3.12.217 Error Resolution Instructions for Form 1120-S

Manual Transmittal

November 05, 2021

Purpose

(1) This transmits revised IRM 3.12.217, Error Resolution, Error Resolution Instructions for Form 1120-S.

Material Changes

(1) IRM 3.12.217.2.5(1) - Taxpayer Bill of Rights (TBOR) content updated. (IPU 21U0510 issued 03-31-2021)

(2) IRM 3.12.217.2.5(4) - Moved "Same Day Resolution by Operations" from IRM 13.1.7.4 to IRM 13.1.7.5.

(3) IRM 3.12.217.2.10(2) - Removed the "Note" because similar language appears under Taxpayer Advocate Service subsection.

(4) IRM 3.12.217.2.17.2(1) Action Code Chart - Updated the description for Action Code 343 for consistency with IRM 3.11.217.

(5) IRM 3.12.217.2.17.2(1) Action Code Chart - Added a Note for Action Code 420 for consistency with IRM 3.11.217.

(6) IRM 3.12.217.2.19(2) - Table for "Other" correspondence - Removed reference to Form 8609, Low-Income Housing Credit Allocation and Certification, which is no longer required to be attached to tax returns.

(7) IRM 3.12.217.2.21(5) - "Leaving Information on Answering Machines" moved from IRM 11.3.2, Disclosure of Official Information, Disclosure to Persons with a Material Interest, to IRM 10.5.1, Privacy and Information Protection, Privacy Policy. (IPU 21U0165 issued 01-28-2021)

(8) IRM 3.12.217.2.26(2) - Added 201712 through 202012 timeframe to the instructions per Work Request Notification (WRN) issued 06-17-2021.

(9) IRM 3.12.217.3.3(3)b - Clarified instruction in the Note when issuing Letter 3875C.

(10) IRM 3.12.217.3.8(1) - Table for Computer Condition Code 9 - Removed reference to Form 8609, Low-Income Housing Credit Allocation and Certification, which is no longer required to be attached to tax returns.

(11) IRM 3.12.217.3.8(1) - Table for Computer Condition Code 9 - Added prior year line reference to Form 8586, Low-Income Housing Credit, per Work Request Notification (WRN) dated 05-10-2021.

(12) IRM 3.12.217.3.8(1) Table for Computer Condition Code J - Added 201712 through 202012 timeframe to the instructions per Work Request Notification (WRN) issued 06-17-2021.

(13) IRM 3.12.217.5(2) - Deleted Field 03QG, Consolidated S Corp Indicator, from the Section 03 Field Designator Table. This field was valid for 199712 and prior Tax Periods only.

(14) IRM 3.12.217.5.5(2)a - Updated Audit Code 2 description to refer to Form 1120-S, Schedule K, Line 16f (previously Line 14p). Updated per Form 1120-S Work Request Notification (WRN) dated 12/21/2020.

(15) IRM 3.12.217.5.5(2)c - Updated description to edit Audit Code 2 when Schedule N is attached. (IPU 21U0165 issued 01-28-2021)

(16) IRM 3.12.217.5.5(7)a - Updated Audit Code 7 description to refer to Form 1120-S, Schedule K, Line 16f (previously Line 14p). Updated per Form 1120-S Work Request Notification (WRN) dated 12/21/2020.

(17) IRM 3.12.217.5.10(4)b and d - Removed reference to Form 8609, Low-Income Housing Credit Allocation and Certification, which is no longer required to be attached to tax returns.

(18) IRM 3.12.217.8(3) - Updated Field 0623D, Field 0623E, Field 06TRT and Field 06TRV in the Field Designator Table.

(19) IRM 3.12.217.8(3) - Updated Field 06A07 to Positive/Negative in the Field Designator Table per UWR 365016.

(20) IRM 3.12.217.8(3) - Added Field 06ITR to the Section 06 Field Designator Table.

(21) IRM 3.12.217.8.2(1)(4) - Updated correction procedures for Field 0623D according to Work Request Notification (WRN) for Form 1120-S Tax Year 2021 Processing Year 2022.

(22) IRM 3.12.217.8.2(4)b - Removed "Reminder" referencing Modernized E File returns which may display on Error Code 074 before Processing Year 2022.

(23) IRM 3.12.217.8.5 - Added new subsection for Field 06ITR. Renumbered remaining subsection accordingly.

(24) IRM 3.12.217.8.6(6)b - Updated correction procedures to state Field 06TRT is no longer applicable and was used for Tax Periods 200612 to 200711.

(25) IRM 3.12.217.9(5) - Added new fields from Form 4797, Sales of Business Property, and Form 8996, Qualified Opportunity Fund, to Section 10 Field Designator Table.

(26) IRM 3.12.217.9.3 - Added new subsection for Field 101B and Field 101C transcribed from Form 4797, Sales of Business Property. Renumbered remaining subsections.

(27) IRM 3.12.217.9.12(2) - Added new paragraph with prior year line numbers for Form 8996, Qualified Opportunity Fund.

(28) IRM 3.12.217.9.13 - Added new subsection for Field 10Q6, transcribed from Form 8996, Qualified Opportunity Fund. Renumbered remaining subsections.

(29) IRM 3.12.217.9.14(1) - Added 2020 Prior Year Line Revision for Field 1010.

(30) IRM 3.12.217.9.15(1) - Added 2020 Prior Year Line Revision for Field 1013.

(31) IRM 3.12.217.9.16(1) - Added 2020 Prior Year Line Revision for Field 1014.

(32) IRM 3.12.217.11.1(1) - Updated the location of Field 14Q01 and Field 14Q03 in the Error Record Format for Section 14. (IPU 21U0165 issued 01-28-2021)

(33) IRM 3.12.217.11.2(1) - Added form revision information for the transcription of Field 14Q01. (IPU 21U0165 issued 01-28-2021)

(34) IRM 3.12.217.11.4(1) - Added form revision information for the transcription of Field 14Q03. (IPU 21U0165 issued 01-28-2021)

(35) IRM 3.12.217.12.1(4)(5) - Section 15-18 Field Errors - Deleted old Credit Reference Numbers (CRN) from table and deleted Tax Period 2000 and prior table.

(36) IRM 3.12.217.13(1)(6)b - Added a Note to Field 20TTR and Field 20TTI Field Designators and updated correction procedures to state Field 20TTR and 20TTI are no longer applicable and were used for Tax Periods 200612 to 200711.

(37) IRM 3.12.217.13(6)d - Removed instruction for Modernized E File returns which may display on Error Code 074 before Processing Year 2022.

(38) IRM 3.12.217.16 - Added new Section 26 Data for Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments. Also added the following subsections:

  • IRM 3.12.217.16.1 - Section 26 Field Errors

  • IRM 3.12.217.16.2 - Field 261A, Field 262A, Field 263A and Field 264A

  • IRM 3.12.217.16.3 - Field 261B, Field 262B, Field 263B and Field 264

  • IRM 3.12.217.16.4 - Field 261D, Field 262D, Field 263D and Field 264D

  • IRM 3.12.217.16.5 - Field 261IN, Field 262IN, Field 263IN and Field 264IN

  • IRM 3.12.217.16.6 - Fields in Section 26

(39) IRM 3.12.217.18.5(3)a - Reworded "Correction Procedures" for clarity. (IPU 21U0165 issued 01-28-2021)

(40) IRM 3.12.217.18.5(3)b - Added new instruction that reads If displayed fields are correct and the return is timely filed, enter a "C" in the Clear Code field. (IPU 21U0165 issued 01-28-2021)

(41) IRM 3.12.217.18.9(1) - Added Field S26DP to the Field Designator Table for Error Code 010.

(42) IRM 3.12.217.18.18(2)c - Updated correction procedures for Error Code 074 to state this error code is no longer applicable and was used for Tax Periods 200612 to 200711.

(43) IRM 3.12.217.18.18(2)d - Removed instruction for Modernized E File (MeF) returns which may display on Error Code 074 before Processing Year 2022.

(44) IRM 3.12.217.18.31(1) - Updated Error Code 672 Field Designator for Field 0623D and removed Field 0623E from the Field Designator Table according to Work Request Notification (WRN) for Form 1120-S Tax Year 2021 Processing Year 2022.

(45) IRM 3.12.217.18.31(3)c - Updated Error Code 672 reference for Field 0623E to Field 0623D according to Work Request Notification (WRN) for Form 1120-S Tax Year 2021 Processing Year 2022.

(46) IRM 3.12.217.18.31(3)g - Added Tax Year 2018 reference to Credit For Prior Year Minimum Tax - Corporations, Line 23d .

(47) IRM 3.12.217.18.31(3)j - Added instruction for Line 23e if the corporation is the beneficiary of a trust reporting estimated payments to its beneficiaries. Renumbered remaining alpha list accordingly. (IPU 21U0316 issued 03-01-2021)

(48) IRM 3.12.217.18.31(3)j - Updated Error Code 672 reference for Field 0623E to Field 0623D according to Work Request Notification (WRN) for Form 1120-S Tax Year 2021 Processing Year 2022.

(49) IRM 3.12.217.18.32(1) - Added a Note to Field 06TRT and Field 06TRV and removed Field 0623E from the table according to Work Request Notification (WRN) for Form 1120-S Tax Year 2021 Processing Year 2022.

(50) IRM 3.12.217.18.32(3)f - Removed "Reminder" for Modernized E File (MeF) returns that may display on Error Code 074 before Processing Year 2022.

(51) Exhibit 3.12.217-15 Telephone Excise Tax Credit Correspondence - Added a Note that correspondence for Form 8913, Credit for Federal Telephone Excise Tax Paid, is no longer applicable and was used for Tax Periods 200612 - 200711.

(52) Exhibit 3.12.217-16 Telephone Excise Tax Credit Disallowance - Added a Note that correspondence for Form 8913, Credit for Federal Telephone Excise Tax Paid, is no longer applicable and was used for Tax Periods 200612 - 200711.

(53) Exhibit 3.12.217-20 - Added Note under TPNC 88 & TPNC 89 to state they are no longer applicable and were used for Tax Periods 200612 to 200711.

(54) Added the following new exhibits:

  • Exhibit 3.12.217-22 - Form 8949, Sales and Other Dispositions of Capital Assets

  • Exhibit 3.12.217-23 - Form 8996, Qualified Opportunity Fund

  • Exhibit 3.12.217-24 - Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments

  • Exhibit 3.12.217-25 - Form 4797, Sales of Business Property

(55) Plain Language changes include:

  • Used simpler words

  • Deleted unnecessary words

  • Changed consistency sections per BMF Consistency template

Editorial changes made throughout the IRM include:
  • Corrected spelling and grammatical errors

  • Corrected references, citations, and links

  • Updated Figures and Exhibits

  • Updated dates throughout including Tax Periods and Received Dates

  • Updated form titles

  • Deleted old line numbers throughout

Effect on Other Documents

IRM 3.12.217, Error Resolution, Error Resolution Instructions for Form 1120-S, dated November 19, 2020 (effective January 1, 2021), is superseded. The following IRM Procedural Updates (IPUs), issued January 28, 2021, through April 20, 2021 have been incorporated into this IRM: 21U0165, 21U0316, 21U0510 and 21U0634.

Audience

Wage and Investment employees working Business Masterfile (BMF) Error Correction are the intended audience for this Internal Revenue Manual.

Effective Date

(01-01-2022)

James L. Fish
Director, Submission Processing
Wage and Investment Division

Program Scope and Objectives

  1. This IRM section provides instructions for Wage and Investment Error Resolution Tax Examiners to correct errors for Form 1120-S, U.S. Income Tax Return for an S Corporation. For tax years before 2018, the form number was Form 1120S. In May 2019 the form number was changed to Form 1120-S due to Tax Forms and Publications hyphen standardization.

  2. Purpose: The Error Resolution System (ERS) resolves errors made by taxpayers and during campus processing.

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

    • Tax Examining Technicians

    • Lead Tax Examining Technicians

    • Supervisory Tax Examining Assistants

  4. Policy Owner: Director, Submission Processing.

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

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

    • Accounts Management (AM)

    • Chief Counsel

    • Compliance

    • Information Technology (IT) Programmers

    • Large Business and International (LB&I)

    • Small Business Self-Employed (SBSE)

    • Statistics of Income (SOI)

    • Submission Processing (SP)

    • Taxpayer Advocate Service (TAS)

    • Tax Exempt and Government Entities (TEGE)

  7. Program Goals: Make sure necessary action is taken on the return and attachments for correct posting of data.

Background

  1. The purpose of Error Resolution is to resolve validity errors, field errors, consistency errors, and math errors in returns and other documents for posting to the Master File. Records fall out in Error Resolution System (ERS) due to the Generalized Mainline Framework (GMF). The entries from transcription are transferred to ERS fields. GMF programming causes a record to fall out to ERS if it fails to meet certain criteria, including:

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

    • Invalid length of field (e.g., Employer Identification Number (EIN) with 8 digits instead of 9)

    • Invalid codes in field (valid Action Codes, Audit Codes, etc., are programmed at GMF)

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

    • Math errors - Computer does math computation and it differs from the taxpayer’s amount

    • Invalid Tax Periods and eligibility for certain credits

  2. Employees use ERS to correct these conditions and use IDRS to research.

Authority

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

    • IRC 6201(a)

    • IRC 6213(b)

  2. Policy Statements for Submission Processing are found in IRM 1.2.1, Servicewide Policies and Authorities, Servicewide Policy Statements.

Responsibilities

  1. The Campus Director monitors operational performance for their campus.

  2. The Operations Manager monitors operational performance for their operation.

  3. The Team Manager/Lead monitors performance and ensures employees have the tools to perform their duties.

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

Program Management and Reviews

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

  2. Program Effectiveness is measured using the following:

    • Embedded Quality Submission Processing (EQSP)

    • Balanced Measures

    • Managerial reviews

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

Program Controls

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

Terms/Definitions/Acronyms

  1. For Terms, Definitions and Acronyms, see Exhibit 3.12.217-21.

Related Resources

  1. The following table lists related sources:

    Resource Link/Title
    Submission Processing Design Center (SPDC) https://program.ds.irsnet.gov/sites/WILESPInstCrnr/SitePages/Home.aspx
    Servicewide Electronic Research Program (SERP) http://serp.enterprise.irs.gov/
    Integrated Data Retrieval System (IDRS)  
    Integrated Automation Technologies (IAT) https://organization.ds.irsnet.gov/sites/WiMttIat/home/default.aspx
    IRM 3.11.217 Returns and Documents Analysis - Form 1120-S Corporation Income Tax Returns
    IRM 3.24.16 ISRP System - Corporation Income Tax Returns
    IRM 3.12.38 Error Resolution, BMF General Instructions

General Information

  1. This IRM cannot address every possibility that occurs while correcting returns or documents. Take taxpayer intent into consideration. Refer issues not addressed in this IRM to the subject matter expert (SME), lead or manager to decide the proper corrective action.

♦Business Master File (BMF) Consistency♦

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

  2. Ogden, Kansas City, and Paper Processing Branch, BMF Code and Edit and Error Resolution System (ERS) identified and developed topics for BMF Consistency.

  3. A ♦ (diamond) before and after the subsection title shows BMF Consistency subsections.

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

♦Internal Revenue Manual (IRM) Deviation Procedures♦

  1. Submit IRM deviations in writing following instructions from IRM 1.11.2.2.4, When Procedures Deviate from the IRM, and elevate through proper channels for executive approval.

Local Desk Procedures

  1. Some Submission Processing Campuses have developed local Desk Procedures. Such procedures are only to be used:

    • To supplement existing Headquarter procedures

    • To expand Submission Processing Campus Error Resolution procedures by incorporating material from other IRMs, Automatic Data Processing (ADP) handbooks, (etc.)

    • For local routing procedures

    • Are not limited to the examples listed above

  2. Unit managers must have a signed approval on file from the responsible Operation Manager on all Submission Processing Campus Desk Procedures.

  3. All existing local information and procedural issuances must be reviewed periodically by the Operation Manager level (at least 2 times a year or with each IRM revision) to ensure conformance with Headquarters procedures (make necessary changes, secure necessary approvals, etc.).

  4. Immediately notify the Headquarter tax analyst of any processing problems that cause a work stoppage.

♦Refund Returns 45 Day Jeopardy and High Dollar Refunds♦

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

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

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

    Note:

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

    1. SSPND with Action Code "341" .

    2. Attach Form 4227, Intra-SC Reject or Routing Slip, and give the return to the lead examiner or manager.

    The refund is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡,
    1. SSPND with Action Code "341" for numbered and unnumbered returns.

    2. Attach Form 12230, Expedite Processing Million Dollar Manual Refund, and give the return to the lead examiner or manager.

  3. Taxpayer Advocate Service (TAS) Manual Refunds - any return hand walked by a W&I Submission Processing (SP) liaison for Taxpayer Advocate Service must be processed by a Lead Tax Examiner or designated tax examiner using the following procedures in the order listed:

    1. Computer Condition Code (CCC) "O" must be edited on the return and entered in Field 01CCC.

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

    3. Continue processing the return according to Error Code procedures.

  4. Correspondence: If required for missing or incomplete information, follow procedures below:

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

    2. Inform the W&I liaison of all information that is being requested.

    3. Suspend (SSPND) with appropriate suspense code and give return back to the W&I SP liaison.

      Note:

      The W&I liaison will contact the Taxpayer Advocate to obtain the required information needed to complete processing.

  5. More suspense action needed: If the return requires other suspense action, then follow procedures below:

    1. Initiate suspense (SSPND) with Action Code according to IRM procedures.

    2. Inform the W&I liaison the reason for the action taken.

    3. Give the return back to the liaison.

      Note:

      The W&I liaison will contact Taxpayer Advocate, who in turn will take the necessary action to complete the processing of the return.

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

    1. Assign the TPNC according to IRM procedures.

    2. After all TPNCs have been assigned, inform your liaison of TPNCs issued.

    3. Suspend (SSPND) with appropriate Action Code (suspense must be done at the generated point of error and give the return to the liaison).

      Note:

      The W&I liaison will contact the Taxpayer Advocate, who in turn will take the necessary action to complete the processing of the return.

  7. When Balance Due/ Overpayment Math Error Code (EC) generates do the following:

    1. Make screen print of the Error Code 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.

    2. Enter the amount the taxpayer claimed as the amount they requested to be refunded back in to Field 07B/R.

    3. If Balance Due/Overpayment Math Error Code regenerates because the taxpayer made a math error when computing their refund, then 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 keeping the entity area visible and assign the appropriate TPNC.

    4. Once return completes processing, give the return, Form 12412, Operations Assistance Request (OAR), and the ERS screen print to the W&I SP liaison.

  8. Rejects Suspense Procedures:

    1. Follow specific instruction given by W&I SP liaison. Correspond and assign appropriate TPNCs as directed.

    2. Refer to paragraphs (6) and (7) above.

♦Taxpayer Advocate Service (TAS)♦

  1. The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see https://www.irs.gov/taxpayer-bill-of-rights. Under TBOR, taxpayers have the right to expect the tax system to consider facts and circumstances that might affect their underlying liabilities, ability to pay, or ability to give information timely. Taxpayers have the right to receive assistance from the Taxpayer Advocate Service if they are experiencing financial difficulty or if the IRS has not resolved their tax issues properly and timely through its normal channels..

  2. TAS uses Form 12412, Operations Assistance Request (OAR), to start the OAR process of referring a case to the Wage and Investment (W&I) Division, to affect the resolution of the taxpayer’s problem. For more information, refer to IRM 13.1.19, TAS Operations Assistance Request (OAR) Process.

  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. The definition of "same day resolution" is within 24 hours. The following two situations meet the definition of "same day resolution" :

    • The issue can be resolved within 24 hours.

    • IRS takes steps within 24 hours to resolve the taxpayer’s issue.

    See IRM 13.1.7.5, Same Day Resolution by Operations.

