Section 6114 Election" on the return, or Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), is attached to the return.
    O "Module Freeze" - Form 3753, Manual Refund Posting Voucher, is attached or a duplicate copy of Form 4466, Corporation Application for Quick Refund of Estimated Tax, is attached.
    R The REMIC has established reasonable cause for filing a delinquent return.
    W Record cleared by Statute Control Unit.
    X Refund Freeze code.
    Three No reply received for correspondence sent to taxpayer. Editing "CCC three" suppresses computation of credit interest.
    Four Return was prepared under IRC 6020(b).
    Seven Reasonable cause for filing a delinquent return or late payment of taxes was examined and denied.
Correction Procedures
  1. The following information pertains to 01CCC correction procedures.

    If Then
    01CCC was transcribed incorrectly, Enter the correct Computer Condition Code from the dotted portion of Section one, Line one.
    01CCC was transcribed correctly, Determine the correct code.

Date REMIC - 01DOB Page 1, Box B

  1. The date REMIC started appears as YYYYMM format. The first four digits are the year and the last two digits are the month.

  2. Field 01DOB must be all numerics or all blanks.

    If Then
    01DOB was transcribed incorrectly, Enter the correct date from Page one, Box B.
    Either the year or month is not present in Box B, Do not enter in 01DOB.
    The taxpayer enters a future date as the date business started, Do not enter in 01DOB.

Number of Residual Interest Holders - 01NCR

  1. If other than one through 999,999, then the entry is invalid.

  2. This entry should reflect the Number of Residual Interest Holders shown on Page three, Question F.

Correction Procedures
  1. The following information pertains to the number of Residual Interest Holders:

    If And Then
    01NOR is other than one through 999,999, Question F has an entry of one through 999,999, 1. Enter the number on Question F in Field 01NOR.
    2. Correct the number edited in the left margin of the "Deductions" section preceded by "3-" .
    01NOR is other than one through 999,999, Question F is blank and Schedules Q are attached, 1. Count the number of Schedules Q and enter the total in field 01NOR.
    2. Edit the number of Schedules Q in the left margin of the "Deductions" section preceded by "3-" .
    01NOR is other than one through 999,999, Question F is blank and no Schedules Q are attached, 1. Enter "one" in Field 01NOR if the "Trust" or "Corporation" boxes are checked on Question E and edit in the left margin of the "Deductions" section preceded by "3-" .
    2. Enter "2" in Field 01NOR if the "Partnership" box is check on Question E and edit in the left margin of the "Deductions" section preceded by "3-" .

    Note:

    If Question E is also blank, enter "two" in Field 01NOR and edit in the left margin of the "Deductions" section preceded by "3-" .

    Taxpayer's figure exceeds 999,999,   Enter "999999" (six nines) in Field 01NOR.

TEFRA - 01TEF

  1. Valid entries are one or blank.

Correction Procedures
  1. The following information provides correction procedures for Field 01TEF:

    If Then
    01TEF was transcribed incorrectly, Enter the correct code in the left margin of the Deductions section preceded by "4-" .
    The incorrect code was edited, Determine the correct entry from the taxpayer's response to question G, Page Three, Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, as follows:
    1. Question G Box checked - Code one.
    2. All other instances, leave the entry blank.

Missing Schedule Code - 01MSC

  1. The valid entry for the Missing Schedule Code field is 35 or blank.

    1. Code "35" is used if Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return Page one, Section I, Line four, Ordinary gain or loss, contains an entry, but Form 4797, Sales of Business Property vs. Supplemental Schedule of Gains and Losses, is not attached or is blank.

  2. This field contains four (4) positions. At this time code 35 is the only valid Missing Schedule Code.

  3. The first position cannot be blank if the second, third or fourth position contains a Missing Schedule Code.

Correspondence Received Date - 01CRD

  1. A Correspondence Received Date (CRD) will be determined from the date the reply was received in the submission processing campus.

    If Then
    The reply was not date stamped, 1. Use the U. S. Postal Service postmark date on the envelope attached to the reply to determine the Correspondence Received Date, except in the following situations:
    a. The correspondence reply was received prior to the due date of the return.
    b. The correspondence was required because of an IRS processing error, such as a request for a return or schedule that we lost during processing.
    c. The correspondence was not necessary, or was issued in error.
    There is no reply to correspondence, Enter "three" in Field 01CCC and to the dotted portion of Section one, Line one. This suppresses credit interest.

    Note:

    If there is an indication that Entity Control has researched and found or has assigned an EIN to the return, edit the Entity Date found in the lower left hand corner of the return to the left margin of the Deductions section preceded by "6-" and in 01CRD, if it is later than the actual correspondence received date. If there are both a CRD and an Entity Assignment date, enter the later of the two.

♦Audit Code - 01ADC♦

  1. The valid entries are blank, one, two, three, four, five and six.

  2. Enter Audit Code "one" if any of the following are attached:

    1. Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR).

    2. Form 8275, Disclosure Statement.

    3. Form 8275-R, Regulation Disclosure Statement.

  3. Enter Audit Code "two" if any of the following conditions exist:

    1. Form 926, Return by a U.S. Transferor of Property to a Foreign Corporation, is attached.

    2. Form 547, Information Return of U.S. Persons with Respect to Certain Foreign Corporations, is attached.

    3. Form 5713, International Boycott Report, is attached.

    4. The taxpayer answered "Yes" to the foreign trust question, "one" , Page three, Additional Information.

  4. Although Audit Codes three, four, five and six are also valid for this field, no uses for these codes have been identified in Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, processing.

Installment Sale Indicator - 01SI

  1. The valid codes are blank, one, two and three.

  2. The Installment Sale Indicator is coded from the partnership's response to Form 6252, Installment Sale Income, Question three, as follows:

    Code One Form, Form 6252, Installment Sale Income Multiple Form 6252, Installment Sale Income
    One "Yes" response to Question three. At least one form has a "Yes" response.
    Two "No" response to Question three. All "No" responses, or a combination of "No" and blank responses.
    Three "Yes" and "No" are checked or Question three is blank. Question three is blank on all forms.
Correction Procedures
  1. Correction procedures for Field 01ISI, Installment Sale Indicator.

    If Then
    The correct code needs to be determined, 1. Examine the return and attachments.
    2. Delete the incorrect entry and enter the correct code on the screen and in the left margin of the Deductions section preceded by "9-" .
    A code should not be present, Blank the entry on the screen.
    Multiple Form 6252, Installment Sale Income, are attached and at least one form has a positive response, Use code "One" .
    Multiple Form 6252, Installment Sale Income, are attached; at least one has a negative response and the others are blank, Use code "Two" .
    Multiple Form 6252, Installment Sale Income, are attached but Question three is blank on all forms, Use code "Three" .

Paid Preparer Checkbox - 01CBI

  1. The Paid Preparer Checkbox is located beside the taxpayer signature area. It indicates whether the taxpayer has elected, or not elected, to allow the paid preparer to represent him/her in order to reach settlement of the return tax period. Code and Edit is instructed not to code amended returns (e.g., returns indicating "Amended" , "Superseding" , "Corrected" , etc.) with an indicator.

  2. If the taxpayer checks only the "Yes" box, Code and Edit should indicate a "One" in the right margin beside the Paid Preparer Checkbox.

  3. There are validity checks on the field.

  4. Invalid Condition: If the value is other than "One" or blank.

Correction Procedures
  1. If invalid, delete the field 01CBI and continue processing.

Preparer’s Tax Identification Number (PTIN) - 01PSN

  1. The Preparer's Tax Identification Number (PTIN) (Preparer's SSN or PTIN box - 2009 and prior revisions) is located at the bottom of Page one, Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.

  2. Valid characters are all blank, all numeric, or a "P" in the first position followed by eight numeric characters (a PTIN). If the field is all numeric, it must have nine positions and cannot be all zeroes or all nines.

    Note:

    The range for a valid PTIN is P00000001 through P99999998. A "P" followed by all zeroes or all nines is not valid.

Correction Procedures
  1. Check for coding and transcription errors and correct accordingly.

