3.12.251 Corporation Income Tax Returns

Manual Transmittal

November 08, 2021

Purpose

(1) This transmits revised IRM 3.12.251, Error Resolution Corporation Income Tax Returns.

Material Changes

(1) IRM 3.12.251.2.1(2)d) - IRS Employee Contacts - Removed the Note since similar language appears under Taxpayer Advocate Service subsection per Chief Counsel feedback.

(2) IRM 3.12.251.2.2(1) - Taxpayer Advocate Service (TAS) - Taxpayer Bill of Rights (TBOR) content updated based on guidance from the Division Counsel/Associate Chief Counsel (National Taxpayer Advocate Program) and Branch 3 of the Associate Chief Counsel (Procedure and Administration) in the Internal Management Document (IMD) community e-mail dated March 12, 2021 (IPU 21U0475 issued 03-26-2021).

(3) IRM 3.12.251.2.3(2) - TAS Service Level Agreements (SLA) - Corrected the Service Level Agreements (SLAs) location (IPU 21U0623 issued 04-19-2021).

(4) IRM 3.12.251.2.7(1) - Figures and Exhibits - Added information regarding new exhibits.

(5) IRM 3.12.251.3.1 (1)(2)(3) - Command Codes - Rewritten for clarity.

(6) IRM 3.12.251.3.2(1)(2)(4) - Action Codes - Rewritten for clarity.

(7) IRM 3.12.251.3.2(8) - Action Codes - Deleted Action Code 343 (old information) and revised Action Code 420.

(8) IRM 3.12.251.3.3(1)(2) - Using Action Codes with Command Codes - Rewritten for clarity.

(9) IRM 3.12.251.3.11(1)(2) - Non-Perfectable Conditions - Clarified instructions per Plain Language.

(10) IRM 3.12.251.3.12(2)(3) - Types of Errors - Deleted paragraph (2) and clarified instructions per Plain Language.

(11) Deleted Sections 3.12.251.3.12.2 through 3.12.251.3.12.16. Moved to IRM 3.12.38.

(12) IRM 3.12.251.3.17(5) - Use of Fax for Taxpayer Submissions - 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 21U0153 issued 01-27-2021).

(13) IRM 3.12.251.3.18(1)a) - Unprocessable Conditions - Deleted old information.

(14) Deleted Section 3.12.251.3.19 for Qualified Cellulosic Biofuel known as "Black Liquor" - information is more than ten years old.

(15) IRM 3.12.251.3.22(2) - Conversion of Form 1120-S to Form 1120 - Defined Field 01NAI. by adding Schedule K, Line 1b per unpostable clearance review feedback.

(16) Moved the following Sections:

  • 3.12.251.28 to IRM 3.12.251.3.24, Section 965 Returns - General Instructions

  • 3.12.251.28.1 to IRM 3.12.251.3.24.1, Section 965 Returns - Tax Period 201712 - 201811

  • 3.12.251.28.2 to IRM 3.12.251.3.24.2, Section 965 - Tax Period 201812 through 202022

  • 3.12.251.29 to IRM 3.12.251.3.25, Documents with Overfilled Money Fields

(17) IRM 3.12.251.3.24.1(2)(8) - Added 201712 through 202012 timeframe to the instructions per circulation issued 06-17-2021.

(18) IRM 3.12.251.3.24.2 Title (1)(2)(3)2)(3)3) - Section 965 - Tax Period 201812 through 202022 - Added 201712 through 202012 timeframe to the instructions per circulation issued 06-17-2021.

(19) IRM 3.12.251.5.7(3)e) - Field 01CCC - Computer Condition Code (XREF EC 010, 011, 065, 070, 072, 073, 172) - Clarified CCC "Q" instructions.

(20) IRM 3.12.251.5.7(3)e) - Field 01CCC - Computer Condition Code (XREF EC 010, 011, 065, 070, 072, 073, 172) - Added 201712 through 202012 timeframe to the instructions per circulation issued 06-17-2021.

(21) IRM 3.12.251.5.7(3)e) - Field 01CCC - Computer Condition Code (XREF EC 010, 011, 065, 070, 072, 073, 172) - Added tax period 201812 and prior per LB&I Exam.

(22) IRM 3.12.251.5.10(1) - Field 01NAI - North American Industry Classification System Code (NAICS Code) - Defined Field 01NAI. by adding Schedule K, Line 1b per unpostable clearance review feedback.

(23) IRM 3.12.251.8.1(1) - Section 04 Field Errors - Changed instructions regarding negative amounts to match Functional Specifics Package (FSP) and MeF and ISRP programming.

(24) IRM 3.12.251.11.1(1) - Section 07 Field Errors - Added 201712 through 202012 timeframe to the instructions per circulation issued 06-17-2021.

(25) IRM 3.12.251.12.1(1) - Section 08 Field Errors - Added 201712 through 202012 timeframe to the instructions per circulation issued 06-17-2021.

(26) IRM 3.12.251.14.1(1) - Section 10 Data-Form 1120 - Added new fields from Form 4797 and Form 8996 per new transcription requests.

(27) IRM 3.12.251.14.4(1)(2)(3) - Fields 101B and 101C - Form 4797 - Added new fields from Form 4797 per new transcription requests.

(28) IRM 3.12.251.14.13(2) - Field 10I5 - Form 8996, Qualified Opportunity Fund, Checkbox - Moved table with revisions to this section and added line changes.

(29) IRM 3.12.251.14.14(1)(2)(3) - Field 10Q6 - Form 8996 - Added new field from Form 8996 per new transcription requests.

(30) IRM 3.12.251.14.16(1) - Field 1013 - Form 8996 - Part III, Line 14 - Deleted revision table and moved to IRM 3.12.251.14.13.

(31) IRM 3.12.251.14.17(1) - Field 1014 - Form 8996 - Part III, Line 15 - Deleted revision table and moved to IRM 3.12.251.14.13.

(32) IRM 3.12.251.23(1) - Section 23 Data - Form 3800, General Business Credit - Added "carryforward" to Line 1d.

(33) IRM 3.12.251.25(1) - Section 25 Data - Form 3800, General Business Credit - Deleted Part II.

(34) IRM 3.12.251.26(1)(2) - Section 26 Data - Form 8997 - Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments - Added section for transcription of Form 8997 per new transcription requests.

(35) IRM 3.12.251.26.1(1) - Section 26 Field Errors - Added new fields for Form 8997 per new transcription requests.

(36) IRM 3.12.251.26.2(1)(2)(3) - Fields 261A, 262A, 263A and 264A - Field error instructions.

(37) IRM 3.12.251.26.3(1)(2)(3) - Fields 261B, 262B, 263B and 264B - Field error instructions.

(38) IRM 3.12.251.26.4(1)(2)(3) - Fields 261D, 262D, 263D and 264D - Field error instructions.

(39) IRM 3.12.251.26.5(1)(2)(3) - Fields 261IN, 262IN, 263IN and 264IN - Field error instructions.

(40) IRM 3.12.251.26.6(1)(2)(3) - All other Fields in Section 26 - Field error instructions.

(41) IRM 3.12.251.28.7(1) - Error Code 010 - Amended Return "G" Coded - Added Field S26DP.

(42) IRM 3.12.251.28.16(1) - Error Code 070 - CCC "9" is Present - Updated instructions per Form 8586 new revision.

(43) IRM 3.12.251.28.17(1) - Error Code 072 - Check Fields 08RLI, 2301D and 2504D against Field 01CCC - Updated instructions per Form 8586 new revision.

(44) IRM 3.12.251.28.30(4) - Error Code 168 - Check Charitable Deductions - Revised instructions to clarify that taxpayers can deduct up to 25 percent for charitable contributions (IPU 21U0013 issued 01-04-2021).

(45) IRM 3.12.251.28.30(4) - Error Code 168 - Check Charitable Deductions - Revised instructions to include TY2021 per PL 116-260 Section 213 (IPU 21U0153) issued 01-27-2021).

(46) IRM 3.12.251.28.33.5(3) - Taxpayer Notice Code Chart for EC 174 - Clarified TPNC’s 88 and 89 (TPNC’s related to Telephone Excise Tax Refund (TETR).

(47) IRM 3.12.251.28.36(5)Note (9) - Error Code 178 - General Business Credit Math Error - Deleted old information.

(48) IRM 3.12.251.28.40(1) - Error Code 188 - Balance Due Math Error - Added 201712 through 202012 timeframe to the instructions per circulation issued 06-17-2021.

(49) IRM 3.12.251.34.1.7(2)a) - Return Processing Code () - Clarified instructions reflecting valid codes (IPU 21U0153) issued 01-27-2021).

(50) IRM 3.12.251.34.1.7(3)b) - Return Processing Code () - Added "6" to Form 1120-C per SBSE (IPU 21U0013 issued 01-04-2021).