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

♦TAS - Service Level Agreements (SLA)♦
  1. The National Taxpayer Advocate reached agreements with the Commissioners of the Wage and Investment (W&I) Division, Small Business/Self Employed (SB/SE) Division, Tax Exempt Government Entities (TEGE), Criminal Investigation (CI), Appeals, and Large Business and International (LB&I) that outline the procedures and responsibilities for processing 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 found at https://irssource.web.irs.gov/TAS/SitePages/SLA.aspx.

Business Master File (BMF) Identification (ID) Theft

  1. Business Master File (BMF) Identification (ID) Theft is increasing. If a case is found with attachments showing the taxpayer is a victim of "ID Theft" :

    1. SSPND with Action Code "360" to route the return to Planning and Analysis (P&A).

    2. Attach Form 4227, Intra-SC Reject or Routing Slip, (or other proper routing slip) with the notation "ID THEFT" .

    3. Give the entire case to the manager/lead.

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

  3. Effective January 1, 2017, Computer Condition Code "E" may be edited on Form 1120-S (any year) by the BMF ID Theft Liaison to identify a potential identify theft filing.

♦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. If CI has stamped the return, do not send for further CI action.

  3. For returns with refund claims of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, do the following:

    Caution:

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

    Refund Claim Ogden and Kansas City
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡,
    1. Make a copy of the first two pages of the tax return along with any page of the return that appears suspicious.

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

    3. Route the copy to Ogden, Mail Stop 9001, Criminal Investigation (CI).

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

    5. Continue processing the return.

  4. Because of the repetitive nature of the ERS/Rejects function, ERS/Rejects Tax Examining Technicians often recognize income tax return data that are outside of the norm for data found on similar returns for each income tax return type. If ERS finds return characteristics not meeting Audit Code or Exam referral criteria it deems suspicious, CI is available to review the referral.

  5. If a suspicious return is found, and there is no sign Code and Edit (C&E) made a copy and sent to CI Referral do the following:

    1. Make a copy of the first two pages of the tax return along with any page of the return that appears suspicious.

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

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

      Ogden Kansas City
      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.

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

♦Examination (Exam) "Funny Box" ♦

  1. The primary goal in identifying tax returns for examination is to promote the highest degree of voluntary compliance. Examination gives support and helps Submission Processing (SP) with any questionable return found during processing. Exam has a vast multitude of programs and tolerance criteria already found in several IRM sections. SP can refer any questionable return to Exam, unless prohibited by instructions currently found in several IRMs.

♦Frivolous Arguments♦

  1. Businesses use frivolous arguments for expressing dissatisfaction with the substance, form, or administration of the tax laws by trying to illegally avoid or reduce tax liabilities. See IRM 25.25.10 , Frivolous Return Program, and Exhibit 3.12.217-14, Potential Frivolous Arguments for Examination Review, for a list of recognized frivolous arguments made by businesses.

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

    Frivolous Return Criteria

    If Then
    The return meets any of the conditions shown as a frivolous return (see Exhibit 3.12.217-14, Potential Frivolous Arguments for Examination Review),

    Exception:

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

    Remove return from the batch and place the return in the locally designated basket for Examination, Frivolous Return Program (FRP) for review.
    Examination has selected the return as frivolous, shown 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" , Continue processing the return using procedures in IRM 3.12.217. However, do not circle or void the Action Code showing a frivolous return.
     

  3. Do not consider the following as frivolous:

    • Returns that have only zeros, blanks, or no entries.

    • Returns showing "None" , "Not Liable" , etc.

    • Returns showing no evidence of a frivolous argument.

♦IRS Employee Contacts♦

  1. The Internal Revenue Service (IRS) Restructuring and Reform Act of 1998, (RRA98), Section 3705(a) gives identification requirements for all IRS employees working tax-related matters.

  2. All IRS employees who communicate by telephone, face-to-face, or any other method of correspondence with taxpayers or their personal representatives on tax related matters must give (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. Toll-free employees may also give their location for identification purposes. Treat faxes to taxpayers on tax-related matters as correspondence and include the required information.

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

    3. Correspondence (sent to the taxpayer and authorized representatives) - A telephone number that taxpayers can call for answers to questions. In addition, manually generated correspondence must have the employee’s title (e.g., Mr., Mrs., Ms., Miss), last name Integrated Data Retrieval System (IDRS) number, and letter system number, which are systemically generated by IDRS. Treat faxes to taxpayers on tax-related matters as correspondence and include the required information.

    4. Correspondex letters - Specific employee name and telephone number if the employee initiating the correspondence is in the best position to respond to any questions the taxpayer may have or if the taxpayer is being asked to give more case-related information. If the taxpayer does not need to contact a specific employee, the correspondence needs only an IRS telephone number and standard signature.

  3. When taxpayer requests to speak with a specific employee who previously worked their inquiry or request, or complains about the level of service previously given, make every attempt to resolve the taxpayer's inquiry. If unable to resolve the issue, refer the inquiry using established procedures to the manager.

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

  5. 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.

♦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 gives daily processing of taxpayer accounts.

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

  3. The Business Master File (BMF) campus cycles are:

    1. Campus Cycle: Thursday - Wednesday

    2. Master File Processing: Friday - Thursday

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

    4. Unpostables: New available Tuesday; closing Tuesday

  4. BMF transaction posting time frames are:

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

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

      Note:

      Implementation of CADE 2 accelerated weekly IDRS analysis. Previously, transactions such as this would have been pending on IDRS and not shown in the CFOL command code displays.

  5. Transaction posting dates show a format of YYYYCCDD. YYYY is the year. CC is the posting cycle. Individual Master File (IMF) transactions values for DD are:

    • 01 = Friday

    • 02 = Monday

    • 03 = Tuesday

    • 04 = Wednesday

    • 05 = Thursday

    Note:

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

Related Forms

  1. When the following forms are referred to in this section, the chart below shows their form number, form title and use.

    If this Form is used Then
    Form 3465, Adjustment Request, Request transfer of credits.
    Form 4227, Intra-SC Reject or Routing Slip, Identify the reason for using the Action Code.
    Form 8161, ERS Return Charge-Out, Generated by the computer to charge out returns on the new Suspense Records List and Duplicate Document Rejected Document Locator Number (DLN) Register. Used as a routing slip and history item.

System Errors

  1. The Error Resolution System will identify errors according to type and priority.

    If this error is present Then it is a
    Action Code Error Priority I
    Section Error Priority II (Integrated Submission and Remittance Processing (ISRP) problem code)
    Validity Error Priority III
    Math/Consistency Error Priority IV (Error Codes)

    Note:

    The record heading will show the type of error.

Field Errors

  1. Any field that does not meet the requirement(s) for that field will be displayed as a Field Error in the order encountered in the record.

    1. Non-alphabetical character in an alpha field

    2. Blank space in numeric field

    3. Blank in the first position of an alpha field

Terminus Error

  1. This error is caused by a section with variable length input fields having an erroneous size field. This type of error will show all input fields of the terminus section. Transcribed data will be present. Computer generated fields or Remittance Field for Section 01 will not be present.

    If Then
    Displayed in error, Check all fields in the section for necessary corrections.
    No correction is needed, Transmit from the bottom of the screen display.
    Section needs to be deleted, Use Command Code (CC) DLSEC to delete the section number.

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 specific inventory.

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

    1. Status 100, error awaiting correction. Records are in the Error Inventory.

    2. Status 2XX, record awaiting information. Records are in the Unworkable Suspense Inventory.

    3. Status 3XX, suspense period expired no response. Records are in the Workable Suspense Inventory.

    4. Status 4XX, record with information, awaiting correction. Records are in the Workable Suspense Inventory.

    5. 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, Action Code "321" = suspense period expired or no response to taxpayer correspondence. If a record was selected to be held for Quality Review, the second and third position will be "QA" . For example, "1QA" , "3QA" , or "4QA" .

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

Action Codes

  1. Action Codes (AC) are input when information is missing, or the record must be suspended from processing.

    1. The code will have sufficient detail to indicate if correspondence is needed or if specific in-house research or action is required.

    2. Document Perfection Tax Examiners will assign a three-digit code to a numbered return when they determine that the return is unprocessable in its present form, either because more information is necessary, or some manual intervention is required.

    3. This code will be edited on the bottom left hand corner of the return.

  2. Temporary Guidance - Due to processing delays, more suspense time is needed in correspondence. Use the table below and replace current Action Codes 211, 212, 215, 216, 225 and 226 with Action Codes 231 and 232 whenever they are listed throughout the IRM:

    Current Action Code New Action Code
    211/212 231
    215/216 231
    225 232
    226 231

    Note:

    These changes are temporary. When processing time frames return to normal, an IPU will be issued to revert Action Codes to their previous uses.

  3. For more information and applicable Action Codes, see IRM 3.12.38.3.4, Error Resolution System (ERS) Action Codes, and the exhibit in IRM 3.12.38-1, Action Codes.

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

    1. If the Action Code assigned by Document Perfection is invalid or incomplete or AC 001 the record will be assigned to the Error Inventory for correction or deletion of the code.

    2. Only one Action Code may be assigned at a time to a record.

    3. For routing within the Submission Processing Campus (In-House Research), the Action Code with a sufficient explanation concerning the missing information will need to be entered on the return.

    4. The ERS 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 ERS. This is done by entering a valid Action Code with a Command Code (CC) SSPND, NWDLN, or RJECT. IRM 3.12.38, BMF General Instructions, also explains these codes.

    5. An ERS Tax Examiner entering a valid Action Code with CC SSPND will be clearing the record from the screen and placing the record in either Workable or Unworkable Suspense.

    6. A Reject Tax Examiner entering a valid Action Code with the CC RJECT will reject the record from ERS. Generally, Service Center Control File (SCCF) will be automatically updated for the rejected records. In cases where the Action Code cannot describe the required action, attach a note of explanation to the return using Form 4227, Intra-SC Reject or Routing Slip.

    Note:

    The Action Code assigned by Document Perfection will be transcribed into the record of the Form 1120-S.

Action Code Chart
  1. The Action Code shows that specific information is missing or that the record is to be rejected from processing. The code will indicate if correspondence is to be sent to the taxpayer or the specific in-house research or action required. This chart describes each Action Code, their functional use (CE = Code and Edit, EC = Error Correction, S = Suspense Correction and GEN = computer generated) and the suspense period.

    Action Code Description Workday Suspense Period Function Used
    001 Input Document 0 GEN
    211 First Correspondence 40 CE, EC, S
    212 Second Correspondence 25 CE, EC, S
    213 Correspondence to other 40 CE, EC, S
    215 International Correspondence 45 CE, EC, S
    225 Taxpayer Correspondence - Signature Only 40 CE, EC, S
    226 International Correspondence (Signature Only) 40 CE, EC, S
    300 Examination (Fuel Tax Credit) 10 CE, EC, S
    310 Statute Control 10 CE, EC, S
    320 Entity Control 10 CE, EC, S
    321 Form 851, Affiliations Schedule, Employer Identification Number (EIN) Mismatch Modernized e File (MeF) Form 1120, U.S. Corporation Income Tax Return only 10 EC
    331 Frivolous Review 3 CE, EC
    332 Questionable Refund Detection Team (QRDT) Review 3 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 10 CE, EC, S
    337 Other Criminal Investigation (CID) 10 CE, EC, S
    341 Manual Refund 10 CE, EC, S
    342 Credit Verification 10 CE, EC, S
    343 Other Accounting

    Note:

    This Action Code is also used for "Black Liquor" claims on Form 6478, Biofuel Producer Credit (Credit for Alcohol Used as Fuel for 2012 - 2007)

    10 CE, EC, S
    344 Manual Refund by Error Resolutions (ERS) 0 EC
    347 Form 2553, Election by a Small Business Corporation, attached to Form 1120-S and/or taxpayer shows Rev. Proc. 2007-62 or Rev. Proc. 2013-30 (effective September 3, 2013) on any page of the Form 1120-S regardless if a Form 2553 is attached. Control case to Entity for approval. 20 EC, CE, S
    351 Taxpayer Identification Number (TIN) Research 0 EC, S
    352 Name Research 3 CE, EC, S
    353 Address Research 3 CE, EC, S
    354 Filing Requirement Research 3 CE, EC, S
    355 Other MFTRA Research 3 CE, EC, S
    360 Other In-House Research 10 CE, EC, S
    370 Examination 10 CE, EC, S
    410 Technical Help 0 EC
    420 Management Suspense–A

    Note:

    Action Code 420 was used for Tax Periods 200612 to 200711 when claiming credit on Form 8913, Credit for Federal Telephone Excise Tax Paid.

    5 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 Code 0 EC
    480 Early Filed Suspense 150 CE, EC, S
    490 System Problem 5 CE, EC, S
    510 Missing Document 0 CE
    511 Missing Document 1st Suspense 25 EC, S
    512 Missing Document 2nd Suspense 20 S
    513 Missing Document 3rd Suspense 20 S
    515 Missing Document Short Term 5 EC, S
    550 Mag Tape Attachments 0 CE
    551 Mag Tape Inconsistent Data 0 CE
    610 Renumber- Non-Remittance 0 CE, EC
    611 Remittance Renumber 0 S
    620 Non Master File (NMF) / Non-ADP 0 CE, EC, S
    630 Reinput 0 EC
    640 Void 0 CE, EC, S
    650 International 0 CE, EC, S
    660 Data Control Delete Tape Edit Processor (TEP) Delete 0 S
    670 Deleted Missing Document 0 GEN
    700 Duplicate (Dup) Block DLN 0 GEN
    711 Dup. DLN
    From Code and Edit (C&E)
    0 GEN
    712 Dup. DLN From Error Correction 0 GEN
    713 Dup. DLN From Unpostables 0 GEN
    714 Dup. DLN From
    Unworkable suspense
    0 GEN
    715 Dup. DLN From Workable suspense 0 GEN
    800 National Account Profile (NAP) Linkage Problem 2 EC, S
    900 Unpostable Record 0 GEN
  2. Beginning with tax returns for periods ending 12–31-2007 and later, Form 2553, Election by a Small Business Corporation, may be filed as an attachment to Form 1120-S requesting to be considered an S Corporation. Code and Edit will edit Action Code (AC) 347 when a Form 2553 is received with a Form 1120-S and the taxpayer shows Rev. Proc. 2007-62 or Rev. Proc. 2013-30 (effective September 3, 2013) on any page of the Form 1120-S regardless if a Form 2553 is attached. For MeF filed Form 1120-S, this will be attached to the return as a Portable Document File (PDF) file and will generate an Action Code 347. Error corrections must then assign the case to Entity Control for prompt consideration.

Clear Code "C" and "000"
  1. The letter "C" is used as a "Clear Code" for the Error Codes when the resolution does not require a change or correction to the record as displayed. The display includes a Clear Code Field labeled "CL" . CC CRECT is used to enter the "C" .

  2. Code "C" is also used for clearing the Action Code from the screen after corrections for the Action Code have been completed. For example, Action Code 410 must be cleared initially so other errors can be resolved. The presence of the "C" with a Priority I Error shows that you have made corrections to the Action Code and now other errors on the record can display.

  3. The "000" is also used as a Clear Code when deleting Action Codes. It is used for erroneous Action Codes when you determine there is no reason to suspend the record. The "000" cannot be used in Suspense Correction.

  4. Programming erases all "C" Clear Codes for Error Codes when a record is suspended with the CC SSPND.

  5. Programming erases all "C" Clear Codes for Error Codes and Action Codes in the new Error Inventory and Workable Suspense Inventory. Unfinished records from the previous day will not show the "C" Clear Codes that were assigned to a record but not completely worked.

  6. Error Codes (including the ones which may require a "C" Clear Code) are numbered consecutively for correcting. There may be instances when the ERS tax examiner will create an Error Code with a higher priority than those cleared with a Taxpayer Notice Code or "C" Clear Code. Should this occur, programming will erase all "C" Clear Codes and Taxpayer Notice Codes for Error Codes with a lower priority.

  7. Beginning with the highest priority Error Code, programming will continue displaying Error Codes for the record. Displays using the corrected data are different from those previously displayed.

  8. There may be instances when you will make a correction erasing an Error Code previously cleared with a "C" and now the error condition no longer exists. Should this occur, the "C" Clear Code for this error and all "C" and TPNC for subsequent errors in the record will be deleted.

  9. If errors remain on the record after deleting the "C" and TPNCs, they will be displayed for resolution whether they were previously displayed.

  10. The "C" Clear Code will prevent any other corrections to the record. If a correction must be entered but you have already entered the "C" Clear Code, and the error is no longer displayed, create a higher priority error. If the record has cleared, then use CC GTRECW to make corrections.

Unprocessable Automatic Data Processing (ADP) Return

  1. When perfection of a return is not possible and it is necessary to correspond, perform research or refer the document to another area of the Submission Processing Campus. The record will be suspended, and the required action taken.

  2. Suspend the unprocessable record by entering the CC SSPND followed by the proper Action Code.

    1. In cases where the Action Code cannot describe the required action, attach Form 4227, Intra-SC Reject or Routing Slip, to the return with an explanation.

    2. If the tax examiner will not be issuing a letter through IDRS, it will be necessary to attach a Correspondence Action Sheet (Form 3696, Correspondence Action Sheet,) to issue the correspondence.

    3. A Charge-Out, Form 8161, ERS Return Charge-Out, will be computer generated for all new suspense items.

    4. The Charge-Out is used for pulling documents, routing and controlling documents while the record is held in suspense, and associating the document with the Workable Suspense Inventory when the record becomes workable.

Correspondence

  1. Replies - When the taxpayer replies to correspondence, continue to process the return.

  2. No Replies - When the taxpayer does not respond to correspondence, input CCC "3" and use the following procedures as applicable.

    If Then
    Tax Period is more than 12 months, Research for the correct period ending and change the Tax Period to conform with the previous filing.
    Tax Period is an unexplained short year, Enter Computer Condition Code "Y" in Field 01CCC. When the screen returns, enter a "C" in the Clear Code Field.
    Tax Period is an unauthorized change in Accounting Period, Enter Computer Condition Code "Y" in Field 01CCC. When the screen returns, enter a "C" in the Clear Code Field.
    There are multiple Tax Periods, Use earliest Tax Period. If a remittance return, SSPND return to have remittance posted to the correct period.

    Other

    If Then
    Signature is required, Enter CCC "X" and CCC "3" .
    Schedule D, See IRM 3.12.217.18.27, Error Code 660 - Total Tax Taxpayer present and No 06MCT, for Schedule D procedures.
    Line 22a Support Schedule, See IRM 3.12.217.18.27, Error Code 660 - Total Tax Taxpayer present and No 06MCT, for Line 22a Support Schedule procedures.
    Form 8825, Rental Real Estate Income and Expenses of a Partnership or an S Corporation, See paragraph (3) below to enter a Missing Schedule Code for Schedule K. Continue normal processing.

    Note:

    Correspondence for Form 8825 was issued to support the Schedule K, Line 2 entry.

    Schedule L - Balance Sheet, See paragraph (3) below to determine and enter a Missing Schedule Code. Continue normal processing.
    Schedule K-1, Shareholder’s Share of Income, Deductions, Credits, etc, See paragraph (3) below or IRM 3.12.217.3.15, Field 01MSC - Missing Schedule Code, to determine and enter a Missing Schedule Code. Continue normal processing.
     

    Unsubstantiated credits

    If Then
    Form 6478, Biofuel Producer Credit, is unsubstantiated, Delete credit from the return and the screen.
    Form 4136, Credit for Federal Tax Paid on Fuels, is unsubstantiated, Delete credit from the return and the screen.
    Form 6249, Computation of Overpaid Windfall Profit Tax, is unsubstantiated, Delete credit from the return and the screen.
    Form 8586, Low-Income Housing Credit, is unsubstantiated, Delete the credit from the return and the screen.
    Form 8611, Recapture of Low-Income Housing Credit, is unsubstantiated, Delete the credit from the return and the screen.
     

  3. For missing schedules use the chart below to determine the Missing Schedule Code, Field 01MSC:

    Missing Schedule Input Code
    Schedule(s) K-1 33
    Schedule L (Balance Sheet) 34
    Schedule(s) K-1 and L 36
    Schedule K 45
    Schedule K and K-1 46
    Schedules K and L 47
    Schedules K, K-1 and L 49

Correspondence Action Sheets
  1. If the tax examiner will not be issuing a letter through IDRS, it will be necessary to attach a Correspondence Action Sheet (Form 3696, Correspondence Action Sheet) or other acceptable form to issue the correspondence.