Firm’s EIN - 01PEN

  1. The Firm's EIN (Paid Preparer's EIN - 2009 and prior revisions) is transcribed from the bottom of Page one, Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.

  2. This field can be all blank or all numeric.

  3. The field is invalid if it is all nines, all zeroes or less than nine positions.

Correction Procedures
  1. Check for coding and transcription errors and correct accordingly.

Paid Preparer Phone Number - 01PTN

  1. If the taxpayer checks only the "Yes" box, then a telephone number for the paid preparer should also be entered to allow contact. However, this field is not required and may be left blank.

  2. There are validity checks on the field, but the field is not correctable. Valid characters are any combination of alpha (A to Z), numeric (zero to nine), or both, characters.

  3. Invalid Condition: If any of the characters are not alpha or numeric.

Correction Procedures
  1. If invalid, delete the field 01PTN and continue processing.

Section 02 Correction Procedures

  1. The following information pertains to Section 02 correction procedures.

Address Data

  1. Section 02 contains the address changes for a return.

  2. The field designator, title, maximum field length, and the location where the entry can be found are listed below:

    Field Designator Title Maximum Field Length Location
    02CON In-Care-Of Name 35 Entity area, Page one, Name line
    02FAD Foreign Address 35 Entity area, Page one, Address line
    02ADD Street Address 35 Entity area, Page one, Address line
    02CTY City 22 Entity area, Page one, city, state, ZIP code line
    02ST State Two Entity area, Page one, city, state, ZIP code line
    02ZIP ZIP Code 12 Entity area, Page one, city, state, ZIP code line

Address Changes

  1. Section 02 should be present if:

    1. A return has an address change or the change of address box is checked on Page one.

    2. Section 02 cannot be present on a "G" coded return.

  2. 02ADD - Street Address (35 character entry).

    1. This entry may be blank or contain alpha and numeric characters, hyphen (-), or slash (/).

    2. If the first position is blank, all positions must be blank.

    3. There cannot be two consecutive blanks within significant data.

  3. 02FAD - Foreign Street Address.

    1. This entry may be blank or contain alpha and numeric characters, hyphen (-), or slash (/).

    2. If the first position is blank, all positions must be blank.

    3. There cannot be two consecutive blanks within significant data.

  4. 02CTY - City (22 character entry).

    1. The first position of this entry cannot be blank.

    2. The second and third position cannot both be blank (this allows for the Major City Code).

    3. There cannot be two consecutive blanks within significant data.

    4. This entry can contain alpha and numeric characters, hyphens (-), and blanks.

    5. Determine whether a Major City Code was used.

  5. 02ST - State (two character entry). (See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries for the valid state abbreviations.

  6. 02ZIP - ZIP code (12 character entry).

    1. This entry must be five (5), nine (9), or twelve (12) numerics.

    2. If a valid ZIP code is not available from the return, perfect the ZIP code using the chart in Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP codes and Countries.

Correction Procedures

  1. Check for transcription errors. If it is transcribed incorrectly, enter the actual city and state data.

  2. The Ogden Submission Processing Campus (OSPC) will process any return that has an international address. Suspend processing of Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, with Action Code 650; attach to Form 4227, Intra-SC Reject or Routing Slip, for routing to Ogden Submission Processing Center.

  3. The Postal Service established new address requirements for Army Post Office (APO)/Diplomatic Post Office (DPO)/Fleet Post Office (FPO) addresses. If the old address appears (e.g., APO New York, NY 091XX) it must be converted to the new state code abbreviation based on the ZIP code (e.g., the previous example would be converted to APO AE 091XX).

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

Filed 02 Con -In-Care-of Name (XREF EC 002, 014, 016)

  1. Description – Field 02CON is located in the Entity section of the return.

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

    Note:

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

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

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

    • The first position is blank, or

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

    • There are two consecutive blanks between significant characters

  4. Correction Procedures:

    1. Check for coding and transcription errors.

    If Then
    A % (percent) is in the first position, 1. Verify there is a blank in the second position.
    2. If not blank, enter a blank followed by the "in-care-of" name beginning with an alpha or numeric in Field 02CON.
    A blank is in the first position, 1. Delete blank.
    2. Enter the "in-care-of" name beginning with an alpha or numeric in Field 02CON.
    The first character of the "in-care-of" name is not alpha or numeric, 1. Verify "in-care-of" name on the return.
    2. Enter the "in-care-of" name beginning with an alpha or numeric in Field 02CON.
    Two consecutive blanks are present between significant characters, Delete any unnecessary blanks in Field 02CON.

Field 02FAD - Foreign Address (XREF EC 002, 014, 016)

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

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

    2. Field 02FAD should not be present on G coded short length returns.

  2. Valid Characters: Valid characters are alpha, numeric, and special characters.

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

    • The first position is blank

    • Any character follows two consecutive blanks

    • There are more than 35 characters present in the field

      Note:

      Integrated Submission and Remittance System 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.

    .

Correction Procedures
  1. Correct all coding and transcription errors.

    If Then
    Field Form 1066 is present,
    1. GTSEC Form 1066.

    2. Ensure Field Form 1066 contains a foreign country code and Field Form 1066 contains a "." (period/space). See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.

      Exception:

      Use the country code based on the province in Field Form 1066 CTY if the foreign address is from Canada and the address contains a province name or abbreviation. See Exhibit 3.12.213-4,Province/Country Code Canada OnlyForm 1066

    A province abbreviation is not present for Australia, Brazil, Canada, Cuba, Italy, Mexico or The Netherlands but a province name is present, Enter the province abbreviation in the appropriate position in Form 1066. Exhibit 3.12.213-5, Province, State and Territory Abbreviations Form 1066
    A foreign address is not present on the return,
    1. SSPND 610.

    2. Renumber return with domestic DLN.

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

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

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

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

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

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

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

    1. Enter address shown on Form 8822, Form 8822-B in Field Form 1066 FAD.

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

    3. Detach Form 8822, Form 8822-B and route to Entity Control using Form 4227, Intra-SC Reject or Routing Slip, or follow local procedures.

    4. Notate on Form 4227, "CHANGE OF ADDRESS PER FORM 8822 or FORM 8822-B" .

    Note:

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

♦Field 02ADD - Street Address (XREF EC 002, 014, 016)♦

  1. This field is transcribed from the Street Address line of the entity portion of the return.

  2. Invalid Condition - Field 02ADD is invalid if:

    1. Street Address is present and the first position is blank,

    2. A character other than alpha, numeric, blank, dash or slash is present,

    3. Any character follows two consecutive blanks, or

    4. There are more than 35 characters in this field.

      Note:

      ISRP will input a pound (#) sign as the 35th character to indicate an overflow condition.

  3. Correction Procedures:

    1. Correct any coding and transcription errors.

    2. If the 35th character is a pound sign (#), refer to Document 7475, State Abbreviations, Major City Codes and Address Abbreviations. Abbreviate the address to 35 or fewer characters.

    3. If unable to correct, DLSEC 02.

♦Field 02CTY - City (XREF EC 002, 014, 016)♦

  1. This field is transcribed from the city, state, ZIP line of the entity portion, on page one of the return.

    1. Certain cities are designated "Major Cities" and have been assigned a designator that consists of two alpha characters. This code represents both the city and state.

    2. Whenever the city is on the Major City list, Integrated Submission and Remittance Process, will enter the Major City Code instead of entering the entire name of the city and the state.

    3. When a Major City Code is used, it will be the first two positions of Field 02CTY.

  2. Invalid Condition - Field 02CTY is invalid if:

    1. City is present and the first position is blank.

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

    3. Any character follows two consecutive blanks.

    4. A Major City Code is present and it is not a valid Major City Code.

    5. Invalid Foreign Country Code is present.

  3. Correction Procedures:

    1. Correct any coding and transcription errors.

      Note:

      For a listing of Major City Codes (listed by state) and valid Foreign Country Codes (FCC) see Document 7475, State Abbreviations, Major City Codes and Address Abbreviations, ZIP Codes and Countries.