(51) IRM 3.12.251.34.7.1(1) - Section 07 Field Errors - Added 201712 through 202012 timeframe to the instructions per circulation issued 06-17-2021.

(52) IRM 3.12.251.34.7.1(1)(1)a) - Section 07 Field Errors - Clarified TETR instructions.

(53) IRM 3.12.251.34.8.1(1) - Section 08 Field Errors - Added Field 08QEV per ISRP/FSP review.

(54) IRM 3.12.251.34.20.15(1)(3) - Error Code 070 - CCC "9" is Present - Updated instructions per Form 8586 new revision.

(55) IRM 3.12.251.34.20.16(1) - Error Code 072- Check Fields 2301D, 2504D and 08RLI against Field 01CCC - Updated instructions per Form 8586 new revision.

(56) IRM 3.12.251.34.20.34(1) - Error Code 188- Balance Due Math Error - Added 201712 through 202012 timeframe to the instructions per circulation issued 06-17-2021.

(57) IRM 3.12.251.35.3.7 - Return Processing Code - Field 01 - Added "Note" to clarify the difference between programming and RPCs used for Form 1120-F.

(58) IRM 3.12.251.35.5.16(2)c) - Field 03EIN - EIN for Qualified Derivatives Dealers - Added tax period check to invalid conditions per IT clearance review feedback.

(59) IRM 3.12.251.35.7.1(1)(3)c) - Section 07 Field Errors - Corrected Section 07 to match Functional Specific Package (FSP).

(60) IRM 3.12.251.35.8.1(1)(2) - Section 10 Field Errors - Added new field from Form 8996.

(61) IRM 3.12.251.35.16(1)(2) - Section 26 Data - Form 8997 - Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments - Added section for transcription of Form 8997.

(62) IRM 3.12.251.35.17(1)(2) - Math Consistency Errors - Form 1120-F - Created heading section for Math Consistency Errors for Form 1120-F (IPU 21U0013 issued 01-04-2021).

(63) IRM 3.12.251.35.17.1(1) - Error Code 001- Tax Year- Invalid Entry - Moved Section for Error Code 001 under heading for Math Consistency Error Codes (IPU 21U0013 issued 01-04-2021).

(64) IRM 3.12.251.35.17.7(1) - Error Code 010- Amended Return "G" Coded - Added Field S26DP.

(65) IRM 3.12.251.36.10.23(1) - Error Code 188 - Balance Due/Overpayment Math Error - Clarified instructions regarding TETR fields.

(66) IRM 3.12.251.37.1.7(2)a) - Return Processing Code () - Clarified instructions reflecting valid codes (IPU 21U0153) issued 01-27-2021).

(67) IRM 3.12.251.37.1.7(3)b) - Return Processing Code () - Added "6" to Form 1120-L and Form 1120-PC per SBSE (IPU 21U0013 issued 01-04-2021).

(68) IRM 3.12.251.37.5.3(1)a) - Section 07 Field Errors - Added 201712 through 202012 timeframe to the instructions per circulation issued 06-17-2021.

(69) IRM 3.12.251.37.5.3(1)a) - Section 07 Field Errors - Deleted TETR fields to match FSP.

(70) IRM 3.12.251.37.15.24(1) - Deleted outdated information (IPU 21U0013 issued 01-04-2021).

(71) IRM 3.12.251.38.3(1) - Section 03 Field Errors - Form 1120-REIT and Form 1120-RIC - Added fields to Section 03 per new transcription requests.

(72) IRM 3.12.251.38.3.15(1)(2)(3) - Fields 03Q10 - Schedule K, Lines 10 - Added field instructions.

(73) IRM 3.12.251.38.3.16(1)(2)(3) - Fields 03Q11 - Schedule K, Lines 11 - Added field instructions.

(74) IRM 3.12.251.38.7(1) - Section 07 Field Errors - Added 201712 through 202012 timeframe to the instructions per circulation issued 06-17-2021.

(75) IRM 3.12.251.38.7(1)a) - Section 07 Field Errors - Form 1120-REIT and Form 1120-RIC - Deleted TETR fields to match FSP.

(76) IRM 3.12.251.38.8(1)(2) - Section 08 Field Errors Form 1120-REIT and Form 1120-RIC - Added fields to Section 08 per new transcription requests.

(77) IRM 3.12.251.38.8.1(1)(2)(3) - Fields 0845C and 0845I - Checkboxes - Added section to accommodate new checkbox fields.

(78) IRM 3.12.251.38.8.2(1)(2)(3) - Other Section 08 Fields - Added section to accommodate new checkbox fields.

(79) IRM 3.12.251.38.10.1(1) - Section 10 Field Errors - Added "Form 1120-REIT only" to applicable Form 8996 fields in table per Subject Matter Expert (SME) review.

(80) IRM 3.12.251.38.20(1)(2) - Section 26 Data - Form 8997 - Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments - Added section for transcription of Form 8997.

(81) IRM 3.12.251.38.20.1(1) - Section 26 Field Errors - Added Section 26 new fields per new transcription requests.

(82) IRM 3.12.251.38.20.2(1)(2)(3) - Field 263A - Added new Field error instructions per new transcription.

(83) IRM 3.12.251.38.20.3(1)(2)(3) - Field 263B - Added new Field error instructions per new transcription.

(84) IRM 3.12.251.38.20.4(1)(2)(3) - Field 263D - Added new Field error instructions per new transcription.

(85) IRM 3.12.251.38.20.5(1)(2)(3) - Field 263IN - Added new Field error instructions per new transcription .

(86) IRM 3.12.251.38.20.6(1)(2)(3) - All Other Fields in Section 26 - Added new Field error instructions per new transcription.

(87) IRM 3.12.251.38.21.7(1) - Error Code 010 - Amended Return "G" Coded - Added Field S26DP.

(88) IRM 3.12.251.38.21.16(1) - Error Code 070 - CCC "9" is Present - Updated instructions per Form 8586 new revision.

(89) IRM 3.12.251.38.21.17(1) - Error Code 072 - Check Fields 08RLI, 2301D and 2504D against Field 01CCC - Updated instructions per Form 8586 new revision.

(90) Exhibit 3.12.251-1 - Moved Taxpayer Notice Codes (TPNC) to an exhibit.

(91) Added the following exhibits:

  • Exhibit 3.12.251-2, Form 1120, U.S. Corporation Income Tax Return (Field Designators)

  • Exhibit 3.12.251-3, Schedule N, Foreign Operations of U.S. Corporations (Field Designators)

  • Exhibit 3.12.251-4, Schedule D, Capitol Gains and Loses (Field Designators)

  • Exhibit 3.12.251-5, Form 4797, Sales of Business Property

  • Exhibit 3.12.251-6, Form 8949, Sales and Other Dispositions of Capital Assets (Field Designators)

  • Exhibit 3.12.251-7, Form 8996, Qualified Opportunity Fund (Field Designators)

  • Exhibit 3.12.251-8, Form 8050, Direct Deposit of Corporate Tax Refund (Field Designators)

  • Exhibit 3.12.251-9, Form 1125-A, Cost of Goods Sold (Field Designators)

  • Exhibit 3.12.251-10, Form 4136, Credit for Federal Tax Paid on Fuels (Field Designators)

  • Exhibit 3.12.251-11, Form 8978, Partner’s Additional Reporting Year Tax (Field Designators)

  • Exhibit 3.12.251-12, Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts (Field Designators)

  • Exhibit 3.12.251-13, Form 8941, Credit for Small Employer Health Insurance Premiums (Field Designators)

  • Exhibit 3.12.251-14, Form 3800, General Business Credit (Field Designators)

  • Exhibit 3.12.251-15, Form 6252, Installment Sale Income (Field Designators)

  • Exhibit 3.12.251-16, Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments

  • Exhibit 3.12.251-17, Form 1120-C, U.S. Income Tax Return for Cooperative Associations (Field Designators)

  • Exhibit 3.12.251-18, Form 1120-F, U.S. Income Tax Return of a Foreign Corporation (Field Designators)

  • Exhibit 3.12.251-19, Form 1120-H, U.S. Income Tax Return for Homeowners Association (Field Designators)

  • Exhibit 3.12.251-20, Form 1120-L, U.S. Life Insurance Company Income Tax Return (Field Designators)

  • Exhibit 3.12.251-21, Form 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return (Document Code 13) (Field Designators)

  • Exhibit 3.12.251-22, Form 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts (Field Designators)

  • Exhibit 3.12.251-23, Form 1120-RIC, U.S. Income Tax Return For Regulated Investment Companies (Field Designators)

  • Exhibit 3.12.251-24, Potential Frivolous Arguments for Examination Review

(92) Exhibit 3.12.251-25, Terms/Definitions/Acronyms - Moved from Exhibit 1 to Exhibit 28.