♦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 shown with "CIS Image - Do not correspond for signature" stamped below the signature line or "CIS" annotated on the front of the return.

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

    CIS Return Correspondence Criteria

    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 with Action Code "640" to have the DLN voided.

    3. Attach Form 4227, Intra SC Reject or Routing Slip, (or other proper 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, Intra-SC Reject or Routing Slip (or other proper routing slip).

    The "CIS" return has a Form 13596, Reprocessing Returns, attached and the return is incomplete (e.g., missing signature, schedules, or forms), The return shows correspondence was 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 (TC 150 posted).
    1. If TC 150 is present and the information is the same, cancel the DLN and treat as classified waste.

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

     

♦Use of Fax for Taxpayer Submissions♦

  1. Taxpayers may send tax return information via fax as part of return perfection even when submitting a signature. In circumstances where contact with the taxpayer was made and documented, fax signatures are acceptable. For more information about accepting signed taxpayer documents by fax, see the most recent revision of the IRS Policy for Use of Fax, available at http://imdtrack.web.irs.gov/IG_Uploads/IRS.gov_No/NHQ-01-1019-0001.pdf

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

  3. Indicate the fax paragraph on the approved Correspondence Action Sheet to inform the taxpayer of the fax options.

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

    • IRM 21.1.3.2.3, Required Taxpayer Authentication

    • IRM 21.1.3.2.4, Additional Taxpayer Authentication

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

    • IRM 10.5.1.6.7.2, Answering Machine or Voicemail

    • IRM 11.3.1.14, Facsimile (FAX), Electronic Facsimile (E-FAX), and IRS Internal Enterprise Electronic Facsimile (EEFAX) Transmission of Tax Information

Perfection of Attachments

  1. Sometimes a return is received with written information on an attachment.

    If Then
    The taxpayer writes a question or request for help on the return itself, Make a photocopy of the question/request and the taxpayer's EIN, name and address. Route this information to the proper function.
    Unrelated, unanswered taxpayer correspondence is attached and no action was taken, Detach and route to the proper area using local Submission Processing Campus procedures.
    Unanswered taxpayer correspondence relating to the Form 1120-S is attached, Make a photocopy of the attachment and forward it to the proper area using local Submission Processing Campus procedures.
  2. All attachments or photocopies of an attachment that are routed to another area must have the taxpayer's:

    • Name

    • Address

    • EIN

    • Received Date

Integrated Data Retrieval System (IDRS) Research Tools

  1. The following shows some IDRS Command Codes (CCs).

  2. See IDRS Command Codes at: IDRS Command Code Job Aid for all Command Code Job Aids.

NAMEE Search
  1. Command Code (CC) NAMEE will be using a system called Name Search Facility (NSF), which is a Taxpayer Identification Number searching tool.

  2. NSF provides a national centralized name search capability which replaces the Key Index File (KIF) found at each Submission Processing Campus. Authorized users will have access to NSF via CC NAMEE for Employer Identification Number (EIN) searches.

  3. NSF will provide an input screen to enter data about the taxpayer (name, address, etc.). It will match the data entered, to data we have in our files and will return to the users the Social Security Number (SSN) or EIN of any possible matches. The more information entered, the narrower the search and the better the possibility for a match. The CC NAMEE requires a name be entered for searching the NSF use CC NAMEE to verify that the EIN the taxpayer has furnished is on the Master File. See IDRS Command Codes at IDRS Command Code Job Aid for all CC Job Aids.

On-Line Entity (OLE)
  1. OLE is a Taxpayer Identification Number (TIN) system designed to allow for validation of the EIN and EIN/name control on line with Integrated Data Retrieval System (IDRS) input CCs. It is also designed to allow for entity research on a national basis.

  2. Use CC INOLE to research the entity module. This information includes name lines, name control, address, employment codes and filing requirements. See IDRS Command Code Job Aid for all CC Job Aids.

  3. The display for a BMF EIN account or INOLE will show the:

    1. Primary name and all the name lines on the BMF

    2. Mailing address

    3. Primary name control

    4. Prior name control

    5. Sole proprietor SSN

    6. Fiscal month

    7. Prior fiscal month

    8. Establishment date

    9. Employment code

    10. Exempt Organization (EO) data, if present, and

    11. Filing requirements

  4. Validation of IDRS CCs - IDRS CCs that create a transaction for posting to the Master File will have the EIN and EIN/name control validated using the Taxpayer Information File (TIF), and the National Account Profile (NAP).

  5. The CCs will not return the "Request Completed" response until the EIN and EIN/name control have been validated by the NAP as being on the Master File that the transaction will attempt to post.

  6. The following IDRS CCs are affected by OLE validation:

    • FRM49 - Taxpayer Delinquent Return Notices and Investigations

    • ENREQ - Entity Changes

  7. If there is a match to the EIN and name control, then continue normal processing.

  8. If there is an EIN or name control mismatch, see IDRS Command Code Job Aid for all CC Job Aids.

BRTVU
  1. Command Code (CC) BRTVU is used to research edited, transcribed and computer-generated line items for BMF returns and related forms and schedules. This information will be accessed using CC BRTVU with a Taxpayer TIN, a two digit Master File Transaction (MFT) Code, Tax Period and Definer Code.

  2. The Returns Transaction File does not have all the information available on the IDRS system, for example, IDRS notice status, case control information. BRTVU can be accessed even when TXMOD and SUMRY are not available.

  3. CC BRTVU, with definer SM, requests the summary screen for a specific EIN, MFT and Tax Period. This screen provides information about income, deductions, tax, remittance, number of pages, and schedules or forms attached to the return.

  4. Definers will only be displayed for the forms that are present with the return. A form is present if any field on the related screen (other than name control) has significant data.

  5. If the definer is blank or invalid, or a definer is requested for a screen not available for the record requested, the computer will display the summary screen, showing available screen and definers.

  6. Screens may be accessed using the correct two positions definer code. The valid definers for Form 1120-S are:

    Definer Meaning
    SM Summary screen
    R1 Screen 1
    R2 Screen 2
    R3 Screen 3
    SK Schedule K
    N1 Form 4136, Credit for Federal Tax Paid on Fuels
    V2 Form 8586, Low-Income Housing Credit (PY 91)
    V1 Form 8586, Low-Income Housing Credit, (PY 91)
    W1 Form 8611, Recapture of Low-Income Housing Credit, (PY 91)
    Y1 Form 8693, Low-Income Housing Credit Disposition Bond, (PY 91)

  7. Amended and duplicate returns can be accessed via CC BRTVU by inputting a sequence number immediately after the definer code. These returns will display the format of the year processed; therefore, the line numbers may be inconsistent with current year returns.

BMFOL
  1. Command Code (CC) BMFOL provides on-line research capability of nationwide entity and tax data information posted to the Master File.

  2. CC BMFOL displays information similar to CC MFTRA. In fact, CC BMFOL is a suggested alternative to CC MFTRA.

  3. CC BMFOL, with definer "I" , displays a summary screen for a specific account. The summary screen will show what other display screens are accessible and a minimum of information on each available module.

  4. For further explanation of the screen displays and applicable definer codes, see IDRS Command Code Job Aid for all CC Job Aids.

Form 1120 Converted to Form 1120-S

  1. Form 1120, U.S. Corporation Income Tax Return, must be converted to Form 1120-S when the taxpayer has filed Form 1120 and the Entity Control Unpostable Unit determines the taxpayer has a valid Form 2553, Election by a Small Business Corporation, on file.

  2. When the Form 1120 is converted to a Form 1120-S, Entity must make sure that only the Received Date, North American Industry Classification System (NAICS) code, and Audit Code "4" is edited to the new renumbered form. If a field other than those mentioned above was transcribed, delete it.

  3. For MeF Form 1120 being reprocessed as Form 1120-S, make sure the correct Received Date is edited on the document. The Received Date is the Julian DLN date of the original DLN. Do not subtract 10 days in the case from the Julian Date.

  4. Do not enter any tax data on the "blank" Form 1120-S.

Installment Agreement

  1. If a request for an installment agreement (an inquiry by the taxpayer to make payments on a debt) is attached to any return, detach it and send it to the Collection Branch. This request may come on Form 9465, Installment Agreement Request. When forwarding the installment request make sure the following information is included as a working trail: EIN, Name, Type of Return, Tax Period, Amount Due and Amount Paid.

Section 965 Returns

  1. Section 14103 of the Tax Cuts and Jobs Act (TCJA) of 2017 overhauled Section 965 of the Internal Revenue Code. Section 965, now titled “Treatment of deferred foreign income upon transition to participation exemption system of taxation,” provides that U.S. shareholders must pay a transition tax on the untaxed foreign earnings of certain specified foreign corporation as if those earnings had been repatriated to the United States.

  2. If the Tax Period is 201712 through 202012, SSPND with Action Code "460" , and input "J" in Field 01CCC, when any of the following are present:

    • "Section 965" or "965 Tax" (or similar language) notated on the return, attachment, or statement.

    • IRC 965 Transition Tax Statement (or similar 965 statement) is attached.

    • Form 965, Inclusion of Deferred Foreign Income Upon Transition to Participation Exemption System, is attached.

    • Form 965, Schedule A, U.S. Shareholder’s Section 965(a) Inclusion Amount, is attached.

    • Form 965, Schedule B, Deferred Foreign Income Corporation’s Earnings and Profits (E&P), is attached.

    • Form 965, Schedule C, U.S. Shareholder’s Aggregate Foreign Earnings and Profits Deficit, is attached.

    • Form 965, Schedule D, U.S. Shareholder’s Aggregate Foreign Cash Position, is attached.

    • Form 965, Schedule E, U.S. Shareholder’s Aggregate Foreign Cash Position - Detail, is attached.

    • Form 965, Schedule F, Foreign Taxes Deemed Paid by Domestic Corporation, is attached.

    • Form 965, Schedule G, Foreign Taxes Deemed Paid by Domestic Corporation for U.S. Shareholder Tax Year Ending in 2017, is attached.

    • Form 965, Schedule H, Disallowance of Foreign Tax Credit and Amounts Reported on Forms 1116 and 1118, is attached.

    • Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts, is attached.

    • A significant entry is present on Schedule K, Lines 10, 12d, or 14r (2020 - 2017 form revisions) or Line 17d with the notation "Section 965" or similar language.

      Note:

      A significant entry is defined as any amount other than zero.

  3. If a Section 965 return was found by ERS and C&E has not edited Action Code "460" or CCC "J" or both, SSPND with Action Code "460" and enter CCC "J" in Field 01CCC.

  4. Follow the instructions below to finish processing the return. Make sure that the return was correctly identified as a Section 965 return.

    1. If Then
      The return was identified as a Section 965 return in error,
      1. Remove "J" from Field 01CCC, if present.

      2. Make sure all correspondence issues are addressed.

        Note:

        Code and Edit (C&E) was instructed not to correspond on Section 965 returns. C&E will notate "K-1 missing" (or similar language) in the lower left margin (action trail) of the return, if correspondence is needed for missing Schedules K-1.

      3. Continue normal return processing.

      The return is confirmed as a Section 965 return, and correspondence is needed,
      1. Verify "J" is present in Field 01CCC.

      2. Resolve Field Errors or Error Codes or both.

      3. SSPND with Action Code "211" and correspond.

        Note:

        Code and Edit (C&E) was instructed not to correspond on Section 965 returns. C&E will notate "K-1 missing" (or similar language) in the lower left margin (action trail) of the return, if correspondence is needed for missing Schedules K-1.

      The return is confirmed as a Section 965 return, and correspondence is not needed,
      1. Verify "J" is present in Field 01CCC.

      2. Resolve Field Errors or Error Codes or both.

♦Working Trail♦

  1. It is important to leave a legible "Working Trail" (or "Action Trail" ) using blue ink for those who may work the return later.

  2. Write all Taxpayer Notice Codes (TPNCs) 90 on the front of the return in the upper left corner (or use Form 12648, Error Correction 90 TPNC). See Exhibit 3.12.217-20, Taxpayer Notice Codes, for more information.

  3. If corresponding with a non-suspense letter, "X" and write the corrected money amounts to the left of each original point(s) of error. Write money amounts in dollars only or dollars and cents, as applicable. Arrowing is allowed for money amounts when there are no intervening entries between the arrow and the line to which the money is to be entered.

  4. Leave a working trail on the return when changes are made to the following items:

    • Employee Identification Number (EIN)

    • Tax Period

    • Received Date

    • Computer Condition Code

    • Correspondence Received Date (CRD)

      Reminder:

      Circle out incorrect Employer Identification Numbers (EINs), Tax Periods, and Received Dates.

  5. When working Reject re-inputs, circle out any previous Action Codes shown on the front of the return, if no longer applicable.

  6. When working Rejects, line through the DLN in red and write "Voided" with the date above the DLN, when voiding a return.

Section 01 - Entity Data and Codes for Returns

  1. Section 01 has the entity data and codes for returns. The line designation, maximum length for each field, title and location where the field can be found is listed below:

    Field Designator Field Title Maximum Length Location Form 1120-S
    01NC Name Control 4 Page 1, First Name Line
    01EIN EIN 9 Page 1, Box D, Employer Identification Number
    01NAI North American Industry Code 6 Page 1, Box B, Business activity code number
    01TXP Tax Period 6 Page 1, upper right margin
    01RCD Received Date 8 Page 1, stamped date
    01CCC Computer Condition Code 10 Dotted portion of Line 2
    01TXB Tax Period Beginning 8 Page 1, to the left/near the title of the return.
    01CRD Correspondence Received Date 8 ERS input only
    01MSC Missing Schedule Code 2 Edited as "7–" 33, 34, 36, 45, 46, 47, or 49 to the left of Line 9. Input by ERS only
    01CBI Checkbox Indicator 1 Page 1, Paid Preparer area
    01PSN Tax Preparer SSN 9 Bottom of Page 1
    01PEN Tax Preparer EIN 9 Bottom of Page 1
    01PTN Tax Preparer Phone Number 10 Bottom of Page 1
    01RPC Return Processing Code 35 Page 1, right margin next to Line 1c

Remittance

  1. Remittance (RMIT>) is an entry that identifies payment made with return.

  2. This entry must be blank or numeric.

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

  4. It must be blank for non-remittance returns, overpaid returns and remittance returns processed through the Residual Remittance Processing System (RRPS) / Integrated Submission and Remittance Processing (ISRP) systems.

  5. This is a non-correctable entry.

Field 01NC - Name Control

  1. Field 01NC consists of the first four significant characters of the corporation’s name.

  2. The valid characters are alpha, numeric, ampersand (&), hyphen (-), and blank.

  3. Invalid Condition:

    • The first position is blank.

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

    • There are intervening blanks between significant characters.

  4. Correction Procedures:

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

    2. Enter the Name Control.

    3. If the Name Control cannot be determined, research using local Submission Processing procedures.

Field 01EIN - Employer Identification Number

  1. The Employer Identification Number (EIN) is found in Box D on the return.

  2. Invalid Condition:

    • The EIN begins with 00, 07, 08, 09, 17, 18, 19, 28, 29, 49, 78, 79, or 89.

    • The EIN is not numeric.

    • The EIN is less than 9 characters.

    • The EIN is all zeroes or all nines.

  3. Correction Procedures:

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

    2. If transcribed correctly, search the return for another EIN or use local Submission Processing Campus research procedures to obtain the EIN. If found, enter in Field 01EIN and send a Letter 3875C, Missing or Incorrect EIN on Return - BMF/EPMF.

      Note:

      Do not send Letter 3875C when:
      • Three or less digits of the EIN are transposed, different or missing or
      • The EIN is consecutive numbers (e.g., 12-3456789) or repeating numbers (e.g., 11-1111111) or
      • INOLES indicates the account has been "merged to" , or "merged from" or
      • The TIN on the return is the taxpayer’s SSN (check CC INOLEG).

    3. If another EIN is not found during the search above, or if there is no record of an EIN, or multiple EINs are found, suspend the record with Action Code "320" and route to Entity Control for an EIN to be assigned.

      If Then
      Entity Control has found the correct EIN, Enter in Field 01EIN.
      Entity Control has assigned an EIN,
      1. Enter in Field 01EIN.

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

    4. On an RPS return, with an EIN change SSPND with Action Code "351" to route to Rejects. Rejects will research any RPS return with a change to the EIN to determine if a payment has posted correctly.

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

  1. Field 01NAI is a 6 digit numeric field transcribed from Page 1, Box B, of Form 1120-S.

  2. Invalid Condition:

    • The field is not present (except "G" coded returns).

    • The field is not numeric.

    • The field is not within range of 000001-999000.

    • The field has six of the same digits.

  3. Correction Procedures:

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

    2. If Field 01NAI is blank, enter the entry from Page 1, Box B, Form 1120-S.

    3. If no code is found, enter "999000" .

    4. If the taxpayer uses the four digit Principal Business Activity Code (PBA Code), enter the four digit code preceded by two zeros.

Field 01TXP - Tax Period

  1. Field 01TXP is found to the right of the title area, at the top of page 1 of Form 1120-S.

  2. Tax Period ending is printed in Year (YYYY), Month (MM) format e.g., Dec. 31, 2021 is printed 202112.

  3. The Tax Period must be present and have six numeric digits.

  4. A taxpayer can file a return for:

    • A Calendar Year (ends December 31).

    • A Fiscal Year (ends last day of the month except December).

    • A 52 and 53 Week Year ends 6 days before to 3 days after the end of the month (April 29, 2021 and May 2, 2021 both are 202104).

      Example:

      A 52-53 week tax year ending on the last Friday of the month can end up to 6 days before the last day of the month. If the tax year ended on April 27, 2021, then the tax period is 202104.

      Example:

      A 52-53 week tax year ending on the Friday nearest to the last day of the month can end up to 6 days before, or 3 days after the last day of the month. If the Tax Period ends August 3, 2021, then the valid period is 202107.

  5. Invalid Condition:

    • The Tax Period is not all numeric.

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

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

    • The Tax Year is equal to the current year (e.g., 2021), but the month is after the current processing month.

  6. Correction Procedures:

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

    2. Determine the correct Tax Period from Form 1120-S and attachments.

      If Then
      The Tax Period cannot be determined from the return, an attachment or research, Enter the current year in Field 01TXP.
      A "Final" return and the Tax Period ending is the same as or later than the Received Date, Change the Tax Period to the month preceding the Received Date.

      Note:

      If prepaid credits are claimed on Lines 23a or 23b, SSPND with Action Code "342" to have the credits moved to the correct Tax Period.

      A non-final return and the Tax Period ending is equal to or later than the current year-month by four months or less, SSPND with Action Code "480" and attach Form 4227, Intra-SC Reject or Routing Slip, noting that the return should be held and processed after the end of the Tax Period.
      A non-final return and the Tax Period ending is later than the current year-month by more than four months, SSPND with Action Code "211" and correspond, requesting confirmation of the Tax Period ending.
      The taxpayer response shows the return is a "final" return and the close of business precedes the edited Tax Period, Change the Tax Period to agree with the close of business date.

      Note:

      If prepaid credits are claimed on Lines 23a or 23b, SSPND with Action Code "342" to have the credits moved to the correct Tax Period.

      No reply is received, SSPND with Action Code "480" and attach Form 4227, Intra-SC Reject or Routing Slip, noting that the return should be held and processed after the end of the Tax Period.

Field 01RCD - Received Date

  1. Field 01RCD is a numeric field that is either the date stamped by Receipt and Control or edited by Code & Edit. The Received Date is required on allForm 1120-S.

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

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

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

    4. Consider the return timely if:

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

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

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

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

  3. Invalid Condition:

    • The Received Date is not present.

    • The Received Date is not in "YYYYMMDD" format.

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

    • The Received Date is not all numeric.