      If Then
      A Major City Code is used, Field 02CTY must be present.
      Field 02CTY contains an error, Verify the Major City Code.
      Field 02CTY is not valid and a Major City Code cannot be determined, Input the entire city name.
      A Major City Code is not used and Field 02CTY is present, Field 02ST must be present.
      A foreign address is shown on the return, Enter the appropriate FCC in Field 02CTY
      Field 02CTY contains an incorrect country code or "XX" Enter appropriate FCC in Field 02CTY. If there is no valid FCC, input the entire country name.
      Unable to correct DLSEC 02

Field 02ST - State (XREF EC 002, 014, 016)

  1. This field is transcribed from the city, state, ZIP code line of the entity portion of the return.

  2. Invalid Condition - Field 02ST is invalid if the entry is not a state code that is listed in the State Code Table in Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.

  3. Correction Procedures:

    1. Correct any coding and/or transcription errors.

    2. If a valid state code is not available from the return or envelope, take any of the following steps: Research using INOLES or ENMOD to determine state, or refer to Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP codes and Countries for correct code.

      Note:

      If a major city code is found, GTSEC 02 and enter in Field 02CTY and delete Field 02ST.

    3. If unable to correct, DLSEC 02.

Field 02ZIP - ZIP Code (XREF EC 002, 014, 016)

  1. This field is transcribed from the city, state, ZIP code line of the entity portion of the return.

  2. Invalid Condition - Field 02ZIP is invalid if:

    • ZIP code is present and the first five positions are not numeric

    • The last four positions are not all numeric or all blank, or

    • Positions four and five are "00"

      Exception:

      ZIP code 20500

  3. Correction Procedures:

    1. Correct any coding and transcription errors.

    2. If a valid ZIP code is not available from the return or envelope, research using any of the following to determine the ZIP code: INOLES and/or ENMOD or Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.

Money Amounts General Information

  1. Sections 03 through 08 contain money amounts. The entries are of variable length. Only sections 01, 02, 03, 07 and 20 are being transcribed by Integrated Submission and Remittance Processing.

Section 03

  1. Listed below are the entries displayed in Section 03 of Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.

    Field Designator Title Max Char $/c Field Type Location
    03TAS Total Assets 13 $ (+ −) Page one, Box C
    03STG Net Short Term Capital Gain/Loss 11 $ (+ −) Lower right margin preceded by "11-"
    03LTG Net Long Term Capital Gain/Loss 11 $ (+ −) Lower right margin preceded by "12-"
  2. Correct Field Designator 03TAS by entering "2-" if Total Assets is a negative greater than two.

Section 07

  1. Listed below are the entries displayed in Section 07 of Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.

  2. Correct as required.

    Field Designator Title Max Char $/c Field Type Location
    0704 Net Income from Prohibited Transactions 13 $/c (+) Page two Schedule J. Part 1, Line four.
    >>>> Net Income from Prohibited Transactions Computer        
    0705A Tax on Net Income (Total Tax) 13 $/c (+) Page one, Section II, Line one.
    0706 Tax Paid, Form on Form 7004 Application for Automatic Extension of Time to File Certain Business Income Tax Information and other Returns. 13 $/c (+) Page one, Section II, Line two.
    07TTE Telephone Excise Tax Return 15 $/c (+) Page one, Section II, dotted portion to the left of Line four. Tax Year 2006 only.
    07TRV Telephone Excise Tax Return (Verified Field) 15 $/c (+) >>>>
    07B/R Balance Due/Overpayment 13 $/c (+ -) Page one, Section II, Line three/four.

    Note:

    07B/R is an Error Resolution input only field.

Math/Consistency Priority IV General Information

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

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

  3. All errors must be resolved by either eliminating the error, or entering "C" in the Clear Code field.

Error Code 001 - Tax Year - Invalid Entry

  1. Fields Displayed:

    Field Designator Field Name Length
    01TXP Tax Period Six
    01RCD Received Date Eight
    01CCC Computer Condition Code 10
  2. Invalid Conditions: Error Code 001 will generate when any of the following conditions are present:

    • Computer Condition Code "G" is not present - The processing date is equal to or more than two years and 10 months after the Return Due Date or Received Date (whichever is later) and CCC "W" is not present

    • Computer Condition Code "G" is present - The processing date is equal to or more than two years and 10 months after the Return Due Date and CCC "W" is not present

    • "G" Coded and Non- "G" Coded Returns - The processing date is less than two years after the Return Due Date and CCC "W" is present

  3. Correction Procedures:

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

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

    3. Do not send the following return to Statute Control for clearance. Instead, enter W in Field 01CCC and on the return and continue processing:

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

    • Any return secured by Examination/Collections, Secured by TE/GE, Secured by TE/GE EP Exam

    • Any return secured by Examination/Collections.

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

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

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

    • Any return that is a Substitute for Return prepared by Examination (SFR in the margin) with Document 13133, Expedite Processing Cycle, attached.

    1. If Then
      Field 01RCD is blank .
      1. Enter the Received Date in Field 01RCD. Use the earliest date if multiple Received Dates are present.

      2. See IRM 3.12.213.5.4, IRS Received Dates to determine the received date.

      CCC "W" was entered incorrectly, Delete CCC "W" from Field 01CCC.
      The return has a stamp that indicates a previous clearance by Statute Control within the last ninety days, Enter CCC "W" in Field 01CCC and on the return.

      Note:

      Do not send the return to Statute Control.

      The return is not stamped by Statute Control within the last ninety days, 1. Suspend (SSPND) 310.
      2. Prepare Form 4227, Intra-SC Reject or Routing Slip, to route to Statute Control.
  4. Suspense Correction:

    1. When Statute Control returns the cleared document, enter "W" in Field 01CCC and on the return. Continue processing.

    2. Statute Control requests the record to be voided to them, SSPND 640.

Error Code 002 - Name Control Mismatch

  1. Fields Displayed:

    Field Designator Field Name Length
    CL Clear Code One
    01NC Name Control Four
    >>>> Name Control Underprint Four
    01EIN Employer Identification Number Nine
    01TXP Tax Period Six
    02CON In-Care-Of Name 35
    02FAD Foreign Address 35
    02ADD Street Address 35
    02CTY City 22
    02ST State Two
    02ZIP ZIP Code 12
  2. InvalidConditions: Error Code 002 will generate when the name control mismatched against the National Account Profile (NAP) or Entity Index File (EIF).

  3. Correction Procedures:

    1. Before taking any additional research steps to resolve Error Code 002, drop the cursor to the bottom of the screen and transmit. This will ensure that any prior changes to the name control have posted to the NAP. If Error Code 002 reappears, continue with the remainder of the correction procedures.

    2. When corrections are made to Field 01NC or Field 01EIN, the computer will validate the entries with the NAP and reset the On-Line Entity (OLE) indicators as appropriate upon transmitting the Error Resolution screen.

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

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

    5. Refer to all of the following research instructions in this error code before taking any action.

    6. If Field 01NC and the name on the return or attachments are the same but differ from the underprint in Field 01NC, research INOLES to determine the correct name.

      If Then
      The name on the return or attachment matches the name control on INOLES, Bring up underprint.
      The name control on INOLES is different from the name on the return or attachment, Research NAMEB/NAMEE for a new EIN.
    7. If a new EIN is located, verify the name control using CC INOLES.

      If Then
      The name control on INOLES matches the name on the return or attachment, 1. Ensure that the entity information matches the return.
      2. Overlay Field 01EIN with the new EIN from NAMEB/NAMEE. When the EIN is changed from the one the taxpayer used, issue Letter 3875C as a non-suspense letter to the address on the return.

      Note:

      Do not send Letter 3875C, Missing or Incorrect EIN or Incorrect EIN on Return - BMF/EPMF when:

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

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

      • The EIN on the return is the taxpayer's SSN and research shows there is no valid entity on Master File for that EIN

      Multiple EINs are located, 1. SSPND 320 to Entity Control.
      2. Prepare Form 4227, Intra-SC Reject or Routing Slip, with the notation "MULTIPLE EINs" .
      INOLES indicates a "Merge To" (MT) EIN, Research the "MT" EIN on INOLES.
      The "MT" EIN matches the entity on the return or attachments, Enter the "MT" EIN in Field 01EIN.