(93) Editorial changes made throughout the IRM include:

  • Corrected spelling and grammatical errors

  • Corrected references, citations and links

  • Changed section titles throughout the IRM for clarity and consistency

  • Updated dates throughout

  • Updated form titles throughout

  • Used simpler words.

  • Deleted unnecessary words

  • Updated consistency sections per BMF Consistency Template

Effect on Other Documents

IRM 3.12.251, dated November 13, 2020 (effective January 1, 2021) is superseded. The following IRM Procedural Updates (IPUs), issued January 4, 2021 through April 19, 2021 have been incorporated into this IRM: IPU 21U0013, IPU 21U0153, IPU 21U0475, and IPU 21U0623.

Audience

Wage and Investment (W&I), Submission Processing Employees

Effective Date

(01-01-2022)

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

Program Scope and Objectives

  1. This IRM section gives instructions for Wage and Investment Error Resolution Tax Examiners to correct errors for the returns below:

    • Form 1120, U.S. Corporation Income Tax Return (Document Code 10 or 11)

    • Form 1120-C, U.S. Income Tax Return for Cooperative Associations (Document Code 03)

    • Form 1120-F. U.S. Income Tax Return of a Foreign Corporation (Document Code 66 or 67)

    • Form 1120-H, U.S. Income Tax Return for Homeowners Association (Document Code 71)

    • Form 1120-L, U.S. Life Insurance Company Income Tax Return (Document Code 11)

    • Form 1120-PC, U.S. Property and Casualty Insurance Company Income Tax Return (Document Code 13)

    • Form 1120-REIT, U.S. Income Tax Return for Real Estate Investment Trusts (Document Code 12)

    • Form 1120-RIC, U.S. Income Tax Return For Regulated Investment Companies(Document Code 05)

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

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

    • Tax Examining Technicians

    • Lead Tax Examining Technicians

    • Supervisory Tax Examining Assistants

  4. Policy Owner: Director, Submission Processing

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

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

    • Accounts Management (AM)

    • Chief Counsel

    • Compliance

    • Information Technology (IT) Programmers

    • Large Business and International (LB&I)

    • Small Business Self-Employed (SBSE)

    • Statistics of Income (SOI)

    • Submission Processing (SP)

    • Taxpayer Advocate Service (TAS)

    • Tax Exempt and Government Entities (TEGE)

Background

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

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

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

    Employees use the ERS system and the return to correct these conditions and when necessary, use Integrated Data Retrieval System (IDRS) to research.

Authority

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

    • IRC 6201(a)

    • IRC 6213(b)

Responsibilities

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

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

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

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

Program Management and Review

  1. Program Goals: Correct any errors that are identified using the Error Resolution System (ERS).

  2. 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.

  3. Program Effectiveness: The program goals are measured by using the following tools:

    • Embedded Quality Submission Processing (EQSP)

    • Balanced Measures

    • Managerial reviews

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

Program Controls

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

Terms/Definitions/Acronyms

  1. For Terms, Definitions, and Acronyms, see Exhibit 3.12.251-25, Terms/Definitions/Acronyms.

Related Resources

  1. The following table lists related sources

    Resource Link/Title
    Submission Processing Design Center (SPDC) https://program.ds.irsnet.gov/sites/WILESPInstCrnr
    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 3.11.16 Corporate Income Tax Returns
    IRM 3.24.16 Integrated Submission and Remittance Processing (ISRP) System - Corporation Income Tax Returns
    IRM 3.12.38 BMF General Instructions

♦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 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 timeframes are:

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

    • Transactions will be viewable as posted transactions using 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.

♦ IRS Employee Contacts♦

  1. The Internal Revenue Service (IRS) Restructuring and Reform Act of 1998 (RRA 98), 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.

♦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 more 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 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 (TE/GE), Criminal Investigation (CI), Appeals and Large Business and International (LB&I), that outline the procedures and responsibilities for processing (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. BMF Identification (ID) Theft is increasing. If a case is found with attachments or correspondence showing the taxpayer is a victim of "ID Theft" :

    1. SSPND with Action Code 360 to route the return to Planning & 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.

Processing Tax Returns

  1. Records are placed into the Error Inventory or the Workable Suspense Inventory for correction.

  2. Once a record is accessed and displayed on the screen, the error must be resolved by:

    1. Fully correcting the record.

    2. Placing the record in suspense until more information is received, or

    3. Rejecting the record from pipeline processing.

  3. Correct coding and transcription errors and misplaced entries, or in the case of a taxpayer error, notify the taxpayer of the error on the return.

Related Manuals

  1. This IRM is your main source of information for correcting the record on the screen and the related return. You will also find procedures in the following IRMs:

    • IRM 3.11.16, Returns and Document Analysis-Corporate Income Tax Returns, which includes instructions for coding and editing of Form 1120, Form 1120-C, Form 1120-F, Form 1120-FSC, Form 1120-H, Form 1120-L, Form 1120-ND, Form 1120-PC, Form 1120-REIT, Form 1120-RIC and Form 1120-SF.

    • IRM 3.12.38, Error Resolution-Business Masterfile (BMF) General Instructions. This IRM has instructions for correcting records on the screen, document control, inventories, and management reports.

  2. If there is any discrepancy between the instructions in other IRMs, always follow the instruction in IRM 3.12.251.

Figures and Exhibits

  1. New exhibits have been added to the IRM. Job Aids can be found at BMF ERS Job Aid 2519-012, Section 07 https://program.ds.irsnet.gov/sites/WILESPInstCrnr/ERS/ERS%20-%20BMF/BMF%20ERS%20Job%20Aid/2519-012.pdf.

  2. If there is any discrepancy between the IRM and the information in the Job Aid, always follow the instruction in IRM 3.12.251.

♦ 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.

♦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 "Desk Procedures." These "Local Desk Procedures" can be used:

    1. To supplement existing Headquarters procedures.

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

    3. For local routing procedures.

    4. Are not limited to the uses listed above.

  2. A "signed approval" must be on file from the responsible manager on all Submission Processing Campus "Desk Procedures."

  3. All existing local information and procedural issuances must be reviewed periodically by a manager (at least 2 times a year or with each IRM revision) to:

    1. Ensure conformance with Headquarters procedures,

    2. Make necessary updates to the Desk Procedures, and

    3. Secure necessary approvals.

  4. An Excel worksheet has been developed and may be used for verifying tax with Forms 1120. This job aid is available for your use and can be found at http://serp.enterprise.irs.gov/databases/portals/sp/bmf/ers/job-aids/form-1120-calculations.xls. Another Excel worksheet has been developed for figuring the blended rate for fiscal filers (201801 through 201811) and can be found at http://serp.enterprise.irs.gov/databases/portals/sp/bmf/ers/job-aids/blended-rate.xlsm. This does not override the "Rule of Two." If the corrected tax is different than the computer’s generated tax, two tax examiners must figure the tax to ensure a quality product.

  5. Immediately notify the Headquarters tax analyst of any processing problems that cause a "work stoppage."

Error Resolution System (ERS) General Correction Procedures

  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 determine the corrective action.

  2. Perfecting the tax return and error screen displays:

    1. The error screen display shows the Document Locator Number (DLN), the Employer Identification Number (EIN) and the Name Control, if present, in the header portion of each error record. Previously assigned Taxpayer Notice Codes (TPNC) will be displayed in the header information.

    2. Before making corrections to the error screen displays, make certain that the DLN of the screen display matches the DLN of the document. If information from 2 taxpayers' returns appear on the error record under one DLN or the DLN does not match the return on the screen display:

    1. Stop processing.

    2. Give the block of work to your manager. Management will make the determination if the mixed data can be corrected via the terminal screen displays, or will take action to have the blocks deleted and reinput.

  3. Make certain the taxpayer's entries are on the correct lines of the tax return. Correct all coding and transcription errors and misplaced entries in each section and field of the screen display and on the return. Follow specific instructions for all sections and fields. Ensure that all sections and fields were transcribed.

  4. Working Trail - see IRM 3.12.251.3.21, Working Trail, for instructions.

  5. When making corrections to the screen display, be sure money amounts within a section have been transcribed in dollars and cents or dollars only, whichever is applicable. Brackets must be placed around negative amounts on the return. A signature is required on all returns. If no signature is present, follow instructions in IRM 3.12.38, BMF General Instructions, for missing signature. If the signature area on the tax return is not signed, SSPND with Action Code "225" and correspond.

    Note:

    A paper return that states their return was rejected through the E-file system require a signature. Form 8879-S is not an acceptable signature substitute for a paper return.