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

      Month Day
      01, 03, 05, 07, 08, 10 and 12 01-31
      04, 06, 09 and 11 01-30
      02 01-28 (29 leap year)

  4. Correction Procedures:

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

      If Then
      The Received Date is invalid and it appears that the incorrect year was used (e.g., 20210115 instead of 20220115), and other information (Julian date, postmark date, or signature date) shows that the Received Date should be a current year, Change the Received Date year to the current year.
      Multiple Received Dates are present, Enter the earliest IRS stamped Received Date.
      The Received Date is missing or illegible, Determine Field 01RCD using the following priority order:
      1. Earliest legible U.S. or foreign postmark or a postmark established by an acceptable designated private delivery service. See IRM 3.10.72, Receiving, Extracting, and Sorting, for further details.

        Note:

        If both U.S. Postal Service and private meter marks are present, honor the U.S. Postal Service Postmarks.

        Note:

        For certified mail only - If a postmark is not present, look for a "USPS.com Track & Confirm" record that was 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.

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

      3. Revenue Officer's signature date.

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

      5. DLN Julian date minus 10 days, unless MeF return. Use the original Julian DLN date when assigning a Received Date for MeF returns.

      6. Current date minus 10 days.

Field 01CCC - Computer Condition Code

  1. Computer Condition Codes are used to identify a specific condition for the computer and can have up to 10 positions. Computer Condition Codes are edited to the center dotted portion of the Income Area, on page 1 (Lines 1–6), Form 1120-S.

  2. Invalid Condition: The field does not have an entry of B, D, E, F, G, I, J, L, M, O, Q, R, S, T, W, X, Y, 1, 2, 3, 8, and 9.

  3. Correction Procedures:

    1. If an overflow condition occurs in Field 01CCC (more than 10 codes) retain the codes in the following priority: F, D, O, Y, W, and others.

    2. Correct coding errors, transcription errors, and misplaced entries.

    3. Refer to the chart of Computer Condition Codes in IRM 3.12.217.3.8.

    4. If CCC "G" is present with another CCC except "S" , "T" , "W" and/or "3" , it will cause a field error.

    5. If CCC "G" is correct, delete all other CCC except "S" , "T" , "W" and/or "3" . Otherwise, delete CCC "G" and enter all tax information as reported on the return.

    6. CCC "M" is valid for Tax Periods 201712 and later. A Field Error will display if Tax Period is before 201712 and CCC "M" is present. Verify the Tax Period and make corrections as needed.

Computer Condition Code (CCC) Chart

  1. Use the chart below to identify Computer Condition Codes:

    Code Definition Error Check
    B Enter when a taxpayer has made an Entry in the margin of either Schedule D or Form 4797, Sale of Business Property, electing not to report sales on the installment basis.  
    D Reasonable cause for failure to pay taxes timely, Received Date must be present.
    E Potential Identify Theft Filing, Edited by the BMF ID Theft Liaison.
    F Final Return.  
    G Amended Return, No other CCC except "W" , "T" , "S" and/or "3" . All entries must be blank, except RMIT, 01NC, 01EIN, 01TXP, 01RCD, 01CCC, and 01CRD.
    I Form 6781, Gains and losses from Section 1256 Contracts and Straddles, is attached, Received Date must be present.
    Tax Period must be 198106 and later.
    J If the Tax Period is 201712 through 202012, input "J" in Field 01CCC when any of the following are present:
    • "Section 965" or "965 Tax" (or similar language) notated on the return, an attachment, or statement.

    • IRC 965 Transition Tax Statement (or similar statement) is attached.

    • Form 965, Inclusion of Deferred Foreign Income Upon Transition to Participation Exemption System, is attached.

    • Form 965, Schedule A, U.S. Shareholder’s Section 965(a) Inclusion Amount, is attached.

    • Form 965, Schedule B, Deferred Foreign Income Corporation’s Earnings and Profits (E&P), is attached.

    • Form 965, Schedule C, U.S. Shareholder’s Aggregate Foreign Earnings and Profits Deficit, is attached.

    • Form 965, Schedule D, U.S. Shareholder’s Aggregate Foreign Cash Position, is attached.

    • Form 965, Schedule E, U.S. Shareholder’s Aggregate Foreign Cash Position - Detail, is attached.

    • Form 965, Schedule F, Foreign Taxes Deemed Paid by Domestic Corporation, is attached.

    • Form 965, Schedule G, Foreign Taxes Deemed Paid by Domestic Corporation for U.S. Shareholder Tax Year ending in 2017, is attached.

    • Form 965, Schedule H, Disallowance of Foreign Tax Credit and Amounts Reported on Forms 1116 and 1118, is attached.

    • Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts, is attached.

    • A significant entry is present on Schedule K, Lines 10, 12d, or 14r (form revision 201712 - 202012) or Line 17d with the notation "Section 965" or similar language.

      Note:

      A significant entry is defined as any amount other than zero.

    • See IRM 3.12.217.2.26, Section 965 Returns.

     
    L Taxpayer writes Section 6114 "Election" on the return or attached Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), to the return.  
    M Form 8949, Sales and Other Dispositions of Capital Assets -
    Enter "M" in Field 01CCC when:
    • Tax Period is 201712 and later, and

    • Form 8949, has a code "Z" or code "Y" in column (f),

    Note:

    Tax Cuts and Jobs Act of 2017, P.L. 115-97 (H.R. 1), Section 13823, Opportunity Zones. Taxpayers who elect to defer gain on the sale of an asset by investing in an Opportunity Zone Fund will indicate that they are deferring the gain by entering code "Z" or "Y" in Column (f).

    Tax Period must be for 201712 and later.
    O Quick refund of overpayment.  
    R Reasonable cause for delinquency, Received Date must be present.
    S Form 8883, Asset Allocation statement under section 338, is attached to the return.  
    T Form 8886, Reportable Transaction Disclosure Statement, is attached to the return.  
    W Used to bypass Statute check, Entered when a return was cleared by Statute Control Group.
    X Indicated settlement of the return is to be frozen.  
    Y Updates Fiscal Year Month (FYM) on Master File. Entered only on a short period return due to change of accounting period, Return must be manually verified.
    1 Current Year Related Party Like-Kind Exchange Indicator, Form 8824, Like-Kind Exchanges (and section 1043 conflict-of-interest sales), is attached, "1" is generated in Field 01CCC.
    2 Form 8938, Statement of Specified Foreign Assets is attached.  
    3 Entered if no reply to correspondence, Enter to suppress credit interest from being generated.
    8 Waiver of Estimated Tax Penalty, When tax on annualized income is computed by the taxpayer, (taxpayer has attached a worksheet) or if the taxpayer has written "Waiver" in the bottom margin of page 1, or on Form 2220, Underpayment of Estimated Tax by Corporations, enter CCC "8" on the return. The Tax Period cannot be before 198912.
    9 Low-Income Housing Credit Indicator, If not present enter "9" when Form 8611, Recapture of Low-Income Housing Credit, Form 8693, Low-Income Housing Credit Disposition Bond, Form 8609-A, Annual Statement for Low-Income Housing Credit, or Form 8586, Low-Income Housing Credit, is attached and has entries on any of Lines 1 through 3 (2016 and prior revisions). The Tax Period cannot be before 198701.

Field 01TXB - Tax Period Beginning

  1. Field 01TXB is found on page 1, to the left/near the title of Form 1120-S.

  2. The Tax Period Beginning displays in YYYYMMDD format and must have eight digits.

  3. Invalid Condition:

    • The Tax Period beginning date is not numeric.

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

    • The Tax Period beginning date is later than Tax Period end date (e.g., if Tax Period is 202112 and Tax Period beginning date is 1/1/2022 or later).

    • The Tax Period beginning date is earlier than 12 months before Tax Period end date (e.g., if Tax Period is 202112, and Tax Period beginning date is 11/01/2020 or earlier).

  4. Correction Procedures:

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

    2. Determine and enter Field 01TXB for all "Initial" , "Final" , and "Short Period" returns.

Field 01CRD - Correspondence Received Date

  1. Field 01CRD is a numeric field found on the reply to correspondence.

  2. The Correspondence Received Date (CRD) displays in YYYYMMDD format and must have eight digits.

  3. Invalid Condition:

    • The field is not numeric.

    • The field is not in YYYYMMDD format.

  4. Correction Procedures:

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

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

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

    4. If there is an indication that Entity Control has assigned an EIN to the return, enter the entity assignment date found in the lower left-hand corner of the return if it is later than the Received Date and the Return Due Date. If there are both a CRD and an Entity Assignment date, enter the later of the two.

    5. Do not enter Field 01CRD if any of the following conditions are present:

      Do not enter CRD:
      • The correspondence was received before the due date of the return.

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

      • We failed to ask for all the required information.

      • The correspondence was not necessary.

      • The correspondence was issued in error.

    6. If the reply is missing, incomplete or the letter is undeliverable, enter CCC "3" in Field 01CCC.

Field 01CBI - Preparer Checkbox Indicator

  1. The Paid Preparer Checkbox is found next to the taxpayer signature area. This box is used to indicate whether the taxpayer has elected to allow the Paid Preparer to answer questions about the taxpayer's return as it is being processed.

  2. This field is transcribed from the bottom of page 1, Form 1120-S.

  3. Invalid Condition: The field is other than "1" or blank.

  4. Correction Procedures:

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

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

Field 01PSN - Preparer Tax identification Number (PTIN)

  1. The Preparer's PTIN is transcribed from the bottom of Page 1, Form 1120-S. Data may or may not be present in Field 01PSN.

  2. Valid Condition: Entries are blank, all numeric or a P for the first character followed by eight numeric characters.

  3. Invalid Condition: The field is all zeros, all nines or less than nine positions.

  4. Correction Procedures:

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

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

Field 01PEN - Preparer Employer Identification Number

  1. The Preparer's EIN is transcribed from the bottom of Page 1, Form 1120-S.

  2. Valid Condition: This field can be blank, or it can be numeric. If numeric, it cannot be all zeros or all nines.

  3. Invalid Condition: The field is all zeros, all nines or less than nine positions.

  4. Correction Procedures:

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

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

Field 01PTN - Paid Preparer Telephone Number

  1. The Paid Preparer Phone Number is transcribed from the bottom of page 1, Form 1120-S below the Paid Preparer EIN.

    Note:

    If the taxpayer checked the paid preparer checkbox "Yes" , a telephone number for the paid preparer must be entered to allow contact.

  2. Invalid Condition: The field is other than alpha or numeric.

  3. Correction Procedures:

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

    2. If the telephone number is invalid, delete Field 01PTN.

Field 01MSC - Missing Schedule Code

  1. Beginning with Tax Period 200812, Form 1120-S will be charged penalties for not providing a complete return. Code and Edit (C&E) will be responsible for initiating correspondence when needed, requesting the missing information, and ERS will be responsible for coding the Field 01MSC correctly if the missing information is not received.

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

    Missing Schedule(s) Code
    Schedule(s) K-1 33
    Schedule L (Balance Sheet) 34
    Schedule(s) K-1 and L 36
    Schedule K 45
    Schedule K and K-1 46
    Schedules K and L 47
    Schedules K, K-1 and L 49

  3. Invalid Condition: The field is not numeric and not one of the numbers shown above.

    Note:

    There is always a possibility that a Missing Schedule Code is edited by C&E. However, employees working the suspense files in ERS must be entering the correct code based on the response received from the taxpayer.

  4. Correction Procedures:

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

    2. If taxpayer does not respond with the missing information, input the correct Missing Schedule Code as shown in (2) above.

  5. Suspense Procedures:

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

    Caution:

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

Field 01RPC - Return Processing Code (RPC)

  1. A Return Processing Code (RPC) is an alpha or numeric character used to identify a specific condition for the computer. The RPC is edited on Page 1, in the right margin next to Line 1c of Form 1120-S.

  2. Invalid Condition:

    • The field is other than "A" , "B" , "C" , "D" , "E" , "F" , "2" , "4" , "6" , "7" , or "9" .

    • The field is more than 35 characters.

  3. Correction Procedures:

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

    2. When the code(s) entered on the return are illegible or invalid, examine the return and enter the correct code from the table below:

      Note:

      RPCs do not need to be entered in any specific order.

    RPC Explanation
    A Form 5471, Schedule E, Income, War Profits, and Excess Profits Taxes Paid or Accrued, is attached.
    B Form 5471, Schedule H, Current Earnings and Profits, is attached.
    C Form 5471, Schedule I-1, Information for Global Intangible Low-Taxed Income, is attached.
    D Form 5471, Schedule P, Previously Taxed Earnings and Profits of U.S. Shareholder of Certain Foreign Corporations, is attached.
    E Form 8865, Schedule G, Statement of Application of the Gain Deferred Method Under Section 721(c), is attached.
    F Form 8865, Schedule H, Acceleration Events and Exceptions Reporting Relating to Gain Deferral Method Under Section 721(c), is attached.
    2 Form 8992, U.S. Shareholder Calculation of Global Intangible Low-Taxed Income (GILTI), is attached.
    4 Form 8994, Employer Credit for Paid Family and Medical Leave, is attached.
    6 Form 8996, Qualified Opportunity Fund, is attached.
    7 Form 8990, Limitation on Business Interest Expense Section 163(j), is attached.
    9 Form 8997, Initial and Annual Statement of Qualified Opportunity Fund QOF Investments, is attached.

Section 02 - Address Information

  1. Section 02 has address (entity) information. It will be present when a change of address was entered.

  2. All fields are of variable length and it is not necessary to account for every position allotted.

  3. This section is not present on a "G" coded return.

    Field Designator Field Title Maximum Length Location Form 1120-S
    02CON In-Care-of-Name 35 Page 1, number and street line
    02FAD Foreign Address 35 Page 1, number and street line
    02ADD Street Address 35 Page 1, number and street line
    02CTY City 22 Page 1, city, state, ZIP line
    02ST State 2 Page 1, city, state, ZIP line
    02ZIP ZIP Code 5/9/12 Page 1, city, state, ZIP line

♦Field 02CON - "In-Care-of" Name♦

  1. Field 02CON is found in the entity section of the return.

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

    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.

    • The first position is blank.

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

    • There are two consecutive blanks between significant characters.

  4. Correction Procedures:

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

    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 space 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♦

  1. Field 02FAD is found in the entity section of the return.

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

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

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

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

    • The first position is blank.

    • Any character follows two consecutive blanks.

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

      Note:

      ISRP will input a pound sign "#" as the 35th character if there are more than 35 characters present for this field on the return.

  4. Correction Procedures:

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

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

      2. Make sure Field 02CTY has a foreign country code and Field 02ST (State) has a "." (period/space).

      See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.

      Exception:

      Use the country code based on the province in Field 02CTY if the foreign address is from Canada and the address has a province name or abbreviation. See Exhibit 3.12.217-17, Province/County Code-Canada Only.

      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 proper position in 02CTY. See Exhibit 3.12.217-12, Province. State and Territory Abbreviation.
      A foreign address is not present on the return,
      1. SSPND with Action Code "610" .

      2. Renumber return with domestic DLN.

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

      Note:

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

      Change of Address

      If And Then
      Form 8822, or Form 8822-B, is attached, All the following applies:
      • Mailing address information is the same,

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

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

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

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

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

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

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

      3. Detach 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 must batch all Forms 8822 or Form 8822-B daily and hand carry them to Entity Control for expedite processing.

Field 02ADD - Street Address

  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:

    • The field length is more than 35 characters.

    • The Street Address is present and the first position is blank.

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

    • Any character follows two consecutive blanks.

    • Note:

      ISRP will enter a pound "#" sign as the 35th character to indicate an overflow condition.

  3. Correction Procedures:

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

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

    3. If unable to correct, DLSEC 02.

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

    Note:

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

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

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

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

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

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

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

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

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

    3. Detach Form 8822 or 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 or Form 8822-B daily and hand carry them to Entity Control for expedite processing.

Field 02CTY - City

  1. This field is transcribed from the City, State, ZIP line of the entity portion, on page 1 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, ISRP 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:

    • The city is present and the first position is blank.

    • Any character other than alpha or blank is present.

    • Any character follows two consecutive blanks.

    • A Major City Code is present and it is not valid.

  3. Correction Procedures:

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

    2. Follow procedures below:

      If Then
      Valid city is not available from return or envelope,
      • Research using CC INOLES or ENMOD or

      • Refer to Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, or

      • Follow local Submission Processing (SP) procedures.

      Major city code is found, Enter in Field 02CTY and delete Field 02ST.
      Unable to correct, DLSEC 02.

Field 02ST - State

  1. This field is transcribed from the City, State, ZIP Code line of the entity portion of the return.

  2. If the address is a foreign address, defined as not within the 50 states or the District of Columbia, SSPND with Action Code "650" and attach a Form 4227, Intra-SC Reject or Routing Slip, with a notation to forward to the "Ogden Submission Processing Campus" .

    Note:

    An Army Post Office (APO), Diplomatic Post Office (DPO) or Fleet Post Office (FPO) address is not considered a foreign address, but an address in an American possession.

  3. 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.

  4. Correction Procedures:

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

    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.
      • Refer to Document 7475, State and Address-Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, and determine Major City Code.
      • Follow local Submission Processing procedures.

      Note:

      If a Major City Code is found, GTSEC 02. Enter the code in Field 02CTY and delete Field 02ST.

    3. If unable to correct, DLSEC 02.

Field 02ZIP - ZIP Code

  1. This field is transcribed from the City, State, ZIP line of the entity portion of the return.

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

    • The ZIP Code is present and the first 5 positions are not numeric.

    • The last 4 positions are not all numeric or all blank.

    • Positions 4 and 5 are "00" .

      Exception:

      ZIP Code 20500.

  3. Correction Procedures:

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

    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.

    3. INOLES, ENMOD, or Document 7475, Major City, State and Address Abbreviations, ZIP Codes and Countries.

Section 03 - General Information

  1. Section 03 is a General Information section.

  2. The list below gives the designation, length, title and the location on the return where the fields are displayed in Section 03 of Form 1120-S.

    Field Designator Field Title Maximum Length Location Form 1120-S
    03PRI Precomputed Penalty/Interest (P/I) Code 1 Entered as "2-" followed by the P&I code next to Line 9, (deductions section)
    03TPC Tax Preference Code (TPC) 1 Entered as "4-" followed by TPC code next to Line 9, (deductions section)
    03SWC Salary and Wage Code 1 Page 1, Line 8, right margin
    03ADC Audit Code 3 Entered as "1-" followed by the correct Audit Code next to Line 9, (deductions section)
    03ISI Installment Sales Indicator 1 Edited as "3-" followed by the correct Installment Sales Indicator next to Line 9, (deductions section)
    03IRC Initial Return Code 1 Page 1 Line G
    03GSH Number of Shareholders 4 Page 1, Line I
    03AMC Accounting Method Code 1 Page 2, Sch B, Line 1
    03LIC Low Income Housing Credit 15 Edited as "5-" followed by Form 8586, Low-Income Housing Credit, next to Line 9, (deductions section).
    03RLI Total Recapture Credit 15 Edited as "6-" followed by the Form 8611, Recapture of Low-Income Housing Credit, next to Line 9, (deductions section).

Field 03PRI - Penalty/Interest Code

  1. The precomputed Penalty and Interest Code "1" is entered when the precomputed penalty and interest applies ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ the original due date.

  2. Transcription is from the left hand margin next to Line 9. If applicable "2-" followed by "1" was edited.

  3. Invalid Condition: The field is not blank or "1" .

  4. Correction Procedures:

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

    2. If interest only is shown, CCC "R" must also be present in Field 01CCC.

Field 03TPC - Tax Preference Code

  1. The Tax Preference Code "1" is entered to identify an excess amount claimed by the taxpayer.

  2. Transcription is from the left hand margin next to Line 9. If applicable, "4-1" will be edited.

  3. Invalid Condition: The field is not blank or "1" .

  4. Correction Procedures:

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

    2. A "1" should be present in Field 03TPC if:

    • Schedule K-1, Line 15, Alternative minimum tax (AMT) items, totals ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ for any individual Tax Period.

    • Form 4626, Alternative Minimum Tax - Corporations, is attached with an amount present on Lines 3, 6, or 11 for Tax Periods 201811 and prior only.