      Note:

      Do not send Letter 3875C, Missing or Incorrect EIN on Return - BMF/EPMF on "MT" EIN cases.

      The "MT" EIN does not match the entity on the return or attachments, SSPND 320 to Entity Control.
    8. If the name on the return or attachment does not agree with the name control on INOLES or there is an indication of a name change on, Form 1066 (Line D, Box 2) research ENMOD for a new name.

      If Then
      The name control on ENMOD matches the name on the return or attachments, Enter "C" in the Clear Code field.
      The name control on ENMOD or INOLES does not match the name on the return or attachments, 1. SSPND 320 to route the return to Entity Control.
      2. Attach Form 4227, Intra-SC Reject or Routing Slip with the notation, "NO RECORD" .
    9. If the Name change has not been made, research ENMOD for a pending TC 013.

      If Then
      A pending TC 013 is present, Enter "C" in the Clear Code field.
      A pending TC 013 is not present, 1. SSPND 320 to route to Entity Control.
      2. Attach Form 4227, Intra-SC Reject or Routing Slip, with the notation "REQUEST NAME CHANGE (TC 013)" .
  4. Suspense Correction:

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

      If Then
      The Entity Assignment Date is past the Return Due Date or Received Date, 1. GTSEC 01
      2. Enter the Entity Assignment Date in Field 01CRD.
      The Entity Assignment Date is not past the Return Due Date, Continue processing.
    2. Research IDRS using CC BMFOL to determine if payments posted incorrectly.

      If Then
      The payment posted to the wrong EIN, 1. Prepare Form 3465, Adjustment Request, to have the payment transferred to the correct module.
      2. Notate on Form 3465 Adjustment Request"MOVE PAYMENT TO CORRECT MODULE UPON COMPLETION AND RELEASE FREEZE" .
      3. Write, "Form 3465, Adjustment Request PREPARED" on return, to the left of the Entity section.
      4. Enter CCC "X" in Field 01CCC.
      The payment posted correctly, 1. Enter correct EIN in Field 01EIN and on the return.
      2. Enter "C" in the Clear Code field.
      Payment cannot be located, Enter "C" in the Clear Code field.

Error Code 003 - Check Digit Invalid

  1. Fields Displayed

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

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

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

  3. Correction Procedures:

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

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

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

    If Then
    The EIN on Form 1066 matches the EIN on NAMEB/NAMEE, Enter Name Control from NAMEB/NAMEE in Field 01NC.
    Research indicates a different EIN, Verify the EIN and name on INOLES.
    Name Control on INOLES matches the name on the return or attachment,
    1. Overlay Field 01EIN with the EIN from INOLES.

    2. Issue Letter 3875C, Missing or Incorrect EIN on Return - BMF/EPMF as a non-suspense letter to the address on the return.

      Note:

      Do not send Letter 3875C, Missing or Incorrect EIN on Return - BMF/EPMF when:
      • Three or less digits of the EIN are transposed, different, or missing, or
      • INOLES indicates the account has been “merged to” or “merged from”, or
      • The EIN on the return is the taxpayer's SSN and research shows there is no valid entity on Master File for that EIN.

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

    2. Prepare Form 4227, Intra-SC Reject or Routing Slip, with the notation "NO RECORD OF EIN" .

Error Code 004 - Name Control/EIN Validation

  1. Fields Displayed:

    Field Designator Field Name Length
    CL Clear Code One
    01NC Name Control Four
    >>>> Name Control Underprint Four
    01EIN Employer Identification Number Nine
  2. Invalid Conditions: Error Code 004 will generate when any of the following conditions are present:

    1. The EIN is not present at Master File (MF).

    2. The EIF and the NAP were not accessed or were not operational causing a blank underprint in Field 01NC.

      Note:

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

  3. Correction Procedures:

    1. Before taking any additional research steps to resolve Error Code 004, drop the cursor to the bottom of the screen and transmit. This will ensure that any prior changes to the name control/EIN have posted to the NAP. If Error Code 004 reappears, continue with the remainder of the correction procedures.

    2. When corrections are made to Field 01NC or Field 01EIN, the computer will validate the entries with the NAP and reset the OLE indicators as appropriate upon transmitting the Error Resolution screen.

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

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

    5. Refer to all of the following research instructions in this error code before taking any action.

    6. If Field 01NC and the name on the return or attachments are the same but differ from the underprint in Field 01NC, research INOLES to determine the correct name control.

      If Then
      The name on the return or attachments matches the name control on INOLES, Bring up underprint.
      The name control on INOLES is different from the name on the return or attachments, Research NAMEB/NAMEE for a new EIN.
    7. If a new EIN is located, verify the name control using CC INOLES.

      If Then
      The name control on INOLES matches the name on the return or attachments, 1. Ensure that the entity information matches the return.
      2. Overlay Field 01EIN with the new EIN from NAMEB/NAMEE. When the EIN is changed from the one the taxpayer used, issue Letter 3875C, Missing or Incorrect EIN on Return - BMF/EPMF as a non-suspense letter to the address on the return.

      Note:

      Do not send Letter 3875C, Missing or Incorrect EIN on Return - BMF/EPMF when:

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

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

      • The EIN on the return is the taxpayer's SSN and research shows there is no valid entity on Master File for that EIN

      Multiple EINs are located, 1. SSPND 320 to Entity Control.
      2. Prepare Form 4227, Intra-SC Reject or Routing Slip, with the notation "MULTIPLE EINs" .
      INOLES indicates a "Merge To" (MT) EIN, Research the "MT" EIN on INOLES.
      The "MT" EIN matches the entity on the return or attachments, Enter the "MT" EIN in Field 01EIN.
      The "MT" EIN does not match the entity on the return or attachments, SSPND 320 to Entity Control.
    8. If the name on the return or attachments does not agree with the name control on INOLES or there is an indication of a name change on Form 1066, (Line D, Box 2) research ENMOD for a new name.

      If Then
      The name control on ENMOD matches the name on the return or attachments, Enter "C" in the Clear Code field.
      The name control on ENMOD or INOLES does not match the name on the return or attachments, 1. SSPND 320 to route the return to Entity Control.
      2. Attach Form 4227- Intra-SC Reject or Routing Slip, with the notation, "NO RECORD" .
    9. If the name change has not been made, research ENMOD for a pending TC 013.

      If Then
      A pending TC 013 is present, Enter "C" in the Clear Code field.
      A pending TC 013 is not present, 1. SSPND 320 to route to Entity Control.
      2. Attach Form 4227- Intra-SC Reject or Routing Slip, with the notation, "REQUEST NAME CHANGE" .
  4. Suspense Correction:

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

      If Then
      The Entity Assignment Date is past the Return Due Date or Received Date, 1. GTSEC 01
      2. Enter the Entity Assignment Date in Field 01CRD.
      The Entity Assignment Date is not past the Return Due Date, Continue processing.
    2. Research IDRS using CC BMFOL to determine if payments posted incorrectly.

      If Then
      The payment posted to the wrong EIN, 1. Prepare Form 3465, Adjustment Request, to have the payment transferred to the correct module.
      2. Notate on Form 3465, Adjustment Request "MOVE PAYMENT TO CORRECT MODULE UPON COMPLETION AND RELEASE FREEZE" .
      3. Write "Form 3465, Adjustment Request PREPARED" on the return, to the left of the Entity section.
      4. Enter CCC "X" in Field 01CCC.
      The payment posted correctly, 1. Enter correct EIN in Field 01EIN and on the return.
      2. Enter "C" in the Clear Code field.
      Payment cannot be located, Enter "C" in the Clear Code field.

Error Code 005 - Received Date

  1. Fields Displayed:

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

  3. Correction Procedures:

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

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

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

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

      Exception:

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

    5. Determine the Received Date following IRM 3.12.213.5.4, IRS Received Dates when one is needed but is not stamped on the return or a valid handwritten Received Date is not present.