Command Codes

  1. Use Command Codes (CC) to correct and research the Error Inventory and the Workable Suspense Inventory.

    1. Command Codes tell the system what function to perform.

    2. The Employee Security file shows the employee’s working Command Codes.

    3. Command Codes must be entered in a valid format, otherwise an error message displays.

    4. Correct the data and transmit.

    5. For more information, see IRM 3.12.38, Error Resolution-BMF General Instructions and the job aid at http://serp.enterprise.irs.gov/job-aids/command-code/command-code.html.

  2. Valid Command Codes are:

    Command Code Description
    GTREC Used to access the first error record in an ERS error block or to access a specific record in the Workable Suspense Inventory.
    CRECT Used to enter a correction. CRECT will be valid only after an error has been displayed in response to the GTREC Command. The Remittance Field in a record is not correctable with the Command Code CRECT.
    GTSEC Used to obtain the display of any data section within the record in process. The response will be a display of all correctable fields of the requested section, including blank fields. No computer generated fields or error indicators will be shown.
    GTRECQ Used to access a worked record that has been held for Quality Review.
    GTRECW Used to recover an ERS data record that has already been worked. This Command Code can be used at any time on the same processing day. If any error is discovered on a subsequent day, the record must be corrected using Notice Review and Adjustment procedures unless the record was held for Quality Review.
    DLSEC Used to delete a section from an ERS record.
    SSPND Used with an ERS Action Code to place a record into suspense status. SSPND is valid for Error Correction and Suspense Correction.
    NWDLN Used to assign a renumbered DLN and reject an ERS record.
    RJECT Used to reject a record from ERS.
    BMFOL Used to access BMF returns. When used with different definer codes, it will access screen displays for computer generated data and data transcribed from individual line items.
    NAMEB Used to research a missing or invalid EIN, Name and address data is input to search the Key Index File.
    ENMOD Used to research for a name control and Transaction Codes (TC).
    INOLE Used to access the most current entity data from the National Account Profile (NAP).
    ERVOL Used with a Status Code to display the number of ERS records in the current Workable Inventory. The printed reports for ERS are updated nightly.
    ERINV Used to research a specific DLN or Taxpayer Identification Number (TIN) on ERS. It is also used to display the number of records in a block.
    ACTVT Used to transfer an Unworkable Suspense record to the Workable Inventory.
    NAMES Used by authorized users of Name Search Facility (NSF). Used to research a missing or invalid Social Security Number (SSN).
    NAMEE Used by authorized users of Name Search Facility. Used to research a missing or invalid EIN.
    NAMEI Used to research missing or invalid SSN.

Action Codes (AC)

  1. The ERS Action Code (AC) shows that specific information is missing or that the record is to be suspended from processing.

  2. Only one Action Code can be assigned at a time to a record. Assign Action Codes in the following priority:

    1. AC 310

    2. AC 320

    3. AC 4XX

    4. AC 6XX

    5. AC 3XX

    6. AC 2XX

  3. Action Code "001" will be computer-generated when the Block Out of Balance (BOB) Resolution Function has added a missing document by only inputting the TIN and the Name Control for the missing document.

  4. Code & Edit assigns Action Codes to numbered returns if the document is unprocessable. This code is edited in the lower left margin of the return.

  5. Temporary Guidance - Due to processing delays, more suspense time is needed in Rejects for 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.

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

  7. The Action Code assigned by Code and Edit (C&E) will be transcribed into the record of the Form 1120. A valid Action Code other than 001 will place the record in the Suspense Inventory, either Workable or Unworkable.

  8. If the Action Code assigned by C&E is invalid or incomplete, the record will be assigned to the Error Inventory for correction or deletion of the code.

    Action Code Description Workday Suspense Period Function Used In
    CE = C&E;
    EC = Error Correction;
    S = Suspense Correction;
    GEN = Computer Generated
    001 Input Document 0 GEN
    210 Employee Plan Master File (EPMF) Correspondence 60 EC, S
    211 First Taxpayer Correspondence 40 CE, EC, S
    212 Second Taxpayer Correspondence 25 CE, EC, S
    213 Correspondence to Other Than Taxpayer 40 CE, EC, S
    215 International Correspondence 45 CE, EC, S
    225 Taxpayer Correspondence (Signature Only) 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
    322 FIRPTA Credit Verification (Form 8288-A) 10 CE, EC
    331 Frivolous Review 3 CE, EC
    332 QRDT (Questionable Refund Detection Team) 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 Case 10 CE, EC, S
    337 Other CID (Criminal Investigation Division) 10 CE, EC, S
    341 Manual Refund 10 CE, EC, S
    342 Credit Verification 10 CE, EC, S
    344 Manual Refund - ERS 0 EC
    347 Form 1120-S - Form 2553 - First Year 20 CE, EC, S
    351 TIN Research 0 EC, S
    352 Name Research 3 CE, EC, S
    353 Address Research 3 CE, EC, S
    354 Filing Requirements Research 3 CE, EC, S
    355 Other MFTRA Research 5 CE, EC, S
    360 Other In-House Research 10 CE, EC, S
    370 Examination 10 CE, EC, S
    410 Assistance Needed 0 EC
    420 Management Suspense A 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 Codes 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 Magnetic Return - Check for Attachments 0 CE
    551 Magnetic - Inconsistent Data 0 CE
    610 Renumber - Non-Remit 0 CE, EC
    611 Renumber - Remit 0 CE, EC
    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 0 S
    670 Rejected Missing Document 0 S
    700 Duplicate Block DLN 0 GEN
    711 Duplicate Document DLN from C&E 0 GEN
    712 Duplicate Document DLN from Error Correction 0 GEN
    713 Duplicate Document DLN from Unpostables 0 GEN
    714 Duplicate Document DLN from Unworkable Suspense 0 GEN
    715 Duplicate Document DLN from Workable Suspense 0 GEN
    800 NAP Linkage Problem 2 EC, S
    900 Unpostable Record 0 GEN

  9. For more information and applicable Action Codes, see IRM 3.12.38.3.4, Error Resolution System (ERS) Action Codes, http://serp.enterprise.irs.gov/databases/irm.dr/current/3.dr/3.12.dr/3.12.38.dr/3.12.38.3.4.htm and the exhibit in IRM 3.12.38-1, Action Codes, http://serp.enterprise.irs.gov/databases/irm.dr/current/3.dr/3.12.dr/3.12.38.dr/3.12.38.htm.

Using Action Codes with Command Codes

  1. Use Action Codes and Command Codes to:

    1. Enter an Action Code on a record.

    2. Delete or correct an invalid code.

    3. Overlay the present Action Code with another to either resuspend or reject from ERS.

  2. Command Codes:

    Tax Examiner Command Code Action
    ERS SSPND Clears the record from the screen and places the record in either Workable Suspense or Unworkable Suspense.
    Rejects RJECT Rejects the record from ERS. Generally Service Center Control File (SCCF) is automatically update for the rejected records.
    Rejects NWDLN Rejects the record from ERS and establishes the new DLN under which the record for input.

  3. When the Action Code does not describe the required action, attach a note of explanation to the return Form 4227, Intra-SC Reject or Routing Slip.

  4. If an IDRS letter is necessary then, attach a Correspondence Action Sheet to issue the correspondence.

Clear Codes

  1. Certain generated Error Codes displays with a Clear Code. A Clear Code must clear the generation of an Error Code and allow the return to continue processing.

Clear Code "C"
  1. The letter "C" is used as a Clear Code for the Error Codes (consistency errors) where the error condition does not require a change or correction to the record as displayed.

    • The display will include a Clear Code Field, labeled "CL" to show the possible need of a Clear Code.

    • The Clear Code Field will always be found to the right of CRECT on the screen display.

  2. Error Codes indicating the possible need for a Clear Code are cleared by either correcting the condition or entering a "C" to show no correction is needed. If corrections are required:

    1. Enter and transmit before entry of the Clear Code "C."

    2. Assure that all corrective procedures have been input as shown under each individual Error Code before entering a "C" in the Clear Code Field.

  3. On Reject documents Clear Code "C" is also used for clearing the Action Code from the screen after corrections for the Action Code have been completed, or as with Action Codes "410" and "700," the Action Code must be cleared initially, so other errors in the record can be resolved.

    • The presence of the "C" with a Priority I Error shows that you have made the corrections to the Action Code and now wish to have any other errors on the record displayed.

  4. Command Code SSPND erases all "C" Clear Codes for Error Codes.

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

  6. The "C" Clear Code will prevent any other corrections to the record to go with the "C" Clear Code. If a correction must be entered but you already have transmitted the "C" Clear Code or SSPND, and the record is no longer displayed, then use Command Code GTRECW to make any corrections.

Error Codes
  1. Error codes (including ones which may require a "C" Clear Code) are numbered consecutively for correcting.