Field 03SWC - Salary and Wage Indicator

  1. The Salary and Wage Code "1" must be entered when Salary and Wages are present.

  2. Invalid Condition: The field is not blank or "1" .

  3. Correction Procedures:

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

    2. Code "1" must be present in Field 03SWC if:

    • Line 8, page 1 Form 1120-S has an amount for salaries/wages.

    • Line 3, Form 1125-A, Cost of Goods Sold, has an amount for salaries/wages.

    • If there are other attachments with salaries/wages shown.

  4. Field 03SWC may be blank if there is no indication of salaries/wages.

Field 03ADC - Audit Code

  1. The Audit Codes are used to identify specific conditions requested by Examination.

  2. Field 03ADC will be transcribed from the left hand margin next to Line 9, page 1 Form 1120-S. If applicable "1-" followed by the correct audit code (1-9) was edited.

  3. Invalid Condition:

    • The field is not numeric or blank.

    • There are more than nine Audit Codes used at one time.

    • A digit or character appears after the first blank.

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

Audit Code

  1. Audit Code 1: Disclosure Statement / Inconsistent Filer:

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

    2. Form 8275, Disclosure Statement, is attached.

    3. Form 8275-R, Regulation Disclosure Statement, is attached.

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

  2. Audit Code 2: International Income or Credit:

    1. Form 1120-S, Schedule K, Line 16f (Line 14(p) for 2020-2018 prior year revisions, Line 14(l) 2017 - 2004 prior year revisions), Foreign taxes paid or accrued,≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

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

    3. Schedule N (Form 1120), Foreign Operations of U.S. Corporations, is attached and Questions 1a, 3, 4a (2019 and prior revision), 5, or 7a are answered "Yes" .

    4. Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, is attached or Schedule N, Line 4a (201912 and prior revision) is marked "Yes" .

    5. Form 5472, Information Return of a 25% Foreign Owned U.S. Corporation or a Foreign Corporation Engaged in a U.S. Trade or Business (Under Sections 6038A and 6038C of the Internal Revenue Code), is attached.

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

    7. Form 5713, International Boycott Report, Tax Effect of the International Boycott Provisions is attached and ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡" .

    8. Form 8832, Entity Classification Election, is attached and either box 2(d), (e) or (f) is checked.

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

    10. Form 8858, Information Return of U.S. Persons With Respect to Foreign Disregarded Entities (FDEs) and Foreign Branches (FBs), is attached.

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

  3. Audit Code 3: Non-Cash Charitable Contributions and Asset Transfers:

    1. Form 8283, Noncash Charitable Contribution, is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, is checked (Page 2, Part I, Question 4 for 2019 and prior revision).

    2. Form 8283 is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡(Page 2, Part I, Question 5, Column (c) for 2019 and prior revision

    3. Form 8883, Asset Allocation Statement Under Section 338, is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

    4. Form 8594, Asset Acquisition Statement Under Section 1060, is attached, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  4. Audit Code 4: Invalid "S" Election:

    1. Form 1120 processed with a valid election on file (Form 2553, Election by a Small Business Corporation) and converted to Form 1120-S.

  5. Audit Code 5: Large Loss - Other Income:

    1. Form 1120-S, Schedule K - Line 10 reflects a loss ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  6. Audit Code 6: Form 3115, Application for Change in Accounting Method:

    1. Form 3115 is attached.

  7. Audit Code 7: International Issues:

    1. Form 1120-S, Schedule K, Line 16f (Line 14(p) for 2020-2018 prior year revisions, Line 14(l) for 2017 - 2004 prior year revisions), Foreign taxes paid or accrued, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

    2. Form 5713, International Boycott Report, is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡" .

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

  8. Audit Code 8: Schedule M-3:

    1. Schedule M-3 attached.

  9. Audit Code 9: First Year "S" Election:

    1. The date in Box A falls during the tax year for which the S corporation is being filed.

Field 03ISI - Installment Sales Indicator

  1. The taxpayer computes installment sales income. Transcription is from left hand margin next to Line 9, page 1 Form 1120-S. If applicable "3-" followed by the correct Installment Sales Indicator (1-3) was edited.

  2. Invalid Condition: The field is not "1" , "2" , "3," or blank.

  3. Correction Procedures:

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

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

    3. Enter the Installment Sales Indicator code shown by the shareholder’s response to Question 3, Form 6252, Installment Sale Income.

      Question 3 Code
      “Yes” 1
      “No” 2
      Blank Blank
      “Yes” and “No” 3

    4. If an incorrect code is present, delete it and enter the correct code on the screen in Field 03ISI and on the left side margin next to Line 9, page 1 Form 1120-S.

    5. If a code should not be present, blank the entry on the screen.

Field 03IRC - Initial Return Code

  1. This code is entered as an indication that this is a first time filer. This field is determined from the Initial Return Box, Line G, page 1 Form 1120-S.

  2. Invalid Condition: The field is not "2" or blank.

  3. ISRP will transcribe this field from the code edited to the upper right margin of page 1, Box E.

  4. Correction Procedures:

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

    2. If there is an indication the return is an initial return, enter a "2" when:
      • The initial return box found below the entity area is checked.
      • The date of incorporation, Box E, is within 12 months of the Tax Period ending.
      • There is an indication of an initial filing written on the return such as "Initial Return" , "First Return" or "New Corporation" .
      • The date of incorporation is within 24 months (or is not shown) and the beginning balance sheet is blank or zeros.

Field 03GSH - Number of Shareholders

  1. ISRP will transcribe this field from Line I, page 1 Form 1120-S .

  2. Invalid Condition: The field is not blank or "0001" through "9999" .

  3. Correction Procedures:

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

    2. Enter the Number of Shareholders present in Line I, page 1 Form 1120-S.

    3. Leave Field 03GSH blank if an entry is not present.

Field 03AMC - Accounting Method Code

  1. This code is input to identify taxpayer’s accounting method. Transcription is from Line 1, Schedule B

  2. Invalid Condition: The field is not blank, "1" , "2" , or "3" .

  3. Correction Procedures:

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

    2. Leave Field 03AMC blank if multiple or no boxes are checked.

    3. Input the Accounting Method Code as follows:

    • Code "1" if box "(a)" is checked.

    • Code "2" if box "(b)" is checked.

    • Code "3" if box "(c)" is checked.

Field 03LIC - Low Income Housing Credit

  1. The taxpayer is claiming a Low Income Housing Credit.

  2. Transcription is from the left hand side margin next to Line 9, Form 1120-S (deductions section). If applicable "5-" followed by the Form 8586, Low-Income Housing Credit, credit amount.

  3. Invalid Condition:

    • The money amount is not entered in dollars only.

    • The money amount is not positive.

    .

  4. Correction Procedures:

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

    2. If Form 8586, or Form 8609-A, Annual Statement for Low-Income Housing Credit, are attached or Low Income Housing Credit is claimed (entries present on Schedule K, Lines 13a or 13b), enter "9" in Field 01CCC.

    3. Valid Tax Periods are 198701 and later. If Tax Period is 198612 or prior, delete the credit.

    4. If Low Income Housing Credit is claimed, Form 8586 must be attached. Form 8609-A must also be attached if Form 8586 has any entries in Lines 1 through 3 (Lines 1 through 4 for tax years 2004 and prior). If missing, SSPND with Action Code "211" and correspond.

    5. If "No Reply" , enter CCC "3" .

Field 03RLI - Total Recapture Credit

  1. The taxpayer is filing a Form 8611, Recapture of Low-Income Housing Credit, to recapture the Low Income Housing Credit. Valid Tax Periods are 198701 and later.

  2. Transcription is from the left hand side margin next to Line 9, Form 1120-S(deductions section). If applicable "6-" was edited with the Form 8611 credit money amount.

  3. The money amount is notated next to "6-" and is edited in "dollars only" from Form 8611, Line 14 (prior year Line 12).

  4. Invalid Condition:

    • The field is not positive.

    • Tax Period is before 198701.

  5. Correction Procedures:

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

    2. If Form 8693, Low Income Housing Credit Disposition Bond, is attached, enter "9" in Field 01CCC (if not present).

    3. If this field has an entry, Form 8611, must be attached.

    4. If missing, SSPND with Action Code "211" and correspond.

    5. If "No Reply" , enter CCC "3" .

Section 04 - Income

  1. Section 04 is the income Lines (1-6) on Form 1120-S.

  2. Listed below are the fields displayed in Section 04 of Form 1120-S.

  3. Verify the figures to make sure that the taxpayer used the correct line.

    Field Designator Field Title Maximum Length Dollars/Cents Positive/ Negative Location Form 1120-S
    0401A Gross Receipts or Sales 15 $ +/- Page 1, Line 1a
    0401B Returns and Allowances 15 $ +/- Page 1, Line 1b
    0402 Cost of Goods Sold 15 $ +/− Page 1, Line 2
    0404 Net Gain/Loss 15 $ +/− Page 1, Line 4
    0405 Other Income 15 $ +/− Page 1, Line 5
    0406 Total Income 15 $ +/− Page 1, Line 6
    04MCV Merchant Card Payments Verified (prior year only) 15 $ +/- Page 1, Line 1a (2011 revision)

Section 05 - Deduction

  1. Section 05 is the deduction Lines (7-21) on Form 1120-S.

  2. Listed below are the fields displayed in Section 05 of Form 1120-S.

  3. Verify the figure to make sure that the taxpayer used the correct line.

    Field Designator Field Title Maximum Length Dollars/Cents Positive /Negative Location Form 1120-S
    0507 Compensation of Officers 15 $ +/− Page 1, Line 7
    0508 Salary and Wages Less employment Credits 15 $ +/− Page 1, Line 8
    0509 Repairs and Maintenance 15 $ +/− Page 1, Line 9
    0510 Bad Debts 15 $ +/− Page 1, Line 10
    0511 Rents 15 $ +/− Page 1, Line 11
    0512 Taxes and Licenses 15 $ +/− Page 1, Line 12
    0513 Interest 15 $ +/− Page 1, Line 13
    0514 Depreciation not claimed on Form 1125-A, or elsewhere (Form 4562) 15 $ +/− Page 1, Line 14
    0515 Depletion 15 $ +/− Page 1, Line 15
    0516 Advertising 15 $ +/− Page 1, Line 16
    0517 Pension, Profit- Sharing, etc., plans 15 $ +/− Page 1, Line 17
    0518 Employee benefit programs 15 $ +/− Page 1, Line 18
    0519 Other deductions 15 $ +/− Page 1, Line 19
    0520 Total deductions 15 $ +/− Page 1, Line 20
    0521 Ordinary business income (loss) 15 $ +/− Page 1, Line 21

Section 06 - Tax, Payments and Other Information

  1. Section 06 is the Tax and Payment lines on Form 1120-S.

  2. Verify the figures to make sure that the taxpayer used the correct line.

  3. Listed below are the fields displayed in Section 06 of Form 1120-S.

    Field Designator Field Title Maximum Length Dollars/ Cents Positive/ Negative Location Form 1120-S
    0618A Total Gross Rents 15 $ + Form 8825, Line 18a
    0622C Total Tax Taxpayer 15 $/¢ + Page 1, Line 22c
    06OTH Travel and Entertainment 15 $ +/- Page 5, Sch M-1, Line 3b
    0623A Estimated Tax Payment 15 $/¢ + Page 1, Line 23a
    0623B Form 7004 Payment 15 $/¢ + Page 1, Line 23b
    0623D Total Payments/Credits (total Lines 23a through 23c)

    Note:

    Prior lines for Field 0623D are:
    Reserved - 2019 and subsequent
    2018 - Refundable Credit from Form 8827
    2017 and prior - Total Payments/Credits (total Lines 23a through 23c)

    )
    15 $/¢ + Page 1, Line 23d
    06TRT

    Note:

    This field is no longer applicable and was used for Tax Periods 200612 to 200711.

    Telephone Excise Tax Paid 15 $/¢ + Page 1 Line 23d (Tax Period 200612-200711)
    06TRV

    Note:

    This field is no longer applicable and was used for Tax Periods 200612 to 200711.

    Telephone Excise Tax Paid - Verify Field 15 $/¢ + Corrected Telephone Excise Tax Refund (TETR) amount based on correspondence reply (Tax Period 200612-200711)
    0624 Estimated Tax Penalty 15 $/¢ + Page 1, Line 24
    0625 Amount owed/ Overpayment Taxpayer 15 $/¢ +/− Page 1, Line 25, 26
    0627 Credit Elect Amount 15 $/¢ + Page 1, Line 27, center
    06Q15 Form 8996 - QUAL-OP-FUND-CD 1 N/A N/A Page 3, Schedule B, Line 15 checkboxes
    06QOF Form 8996 - QUAL-OP-FUND-AMT 15 $/¢ + Page 3, Schedule B, Line 15
    06A01 Inventory at beginning of year 15 $ + Form 1125-A, Line 1
    06A07 Inventory at end of year 15 $ +/- Form 1125-A, Line 7
    0613F Form 6478, Biofuel Producer Credit 15 $ + Page 3, Schedule K, Line 13f
    06ITR Checkbox 1 N/A N/A Page 3, Schedule K, Line 14
    0616D Distributions 15 $ +/- Page 4, Schedule K, Line 16d
    0618 Income/loss reconciliation 15 $ +/- Page 4, Schedule K, Line 18
    06BXF Total Assets 15 $ + Page 1, Form 1120-S, Box F
    06MCT Manually Corrected 15 $ + Page 1, Line 22c, left
    06K4 Portfolio Interest 15 $ +/− Page 3, Schedule K, Line 4
    06LTS Loans to Shareholders (end of year) 15 $ +/- Page 4, Schedule L, Line 7d
    06TAB Total Assets Beginning 15 $ +/- Page 4, Schedule L, Line 15b
    06LFS Loans from Shareholders 15 $ +/- Page 4, Schedule L, Line 19d
    06CSE Capitol Stock (EOY) 15 $ +/- Page 4, Schedule L, Line 22d
    06ACE Additional Paid in Capital 15 $ +/- Page 4, Schedule L, Line 23d
    06REE Retained Earnings (EOY) 15 $ +/- Page 4, Schedule L, Line 24d
    06AAA Sch. M-2 Balance (BOY) 15 $ +/- Page 5, Schedule M-2, Line 1A

Field 0618A - Total Gross Rents

  1. Field 0618A is transcribed from Form 8825, Rental Real Estate Income and Expenses of a Partnership or an S Corporation, Line 18a.

  2. Field 06QOF is a 15 digit numeric, positive only, dollars only field.

  3. Invalid Condition:

    • The field length is more than 15 characters.

    • The field is other than all numeric or blank.

    • The field is negative.

  4. Correction Procedures:

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

    2. If the amount is negative, delete the field.

Field 0623D - Total Credits

  1. Field 0623D is transcribed from Form 1120-S, Line 23d.

  2. Field 0623D is a 15 digit numeric, positive only, dollars and cents field.

  3. Invalid Condition:

    • The field length is more than 15 characters.

    • The field is other than all numeric or blank.

    • The field is negative.

  4. Correction Procedures:

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

    2. If Line 23d is blank or illegible and there are entries on any of Lines 23a, 23b or 23c, then compute the total and enter in Field 0623D.

      Note:

      A significant entry is defined as any amount other than zero.

    3. Previously, Field 0623D (Line 23d) had different purposes. The prior line usage for this field are:
      2019 and 2020 form revisions- Reserved for future use.
      2018 revision - Refundable Credit from Form 8827 .
      2007 through 2017 form revisions - Total Payments/Credits (Total Lines 23a through 23c).

      Note:

      For Tax Period 200612 through 200711, Field 0623D was used to report Telephone Excise Tax Paid.

       

    4. If you are processing a 2018 Tax Year Form and there is an amount in Field 0623D representing a credit from Form 8827, then delete the amount. See IRM 3.12.217.18.31(3) g, Error Code 672 - Sections 15, 16, 17, 18, or 06 Not Present, for more information.

Field 06Q15 - Form 8996, Qualified Opportunity Fund Code

  1. Field 06Q15 is transcribed from Form 1120-S, Schedule B, Line 15.

  2. Field 06Q15 is a one digit numeric field valid for Tax Periods 201812 and later.

  3. Invalid Condition:

    • The field is blank.

    • An entry other than "0" , "1" , "2" , or "3" is present.

    • The Tax Period is before 201812.

  4. Correction Procedures:

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

      If Then
      Schedule B, Line 15 box is "Yes" , Enter "1" in Field 06Q15.
      Schedule B, Line 15 box is "No" , Enter "2" in Field 06Q15.
      Both the "Yes" and "No" boxes are checked, Enter "3" in Field 06Q15.
      Neither box is checked (e.g., blank), Enter "0" in Field 06Q15.
      Tax Period is before 201812, Change entry to "0" in Field 06Q15.

      Note:

      If Form 8996, Qualified Opportunity Fund, is attached, verify "6" is present in Field 01RPC.

Field 06QOF - Form 8996, Qualified Opportunity Fund Amount

  1. Field 06QOF is transcribed from the dotted line area of Form 1120-S, Schedule B, Line 15.

  2. Field 06QOF is a 15 digit numeric, positive only, dollars and cents field valid for Tax Periods 201812 and later.

  3. Invalid Condition:

    • The field length is more than 15 characters.

    • The field is not numeric.

    • The field is negative.

    • The Tax Period is before 201812.

  4. Correction Procedures:

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

    2. If the amount is negative, delete the field.

    3. If the Tax Period is before 201812, delete the field.

    Note:

    If Form 8996, Qualified Opportunity Fund, is attached, verify "6" is present in Field 01RPC.

Field 06ITR - International Tax Reporting Checkbox

  1. Field 06ITR is transcribed from Form 1120-S, Schedule K, Line 14.

  2. Field 06ITR is 1 digit numeric field valid for Tax Periods 202112 and after.

  3. Invalid Condition:

    • The field length is more than 1 character and not "0" or "1" .

    • The Tax Period is before 202112.

    Correction Procedures:
    1. Correct coding errors, transcription errors, and misplaced entries.

    2. If the Tax Period is before 202112, delete the field.

Field 06TRT - Telephone Excise Tax Paid

  1. Field removed once programming corrected.

  2. Field 06TRT is transcribed from Line 23d, Form 1120-S, and is only valid for Tax Periods 200612 to 200711.

  3. Field 06TRT is a 15 digit numeric, positive only, dollars and cents field.

  4. Invalid Condition:

    • The field length is more than 15 characters.

    • The field is not numeric.

    • The field is negative.

    • The Tax Period beginning is after 200711.

  5. Correction Procedures:

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

    2. This field is no longer applicable and was used for Tax Periods 200612 to 200711.

Section 10 - Schedule D, Capital Gains and Losses, Form 4797, Sales of Business Property, Form 8949, Sales and Other Dispositions of Capital Assets, and Form 8996, Qualified Opportunity Fund.

  1. Section 10 has information from Form 1120-S, Schedule D, Capital Gains and Losses, Form 4797, Sales of Business Property, Form 8949, Sales and Other Dispositions of Capital Assets and Form 8996, Qualified Opportunity Fund.