    1. Earliest legible Postmark Date (e.g., U.S. Postal Service (USPS), Foreign or Private Delivery Service (PDS)).

      Note:

      If an envelope is not attached, use the postmark date stamped on the face of the return.

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

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

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

    5. Julian Date of the Document Locator Number (DLN) minus 10 days.

  4. IRS Received Date for faxes - Enterprise Electronic Fax (EEFax) is the e-fax system used by IRS employees to send and receive fax documents. When fax receipts are timely dated by the fax machine (e.g., "RECEIVED BY IRS-EEFAX 03/04/201X" ), no further action is required to evidence receipt. Code & Edit should edit the Received Date to the proper location on the return. Enter the Received Date according to instructions.

    Caution:

    Only use the EEFax received date as the IRS Received Date on original return submissions. If the EEFax is a response to correspondence requesting additional information on a suspended return, use the received date of the suspended return as the IRS Received Date instead of the EEFax received date.

    Note:

    The Taxpayer Advocate Service (TAS) organization is not a point of filing and TAS employees have not been delegated the authority to accept returns for filing. Treat all TAS Received Dates as invalid by circling them out (if Code & Edit hasn’t). Enter the Received Date according to instructions.

    Note:

    EEFax added per memo “Revision of Policy for Use of Fax in Taxpayer Submissions” dated November 19, 2015, located at http://irweb.irs.gov/AboutIRS/co/dcse/memo/48254.aspx.

Error Code 006 - Remittance with No Received Date

  1. Fields Displayed:

    Field Designator Field Name
    RMIT (Non-correctable field)
    01RCD Received Date
  2. Invalid Condition: Error Code 006 will display when a remittance is received with the return but a received date is not present.

  3. Correction Procedures:

    1. Compare the displayed fields with the return.

    2. If incorrect, overlay the screen with the correct information.

    3. If no received date is noted please refer to IRM 3.12.213.5.4, IRS Received Dates to determine the correct received date.

      Note:

      If multiple dates are on the return, use the earliest date as the received date.
      (Enter in YYYYMMDD format.)

Error Code 007 - Received Date is Earlier Than Tax Year

  1. Fields Displayed

    Field Designator Field Name Length
    01TXP Tax Period Six
    01RCD Received Date Eight
    01CCC Computer Condition Code 10
  2. Invalid Condition: Error Code 007 will generate when the Received Date is earlier than the first day of the Tax Period/Year.

  3. Correction Procedures:

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

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

      If And Then
      The Received Date is invalid and it appears that the incorrect year was used (i.e., 20110115 instead of 20120115), and other information (Julian date, postmark date, and/or signature date) indicates that the received date should be the current year,   Change the Received Date year to the current year in Field 01RCD.
      The return is an early filed "Final" return,   1. Change the Tax Period to agree with the month before the Received Date and enter in Field 01TXP.
      2. Enter "F" in Field 01CCC.
      The return is not an early filed "Final" return, The Tax Period ending is less than four months after the Received Date, 1. SSPND 480
      2. Prepare Form 4224, Exemption from Withholding of Tax Income Effectively Connects with the Conduct of Business in U.S. with the notation, "EARLY FILED" .
      The return is not an early filed "Final" return, The Tax Period ending is more than four months after the Received Date, 1. Initiate correspondence for clarification of the Tax Period.
      2. SSPND 211.
  4. Suspense Correction:

    1. When the reply is received, correct the screen as follows:

      If Then
      The taxpayer replies that the return is a "Final" , 1. Change the Tax Period to agree with the month before the Received Date and enter in Field 01TXP.
      2. Enter "F" in Field 01CCC.
      The taxpayer replies that the return is not a final return, SSPND 480 until the end of the tax period provided by the taxpayer.
      The taxpayer fails to reply or the reply is not adequate, 1. Enter "Three" in Field 01CCC.
      2. SSPND 480 until the end of the tax period indicated on the return.

Error Code 010 - Amended Return G

  1. Fields Displayed:

    Field Designator Field Name Length
    01RCD Received Date Eight
    01CCC Computer Condition Code 10
    01DOB Date REMIC Started Six
    01NOR Number of Residual Holders Six
    01TEF TEFRA One
    01MSC Missing Schedule Code Four
    01ADC Audit Code Three
    01ISI Installment Sales Indicator One
    Section 02 Present or Not Present  
    Section 03 Present or Not Present  
    Section 04 Present or Not Present  
    Section 05 Present or Not Present  
    Section 06 Present or Not Present  
    Section 07 Present or Not Present  
    Section 08 Present or Not Present  

    Note:

    The literal SECTION XX PRESENT or "SECTION XX NOT PRESENT" will display for Sections 02 through 08 (XX = section number).

  2. Invalid Condition: Error Code 010 will generate when Computer Condition Code "G" is present and fields other than Fields 01CCC, 01NC, 01EIN, 01TXP, O1CRD, and 01RCD contain entries.

  3. Correction Procedures:

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

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

    3. Determine if CCC "G" was input correctly:

      If Then
      Return indicates amended, revised, supplemental, corrected or superseding, Research the applicable Command Code(s) e.g., BRTVU, BMFOL, SUMRY, and/or TXMOD, etc., to determine if information is exactly the same as the posted return.
      All information is not the same,
      1. Process the return with CCC "G" .

      2. DLSEC to delete all sections except Section 01.

      3. Delete the invalid entries that are present in Section 01. GTSEC 01, if necessary.

      All information is exactly the same, SSPND 640 and route to Rejects.
      A return is not posted for the tax period and the return is an amended return, Continue processing as an amended return.
      A return is not posted for the tax period and the return is not amended ("G" coded in error),
      1. Enter all data in Sections 02, 03, and 07.

      2. Ensure that the Section 01 fields are correct.

      3. Delete the "G" code in Field 01CCC.

      Note:

      When deleting CCC "G" and the sections required are shown as being present, no further verification of section entries is needed.

Error Code 014 - Missing Address Entries

  1. Fields Displayed:

    Field Designator Field Name Length
    02CON "In-Care-Of" Name 35
    02FAD Foreign Address 35
    02ADD Street Address 35
    02CTY City 22
    02ST State Two
    02ZIP ZIP Code 12
  2. Invalid Conditions: Error Code 014 will generate when any of the following conditions are present:

    • If the street address is present, Field 02CTY and Field 02ST must be present, unless a Major City Code is used

    • If a Major City Code is used, Field 02ADD must be present

    • A city must be present. If the city is not in the Major City format, Field 02ST must be present. Field 02ADD can be blank

    • A Major City Code is used and Field 02ST is present

  3. Correction Procedures:

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

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

    3. Research any of the following for valid address information: Document 7475, or INOLE, NAMEB/NAMEE, ENMOD.

      If And Then
      A Major City Code is present, A street address is not available, 1. Enter the city Name (spelled out, not in Major City Code format) in Field 02CTY.
      2. Enter the state Code in Field 02ST.
      The Major City Code is correct, The state is present, Delete Field 02ST.
      The ZIP code or address cannot be corrected from the information on the return, attachments, or from research,   DLSEC Section 02.

Error Code 015 - Foreign Address/State

  1. Fields Displayed:

    Field Designator Field Name Length
    02FAD Foreign Address 35
    02ADD Street Address 35
    02CTY City 22
    02ST State Two
    02ZIP ZIP Code 12
  2. Invalid Conditions: Error Code 015 will generate when any of the following conditions are present:

    • Field 02ST has an entry other than "." (period/space) when Field 02FAD is present

    • Field 02ZIP has an entry when Field 02FAD is present

  3. Correction Procedures:

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

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

      If Then
      A foreign address is present in Field 02FAD, 1. Field 02ST must contain "." (period/space).
      2. Delete any entry in Field 02ZIP.
      A foreign address is not present in Field 02FAD, Check return for foreign address.
      A foreign address is present on the return, 1. Enter the foreign address in Field 02FAD

      Note:

      If additional space is required, continue entering the address in Field 02ADD.