    1. When correcting errors at the terminal, it is possible to create an Error Code with a higher priority than the one(s) cleared with a Taxpayer Notice Code or "C" Clear Code. Programming erases all "C" Clear Codes and TPNCs for Error Codes with a lower priority than the one created.

    2. Beginning with the higher priority Error Code created, programming will continue displaying Error Codes for the record. Displays using the corrected data may be different from those previously displayed.

    3. When a correction erases an Error Code previously cleared with a "C" , the error condition no longer exists. The "C" Clear Code for this error and all "C" and TPNCs for all subsequent errors in the record are deleted. If errors remain after deleting the "C" and TPNCs on the record, the program continues to display Error Codes whether or not they were previously displayed.

Clear Code 000
  1. Clear Code "000" is used when deleting an Action Code.

    • Only use Clear Code 000 for invalid or erroneous Action Codes when you have determined there is no reason to suspend the record.

    Note:

    The "000" cannot be used in suspense correction.

Status Codes

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

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

    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 Code 900, Record is on the Unselected Inventory.

  3. The final two positions of the Status Code consists of the first two positions of the Action Code. This puts similar work together on the Workable Suspense Inventory. For example, "321" Suspense period expired, no response to taxpayer correspondence.

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

Statute Control Documents

  1. A statute control document is a document that is filed for a barred period. A barred period is a taxable period on which statutory limitations are placed for allowing refunds, credits, or for assessing additional taxes.

  2. Any Form 1120 that the current processing date is equal to or more than two years after the return due date or received date, whichever is later, is a statute control document. It appears on the screen with Error Code 001, unless Computer Condition Code "W" is present on the record. The Computer Condition Code "W" shows the record has been cleared by Statute Unit.

  3. All "G" coded returns become statute returns if the processing date is equal to more than two years and ten months after the 15th day of the third month after the tax period ending.

  4. In general, a claim for refund must be filed or additional tax assessments must be made not later than three years from the date the original return was filed or two years from the date the tax was paid, whichever is later.

♦Criminal Investigation (CI) Referrals♦

  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 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 which is 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 C&E made a copy and sent to CI Referral, then, 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.

      CI Referral Routing

      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 3.12.251-24, 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 3.12.251-24Potential Frivolous Arguments for Examination Review.

    Exception:

    If the return shows Action Code "331" and has a Form 4227, Intra-SC Reject or Routing Slip, attached with the remarks, "Refer to Examination 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 with the remarks "Refer to Exam FRP for audit after processing," but send the return for processing, Continue processing the return using procedures in IRM 3.12.251.3.9, Frivolous Returns and Claims. 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.

Charge-Out (Form 8161 or Form 4251)

  1. A charge-out (Form 8161, ERS Return Charge-Out, or Form 4251, Return Charge Out, computer generates for all new suspense items.

    Note:

    The Charge-Out will be used for pulling documents as well as routing the controlling documents while the record is being held in suspense and for use in associating the document with the Workable Suspense Inventory when the record becomes workable.

    Exception:

    AC 470 does not generate a charge-out.

  2. When a record appears on the Workable Suspense inventory with the Action Code as first priority:

    1. Tax examiners will add the information received to the record or follow the IRM instructions and clear the Action Code by entering the letter "C" in the Clear Code Field (CL) and transmitting.

    2. Once the Action Code is cleared, any Validity, Section, or Math/Consistency errors will be displayed for correction.

    3. Records may have been unprocessable and again require suspension for more information. A charge-out will not be generated for resuspended items. Attach Form 4227, Intra-SC Reject or Routing Slip, notating the corrective action and route as necessary.

  3. Some Action Codes may not be resuspended. If this occurs the charge-out should be notated in the correct block by entering the correct Action Code and date.

Non-Perfectable Conditions

  1. Work non - perfectable conditions as follows:

    Condition ERS Action Rejects Action
    Perfection is not possible: Reject the record by entering CC RJECT followed by Action Code "640." Void the DLN. If remittance is involved, transfer to the "Unidentified Remittance File."
    Perfection is possible, but the record requires renumbering: Reject the record by entering CC RJECT followed by Action Code "640." Assign a new DLN using Command Code NWDLN, with the correct Action Code, the new DLN and Master File ID Code if required.

  2. A charge-out generates for all Rejected Records. The charge-out remains in the SC files for future reference. ERS automatically controls adjustments to SCCF.

    Note:

    If the DLN was transcribed incorrectly and is wrong on the screen, the DLN appearing on the charge-out will be in error. The correct DLN must be noted on the charge-out for use in pulling the document. Inform your supervisor of the block involved and the physical location of the document.

Types of Errors

  1. The Error Resolution System identifies errors according to type and priority. The record heading shows the type of error.

    • Priority I - Action Code/Unpostable Code Error

    • Priority II - Terminus Error / Integrated Submission and Remittance Processing (ISRP) system Problem

    • Priority III - Field Error

    • Priority IV - Math/Consistency Error

  2. If programming has not furnished a section needed to correct an error, then:

    1. Enter Command Code (CC) GTSEC.

    2. Report to National Office for correction of the display.

Priority I - Action Code/Unpostable Code Error
  1. Description

    • Records with an invalid Action Code assigned by Document Perfection is placed in the Error Inventory and displayed as a Priority I Error.

    • Records with a valid Action Code is assigned to a Suspense Inventory and displayed as a Priority I Error.

  2. Display - The Action Code for the record with the literal description of the action or unpostable condition is shown.

  3. Suspense Inventory Correction Procedures (Reject Procedures)

  4. Correction Procedures:

    1. Correct a Priority I Error as follows:

    If Then
    Suspense action is required, Enter Command Code SSPND with the correct Action Code. Then transmit.
    No suspense action is required, Enter numeric "000" in the Clear Code Field (CL) and transmit.

    Note:

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

     

  5. For purposes of the ERS program, Action Code "001" is identified as a Priority I Error.

    1. This condition occurs whenever the Block out of Balance (BOB) Resolution function has added a document to a block by entering Name Control and TIN. The remainder of the record must be added by Error Resolution.

    2. Enter CC GTSEC for each record section that should have data. Add the required data.

    3. When all the sections have been entered, enter "C" in the Clear Code Field, and the record will be subjected to normal validity checks.

Priority II Error Section Errors
  1. Most edit, missing section, and terminus errors should be eliminated by ISRP. The following conditions may be present if normal ISRP validity checks have been bypassed: Edit Error - A section with an error detected by ISRP.

    1. Code 1 - Split screen transmission. Key Verifier changed four or more digits of the Primary Taxpayer Identification Number, TIN, or the Original Entry.

    2. Operator shown that a required section was missing.

    3. Code 3 - Invalid section ending point.

    4. Code 4 - Invalid field length.

    5. Code 5 - Questionable Section - A section entered twice or entered out of sequence by ISRP.

  2. Terminus Error - A section with variable length fields having an erroneous size field or otherwise being of erroneous size.

  3. Display - All transcribed fields, except the ERS Action Code and the Remittance (Payment Received), is displayed in columnar format with or without data. The error type is also shown for ISRP Problem Code errors. Only one section (error) is displayed at a time.

  4. Content - Any individual section, excluding computer generated fields and the Action Code. The Action Code is an uncorrectable field except as defined for SSPND and RJECT.

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

  6. ISRP Error Codes are displayed by a 4 digit field. Validation remains the same but the error is reported by the display of a numeric character in a specific position of the field. The positions and the valid characters are as follows:

    Position Name Values Explanation of Value
    0 ISRP PROBLEM CODE 0 Normal
    1 ISRP PROBLEM CODE 1 ISRP set problem code
    2 MIXED FIELD CHECK 2 Documents specified fields (by group) are compared with the corresponding data fields. If all the fields within the group are the same for any one of the available combinations, then generate value. Bypass the check if the field has all blanks or all zeros.
    3 SECTION END PROBLEM CODE 3 Section length is other than defined parameter
    4 FIELD LENGTH PROBLEM CODE 4 Non-numeric data, not blanks, is present in numeric field
    5 DUPLICATE SECTION NUMBERS 5 Duplicate section numbers

Priority II Error, Section Errors Correction Procedures
  1. ISRP Errors - All fields of the section must be examined when this condition exists. If Section 01 of a return is coded, examine the section for an error to ensure that the return is for the taxpayer whose name is in Section 01. Once the section is correct, or if no corrections are necessary, transmit from the bottom of the screen.

  2. Terminus Errors - All fields of the section must be examined when this condition exists. Make the necessary corrections to the record. Once the section is correct, or if no corrections are necessary, transmit from the bottom of the screen.

  3. Questionable Section - Verify and enter all the data for the displayed section. When all the data is correct, transmit from the bottom of the screen. Correct all fields in the display before transmitting.