  2. This section is not required.

  3. All fields in Section 10 are numeric only except Field 1013, which is alpha numeric.

  4. Section 10 is transcribed in dollars only except for Field 1014, which is transcribed in dollars and cents.

  5. Listed below are all valid fields:

    Field Designator Field Title Maximum Length Positive/ Negative Location Form 1120-S, Schedule D, Form 4797, Form 8949, or Form 8996
    10OID Qualified Opportunity Fund Investments Checkbox - Did the corporation dispose of any investment(s) in a qualified opportunity fund during this year? 1 N/A Schedule D, above Part I
    101AD Line 1a Short Term Proceeds (Sales Price) 15 + Schedule D, Part I, Line 1a, Column (d)
    101AE Line 1a Short Term Cost or other basis 15 + Schedule D, Part I, Line 1a, Column (e)
    101BD Line 1b Short Term Proceeds (Sales Price) 15 + Schedule D, Part I, Line 1b, Column (d)
    101BE Line 1b Short Term Cost or other basis 15 + Schedule D, Part I, Line 1b, Column (e)
    101BG Line 1b Short Term Adjustments to gain or loss 15 +/- Schedule D, Part I, Line 1b, Column (g)
    1002D Line 2, Short Term Proceeds (Sales Price) 15 + Schedule D, Part I, Line 2, Column (d)
    1002E Line 2, Short Term Cost or other basis 15 + Schedule D, Part I, Line 2, Column (e)
    1002G Line 2 Short Term Adjustments to gain or loss 15 +/- Schedule D, Part I, Line 2, Column (g)
    1003D Line 3 Short Term Cost or other basis 15 + Schedule D, Part I, Line 3, Column (d)
    1003E Line 3 Short Term Cost or other basis 15 + Schedule D, Part I, Line 3, Column (e)
    1003G Line 3 Short Term Adjustments to gain or loss 15 +/- Schedule D, Part I, Line 3, Column (g)
    108AD Line 8a Long Term Proceeds (Sales Price) 15 + Schedule D, Part II, Line 8a, Column (d)
    108AE Line 8a Long Term Cost or other basis 15 + Schedule D, Part II, Line 8a, Column (e)
    108BD Line 8b Long Term Proceeds (Sales Price) 15 + Schedule D, Part II, Line 8b, Column (d)
    108BE Line 8b Long Term Cost or other basis 15 + Schedule D, Part II, Line 8b, Column (e)
    108BG Line 8b Long Term Adjustments to gain or loss 15 +/- Schedule D, Part II, Line 8b, Column (g)
    1009D Line 9, Long Term Proceeds (Sales price) 15 + Schedule D, Part II, Line 9, Column (d)
    1009E Line 9, Long Term Cost or other basis 15 + Schedule D, Part II, Line 9, Column (e)
    1009G Line 9 Long Term Adjustments to gain or loss 15 +/- Schedule D, Part II, Line 9, Column (g)
    1010D Line 10, Long Term Proceeds (Sales price) 15 + Schedule D, Part II, Line 10, Column (d)
    1010E Line 10, Long Term Cost or other basis 15 + Schedule D, Part II, Line 10, Column (e)
    1010G Line 10 Long Term Adjustments to gain or loss 15 +/- Schedule D, Part II, Line 10, Column (g)
    10013 Capital gain distributions 15 + Schedule D, Part II, Line 13
    101B Gain due to partial dispositions of MACRS assets 15 + Form 4797, Line 1b
    101C Loss due to partial dispositions of MACRS assets 15 + Form 4797, Line 1c
    101AZ EIN from description of property 9 N/A Form 8949, Part I, Line 1, Column (a), if Code "Z" in Column (f)
    101BZ Date Acquired (YYYYMMDD) 8 N/A Form 8949, Part I, Line 1, Column (b), if Code "Z" in Column (f)
    101GZ Amount of Adjustment 15 + Form 8949, Part I, Line 1, Column (g), if Code "Z" in Column (f)
    101Z Form 8949 Indicator 1 N/A Form 8949, right margin of Part I, Line 1, Row 1, if Code "Z" in Column (f)
    101AY EIN from description of property 9 N/A Form 8949, Part 1, Line 1 Column (a), if Code "Y" in Column (f)
    101CY Date sold or disposed of (YYYYMMDD) 8 N/A Form 8949, Part 1, Line 1 Column (c), if Code "Y" in Column (f)
    101GY Recaptured amount 15 + Form 8949, Part 1, Line 1 Column (g), if Code "Y" in Column (f)
    101Y Form 8949 Indicator 1 N/A Form 8949, right margin of Part I, Line 1, Row 1, if Code "Y" in Column (f)
    102AZ EIN from description of property 9 N/A Form 8949, Part II, Line 1, Column (a), if Code "Z" in Column (f)
    102BZ Date Acquired (YYYYMMDD) 8 N/A Form 8949, Part II, Line 1, Column (b), if Code "Z" in Column (f)
    102GZ Amount of Adjustment 15 N/A Form 8949, Part II, Line 1, Column (g), if Code "Z" in Column (f)
    102Z Form 8949 Indicator 1 N/A Form 8949, Right margin of Part II, Line 1 (h), if Code "Z" in Column (f)
    102AY EIN from description of property 9 N/A Form 8949, Part II, Line 1 Column (a), if Code "Y" in Column (f)
    102CY Date sold or disposed of (YYYYMMDD) 8 N/A Form 8949, Part II, Line 1 Column (c), if Code "Y" in Column (f)
    102GY Recaptured amount 15 + Form 8949, Part II, Line 1 Column (g), if Code "Y" in Column (f)
    102Y Form 8949 Indicator 1 N/A Form 8949, right margin of Part II, Line 1, Row 1, if Code "Y" in Column (f)
    10I5 Checkbox - Did any investor dispose, in part or whole, of their equity in the fund? 1 N/A Form 8996, Part I, Line 5
    10Q6 Reserved for future use 1 N/A Form 8996, Part I, Line 6
    10II6 Total qualified opportunity zone property held 6-month 15 + Form 8996, Part II, Line 7
    • Line 6 - 2019

    • Line 5 - 2018 and 2017

    10II7 Total assets held 6-month 15 + Form 8996, Part II, Line 8
    • Line 7 - 2019

    • Line 6 - 2018 and 2017

    10II9 Total qualified opportunity zone property held last day of tax year 15 + Form 8996, Part II, Line 10
    • Line 9 - 2019

    • Line 8 - 2018 and 2017

    1010 Total assets held last day of tax year 15 + Form 8996, Form 8996, Part II, Line 11
    • Line 10 - 2019

    • Line 9 - 2018 and 2017

    1013 Divide Line 14 by 2.0 (Line 14 is expressed as a decimal amount 0.00) 3 N/A Form 8996, Part III, Line 14
    • Line 13 - 2019

    • Line 12 - 2018 and 2017

    1014 Is Line 15 equal to or more than .90 15 + Form 8996, Part III, Line 15
    • Line 14 - 2019

    • Line 13 - 2018 and 2017

  6. Field Errors will display for Section 10 whenever an invalid character is entered. Correct coding errors, transcription errors, and misplaced entries. If correct information is not available, delete the entry.

Field 10OID - Qualified Opportunity Fund Investments

  1. Field 10OID - Checkbox is transcribed from Form 1120-S, Schedule D, above Part I.

  2. Invalid Condition: Field 10OID is invalid if:

    • The field length is more than 1 character.

    • The checkbox values are not "1" , "2" or "3" .

    • The Tax Period is before 201712.

  3. Correction Procedures:

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

      If Then
      Form 1120-S, Schedule D Checkbox is marked "Yes" , Enter "1" in Field 10OID.
      Form 1120-S, Schedule D Checkbox is marked "No" , Enter "2" in Field 10OID.
      Both the "Yes" and "No" Checkboxes are marked, Enter "3" in Field 10OID.
      Neither box is checked, Delete Field 10OID.

Field 101AD through Field 10013 - Form 1120-S, Schedule D

  1. Field 101AD through Field 10013 are transcribed from Form 1120-S, Schedule D, Parts I and II.

  2. Invalid Condition: Section 10 Field Errors will display if Field 101AD through Field 10013 are not numeric.

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

Field 101B and Field 101C - Form 4797

  1. Fields 101B and 101C must be entered if Form 4797, Line 1a and Line 1b have an entry.

  2. Invalid Condition - Fields 101B and 101C are invalid if:

    • The field length is more than 15 characters.

    • The field is not numeric, positive, and dollars only.

    • The Tax Period is before 202112.

  3. Correction Procedures:

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

    2. If a field is negative, delete the field.

    3. If the Tax Period is before 202112, delete the field.

Field 101AZ and Field 102AZ - Form 8949, EIN from Description of Property

  1. Field 101AZ and Field 102AZ must be entered if Form 8949, Sales and Other Dispositions of Capital Assets, Part I, Column (f) or Part II, Column (f) are coded with a "Z" by the taxpayer.

  2. Invalid Condition - Field 101AZ and Field 102AZ are invalid if:

    • The field length is not 9 characters.

    • The EIN is not numeric.

    • The Tax Period is before 201712.

  3. Correction Procedures:

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

    2. If the Tax Period is before 201712, delete the field.

      If And Then
      Field 101AZ has an entry, Form 8949, Part I, Column (f) does not have a "Z" entered in the same row, Delete the EIN.
      Field 101AZ has an entry, The EIN is incomplete or invalid, Delete the EIN.
      Field 102AZ has an entry, Form 8949, Part II, Column (f) does not have a "Z" entered in the same row, Delete the EIN.
      Field 102AZ has an entry, The EIN is incomplete or invalid, Delete the EIN.

Field 101AY and Field 102AY - Form 8949 - EIN from Description of Property

  1. Field 101AY and Field 102AY must be entered if Form 8949, Sales and Other Dispositions of Capital Assets, Part I, Column (f) or Part II, Column (f) are coded with a "Y" by the taxpayer.

  2. Invalid Condition: Field 101AY and Field 102AY are invalid if:

    • The field length is more than 9 characters.

    • The EIN is not numeric.

    • The Tax Period is before 201712.

  3. Correction Procedures:

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

    2. If the Tax Period is before 201712, delete the field.

    If And Then
    Field 101AY has an entry, Form 8949, Part I, Column (f) does not have a "Y" entered in that same row, Delete the EIN.
    Field 101AY has an entry, The EIN is incomplete or invalid, Delete the EIN.
    Field 102AY has an entry, Form 8949, Part II. Column (f) does not have a "Y" entered by the taxpayer in that same row, Delete the EIN.
    Field 102AY has an entry, The EIN is incomplete or invalid, Delete the EIN.

Field 101BZ and Field 102BZ - Form 8949 - Date Acquired

  1. Field 101BZ and Field 102BZ must be entered if Form 8949, Sales and Other Dispositions of Capital Assets, Part I, Column (f)or Part II, Column (f) are coded with a "Z" by the taxpayer.

  2. Invalid Condition: Field 101BZ and Field 102BZ are invalid if:

    • The field length is more than 8 characters (YYYYMMDD).

    • The date acquired is other than numeric.

    • The month is zero or greater than 12.

    • The day range does not match the amount of days in the month.

    • The Tax Period is before 201712.

  3. Correction Procedures:

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

    2. If the Tax Period is before 201712, delete the field.

      If And Then
      Field 101BZ has an entry, Form 8949, Part I, Column (f) does not have a "Z" entered by the taxpayer in that same row, Delete the date.
      Field 101BZ has an entry, The date is incomplete (for example, only the year is present), Delete the date.
      102BZ has an entry, Form 8949, Part II, Column (f) does not have a "Z" entered by the taxpayer in that same row, Delete the date.
      Field 102BZ has an entry, The date is incomplete (for example, only the year is present), Delete the date.

Field 101CY and Field 102CY - Form 8949 - Date Sold or Disposed of

  1. Field 101CY and Field 102CY must be entered if Form 8949, Sales and Other Dispositions of Capital Assets, Part I, Column (f) or Part II, Column (f) are coded with a "Y" by the taxpayer.

  2. Invalid Condition: Field 101CY and Field 102CY are invalid if:

    • The field length is not 8 characters (YYYYMMDD).

    • The field is not numeric.

    • The month is zero or greater than 12.

    • The day range does not match the amount of days in the month.

    • The Tax Period is before 201712.

  3. Correction Procedures:

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

    2. If the Tax Period is before 201712, delete the field.

    If And Then
    Field 101CY has an entry, Form 8949, Part I, Column (f) does not have a "Y" entered by the taxpayer in that same row, Delete the date.
    Field 101CY has an entry, The date is not complete (for example, only the year is present), Delete the date.
    Field 102CY has an entry, Form 8949, Part II, Column (f) does not have a "Y" entered by the taxpayer in that same row, Delete the date.
    Field 102CY has an entry, The date is not complete (for example, only the year is present), Delete the date.

Field 101GZ and Field 102GZ - Form 8949- Amount of Adjustment

  1. Field 101GZ and Field 102GZ must be entered if Form 8949, Sales and Other Dispositions of Capital Assets, Part I or Part II, Column (f) are coded "Z" by the taxpayer.

  2. Invalid Condition: Field 101GZ and Field 102GZ are invalid if:

    • The field length is more than 15 characters.

    • The amount is other than numeric, positive, and dollars only.

    • The Tax Period is before 201712.

  3. Correction Procedures:

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

    2. If a field is negative, delete the field.

    3. If the Tax Period is before 201712, delete the field.

Field 101GY and Field 102GY - Recaptured Amount

  1. Field 101GY and Field 102GY must be entered if Form 8949, Sales and Other Dispositions of Capital Assets, Part I, Column (f) or Part II, Column (f) are coded with a "Y" by the taxpayer.

  2. Invalid Condition: Field 101GY and Field 102GY are invalid if:

    • The field length is more than 15 characters.

    • The field is other than numeric, positive, and dollars only.

    • The Tax Period is before 201712.

  3. Correction Procedures:

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

    2. If a field is negative, delete the field.

    3. If the Tax Period is before 201712, delete the field.

Field 101Z and Field 102Z - Form 8949 Indicator, Line 1

  1. An indicator will be entered in Field 101Z and Field 102Z when Form 8949, Sales and Other Dispositions of Capital Assets, Part I or Part II has more than one row with a "Z" present in Column (f). Code & Edit will edit "Z-1" in the right margin of Part I or Part II, Line 1, Row 1.

  2. Invalid Condition: Field 101Z and Field 102Z are invalid if:

    • The field length is more than 1 character.

    • The field is not "blank" , "0" , or "1" (more than one row with a "Z" in Column (f)).

    • The Tax Period is before 201712.

  3. Correction Procedures:

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

    2. If the Tax Period is before 201712, delete the field.

Field 101Y and Field 102Y - Form 8949 Indicator

  1. An indicator will be entered in Field 101Y and Field 102Y when Form 8949, Sales and Other Dispositions of Capital Assets, Part I or Part II has more than one row with a "Y" in Column (f). Code & Edit will edit "Y-1" in the right margin of Part I, Line 1, Row 1 or Part II, Line 1, Row 1.

  2. Invalid Condition: Field 101Y and 102Y are invalid if:

    • The field length is more than 1 character.

    • The field is other than "blank" (default) or "1" (more than one row with a "Y" in Column (f).

    • The Tax Period is before 201712.

  3. Correction Procedures:

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

    2. If the Tax Period is before 201712, delete the field.

Field 10I5 - Form 8996 Checkbox, Line 5

  1. Field 10I5 Checkbox is found on Form 8996, Qualified Opportunity Fund, Part I, Line 5.

  2. Form 8996 is valid for Tax Periods ending 201712 and later. The table below compares Form 8996 line numbers based on the tax year of the return:

    Form 8996 Revisions

    2021 and later 2020 2019 2018 and 2017
    Line 5 Line 5 Line 5 N/A
    Line 6 N/A N/A N/A
    Line 7 Line 7 Line 6 Line 5
    Line 8 Line 8 Line 7 Line 6
    Line 10 Line 10 Line 9 Line 8
    Line 11 Line 11 Line 10 Line 9
    Line 14 Line 14 Line 13 Line 12
    Line 15 Line 15 Line 14 Line 13
  3. Invalid Condition: Field 10I5 is invalid if:

    • The field length is more than 1 character.

    • The Tax Period is before 201712.

    • The checkbox values are not "1" , "2" , or "3" .

  4. Correction Procedures:

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

    2. If the Tax Period is before 201712, delete the field.

      If Then
      Form 8996, Part I, Line 5 Checkbox is marked "Yes" , Enter "1" in Field 10I5.
      Form 8996, Part I, Line 5 Checkbox is marked "No" , Enter "2" in Field 10I5.
      Both the "Yes" and "No" Checkboxes are marked, Enter "3" in Field 10I5.
      Neither Checkbox is marked, Delete Field 10I5.

Field 10Q6 - Form 8996 Checkbox, Line 6 Reserved for future use

  1. Field 10Q6 - is a "Reserved" field transcribed from Form 8996, Line 6.

  2. Invalid Condition - Field 10Q6 is invalid if:

    • The field length is more than 1 character.

    • The value is not blank, "0" or "1."

    • The Tax Period is before 201712.

  3. Correction Procedures:

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

    2. If the Tax Period is before 201712, delete the field.

    If Then
    Form 8996, Line 6, box is "Yes" , Enter "1" in Field 10Q6.
    Box 6 is not checked, Delete Field 10Q6.

Field 10II6, Field 10II7, Field 10II9 and Field 1010 - Form 8996, Lines 6, 7, 9 and 10

  1. Field 10II6, Field 10II7, Field 10II9 and Field 1010 are entered from Form 8996, Qualified Opportunity Fund, Part II, Lines 6, 7, 9 and 11.

    Form 8996 - Field 1010 Revisions

    Prior Year Revision Line
    2020 Part II, Line 11
    2019 Part II, Line 10
    2018 and 2017 Part II, Line 9
     

  2. Invalid Condition: Field 10II6, Field 10II7, Field 10II9 and Field 1010 are invalid if:

    • The field length is more than 15 characters.

    • The fields are other than numeric, positive and dollars only.

    • The Tax Period is before 201712.

  3. Correction procedures:

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

    2. If a field is negative, delete the field.

    3. If the Tax Period is before 201712, delete the field.

Field 1013 - Form 8996, Line 14

  1. Field 1013 is found on Form 8996, Qualified Opportunity Fund, Part III, Line 14 and is a percentage. It is expressed as a decimal amount (0.00).

    Note:

    The ERS screen will display 000 (the decimal is implied). For example, 50% will display as 050.

    Form 8996 Revisions

    Prior Year Revision Line
    2020 Part III, Line 14
    2019 Part III, Line 13
    2018 and 2017 Part III, Line 12
     

  2. Invalid Condition: Field 1013 is invalid if:

    • The field length is more than 3 characters.

    • The field is not numeric.

    • The value exceeds 1.00.

    • The Tax Period is before 201712.

  3. Correction Procedures:

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

    If Then
    Field 1013 is more than 3 characters (e.g. 0.456), Enter the first 3 characters (e.g. 0.45).
    Field 1013 is greater than 1 (e.g. 1.456), Delete the field.
    The Tax Period is before 201712, Delete the field.

Field 1014 - Form 8996, Line 15

  1. Field 1014 is found on Form 8996, Qualified Opportunity Fund, Part III, Line 15.

    Form 8996 Revisions

    Prior Year Revision Line
    2020 Part III, 15
    2019 Part III, Line 14
    2018 and 2017 Part III, Line 13
     

  2. Invalid Condition: Field 1014 is invalid if:

    • The field length is more than 15 characters.

    • The field is not numeric, positive and entered as dollars and cents.

    • The Tax Period is before 201712.

  3. Correction Procedures:

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

    2. If the field is negative, delete the field.

    3. If the Tax Period is before 201712, delete the field.

Section 12 - Direct Deposit Refunds

  1. Section 12 has data for Direct Deposit refunds for businesses.

  2. If direct deposit is requested, filers of Form 1120-S must use Form 8050, Direct Deposit of Corporate Tax Refund, to request that the IRS deposit a corporate income tax refund directly into an account at any U.S. bank or other financial Institution (such as a mutual fund or brokerage firm) that accepts direct deposits.

  3. Direct Deposit refunds are not valid for prior year returns.

Error Record Format Section 12

  1. The Error Record Format for Section 12 is:

    Field Designator Field Title Maximum Length Location on Form 1120-S
    12RTN Routing Transit Number (RTN) 9 Form 8050
    12DAN Depositors Account Number (DAN) 17 Form 8050
    12DDC Direct Deposit Code 2 Form 8050
    12TDA Type Depositor Account (TDA) 1 Form 8050

Field 12RTN - Routing Transit Number (RTN)

  1. Field 12RTN is transcribed from Line 1, Form 8050, Direct Deposit of Corporate Tax Refund.

  2. Field 12RTN is a 9 digit numeric or blank field.

  3. Invalid Condition: Field 12RTN is invalid if present and the first two digits are not:

    • Between "01" through "12" .

    • Between "21" through "32" .