      2. Field 02CTY must contain the appropriate foreign country code. (See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.)

      Exception:

      Use the country code based on the province in field 02FAD if the foreign address is from Canada and the address contains a province name or abbreviation. See Exhibit 3.12.213-4, Province/Country Code - Canada Only


      3. Field 02ST must contain "." (period/space)
      4. Delete any entry in Field 02ZIP.
      A foreign address is not present on the return, 1. Verify the address on the return is not a foreign address.
      2. SSPND 610
      3. Renumber return with domestic DLN.

Error Code 016 - Zip Code/State Mismatch

  1. Fields Displayed:

    Field Designator Field Name Length
    02CON "In-Care-Of" Name 35
    02FAD Foreign Address 35
    02ADD Street Address 35
    02CTY City 22
    02ST State Two
    02ZIP ZIP Code 12
  2. Invalid Condition: Error Code 016 will generate when the ZIP code is inconsistent with the Major City Code or state code.

  3. Correction Procedures:

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

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

    3. If Field 02ZIP is present, then 02ADD, 02CTY, and 02ST must be present.

    4. Research Document 7475, State and Address Abbreviations Major City Codes (MCC’s) or INOLES, NAMEB/NAMEE, ENMOD for valid ZIP code information.

      If And Then
      Unable to determine a valid ZIP code from the return or attachments, A valid ZIP code is found through IDRS research Enter the valid ZIP code found in Field 02ZIP.
      Only the first three digits of the ZIP code can be determined,   Enter "01" in the (fourth) and (fifth) position.
      A ZIP code cannot be determined,   Enter the three digits follow by "01" of the first ZIP code listed for the applicable state in Document 7475, State and Address Abbreviations Major City Codes (MCC’s), Zip Codes, and Countries,(e.g., 99501 for Alaska).
      The address is in a major city, A Major City Code can be determined, Enter Major City Code in Field 02CTY.
      The address is in a major city, A Major City Code cannot be determined, 1. Enter the name of the city in Field 02CTY.
      2. Enter the state Code in Field 02ST.
      The address is not in a major city,   1. Enter the appropriate state abbreviation in Field 02ST.
      2. Enter the ZIP code in Field 02ZIP.
    5. APO/DPO/FPO Addresses - 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, convert to the new state code abbreviation based on the ZIP code. For example, if the old address appears as "APO New York, NY 091XX" , convert to read as "APO AE 091XX" . Refer to the APO/DPO/FPO conversion chart below:

      ZIP Code State Code
      340 AA
      090-098 AE
      962-966 AP

Error Code 026 - Tax Period Underprint

  1. Fields Displayed:

    Field Designator Field Name Length
    01EIN Employer Identification Number Nine
    01TXP Tax Period Six
    >>>> Tax Period Underprint  
    01CCC Computer Condition Code 10
    01ADC Audit Code Three
  2. Invalid Condition: The Tax Period Underprint is present, the Tax Period does not agree with the Entity Index File and Computer Condition Code "F" is not present.

    Reminder:

    A correction to any displayed entry must be entered and transmitted prior to entering a "C" in the Clear Code. The Clear Code does not permit any other correction to the record.

  3. Correction Procedures:

    1. Before taking any additional research steps to resolve Error Code 026, drop the cursor to the bottom of the screen and transmit. This will ensure that any prior changes to the Fiscal Year Month (FYM) have posted to the National Account Profile (NAP).

    2. If Error Code 026 reappears, continue with the remainder of the correction procedures.

    3. When corrections are made to Field 01TXP, the computer will validate the entries with the NAP and reset the indicators as appropriate upon transmitting the Error Resolution screen.

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

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

    6. The following information pertains to correction procedures for Error Code 026:

      If Then
      A final return, Enter Computer Condition Code "F" .
      Not a final return and the EIN on the return differs from 01EIN, 1. Change 01EIN to agree with the return.
      2. When the screen returns, enter a "C" in the Clear Code.
      Not a final return and the EINs agree, 1. Research to verify EIN.
      2. Correct 01EIN if different EIN found.
      3. If EIN on the return is correct, compare the tax period on the return with 01TXP.
      The tax period on the return does not agree with 01TXP, Change 01TXP to agree with the return.
      (TXP must be entered as YYYYMM).
      The EIN and tax period on the return agree with 01EIN and 01TXP and are transcribed correctly, 1. Correspond with the taxpayer to determine why the FYM (Fiscal Year Month) is other than 12.
      2. Suspend the return with Action Code 211.
  4. Suspense Correction: The following information pertains to suspense corrections:

    If Then
    The taxpayer does not reply, Void the DLN, and inform the taxpayer that he/she does not meet the requirements for filing a Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.
    The return was received with remittance, Prepare Form 3244, Payment Posting Voucher, to remove the remittance before voiding the DLN. Post the remittance to the taxpayer’s account with a Transaction Code "670" .

Error Code 028 - Condition Codes versus Received Date

  1. Fields Displayed:

    Field Designator Field Name Length
    01RCD Received Date Eight
    01CCC Computer Condition Code 10
  2. Invalid Condition: Error Code 028 will generate when either of the following conditions is present:

    • Computer Condition Code "R" , "7" or "D" is present and the Received Date is not present.

    • Error Code 028 is bypassed on a "G" coded return.

  3. Correction Procedures: The following information pertains to the correction procedures for Error Code 028:

    If Then
    The displayed fields do not match the information on the return, Overlay the screen with the correct information.
    "R" , "D" or "Seven" is present on the return, Enter the Received Date in 01RCD.
    "R" , "D" or "Seven" is not on the return, Delete the "R" , "D" , or "Seven" from 01CCC.
    The return is not a "G" coded return (e.g., no indication that the return is "Amended" , or nothing indicates that this is other than the first return filed), 1. GTSEC 02 and enter the data in the fields for Section 02 and transmit.
    2. When Error Code 010 generates enter the appropriate fields and delete Field 01CCC.
    The return is correctly "G" coded, Enter the Received Date in 01RCD. Determine the date in the order listed below:
    1. Earliest legible U.S. Post Office, foreign, or Private Delivery Service postmarked date.
    2. Service Center Automated Mail Processing System (SCAMPS) digital date.
    3. Revenue Officer's signature date.
    4. Taxpayer's signature date (only if within current year).
    5. Julian control date.

    Exception:

    If the received date is not present on blue/green rocker remittance returns, use DLN control date as in four above.

    Note:

    If multiple dates are on the return, use the earliest date as the received date.

♦Error Code 034 - Correspondence Received Date Inconsistency♦

  1. Fields Displayed:

    Field Designator Field Name Length
    01TXP Tax Period Six
    01RCD Received Date Eight
    01CRD Correspondence Received Date Eight
    (Entered by Rejects)
  2. Invalid Conditions: Error Code 034 will generate when either of the following conditions are present:

    • The Correspondence Received Date (Field 01CRD) is earlier or the same as either the Received Date (Field 01RCD), or the Return Due Date

    • The Correspondence Received Date is later than the processing date

      Note:

      An entry in Field 01CRD does not require an entry in Field 01RCD.

  3. Correction Procedures:

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

    2. Please see IRM 3.12.213.5.4, IRS receive dates.

      Exception:

      If Received Date is not present on blue/green rocker remittance returns, use Julian control date.

    3. A Correspondence Received Date (CRD) will be determined from the date the reply was received in the Submission Processing Campus. Refer to the return for the Correspondence Received Date. It is edited in the Entity section of the return. This can be verified by checking the stamped Received Date on the correspondence attached to the return.

    If Then
    The Correspondence Received Date is present and earlier than the Return Due Date or later than the processing date, Delete the Correspondence Received Date from Field 01CRD.
    More than one received date is present and earlier than the Return Due Date or later than the processing date, Delete the Correspondence Received Date from Field 01CRD.
    More than one received date is present, Use the earliest date.
    "No Reply" , Enter "Three" in Field 01CCC to bypass the consistency check.