Priority III Errors, Field Errors
  1. Definition - Any field failing to meet the requirement(s) for that field (and that field only) is shown as a Priority III error. Consistency and/or relationships with other fields is not a factor. Individual field validity errors to be bypassed after initial consideration are shown as Priority IV Errors. Some reasons for field errors include:

    • Non-numeric character in a numeric field

    • Non-alphabetic character in an alpha field

    • Blank space in a number field

    • Blank in the first position of an alpha field

  2. Display - All fields with a Priority III error are displayed in columnar format in the order encountered in the record. The Action Code and Taxpayer Notice Codes are never displayed as a Priority III Error.

    1. An overflow field is identified by all question marks for a money field or a single pound sign in the last position of a name line.

    2. If any money amount exceeds the maximum field length allowable, follow correction procedures in the Math/Consistency Errors Priority IV, see IRM 3.12.251.28, Math/Consistency Errors - Priority IV, or IRM 3.24.37, ISRP System - General Instructions.

  3. Correction Procedures:

    1. Every field displayed is in error. Correct the field using the specific instructions within each section for the field in error.

    2. Check the information on the source document to determine if each displayed field has been correctly edited and transcribed.

    3. Enter the correct data for each field displayed.

    4. If no data is to be displayed in the field, delete the field.

    5. Correct every field displayed.

    6. Transmit.

  4. This IRM shows each section for Priority III errors as:

    1. Error Record Format

    2. Each field within that section, with description, invalid condition and correction procedures.

Priority IV - Math/Consistency Errors
  1. A priority IV error displays whenever the contents of one field is inconsistent with the contents of another field, or when a math computation is incorrect. These errors are assigned a specific Error Code and displays in ascending Error Code order.

  2. The screen display shows the Error Code assigned and all the fields needed to make the necessary correction.

  3. For some math Error Codes, a field labeled "NC" displays for the entry of a Taxpayer Notice Code (TPNC). Multiple taxpayer notice codes may be entered when multiple XX(s) are shown. Previously assigned TPNC(s) displays on the right hand side of Line 3 of the screen.

  4. A field labeled "CL" will be displayed for the entry of a Clear Code on records where the possibility exists that a change or correction may not be needed. All coding and transcription errors and misplaced entries must be corrected, and all IRM procedures must be applied BEFORE entering a "C" in the Clear Code Field. All errors must be resolved, as applicable, by:

    1. Eliminating the error;

    2. Entering a Clear Code;

    3. Entering a Taxpayer Notice Code; or

    4. Suspending the document with the correct Action Code.

  5. ERS MUST enter Action Code "341" and route to ERS/Rejects for the issuance of a manual refund when either of the following conditions are present:

    1. The refund amount is ≡ ≡ ≡ ≡ ≡ ≡ ≡ or more, OR

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

Taxpayer Notice Codes (TPNC)

  1. This code is used when a math error is present involving the tax liability or tax due/overpayment. Each math error display requires a correction to a field or the assignment of a TPNC.

    1. TPNCs are entered on the terminal screen following the literal "NC" (Notice Code).

    2. The TPNC 90 must be entered on the front of the return in the upper left corner (or use Form 12648, Error Correction 90 TPNC).

      Reminder:

      The transmission of a TPNC cannot be accompanied by any other correction.

  2. A TPNC is entered only after determining that no corrections to the record can be made. Before assignment of a TPNC:

    1. All corrections must be entered and transmitted for each error condition.

    2. A working trail showing the changes made must be entered on the return at the point of error and on the Total Tax line.

      Note:

      An error may ripple through a return so that figures/entries based on the original calculations/entries could appear to be additional errors/Error Codes. If an Error Code is the direct result of a ripple, reassign any previously sent TPNC.

  3. Each math error will have certain TPNCs that are valid to clear the math error. If an invalid code is assigned, the error will be re-displayed.

  4. A return can have a total of three TPNCs. If more than three codes are to be assigned, use TPNC 90 instead and list the needed TPNCs for Notice Review to type and send to the taxpayer.

  5. TPNC 90 is a blank fill-in notice with 10 lines available for whatever statement is needed and is used when no other TPNC fully explains the error situation or when more than three notice codes are necessary. TPNC 90 can be used in conjunction with other notice codes. The TPNCs will be noted on the 90 notice as “Other notices sent”. When a TPNC 90 is needed, See "TPNC 90 Math Error Code Job Aid" on Servicewide Electronic Research Program (SERP) at http://serp.enterprise.irs.gov/databases/portals/sp/bmf/ers/job-aids/tpnc-90-math-error-code.doc and TPNC 90 Literals - Copy and Paste Job Aid on SERP at http://serp.enterprise.irs.gov/databases/portals/sp/bmf/notice-review/job-aids/tpnc-90-literals.txt.

  6. When sending a TPNC 90, do the following:

    1. Write on the returns “TPNC 90 - ###” (or similar language) or use Form 12648, Error Correction 90 TPNC.

      Note:

      TPNC 90 Math Error Code Job Aid, shows literals with two digits and TPNC 90 Literals - Copy and Paste Job Aid, shows literals with three digits.

    2. Notate TPNC 90 (or similar language) and the date on Form 1332, Block and Selection Record, or Form 2275, Records Request, Charge and Recharge.

    3. Place the return in the TPNC 90 designated area (basket/tub).

  7. If there is not an applicable TPNC 90 Math Error Code, then the ERS tax examiner will do the following:

    1. Attach the applicable TPNC 90 slip of paper to the front of the return, after completing applicable fields or use Form 12648, Error Correction 90 TPNC, with the TPNC or narrative to be sent.

    2. Notate TPNC 90 (or similar language) and the date on Form 1332, Block and Selection Record, or Form 2275, Records Request, Charge and Recharge.

    3. Place the return in the TPNC 90 designated area (basket/tub).

  8. Make sure that the return needing a TPNC 90 leaves Error Resolution System (ERS) with the correct TPNC 90 language for the applicable form. For questions, please contact your Lead and/or Manager.

  9. Once a code is transmitted to the record, it may be changed in the following manner:

    1. For records which have not been cleared from the terminal (errors remain after transmitting the TPNC), create an error with a higher priority.

      Note:

      This will cause all "C" clear codes and any notice code already assigned a lower priority error to be deleted from the record. TPNCs will be deleted from the header display. Beginning with the high Priority IV error created, all subsequent errors will be displayed for resolution, even though they may have been displayed previously.

    2. For records which have cleared the terminal, the "C" or TPNC on this error and all subsequent Error Codes are displayed for resolution whether or not they were displayed previously. TPNCs previously assigned for this error and subsequent Error Codes will be deleted from the screen.

    3. Records which have been worked may be reworked using Command Code GTRECW. See IRM 3.12.38, Error Resolution - BMF General Instructions, for further details.

    4. All TPNCs are erased when a record is suspended with Command Code SSPND.

    5. Unfinished records from the previous day will have none of the TPNCs that were assigned to the records that were not worked.

  10. See Exhibit 3.12.251-1, Form 1120 Taxpayer Notice Codes, for a list of the TPNCs that are valid for Forms 1120.

Unprocessable ADP Returns

  1. Unprocessable returns occur when perfection of a return is not possible or it is necessary to correspond, perform in-house research or refer the document to another area of the campus. The record will be suspended and the required action taken. Suspend the unprocessable record by entering Command Code SSPND followed by the correct Action Code.

  2. In cases where the Action Code cannot describe the required action, attach a note of explanation to the return (use Form 4227, Intra-SC Reject or Routing Slip.

  3. If an IDRS letter is necessary attach a Correspondence Action Sheet to issue the correspondence and SSPND with Action Code "211."

On-Line Entity (OLE)

  1. OLE is the system designed to allow for validation of the EIN and EIN/name control on line using IDRS input Command Codes. It is designed to allow for entity research on a national basis.

  2. Command Code INOLE is used with the National Accounts Profile (NAP) to research the entity module. This information includes name lines, name control, address, employment codes, filing requirements, etc.

  3. Definer Code "S" should be used when you need more information that cannot be found using Command Code NAMEB or NAMEE to verify that the EIN the taxpayer has furnished is on the Master File. The display for a BMF EIN account will show the following:

    • Primary name and all the name lines on the BMF

    • Mailing address

    • Primary name control

    • Prior name control

    • Sole proprietor SSN

    • Fiscal month

    • Prior fiscal month

    • Establishment date

    • Employment date

    • Exempt Organization (EO) data, if present

    • Filing requirements

    • Parent Corporation EIN

    • Subsidiary Corporation.

  4. Validation of IDRS Command Codes - IDRS Command Codes that create transactions posting to the Master File will have the EIN and EIN/name control validated using the Taxpayer Identification File (TIF) and the National Accounts Profile (NAP). The Command Codes 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. The transaction will then try to post. The following IDRS Command Codes are affected by OLE validation:

    • FRM49 - Taxpayer Delinquent Return Notices and Investigations;

    • ENREQ - Entity Changes.