  4. Correction Procedures:

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

    2. If Field 12RTN is not valid, blank the field.

Field 12DAN - Depositors Account Number (DAN)

  1. Field 12DAN is transcribed from Line 2, Form 8050, Direct Deposit of Corporate Tax Refund. Field 12DAN is valid up to 17 characters.

  2. Invalid Condition: Field 12DAN is invalid if:

    • A Depositor Account Number is present and a character is not numeric, alpha, hyphen or space.

    • Field 12DAN is present but Field 12TDA is not present.

  3. Correction Procedures:

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

    2. Check Line 2 of Form 8050.

      If Then
      The account number is valid (the entry has only numeric, alpha, hyphen or space), GTSEC 12 and refer to Field 12TDA instructions below.
      Enter a valid code in Field 12TDA.
      The account number is not valid, Delete Field 12DAN.

Field 12DDC - Direct Deposit Code (DDC)

  1. Field 12DDC is a computer generated field and is not correctable. The Direct Deposit Code is included in the Section 12 screen display for information only.

  2. Field 12DDC may be blank or it may have a two digit number that is used by Master File to generate a notice to the taxpayer.

Field 12TDA - Type Depositor Account (TDA)

  1. Field 12TDA is transcribed from Line 3, Form 8050, Direct Deposit of Corporate Tax Refund. Field 12TDA may be blank or a one-digit alpha code (C or S).

  2. Invalid Condition: Field 12TDA is invalid if present and the entry is not:

    • "C" for Checking, or

    • "S" for Savings

  3. Correction Procedures:

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

    2. If both or neither box (Checking or Savings) is checked, enter "C" in Field 12TDA.

Section 14 - Schedule N, Foreign Operations of U.S. Corporations

  1. Section 14 has data from Form 1120-S, Schedule N, Foreign Operations of U.S. Corporations. See Exhibit 3.12.217-2 for a copy of Schedule N.

  2. Section 14 data is valid for Tax Periods beginning after 199912. Schedule N was not available for Tax Periods 199912 and prior.

Error Record Format Section 14

  1. The Error Record Format for Section 14 is:

    Field Designator Field Title Maximum Length Location on Form 1120-S
    14Q01 Disregarded Entity 1 Schedule N, Line 1a (2020 and prior revisions)
    14Q02 Number of Forms 8865 3 Schedule N, Line 2
    14Q03 Direct/Indirect Interest 1 Schedule N, Line 3 (2020 and prior revisions)
    14Q4A Reserved for Future Use 1 Schedule N, Line 4a (2020 and prior revisions)
    14Q4B Number of Forms 5471 3 Schedule N, Line 4b
    14Q05 Foreign Trust Distribution 1 Schedule N, Line 5
    14Q6A Foreign Country Financial Account 1 Schedule N, Line 6a
    14Q6B Foreign Country Code 2 Schedule N, Line 6b
    14Q7A Extraterritorial Income (EI) Exclusion 1 Schedule N, Line 7a
    14Q7B Number of Forms 8873 3 Schedule N, Line 7b
    14Q7C Total extraterritorial income exclusion 15 Schedule N, Line 7c

Field 14Q01 - Disregarded Entity

  1. Field 14Q01 is transcribed from Line 1a, Schedule N, Form 1120-S (2020 and prior revisions).

  2. Invalid Condition: Field 14Q01 is invalid if it is not blank or an entry other than "1" , "2" or "3" is present.

  3. Correction Procedures:

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

      If Then
      Schedule N, Line 1 box is "Yes" , Enter "1" in Field 14Q01.
      Schedule N, Line 1 box is "No" , Enter "2" in Field 14Q01.
      Both the "Yes" and "No" boxes are checked, Enter "3" in Field 14Q01.
      Neither box is checked, Delete Field 14Q01.

Field 14Q02 - Number of Forms 8865

  1. Field 14Q02 is transcribed from the dotted line portion of Line 2, Schedule N, Form 1120-S.

  2. Invalid Condition: Field 14Q02 is invalid if it is not numeric (001 through 999) or blank.

  3. Correction Procedures:

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

    2. If Schedule N, Line 2 is blank and Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships, is attached, overlay with the correct number of forms.

Field 14Q03 - Direct/Indirect Interest

  1. Field 14Q03 is transcribed from the Line 3, Schedule N, Form 1120-S (2020 and prior revisions).

  2. Invalid Condition: Field 14Q03 is invalid if it is not all blank or an entry other than "1," "2" or "3" is present.

  3. Correction Procedures:

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

      If Then
      Schedule N, Line 3 box is "Yes" , Enter "1" in Field 14Q03.
      Schedule N, Line 3 box is "No" , Enter "2" in Field 14Q03.
      Both the "Yes" and "No" boxes are checked, Enter "3" in Field 14Q03.
      Neither box is checked, Delete Field 14Q03.

Field 14Q4A - Reserved for Future Use

  1. Field 14Q4A is transcribed from Line 4a, Schedule N, Form 1120-S (2020 and prior revisions).

  2. Invalid Condition: Field 14Q4A is invalid if it is not all blank or an entry other than "1," "2" or "3" is present.

  3. Correction Procedures:

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

      If Then
      Schedule N, Line 3 box is "Yes" , Enter "1" in Field 14Q4A.
      Schedule N, Line 3 box is "No" , Enter "2" in Field 14Q4A.
      Both the "Yes" and "No" boxes are checked, Enter "3" in Field 14Q4A.
      Neither box is checked, Delete Field 14Q4A.

  4. If Form 1120, U.S. Corporation Income Tax Return, Schedule N, Line 4a (2020 and prior revisions) is checked "Yes" or Forms 5471 are attached. GTSEC 03. Enter "2" in Field 03ADC and in the margin to the left of "Deductions" section of the return following "2-" .

Field 14Q4B - Number of Forms 5471

  1. Field 14Q4B is transcribed from the dotted line portion of Line 4b, Schedule N, Form 1120-S.

  2. Invalid Condition: Field 14Q4B is invalid if it is not numeric (001 through 999) or blank.

  3. Correction Procedure:

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

    2. If Schedule N, Line 4b is blank and Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, is attached, overlay with the correct number of forms.

Field 14Q05 - Foreign Trust Distribution

  1. Field 14Q05 is transcribed from Line 5, Schedule N, Form 1120-S.

  2. Invalid Condition: Field 14Q05 is invalid if it is not all blank or an entry other than "1," "2" or "3" is present.

  3. Correction Procedures:

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

      If Then
      Schedule N, Line 5 box is "Yes" , Enter "1" in Field 14Q05.
      Schedule N, Line 5 box is "No" , Enter "2" in Field 14Q05.
      Both the "Yes" and "No" boxes are checked, Enter "3" in Field 14Q05.
      Neither box is checked, Delete Field 14Q05.

Field 14Q6A - Foreign Country Financial Account

  1. Field 14Q6A is transcribed from Line 6a, Schedule N, Form 1120-S.

  2. Invalid Condition: Field 14Q6A is invalid if it is not all blank or an entry other than "1," "2" or "3" is present.

  3. Correction Procedures:

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

      If Then
      Schedule N, Line 6a box is "Yes" , Enter "1" in Field 14Q6A.
      Schedule N, Line 6a box is "No" , Enter "2" in Field 14Q6A.
      Both the "Yes" and "No" boxes are checked, Enter "3" in Field 14Q6A.
      Neither box is checked, Delete Field 14Q6A.

Field 14Q6B - Foreign Country Code

  1. Field 14Q6B is transcribed from Line 6b, Schedule N, Form 1120-S.

  2. Invalid Condition: Field 14Q6B is invalid if present and the code is not a valid Foreign Country Code.

  3. Correction Procedures:

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

    If Then
    A foreign country is present on Schedule N, Line 6b,
    Enter the correct code in Field 14Q6B and to the left of Line 6b.

    Note:

    See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, for a list of the valid two-digit Foreign Country Codes.

    Unable to determine the Foreign Country Code, Delete Field 14Q6B.

Field 14Q7A - Extraterritorial Income Exclusion

  1. Field 14Q7A is transcribed from the left of Line 7a, Schedule N, Form 1120-S.

  2. Invalid Condition: Field 14Q7A is invalid if it is not all blank or an entry other than "1," "2" or "3" is present.

  3. Correction Procedures:

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

      If Then
      Schedule N, Line 7a box is "Yes" , Enter "1" in Field 14Q7A.
      Schedule N, Line 7a box is "No" , Enter "2" in Field 14Q7A.
      Both the "Yes" and "No" boxes are checked, Enter "3" in Field 14Q7A.
      Neither box is checked, Delete Field 14Q7A.

Field 14Q7B - Number of Forms 8873

  1. Field 14Q7B is transcribed from the dotted line area of Line 7b, Schedule N, Form 1120-S.

  2. Invalid Condition: Field 14Q7B is invalid if it is not numeric (001 through 999) or blank.

  3. Correction Procedures:

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

    2. If Schedule N, Line 7b is blank and Form 8873, Extraterritorial Income Exclusion, is attached, overlay with the correct number of forms.

Field 14Q7C - Total Extraterritorial Income Exclusion

  1. Field 14Q7C is transcribed from the dotted line area of Line 7c, Schedule N, Form 1120-S.

  2. Field 14Q7C can be positive or negative and is dollars only.

  3. Invalid Condition: Field 14Q7C is invalid if it is not blank or all numeric.

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

Sections 15-18 - Form 4136, Credit for Federal Tax Paid on Fuels

  1. This section has instructions for correcting Sections 15-18 Field Errors.

  2. Computer generated fields are described under the proper Error Code(s).

  3. Section 15 -18 has data from Form 4136, Credit for Federal Tax Paid on Fuels. All fields are transcribed in dollars and cents and must be positive. Each of these fields are 15 characters in length and must be numeric only.

  4. ISRP enters the Form 4136 information by inputting the specific credit reference number (CRN) the taxpayer shows on his Form 4136. All fields that represent CRNs are three characters in length and must be numeric only.

    Example:

    Taxpayer reports a credit of $4,500.00 on Line 3a and $600.00 on Line 5b, Form 4136. Section 15 will show the amount transcribed from Line 3a as 15A01, $4,500.00 with 15C01 as 360 Credit Reference Number (CRN) and amount transcribed as 15A02 $600.00 and 15C02 as 355 (CRN). In this scenario only Section 15 would appear since only two credits were claimed.

  5. Sections 15-18 could generate on an account if the taxpayer claimed as many as 43 different Federal Tax Paid on Fuels credits. Section 15 shows the first 12 credits transcribed, Section 16 will indicate credits 13-24, Section 17 will indicate credits 25-36, and Section 18 will indicate credits 37-43.

Sections 15-18 Field Errors

  1. Correctable Sections 15-18 fields are listed below:

    Field Designator Field Title/Field Location on Form 4136 Maximum Length
    15TG> Total Fuel Credits from Form 4136 15
    15A01 First credit amount reported 15
    15C01 First CRN for first credit amount reported 3
    15A02 - 15A12 Second through twelfth credit amounts reported 15
    15C02 - 15C12 Second through twelfth CRN(s) reported 3
    16A01 Thirteenth credit amount reported (Section 16) 15
    16C01 Thirteenth CRN reported (Section 16) 3
    16A02 - 16A12 Fourteenth through twenty-fourth credit amounts reported 15
    16C02 - 16C12 Fourteenth through twenty-fourth CRN(s) reported 3
    17A01 Twenty-fifth credit amount reported (appears on Section 17) 15
    17C01 Twenty-fifth CRN reported (Section 17) 3
    17A02 - 17A12 Twenty-sixth through thirty-sixth credit amounts reported 15
    17C02 - 17C12 Twenty-sixth through thirty-sixth CRN(s) reported 3
    18A01 Thirty-seventh credit amount reported (Section 18) 15
    18C01 Thirty-seventh CRN reported (Section 18) 3
    18A02 - 18A07 Thirty-eighth through forty-third credit amounts reported 15
    18C02 - 18C07 Thirty-eighth through forty-third CRN(s) reported 3

  2. Invalid Condition: Section 15-18 field errors will display if:

    • The field is not numeric.

    • An entry exceeds the maximum field length.

    • A "positive only" field is negative.

  3. Correction Procedures:

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

    2. Make necessary corrections.

    3. If a "positive only" field is negative, delete the field.

  4. Current valid Credit Reference Numbers with their valid periods are listed below:

    CRN Valid Tax Periods
    306 200601 and later
    307 200601 and later
    309 200601 and later
    310 200601 and later
    324 199701 and later
    346 199801 and later
    347 199801 and later
    350 199801 and later
    353 All
    354 All
    355 All
    360 All
    362 199401 and later
    369 199401 and later
    377 199301 - 200511 or after 200712
    388 200501 and later
    390 200501 and later
    393 200501 - 201211
    394 200501 - 201211
    395 200501 - 200708
    411 200601 and later
    412 200601 and later
    413 200601 and later
    414 200601 and later
    415 200601 and later
    416 200601 and later
    417 200601 and later
    418 200601 and later
    419 200610 and later
    420 200610 and later
    421 200610 and later
    422 200610 and later
    423 200610 and later
    424 200610 and later
    425 200610 and later
    426 200610 and later
    427 200610 and later
    428 200610 and later
    429 200610 and later
    430 200610 and later
    431 200610 and later
    432 200610 and later
    433 200510 and later
    434 200510 and later
    435 200810 and later
    436 200810 and later
    437 200810 and later

Section 20 - Telephone Excise Tax Refund

  1. The Error Record Format for Section 20 is:

    Field Designator Field Title Maximum Length Location Form 8913
    20TTR

    Note:

    This field is no longer applicable and was used for Tax Periods 200612 to 200711.

    Telephone Excise Tax Credit 15 Line 15(d)
    20TTI

    Note:

    This field is no longer applicable and was used for Tax Periods 200612 to 200711.

    Telephone Excise Tax Credit Interest 15 Line 15(e)

  2. Fields removed once programming corrected.

  3. Section 20 has information reported on Form 8913, Credit For Federal Telephone Excise Tax Paid. This section is not required.

  4. All fields in Section 20 are numeric only and transcribed in dollars and cents.

  5. All fields in Section 20 must be positive.

  6. Invalid Condition: Section 20 field errors will display if:

    • The field is not numeric.

    • The field is negative.

    • The credit is claimed on returns without a Tax Period of 200612-200711.

  7. Correction Procedures:

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

    2. These fields are no longer applicable and were used for Tax Periods 200612 to 200711.

Section 21 - Form 8941, Small Employer Health Insurance Premiums

  1. The Error Record Format for Section 21 is:

    Field Designator Field Title Maximum Length Location Form 8941
    21CBX SHOP Box 1 Box A
    21LNB E.I. Number 9 Line B
    21BXC Previous Form 8941 filed 1 Box C
    21LN1 Number of Employees 4 Line 1
    2102 Number of Full Time Employees 4 Line 2
    2103 Average Annual Wages 15 Line 3
    2104 Health Insurance Premiums Paid 15 Line 4
    2105 Premiums You Would Have Paid 15 Line 5
    2110 Premium Subsidies Paid 15 Line 10
    2113 Number of Employees With Premiums Paid 4 Line 13
    2114 Number of Full Time Employees With Premiums Paid 4 Line 14
    2115 Credit for Small Employer Health Insurance Premiums 15 Line 15
    2116 Sum of Lines 12 and 15 15 Line 16

  2. Section 21 has information reported on Form 8941, Credit for Small Employer Health Insurance Premiums. This section is not required.

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

  4. All fields in Section 21 must be positive.

  5. Invalid Condition: Section 21 field errors will display if:

    • Non numeric characters are entered in Section 21 fields.

    • Field 21CBX and Field 21BXC are blank or other than "0" through "3" .

    • Field 21LN1 is all zeroes.

  6. Correction Procedures:

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

    2. To resolve errors for checkboxes, enter "0" if no boxes are checked, "1" if the "Yes" box is checked and "2" if the "No" box is checked.

Section 22 - Form 5884-B, New Hire Retention Credit

  1. The Error Record Format for Section 22 is:

    Field Designator Field Title Maximum Length Location Form 5884-B
    2210 Total of Line 9, columns (a) through (c) 15 Line 10
    2211 Number of retained workers for whom receiving credit 7 Line 11

  2. Section 22 has information reported on Form 5884-B, New Hire Retention Credit. This section is not required.

  3. All fields in Section 22 are numeric only.

  4. Field 2210 is a "dollars only" positive field. Field 2211 is a 7 digit numeric field (not a dollar field).

  5. Invalid Condition: Section 22 field errors will display if:

    • The field length for Field 2210 is more than 15 numeric digits.

    • Field 2210 is negative.

    • The field length for Field 2211 is more than 7 numerics.

  6. Correction Procedures:

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

    2. If correct information is not available, delete the entry.

Section 26 - Form 8997 - Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments

  1. This section has instructions for correcting Section 26 Field Errors.

  2. If the Tax Period is before 201901 then delete any fields present in Section 26.

Section 26 Field Errors

  1. Section 26 has information reported on Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments.

  2. The Error Record Format for Section 26 is:

    Field Designator Field Title Maximum Length Location on Form 8997 Dollars/Cents Pos/Neg
    261A EIN 9 Part I, Row 1, Column a    
    261B Date 8 Part I, Row 1, Column b    
    261D Special gain code 1 Part I, Row 1, Column d    
    261E $ Amount 15 Part I, Row 1, Column e $ only +
    261F $ Amount 15 Part I, Row 1, Column f $ only +
    261IN Indicator 1 Edited right margin, Part I, Row 1    
    2612E $ Amount 15 Part I, Line 2, Column e (Column e total) $ only +
    2612F $ Amount 15 Part I, Line 2, Column f (Column f total) $ only +
    262A EIN 9 Part II, Row 1, Column a    
    262B Date 8 Part II, Row 1, Column b    
    262D Special gain code 1 Part II, Row 1, Column d    
    262E $ Amount 15 Part II, Row 1, Column e $ only +
    262F $ Amount 15 Part II, Row 1, Column e $ only +
    262IN Indicator 1 Edited right margin, Part II, Row 1    
    2622E $ Amount 15 Part II, Line 2, Column e (Column e total) $ only +
    2622F $ Amount 15 Part II, Line 2, Column f (Column f total) $ only +
    263A EIN 9 Part III, Row 1, Column a    
    263B Date 8 Part III, Row 1, Column b    
    263D Special gain code 1 Part III, Row 1, Column d    
    263E $ Amount 15 Part III, Row 1, Column e $ only +
    263F $ Amount 15 Part III, Row 1, Column f $ only +
    263IN Indicator 1 Edited right margin, Part III, Row 1    
    2632E $ Amount 15 Part III, Line 2, Column e (Column e total) $ only +
    2632F $ Amount 15 Part III, Line 2, Column f(Column f total) $ only +
    264A EIN 9 Part IV, Row 1, Column a    
    264B Date 8 Part IV, Row 1, Column b    
    264D Special gain code 1 Part IV, Row 1, Column d    
    264E $ Amount 15 Part IV, Row 1, Column e $ only +
    264F $ Amount 15 Part IV, Row 1, Column f $ only +
    264IN Indicator 1 Edited right margin, Part IV, Row 1    
    2642E $ Amount 15 Part IV, Line 2, Column e (Column e total) $ only +
    2642F $ Amount 15 Part IV, Line 2, Column f(Column f total) $ only +

Field 261A, Field 262A, Field 263A and Field 264A

  1. Field 261A, Field 262A, Field 263A and Field 264A - Form 8997 - Qualified Opportunity Fund (QOF) EIN.

  2. Invalid Condition: Field 261A, Field 262A, Field 263A and Field 264A are invalid if:

    • The field length is more than 9 characters.

    • The field is not numeric.

    • The Tax Period is before 201901.

  3. Correction Procedures:

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

    2. If the Tax Period is before 201901, delete the field.

Field 261B, Field 262B, Field 263B and Field 264B

  1. Field 261B, Field 262B, Field 263B and Field 264B - Form 8997 - Date QOF Investment acquired.

  2. Invalid Condition: Field 261B, Field 262B, Field 263B and Field 264B are invalid if:

    • The field length is not 8 characters.