Error Code 042 - Short Period Return not Final

  1. Fields Displayed:

    Field Designator Field Name Length
    01TXP Tax Period Six
    01CCC Computer Condition Code 10
  2. Invalid Condition: The tax period is 198801 or subsequent, the tax period month is other than "12" , and Computer Condition Code "F" is not present.

  3. Correction Procedures: Search the return and attachments for an indication that this is a final return.

    If Then
    The taxpayer indicates the return is a final return, Enter Computer Condition Code "F" in Field 01CCC.
    Other than a calendar year and determination cannot be made that the return is a final return, 1. Correspond with the taxpayer to determine the correct tax period.
    2. Advise that Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, instructions state that the return must be for a calendar year unless it is a final.
    3. Suspend the return with Action Code "211" .
  4. Suspense Corrections:

    If Then
    The taxpayer does not reply, Void the DLN, and inform the taxpayer that he/she does not meet the requirements for filing a Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.
    The return was received with remittance, Prepare Form 3244, Payment Posting Voucher, to remove the remittance before voiding the DLN. Post the remittance to the taxpayer’s account with a Transaction Code "670" .

Error Code 073 - Correspondence Received Date Present with CCC Three

  1. Fields Displayed:

    Field Designator Field Name Length
    01CCC Computer Condition Code 10
    01CRD Correspondence Received Date Eight
    (Entered by Rejects)
  2. Invalid Condition: The error condition will generate if Field 01CCC is "Three" and a date was entered in Field 01CRD.

  3. Correction Procedures:

    1. Review the return and attachments for IRS correspondence.

    2. If IRS correspondence is attached, determine if a reply was received from the taxpayer.

    3. If so, circle the CCC "Three" edited on the return. Delete CCC "Three" .

    4. If no reply is attached, circle the Correspondence Received Date entered on the return and delete the entry in the field 01CRD.

Error Code 800 - RRPS and No Received Date

  1. Fields Displayed:

    Field Designator Field Name Length
    01RCD Received Date Eight
  2. Invalid Conditions: The return was processed through Returns Remittance Processing System and the Received Date is not present.

  3. Correction Procedures: Determine the Received Date using the following the directions in IRM 3.12.213.5.4IRS Receive Dates

Error Code 812 - Balance Due/Overpayment Math Verification

  1. Fields Displayed:

    Field Designator Field Name
    NC Notice Codes
    0705A Total Tax
    0706 Tax Paid with Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax Information and other Returns.
    07TTE Telephone Excise Tax Return Refund Amount (previously Line 2b; now dotted portion to the left of Line 4.)
    07TC> Telephone Excise Tax Return (Computer Generated)
    07TRV Telephone Excise Tax Return (Verified Field)
    07B/R Balance Due/Overpayment
    ("Error Resolutions input only" Field)
  2. Invalid Condition: The difference between Balance Due/Overpayment Computer and Balance Due/Overpayment is $50.00 or more.

  3. Correction Procedures:

    1. Check for transcription or taxpayer errors. Compare Field 0705A (Total Tax) against the taxpayer’s entry on the return, Line one, Section II (Tax and Payments), Page one, Form 1066.

    2. The computer will compute Balance Due/Overpayment Computer field by subtracting Field 0706 (Tax Paid with Form 7004) and Field 07TTE (Telephone Excise Tax Credit) from Field 0705A (Total Tax).

    3. If the return is blank, verify the "Total Tax" amount against the amount on Line 12, Part IV (Total Tax) Schedule J.

    4. If Schedule J, Part IV, Line 12 is blank, but there are items on Schedule J under Part I (Tax on Net Income From Prohibited Transactions), Part II (Tax on Net Income From Foreclosure Property), and/or Part III (Tax on Contributions After the Startup Day), math verify each of the following items as described below:

    If Then
    Tax on Net Income From Prohibited Transactions (Schedule J, Part I, Line 4) is being verified, 1. Line 2 (Total Income) must equal the sum of Lines 1a, 1b, 1c, and 1d.
    2. Line four must equal Line two minus Line three.
    Tax on Net Income From Foreclosure Property (Schedule J, Part II, Line 10) is being verified, Math verify the following:
    1. Line seven (Total Income from Foreclosure of Property) must equal the sum of Line five plus Line six.
    2. Line nine must equal Line seven minus Line eight.
    3. Line 10 must equal 35 percent of Line nine.
    Total Tax (Schedule J Part IV, Line 12) is being verified, 1. Add Lines four, 10 and 11, Schedule J.
    2. Enter the sum on Schedule J, Part IV, Line 12, and on Page one, Section II, Line one (Form 1066).
    3. If correct as transcribed, attach an adding machine tape verifying Schedule J.
    4. Enter the total in Field 0705A.
    5. Correct Schedule J, Part IV, Line 12, and Page one, Section II, Line one (Form 1066) on the return, if different.
    6. Compare Field 0706 (Tax Paid with Form 8736/8800) against the taxpayer’s entry on the return (Line two, Section II) (Tax and Payments), Page one, Form 1066
    7. Correct the screen display if different.
    All corrections are made and there is a ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , Send appropriate TPNC.
    CCC "four" is present, 1. Enter the amount from the verified total (Balance Due/Overpayment Computer) in Field 07B/R (the "Error Resolution input only" field).
    2. This will clear Error Code 812 from the screen display.
    No corrections are needed to Fields 0705A, 0706, and/or 07TTE,

    Caution:

    Do not attempt to correct Field 07TTE. Correspond to verify taxpayer entry.

    Send the appropriate TPNC. See IRM 3.12.213.8.18.1, Taxpayer Notice Codes.

    Note:

    Field 07TC> is the computer generated total from Form 8913, Credit for Federal Telephone Excise Tax Refund. Field 07TRV is the Telephone Excise Tax Return Verified Field.

Taxpayer Notice Codes
  1. The allowable Taxpayer Notice Codes (TPNC) are provided as follows:

    Taxpayer Notice Code (TPNC) Definition
    01 We found an error in the computation of your total income from prohibited transactions.
    05 We found an error in the computation of tax on net income from prohibited transactions.
    10 We found an error in the computation of tax due or overpayment amount.
    20 We found an error in the computation of tax on net income from foreclosure property.
    25 We found an error in the computation of tax on contributions after the startup day.
    90 Blank Notice - 10 blank lines are available on the notice for whatever statement is needed.

Error Code 999 - End of Year Conversion

  1. Fields Displayed - The field displayed for Error Code 999 is:

    Field Designator Field Name Length
    01TXP Tax Period Six
  2. Invalid Condition: Error Code 999 will be generated for all returns that are in error status at the end of the processing year.

  3. Correction Procedures: Since the system will re-validate the record and set validity checks based on next processing year's programming, the only correction procedure required for Error Code 999 is for the tax examiner to transmit.

Form 1066 - U.S. Real Estate Mortgage Investment Conduit Income Tax Return

This is an Image: 33752001.gif
 

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This is an Image: 33752003.gif
 