  5. If the EIN matches the EIN and name control, normal processing will continue.

Correspondence

  1. Correspondence records with Action Code 21X will be automatically suspended for a predetermined number of days or until the taxpayer replies, whichever is earlier.

    Note:

    DO NOT CORRESPOND for information on any return "secured by Examination." If unprocessable, treat as a no reply case and follow the no reply instructions, see IRM 3.12.251.3.20.1, No Reply Returns.

  2. An ERS tax examiner initiating correspondence may either:

    1. Use the IDRS Correspondence Command Code LETER which will be available, or

    2. Initiate correspondence by using a Correspondence Action Sheet (CAS), as is currently done for the IDRS operator or typist to use in issuing the actual correspondence. Attach the CAS to the left of Page 1 of the return, keeping the entity area visible.

  3. Most correspondence is either a computer-generated notice, a computer-generated letter or a pre-printed letter. All correspondence now reflects a response period within 30 days and the potential consequences for not replying.

  4. Review the document before issuing correspondence to ensure all needed information is requested the first time. Check CC BMFOLI to ensure the return is not a duplicate document before corresponding. If a return is posted to the tax module, use CC BRTVU or BMFOLR to see if the raw return is a duplicate. If it is, SSPND with Action Code "640" to have it deleted. If it does not match the posted return, enter CCC "G" and continue processing the document as an amended return.

  5. All correspondence to taxpayers requesting information should show that a response is required. Specify the length of time the taxpayer has to respond and include a statement on the action the IRS will take if the response is not received timely. Include the statement "When you reply, please send your telephone number and the most convenient time for us to call so we may contact you if we need additional information." Give for a purge date at least 10 days after the date given in the letter to the taxpayer.

  6. Whenever possible, pattern letters should be used to correspond with taxpayers. If a CNOTE or QUICKNOTE is used, be sure that it clearly communicates the message in simple language and has the above required information.

  7. Before initiating manual correspondence on an account dealing with anything other than a recently filed return, check the Centralized Authorization File (CAF) to ensure that the information will be mailed to the taxpayer's representative if one is on record.

  8. Specific turnaround times for working taxpayer correspondence as outlined in IRM 3.30.123, Work Planning and Control-Processing Timeliness: Cycles, Criteria, and Critical Dates, must be followed. Monitored reports must be kept to ensure that these guidelines are met.

  9. When taxpayer errors are discovered in processing which have caused or will cause processing delays and no other notification is to be sent to the taxpayer, advise the taxpayer of the reasons for the delay.

♦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" is annotated on the front of the return.

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

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

    2. Remove the return from the batch and SSPND 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. show "Additional information needed to process incomplete CIS return" or similar language on Form 4227 (or other routing slip).

    The "CIS" return has a Form 13596 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, faxed 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

Unprocessable Conditions

  1. An error record must be rejected when:

    1. It is International related and it has a foreign address or claims Possessions Tax Credit (197601 and subsequent), or claims Credit for Income Tax Withheld (or paid) at source (Form 1042-S credit) (except Ogden Submission Processing Center (OSPC) only).

    2. It covers multiple tax periods or reports multiple types of tax.

    3. It is misblocked.

    4. It requires correspondence with the taxpayer for missing or clarifying information.

    5. Subsidiary returns are detached from parent returns.

    6. It is a potential Statute Case not cleared by Statute Control Group.

    7. It is an unprocessable return "Secured by Audit/Examination." Do not correspond. Treat as a "No Reply" and follow No Reply instructions.

    8. The return is stamped "Pro Forma" or other designation that shows income calculation for a state that requires such tax filing requirements.

    9. The return is a supporting document for Form 1139, Corporation Application for Tentative Refund.

    10. The return is a supporting document for Form 6166, Certification Program Letterhead.

  2. When a record is rejected, it is necessary to suspend with Action Code "640" and prepare one or more of the following:

    1. Form 4227, Intra-SC Reject or Routing Slip. Note the reason for rejecting the document.

    2. Correspondence Action Sheet used to correspond with the taxpayer.

    3. Form 6882, IDRS/Master File Information Request.

Refund Returns 45 Day Jeopardy and High Dollar Refunds

  1. Document Perfection and ERS must identify refunds and initiate requests for manual refunds.

    Note:

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

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

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

    Note:

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

    Enter Action Code "341" and route to ERS/Rejects for manual refund.
    The refund is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Enter Action Code "341" and route to ERS/Rejects for manual refund.

  3. TAS Manual Refunds - any return hand walked by a W&I SP (SP) liaison for TAS must be processed by a lead tax examiner or designated tax examiner using the following procedures in the order listed:

    1. 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 correct 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 correct suspense code and give return back to the W&I SP liaison.

      Note:

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

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

    1. Initiate suspense (SSPND) action 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 TAS, who in turn will take the necessary action to complete the processing of the return.

  6. Assigning 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 correct 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 TAS, who in turn will take the necessary action to complete the processing of the return.

  7. When Balance Due/ Overpayment Math Error Code 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 correct 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 as directed.

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

Correspondence Action

  1. General Information - This sub-section has general instructions for processing correspondence items. If instructions in this sub-section differ from specific instructions in other parts of this IRM, follow the specific instructions.

  2. Replies to Correspondence:

    1. The Correspondence Received Date (CRD) must be present when returns have been held in suspense and the reply is received after the due date of the return. The field format is YYYYMMDD. This field will be invalid when day of the month (DD) exceeds the allowable number of days for the transcribed calendar month (MM).

    2. Enter the Received Date of the correspondence reply in the Correspondence Received Date Field, 01CRD, except when the correspondence reply was received before the due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ of the return or the correspondence was required because of an IRS processing error, we didn’t ask for all required information, or the correspondence was sent in error.

    3. Correct the screen display and the return if necessary with the information received, including address changes.

  3. Missing Information - Do not correspond a second time if one contact from any processing area has already been made. Missing information on a return should be treated as a no reply.

  4. Frivolous Replies - If an item being questioned by the IRS is protested by the taxpayer, follow instructions for protest returns. If in doubt whether an item is a protest, check with your manager, who may consult with Examination for final determination.

  5. All Form 1120-F (Modernized Electronic Filing (MeF) and paper) returns claiming credit on Line 5(i), U.S. Income tax paid or withheld at source, on Form 8288-A, Statement of Withholding on Certain Dispositions by Foreign Persons, must be verified on the INTLWebApps Application, see IRM 3.12.251.35, Form 1120-F Sections and Fields, IRM 3.12.251.35.7.1, Section 07 Field Errors, and IRM 3.12.251.35.17.22, Error Code 188 - Balance Due Math Error.

    Note:

    This applies to form(s) the taxpayers include with their replies. If we correspond for the form because it is missing, the credits must be verified before processing continues.

  6. No Replies/Incomplete Replies

    1. If there is no reply or an incomplete reply to correspondence, perfect the document from available information and resolve any doubt in favor of the Internal Revenue Service.

    2. Disallow unsubstantiated credits where substantiation is required.

      Example:

      Form 2439 and Form 4136.

    3. When unable to identify an excess remittance, transfer the remittance to the Unidentified Remittance File.

    4. Enter CCC "X" on refund returns with a missing signature.

    5. Refer to the chart of "No Reply" returns at the end of the section.

    6. Edit a CCC "3" in Field 01CCC for no reply returns.

  7. Undeliverable

    1. When working reject cases, if the correspondence is returned "Undeliverable," check to see if the address was correctly input on the letter. If it was not, resuspend using Action Code "212" to have another letter sent. Examine the return or attachments for a second address. If one is found, resuspend using Action Code "212" to have another letter sent.

    2. If none of the above conditions apply, process as a "No Reply."

  8. Late Replies - When a reply to correspondence is received after "No Reply" procedures have been implemented, special routing instructions are required. Follow procedures in IRM 3.12.38, Business Master File (BMF) Error Resolution - General Instructions.

  9. Return Secured by Audit - If a return secured by Audit is unprocessable due to missing information, do not correspond. Treat the return as "No Reply."

No Reply Returns
  1. "No reply" returns require the following action:

    1. All"No reply" returns must have Computer Condition Code "3" entered in Field 01CCC.

    If Then
    Section 965 return, Enter a CCC "X" into Field 01CCC, if the taxpayer has deferred Section 965 tax.
    Tax period is one to eleven months later than the current date, SSPND with Action Code "480" and attach Form 4227, Intra-SC Reject or Routing Slip, to hold until the end of the tax period.
    Unexplained short year or unauthorized change in accounting period, Enter CCC "Y."
    Multiple tax periods, Use earliest tax period. See "no reply" instructions in IRM 3.12.38, BMF Error Resolution - General Instructions.
    Signature is missing or it is not in the correct location on the return, Enter CCC "X."
    Form 851, Affiliations Schedule, is missing and Prepaid Credits on return, Research BMFOLT:
    1. If prepaid credits are present, continue processing.