    • The field is not numeric.

    • The month is zero or more than 12.

    • The day range does not match the amount of days in the month.

    • The Tax Period is before 201901.

  3. Correction Procedures:

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

    2. If the Tax Period is before 201901, delete the field.

Field 261D, Field 262D, Field 263D and Field 264D

  1. Field 261D, Field 262D, Field 263D and Field 264D - Form 8997 - Special gain code.

  2. Invalid Condition: Field 261D, Field 262D, Field 263D and Field 264D are invalid if:

    • The field length is more than 1 character.

    • The field is not "A" , "B" , "C" , "D" , "E" or "F" .

    • The Tax Period is before 201901.

  3. Correction Procedures:

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

    2. If the Tax Period is before 201901, delete the field.

Field 26IN, Field 262IN, Field 263IN and Field 264IN

  1. If any of Parts I, II, III or IV have more than one row with tax data present, an indicator will be entered in Field 26IN (Part I), Field 262IN (Part II), Field 263IN (Part III), and Field 264IN (Part IV).

  2. Invalid Condition: Field 26IN, Field 262IN, Field 263IN and Field 264IN are invalid if:

    • The field length is more than 1 character.

    • The field is not "blank" , "0" or "1" (more than one row with data present).

    • The Tax Period is before 201901.

  3. Correction Procedures:

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

    2. If the Tax Period is before 201901, delete the field.

All other Fields in Section 26

  1. Money Amount fields - Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments.

  2. Invalid Condition: Money amount fields can only be positive and are invalid if:

    • The field length is more than 15 characters.

    • The field is not dollars only.

    • The Tax Period is before 201901.

  3. Correction Procedures:

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

    2. If the Tax Period is before 201901, delete the field.

Section 29 - Form 6252 - Installment Sale Income

  1. The Error Record Format for Section 29 is:

    Field Designator Field Title Maximum Length Location on Form 6252
    2901 Description of Property Indicator 1 Line 1
    2902A Date Acquired (YYYYMMDD) 8 Line 2a
    2902B Date Sold (YYYYMMDD) 8 Line 2b
    2907 Subtract Line 6 from Line 5 (Net property Selling Price) 15 Part I, Line 7
    2919 Gross Profit percentage (expressed as a decimal amount 0.0000) 5 Part II, Line 19
    2921 Payments received during year 15 Part II, Line 21
    2923 Payments received in prior years 15 Part II, Line 23

  2. Section 29 has information reported on Form 6252, Installment Sale Income. This section is not required.

  3. Section 29 is valid for Tax Periods ending 201712 and later.

Field 2901 - Description of Property

  1. Field 2901 is found on Form 6252, Installment Sale Income, Line 1.

  2. Invalid Condition: Field 2901 is invalid if:

    • The field length is more than 1 character.

    • The field is other than "0" , "1" , "2" , "3" or "4" .

    • The Tax Period is before 201712.

  3. Correction Procedures:

    1. Correct coding, transcription and misplaced entries.

    2. If the Tax Period is before 201712, delete the field.

      If Then
      "Timeshares or residential lots" is shown on Form 6252, Line 1, Enter "1" in Field 2901.
      "Sale by an individual of personal use property (within the meaning of Section 1275(b)(3)" is shown on Form 6252, Line 1, Enter "2" in Field 2901.
      "Sale of any property used or produced in the trade or business of farming (within the meaning of Section 2032A(e)(4) or (5))" is shown on Form 6252, Line 1, Enter "3" in Field 2901.
      "Other" is shown on Form 6252, Line 1, Enter "4" in Field 2901.
      No description is given, Enter "0" in Field 2901.

Field 2902A and Field 2902B - Date Acquired and Date Sold

  1. Field 2902A and Field 2902B are found on Form 6252, Installment Sale Income, Line 2a and 2b.

  2. Invalid Condition: Field 2902A and Field 2902B are invalid if:

    • The field length is more than 8 characters (YYYYMMDD).

    • The field is not numeric.

    • The month is zero or greater than 12.

    • The day range does not match the amount of days in the month.

    • The Tax Period is before 201712.

  3. Correction Procedures:

    1. Correct coding, transcription and misplaced entries.

    2. If the Tax Period is before 201712, delete the field.

Field 2907, Field 2921 and Field 2923 - Net Property Selling Price, Payments received during year and Payments received in prior years

  1. Field 2907, Field 2921 and Field 2923 are transcribed from Form 6252, Installment Sale Income, Part I, Line 7, Part II, Line 21 and Part II, Line 23.

  2. Invalid Condition: Field 2907, Field 2921 and Field 2923 are invalid if:

    • The field length is more than 15 characters.

    • The field is not numeric, positive or entered in dollars and cents.

    • The Tax Period is before 201712.

  3. Correction Procedures:

    1. Correct coding, transcription and misplaced entries.

    2. If the field is negative, delete the field.

    3. If the Tax Period is before 201712, delete the field.

Field 2919 - Gross profit percentage

  1. Field 2919 is transcribed from Form 6252, Installment Sale Income, Part II, Line 19. The gross profit percentage is expressed as a decimal (0.0000).

    Note:

    The ERS screen will display 00000 (the decimal is implied). For example, 50% will display as 05000.

  2. Invalid Condition: Field 2919 is invalid if:

    • The field length is more than 5 characters.

    • The field is not numeric.

    • The value exceeds 1.0000.

    • The Tax Period is before 201712.

  3. Correction Procedures:

    1. Correct coding, transcription and misplaced entries.

    If Then
    Field 2919 is more than 5 characters (e.g. 0.45678), Enter the first 5 characters (e.g. 0.4567).
    Field 2919 is greater than 1 (e.g. 1.4567), Delete the field.
    The Tax Period is before 201712, Delete the field.

Math/Consistency Priority IV

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

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

  3. All errors must be resolved by either eliminating the error, entering a Clear Code, or entering a Taxpayer Notice Code.

♦Error Code 001 - Tax Year-Invalid Entry♦

  1. Fields Displayed:

    Field Designator Field Title Maximum Length
    01TXP Tax Period 6
    01RCD Received Date 8
    01CCC Computer Condition Code 10

  2. Invalid Condition: Error Code 001 will generate when any of the following conditions are present:

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

    • Computer Condition Code"G" is present - The processing date is equal to or more than 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 a Computer Condition Code "W" is present.

  3. Correction Procedures:

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

    2. Do not send the returns in the following table to Statute Control for clearance. Instead, do the following:

      If Then
      • Return is prepared by Compliance (e.g., IRC 6020(b)),

      • Return is secured by Examination/Collections,

      • Return has a TC 59X (Transaction Code),

      • Return has "ICS" (Integrated Collection System) notated on the face of the return,

      • Return is a Substitute for Return prepared by Examination ("SFR" in the margin) with Form 13133, Expedite Processing Cycle, attached,

      • Return has a stamp indicating a previous clearance by Statute Control within the last 90 days,

      Enter "W" in Field 01CCC and on the return and continue processing.

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

    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 3.12.217.3.6, Field 01RCD - Received Date, to determine the Received Date.

      CCC "W" entered incorrectly, Delete CCC "W" from Field 01CCC.
      The return has a stamp that shows a previous clearance by Statute Control within the last 90 days, Enter CCC "W" in Field 01CCC and on the return.

      Note:

      Do not send the return to Statute Control.

      The return is not stamped by Statute Control within the last 90 days,
      1. SSPND with Action Code "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. If Statute Control requests a voided record, SSPND with Action Code "640" .

♦Error Code 002 - Name Control Mismatch♦

  1. Fields Displayed:

    Field Designator Field Title Maximum Length
    CL Clear Code 1
    01NC Name Control 4
    >>>> Name Control Underprint 4
    01EIN Employer Identification Number 9
    01TXP Tax Period 6
    02CON "In-Care-of" Name 35
    02FAD Foreign Address 35
    02ADD Street Address 35
    02CTY City 22
    02ST State 2
    02ZIP ZIP Code 12

  2. Invalid Condition: Error Code 002 will generate when the Name Control mismatched against the National Account Profile (NAP) or the Entity Index File (EIF).

  3. Correction Procedures:

    1. Before taking any more research steps to resolve Error Code 002, drop the cursor to the bottom of the screen and transmit. This will make sure 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.

      Note:

      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 correctly upon transmitting the ERS screen.

    2. Correct coding errors, transcription errors, and misplaced entries.

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

    4. Refer to all the following research instructions in this Error Code before taking any action.

    5. If Field 01NC and the Name on the return or an attachment are the same but differ from the underprint in Field 01NC, research IDRS using Command Code INOLES to determine the correct Name.

      If Then
      The Name on the return or attachment matches the Name Control on INOLES, Bring up the underprint.
      The Name Control on INOLES is different from the Name on the return or attachment, Research IDRS using Command Code NAMEB/NAMEE for a new EIN.

    6. If a new EIN is found, verify the Name Control using IDRS Command Code (CC) INOLES.

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

      2. Overlay Field 01EIN with the new EIN from NAMEB/NAMEE. Enter the new EIN on the return. 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. Make sure the entity information matches the return.

        Note:

        Do not send Letter 3875C when:

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

        • The EIN is consecutive numbers (e.g., 12-3456789) or repeating numbers (e.g., 11-1111111), or

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

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

      Multiple EINs are found,
      1. SSPND with Action Code "320" to Entity Control.

      2. Prepare Form 4227, Intra-SC Reject or Routing Slip, with the notation "MULTIPLE EINS" .

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

      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 attachment, SSPND with Action Code "320" to Entity Control.

    7. 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 1120-S, research IDRS using Command Code ENMOD for a new name.

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

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

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

      If Then
      A pending TC 013 is present, Enter "C" in the Clear Code Field.
      A pending TC 013 is not present,
      1. SSPND with Action Code "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 IRS Received Date,
      1. GTSEC 01.

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

      The Entity Assignment Date is not past the Return Due Date and IRS Received Date, Continue Processing.

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

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

      2. Notate on Form 3465, "Move payment to correct module upon completion and release freeze" .

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

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

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

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

      Payment can’t be found, Enter "C" in the Clear Code Field.

♦Error Code 003 – Check Digit Invalid♦

  1. Fields Displayed:

    Field Designator Field Title Maximum Length
    01NC Name Control 4
    01EIN Employer Identification Number 9

  2. Invalid Condition: Error Code 003 will generate when any of the following conditions are present:

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

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

  3. Correction Procedures:

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

    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 Command Code (CC) NAMEB/NAMEE for correct EIN.

    3. Compare the EIN from CC NAMEB/NAMEE to the EIN on the return.

    If Then
    The EIN on Form 1120-S matches the EIN on CC NAMEB/NAMEE, Enter Name Control from CC NAMEB/NAMEE in Field 01NC.
    Research shows a different EIN, Verify the EIN and name on CC INOLES.
    Name Control on CC INOLES matches the name on the return or attachment,
    1. Overlay Field 01EIN with the EIN from CC INOLES. Enter the EIN from CC INOLES on the return.

    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 when:
      • Three or less digits of the EIN are transposed, different, or missing, or
      • The EIN is consecutive numbers (e.g., 12-3456789) or repeating numbers (e.g., 11-1111111), or
      • CC INOLES shows the account was “merged to” or “merged from”, or
      • The TIN on the return is the taxpayer's SSN (check CC INOLEG).

    Unable to find an EIN or more than one EIN is found,
    1. SSPND with Action Code "320" to Entity Control.

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

  4. Suspense Correction: Research IDRS using CC BMFOL to determine if payments posted incorrectly.

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

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

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

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

    The payment posted to the correct EIN, Enter the correct EIN in Field 01EIN and on the return.
    Payment can’t be found, Enter "C" in the Clear Code Field.

♦Error Code 004 - Name Control/EIN Validation♦

  1. Fields Displayed:

    Field Designator Field Title Maximum Length
    CL Clear Code 1
    01NC Name Control 4
    >>>> Name Control Underprint 4
    01EIN Employer Identification Number 9

  2. Invalid Condition: Error Code 004 will generate when any of the following conditions are present:

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

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

      Note:

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

  3. Correction Procedures:

    1. Before taking any more research steps to resolve Error Code 004, drop the cursor to the bottom of the screen and transmit. This will make sure 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.

      Note:

      When corrections are made to Field 01NC or Field 01EIN, the computer will validate the entries with the NAP and reset the OLE indicators correctly upon transmitting the ERS screen.

    2. Correct coding errors, transcription errors, and misplaced entries.

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

    4. Refer to all the following research instructions in this Error Code before taking any action.

    5. If Field 01NC and the Name on the return or an attachment are the same but differ from the underprint in Field 01NC, research IDRS using Command Code (CC) INOLES to determine the correct Name Control.

      If Then
      The Name on the return or attachment matches the Name Control on INOLES, Bring up the underprint.
      The Name Control on INOLES is different from the Name on the return or attachment, Research IDRS using Command Code NAMEB/NAMEE for a new EIN.

    6. If a new EIN is found, verify the Name Control using IDRS Command Code (CC) INOLES.

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

      2. Overlay Field 01EIN with the new EIN from NAMEB/NAMEE. Enter the new EIN on the return. 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 when:

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

        • The EIN is consecutive numbers (e.g., 12-3456789) or repeating numbers (e.g., 11-1111111), or

        • INOLES shows the account was "merged to" or "merged from" or

        • The TIN on the return is the taxpayer’s SSN (check CC INOLEG).

      Multiple EINs are found,
      1. SSPND with Action Code "320" to Entity Control.

      2. Prepare Form 4227, Intra-SC Reject or Routing Slip, with the notation "MULTIPLE EINS" .

      INOLES shows a "Merge To" (MT) EIN, Research the "MT" EIN on Command Code INOLES.
      The "MT" EIN matches the entity on the return or attachment, Enter the "MT" EIN in Field 01EIN and on the return.
      The "MT" EIN does not match the entity on the return or attachment, SSPND with Action Code "320" to Entity Control.

    7. If the Name on the return or attachment does not agree with Name Control on INOLES or there is an indication of a name change on Form 1120-S, research IDRS using Command Code ENMOD for a new name.

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

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

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

      If Then
      A pending TC 013 is present, Enter "C" in the Clear Code Field.
      A pending TC 013 is not present,
      1. SSPND with Action Code "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 and Received Date,
      1. GTSEC 01.

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

      The Entity Assignment Date is not past the Return Due Date and Received 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, "MOVE PAYMENT TO CORRECT MODULE UPON COMPLETION AND RELEASE FREEZE" .

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

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

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

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

      Payment can’t be found, Enter "C" in the Clear Code Field.

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

  1. Fields Displayed:

    Field Designator Field Title Maximum Length
    CL Clear Code 1
    01TXP Tax Period 6
    01RCD Received Date 8

  2. Invalid Condition: Error Code 005 will generate when the year-month of the processing date is later than the Tax Period plus six months and the Received Date is not present.

  3. Correction Procedures:

    1. Compare the displayed fields with the return and correct all misplaced entries, coding and transcription errors.

    2. If displayed fields are correct and the return is timely filed, enter a "C" in the Clear Code field.

    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 before the beginning of the Tax Period.

    5. Determine the Received Date using the following priority when one is needed but is not stamped on the return or a valid handwritten Received Date is not present.

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

      Note:

      Use the postmark date stamped on the face of the return, if envelope not attached.

    • 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 shows signature date is invalid)

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

  4. If a return is faxed to another service area and then sent to Submission for processing, do not enter the Enterprise Electronic Fax (EEFax) Date as the IRS Received Date. Enter a Received Date according to normal procedures.

    Caution:

    Do not use the EEFax Date as the IRS Received Date.

Error Code 006 - Remittance Received and No Received Date

  1. Fields Displayed:

    Field Designator Field Title Maximum Length
    RMIT> Remittance 16
    01TXP Tax Period 6
    01RCD Received Date 8

  2. Invalid Condition: Error Code 006 will generate when a remittance is received with the return and a Received Date is not present.

  3. Correction Procedures:

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

    2. Compare the displayed fields with the return. If incorrect, overlay the screen with the correct information. The format for Tax Period is "YYYYMM" and Received Date is "YYYYMMDD" .

    3. If the Received Date is missing or illegible, determine the date in the order listed below:
      1. IRS date stamp.
      2. Legible U.S. Post Office postmark date or foreign postmark or an acceptable designated private delivery service. See IRM 3.10.72, Receiving, Extracting, and Sorting, for further details.

      Note:

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


      3. Service Center Automated Mail Processing System (SCAMPS) digital date.
      4. Signature (Use a signature date only for the current year return; if it is a prior year return use the DLN Julian date).
      5. DLN Julian Date minus ten days. (MeF Form 1120-S use the Julian date).
      6. Current date minus ten days.

    4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ from the Return Due Date (RDD), despite Saturday, Sunday or Holiday extension dates.

    5. If both U.S. Postal Service and private meter postmarks are present, honor the U.S. Postal Service postmark.

♦Error Code 007- Received Date Earlier Than Tax Year♦

  1. Fields Displayed:

    Field Designator Field Title Maximum Length
    01TXP Tax Period 6
    01RCD Received Date 8
    01CCC Computer Condition Code 10

  2. Invalid Condition: Error Code 007 will generate when the Received Date is earlier than the first day of the Tax Period/Year.

  3. Correction Procedures:

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

    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 (e.g., 20210115 instead of 20220115), and other information (Julian date, postmark date, or signature date) shows that the Received Date should be the current year,   Change the Received Date 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 with Action Code "480" .

      2. Prepare Form 4227, Intra-SC Reject or Routing Slip, 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 Tax Period.

      2. SSPND with Action Code "211" .

  4. Suspense Correction:

    If Then
    The taxpayer replies that the return is a "Final" ,
    1. Change the Tax Period to agree with the month before the Received Date and enter in Field 01TXP.

    2. Enter "F" in Field 01CCC.

    The taxpayer replies that the return is not a final return, SSPND with Action Code "480" until the end of the Tax Period given by the taxpayer.
    The taxpayer fails to reply or the reply is not adequate,
    1. Enter "3" in Field 01CCC.

    2. SSPND with Action Code "480" until the end of the Tax Period shown on the return.

Error Code 008 - Tax Period Beginning

  1. Fields Displayed:

    Field Designator Field Title Maximum Length
    01TXB Tax Period Beginning 8
    01TXP Tax Period 6
    01CCC Computer Condition Code 10

  2. Invalid Condition: Error Code 008 will generate when any of the following conditions are present:

    • Tax Period Beginning is not present with a CCC "Y" or "F" .

    • Tax Period Beginning is after the Tax Period Ending.

    • Tax Period Beginning is earlier than 12 months before Tax Period Ending.

  3. Correction Procedures:

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

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

    If And Then
    The return is a "Final" or "Short Period" , Tax Period Beginning is present on return, Enter Tax Period Beginning in YYYYMMDD format.
    The return is a "Final" or a "Short Period" , The day is not present in the Tax Period Beginning, Enter "01" for the day.
    The return is a "Final" or a "Short Period" , Tax Period Beginning is not valid, Determine a Tax Period Beginning date from the original Tax Period Ending date.
    The return is an "Initial" Short Period, Tax Period Beginning is not present, Use the "Date Incorporated" from Form 1120-S, Box E or the "S-election Effective Date" from Form 1120-S, Box A.
    The return is not a "Final" or "Short Period" ,   Remove CCC "Y" or "F" from the field display.
    The return is not a "Final" or "Short Period" , Tax Period Ending was corrected, Enter the Tax Period Beginning from the return or determine from the Tax Period Ending (one full year).

♦Error Code 010 - Amended Return "G" Coded♦

  1. Fields Displayed:

    Field Designator Field Title Maximum Length
    01TXP Tax Period 6
    01NAI North American Industry Code 6
    01CCC Computer Condition Code 10
    01CRD Correspondence Received Date 8
    S02DP Data Present  
    S03DP Data Present  
    S04DP Data Present  
    S05DP Data Present  
    S06DP Data Present  
    S10DP Data Present  
    S12DP Data Present  
    S14DP Data Present  
    S15DP Data Present  
    S16DP