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Action Codes

Action Code Description Workday Suspense Period Function Used In
001 Input Document Zero GEN
Action Code Correspondence Workday Suspense Period Function Used In
210 EPMF Correspondence 60 ES, S
211 First Taxpayer Correspondence 40 CE, EC, S
212 Second Taxpayer Correspondence 25 CE, EC, S
213 Correspondence to Other Than Taxpayer 40 CE, EC, S
215 International Correspondence 45 CE, EC, S
225 Taxpayer Correspondence (Signature Only) Domestic 40 CE, EC, S
226 Taxpayer Correspondence (Signature Only) International 40 CE, EC, S
Action Code Description In House Research Workday Suspense Period Function Used In
300 Examination (Fuel Tax Credit) 10 CE, EC, S
310 Statute Control 10 CE, EC, S
320 Entity Control 10 CE, EC, S
Action Code Description Criminal Investigation Division Workday Suspense Period Function Used In
331 Frivolous Review Three CE, EC
332 QRDT Review Three CE, EC
333 Prompt Audit 10 CE, EC, S
334 Joint Committee 10 CE, EC, S
335 Frivolous Case 10 CE, EC, S
336 QRDT Case 10 CE, EC, S
337 Other CID (Criminal Investigation Division) 10 CE, EC, S
Action Code Description Accounting Workday Suspense Period Function Used In
341 Manual Refund 10 CE, EC, S
342 Credit Verification 10 CE, EC, S
343 Black Liquor 10 CE, EC, S
344 Manual Refund - Error Resolution Zero EC
Action Code Description MFTRA Research Workday Suspense Period Function Used In
351 TIN Research Zero EC, S
352 Name Research Three CE, EC, S
353 Address Research Three CE, EC, S
354 Filing Requirements Research Three CE, EC, S
355 Other MFTRA Research Five CE, EC, S
360 Other In-House Research 10 CE, EC, S
370 Examination 10 CE, EC, S
Action Code Description Management Suspense Workday Suspense Period Function Used In
410 Assistance Needed Zero EC
420 2006 tax return with Form 8913 credit (TETR) Five CE, EC, S
430 Management Suspense B 10 CE, EC, S
440 Management Suspense C 15 CE, EC, S
450 Management Suspense D 20 CE, EC, S
460 Management Suspense E 25 CE, EC, S
470 Complex Error Codes Zero EC
480 Early Filed Suspense 150 CE, EC, S
490 System Problem Five CE, EC, S
Action Code Description Rejects Workday Suspense Period Function Used In
550 Magnetic Tape Return - Check for Attachments Zero CE
551 Magnetic Tape - Inconsistent Data Zero CE
610 Renumber - Non-Remit Zero CE, EC
611 Renumber - Remit Zero CE, EC
620 NMF/Non-ADP Zero CE, EC, S
630 Reinput Zero EC, S
640 Void Zero CE, EC, S
650 International (ACI) Zero CE, EC, S
660 Data Control Delete (TEP Delete) Zero S
670 Rejected Missing Document Zero S
700 Duplicate Block DLN Zero GEN
711 Duplicate Document DLN from Code & Edit Zero GEN
712 Duplicate Document DLN from Error Correction Zero GEN
713 Duplicate Document DLN from Unpostables Zero GEN
714 Duplicate Document DLN from Unworkable Suspense Zero GEN
715 Duplicate Document DLN from Workable Suspense Zero GEN
800 NAP Linkage Problem Two EC, S
900 Unpostable Record Zero GEN

Note:

CE = Code & Edit
EC = Error Correction. S = Suspense Correction
GEN = Computer Generated

U.S. Possession Abbreviations and ZIP Codes

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

Province/Country Code - Canada Only

Canadian Province Province Abbreviation Country Code
(Field 02CTY)
Alberta AB XA
British Columbia BC XB
Manitoba MB XM
New Brunswick NB XN
Newfoundland and Labrador NL XL
Northwest Territories NT XT
Nova Scotia NS XS
Nunavut NU XV
Ontario ON XO
Prince Edward Island PE XP
Quebec QC XQ
Saskatchewan SK XW
Yukon YT XY

Province, State and Territory Abbreviations

Australia State

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

Brazil State

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

Canada Province/Territory

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

Cuba Province

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

Italy Province

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

Mexico State

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

The Netherlands Province

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

Potential Frivolous Arguments for Examination Review

Potential Frivolous Arguments Description
Alleged Churches/First Amendment Income from non-religious sources and may claim a vow of poverty.
Altered Form Altering any or all line items with the intent of facilitating non-compliance with the tax laws.
Altered Jurat/UCC 1-207 Return contains income and deductions but the jurat has been altered or stricken. May include reference to UCC 1-207 or a statement that the return was not signed under penalties of perjury.
Amended Returns/Form 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 a tax avoidance argument.
C-Filings This frivolous position includes the following four categories:
a) 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.
b) Files a return containing the filers identifying information but does not request a refund, often lacking sufficient information to determine a tax liability.
c) Files a return with various types of rambling dialogue and/or crazy arguments that no one could reasonably view as a good faith attempt to comply with the law.
d) Files a return that attempts to send some type of message or protest to the IRS, but fails to include sufficient identifying information for the Service to either determine the identity of the taxpayer or correspondent or return address.
Challenges to Authority/Due Process Questions various administrative authorities such as delegation orders, summons authority, privacy act, etc. Argues that they must be afforded a hearing or a trial before taxes can be assessed or before property can be seized.
Challenges to Authority/Title 26 or "law" in Other Documents Argues that Title 26 of the United States Code is not law because it was never enacted as named
Collections Issues Files frivolous documents contending that various collections issues are invalid (e.g., Offers in Compromise, Collection Due Process Requests, Installment Agreements, Appeals Requests, etc.) because they are not filed and/or signed by someone with delegated authority. They may have no certificate of assessment attached, do not comply in form or content with a State or Local law, are not in a certain format or lack a valid OMB (Office of Management and Budget) number or other frivolous positions.
Disclaimer Submits a disclaimer stating, "disclaims the liability for the tax due" , making the liability on the return zero.
Fifth Amendment Assertion of the Fifth Amendment right against self-incrimination as a basis for not providing any financial information.
Foreign Income Argues that United States citizens and residents are not subject to tax on their wages or other income derived from sources within the United States, as only foreign-based income or income received by nonresident aliens and foreign corporations from sources within the United States is taxable.
Form 1099
(Original Issue Discount)
An individual files a return reporting false amounts of income (generally "Other" or "Miscellaneous" income) and all of them claim a false amount of income tax withholding approximately equal to the amount of falsely reported income. Although the returns report income, they do not calculate any tax due. Some of the returns have Form 1099 - OID(Original Issue Discount) attached and some have Form 1096, Annual Summary and Transmittal of U.S. Information Returns. Other false financial instruments may be filed in the place of or in addition to the Form 1099-OID, Original Issue Discount such as Form 2439, promissory notes, bonds, sight drafts, etc.
IRC 861Business
Employment Tax (BMF 861)
Argument targets employers and advises them that wages are exempt from withholding. Based on 26 CFR Section 1.861, promoters of this scheme advise employers to stop withholding and paying payroll taxes on their employee's wages. In addition, some employers file amended payroll tax returns and request refunds of previously paid payroll taxes.
IRS is a Private Organization/Collects Tribute, Not Taxes Argues that the IRS is an entity named the Internal Revenue and Tax Service, Inc., which was incorporated in Delaware in 1933, it is a collection agency for the Federal Reserve Bank, or is part of the United Nations and is clandestinely leading the tax-paying public into a "new world order" .
Not a Person Argues that a taxpayer is not a "person" within the meaning of IRC Section 7701 (a) (14).
Obscene, Vulgar, Harassing Submits documents or other materials indicating that non-filing is due to dissatisfaction with tax policies or taxation in general. Often, this argument is expressed with obscene, vulgar, or crude language and characters in an extremely demeaning manner.
Protest Against Government Action/Inaction Argues that refusal to file or pay is justified because they disagree with government policies or spending plans.
Sixteenth Amendment Argues the Sixteenth Amendment was not properly ratified and therefore the federal government does not have the legal authority to collect an income tax without apportionment.
Straw Men Argues the government has created an entity separate and distinct from the taxpayer - a "Straw Man" and any tax obligations are exclusively those of the "Straw Man" .
Taxes are Voluntary/Law Does Not Require Submits a return, amended return or correspondence that argues income taxes are voluntary.
U.S. v. Long Submits a return with zero money amounts. To explain the zeros 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.
Valuation Income is not taxable because of the declining fair market value of the dollar, because the dollar is not backed by gold/silver, because the value of services is offset by the value of the labor (barter income), etc.
Zero Returns Submits a return with zero money amounts on all or most of the line items on the form (e.g., IRC §861, Form 2439, Notice to Shareholders of Undistributed Long-Term Capital Gains, 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 tax liability. The statement may also contain arguments regarding the definition of income. There are several variations on this type of filing such as those bearing the words "nunc pro tunc" and "not liable" .

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Other All others including those listed in Notice 2008-14 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.

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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 Procedures, for additional information.