    2. If prepaid credits are not present, adjust the credits on the return to match BMFOLT and send TPNC 90 (e.g., 90-255) with the following language: "You claimed prepaid credits on your tax return. However we either have no record of having received them or our records show a different amount was received. As such, we have adjusted your return."

    3. For an updated listing of the non-programmed TPNC 90 literals, see TPNC 90 Literals - Copy and Paste Job Aid, on Servicewide Electronic Research Program (SERP) at http://serp.enterprise.irs.gov/databases/portals/sp/bmf/notice-review/job-aids/tpnc-90-literals.txt .

    Form 1118, Foreign Tax Credit - Corporations, is not supported, Deny the credit.
    Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, is not supported, Deny the credit.
    Form 3800, General Business Credit, is not supported, Deny the credit.
    Form 4136, Credit for Federal Tax Paid on Fuels, is not supported, Deny the credit and send TPNC 40. Adjust Field 07B/R.
    Form 4626, Alternative Minimum Tax - Corporations, is required (Tax Period 201811 and prior), Assess AMT per computer and assign correct TPNC
    Form 5735, American Samoa Economic Development Credit, is not supported, Deny the credit.
    Form 5884, Work Opportunity Credit, is not supported, Deny the credit.
    Form 5884-A, Employee Retention Credit, is not supported, Deny the credit.
    Form 6478, Biofuel Producer Credit, is not supported, Deny the credit.
    Form 6765, Credit for Increasing Research Activities, is not supported, Deny the credit.
    Form 8007, Credit for Employee Stock Ownership Plan, is not supported, Deny the credit.
    Form 8827, Credit for Prior Year Minimum Tax - Corporations, is not supported, Deny the credit.
    Form 8834, Qualified Electric Vehicle Credit, is not supported, Deny the credit.
    Form 8835, Renewable Electricity, Refined Coal and Indian Coal Production Credit, is not supported, Deny the credit.
    Taxable Income Bracket Amounts, Assign TPNC 05.
    Form 8844, Empowerment Zone Employment Credit, is not supported, Deny the credit.
    Form 8845, Indian Employment Credit, is not supported, Deny the credit.
    Form 8847, Credit for Contributions to Selected Community Development Corp, is not supported, Deny the credit.
    Form 8860, Qualified Zone Academy Bond Credit, is not supported, Deny the credit.
    Form 8864, Biodiesel and Renewable Diesel Fuels Credit, is not supported, Deny the credit.
    Form 8884, New York Liberty Zone Business Employee Credit, is not supported, Deny the credit.
    Negative entry on Line 32d (2010 revision and prior), Form 1120, Delete the entry.
    No Production Tax Credit Statement, Deny the credit.
    No Schedule D and a loss is claimed, Delete the amount claimed for the loss.
    No Schedule L, Process as is.
    Excess Remittance, Transfer to Unidentified.

♦Working Trail♦

  1. It is important to leave a legible "Working Trail" (or "Action Trail" ) using blue ink for those who may work with 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 IRM 3.12.251.3.13, Taxpayer Notice Codes (TPNC), 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:

    • Employer Identification Number (EIN)

    • Tax Period

    • Received Date

    • Computer Condition Code

    • Correspondence Received Date (CRD)

    Reminder:

    Circle out incorrect Employer Identification Numbers (EINs), Social Security Numbers (SSNs), 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.

Conversion of Form 1120-S to Form 1120

  1. If a taxpayer filed Form 1120-S and the Entity Control Unpostable Unit has determined the taxpayer does not have a valid Form 2553, Election by a Small Business Corporation, on file, the Form 1120-S must be converted to Form 1120 to be processed.

  2. Entity Control Unpostables will edit the name control, CCC "3" (if applicable), Received Date, Field 01NAI, Schedule K, Line 2a , Tax Period and Audit Code 4.

  3. If a field other than those mentioned above has been entered, delete it.

  4. Do not enter any tax data on the "blank" Form 1120. No conversion to a Form 1120 should be attempted.

  5. If the converted form displays with Error Code 026 and there is an indication that Entity has taken action to resolve the tax period, clear the Error Code. If there is no indication that Entity has taken action on the tax period follow instructions for Error Code 026.

  6. When reprocessing an original e-filed (MeF) Form 1120-S as Form 1120, ensure that the received date is properly edited on the return. The received date is the same as the original DLN Julian date. Do not subtract ten days.

Homeowners Association Filing on Form 1120

  1. Homeowners Associations may file on Form 1120. When they do so, they are to be taxed at the normal corporate tax rate.

  2. If the taxpayer shows Section 277 or states "minimum amount of tax" when there is no amount for taxable income present, accept the taxpayer's figures by using one or more verified fields.

Section 965 Returns - General Instructions

  1. Instructions in this section apply to tax periods 201712 through 202012,

  2. A Section 965 return can be identified by any of the following:

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

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

    • IRC 965 Transition Tax Statement is attached (201712 returns).

  3. IRC 965 affects returns for tax periods 201712 through 202012, see IRM 3.12.251.3.24.1, Section 965 - Tax Period 201712 - 201811 and IRM 3.12.251.3.24.2, Section 965 - Tax Period 201812 through 202012 and later for specific instructions according to the year the taxpayer reported their Section 965 tax liability.

    Note:

    All corporate taxpayers, whether or not a Section 965(h) election was made, will report their Section 965 net tax liability and related amounts on Form 965, Inclusion of Deferred Foreign Income Upon Transition to Participation Exemption System. For tax period 201712, taxpayers used an IRC 965 Transition Statement to report these amounts. Taxpayers who filed an IRC 965 Transition Statement will also file a Form 965 for the tax period 201812.

  4. Corporate taxpayers can elect under Section 965(h) to pay their Section 965(h) net tax liabilities in installments over a period of 8 years. They will use Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net Tax Liability and Electing REIT Report of 965 Amounts, to report their transactions, payments, adjustments, and transfers during the 8 year period.

  5. The table below shows required annual installment amounts:

    Note:

    Taxpayers can pay more than required

    Year Installment Percentage Deferred Percentage
    1 through 5 8 percent per tax year 92 percent (1st year)
    84 percent (2nd year)
    76 percent (3rd year)
    68 percent (4th year)
    60 percent (5th year)
    Year 6 15 percent 45 percent
    Year 7 20 percent 25 percent
    Year 8 25 percent 0 percent

  6. Modernized e-File (MeF) created naming conventions to identify "965" on the return. Some returns may not be true Section 965 returns. The numbers "965" may appear in the address, banking account number, EIN or anywhere on the return. If determined that the return is not Section 965, delete CCC "J," correspond for missing information and continue processing.

  7. New fields and programming have been created that will automatically input Transaction Code 971 with Action Codes 114 and 115. It is not necessary to input these transactions. CCC "X" will automatically generate. The new fields capture the net tax liability under Section 965 (Field 0796I/0896I) and the net Section 965 tax paid for the reporting year (Field 0796P).

  8. Computer programming is in place to compute the Section 965(h) deferred tax amount by subtracting Field 0796P (Net Section 965 tax paid for the reporting year) from Field 0796I/0896I (Section 965 Tax Liability).

  9. The table below shows the new fields that have been created:

    Caution:

    These fields capture different tax data than those input manually with TC 971 for TY2017. In TY2017, net tax liability under Section 965 (TC 971 AC 114) and deferred tax (TC 971 AC 115) was captured.

    Form Fields Description Parent Form Lines Form 965-B Lines
    Form 1120 0796P Net Section 965 tax paid for the reporting year Page 1, Line 32 (Schedule J, Part II, Line 12) Part II, Column (k)
    • 2017 - Line 1

    • 2018 - Line 2

    • 2019 - Line 3

    • 2020 - Line 4

      0896I Net tax liability under Section 965 Schedule J, Line 22 Part I, Column (d)
    • 2017 - Line 1

    • 2018 - Line 2

    • 2019 - Line 3

    • 2020 - Line 4

    Form 1120-C 0796P Net Section 965 tax paid for the reporting year Page 1, Line 29 Part II, Column (k)
    • 2017 - Line 1

    • 2018 - Line 2

    • 2019 - Line 3

    • 2020 - Line 4

      0796I Net tax liability under Section 965 Page 1, Line 30i Part I, Column (d)
    • 2017 - Line 1

    • 2018 - Line 2

    • 2019 - Line 3

    • 2020 - Line 4

    Form 1120-L 0796P Net Section 965 tax paid for the reporting year Page 1, Line 27 Part II, Line 2, Column (k)
    • 2017 - Line 1

    • 2018 - Line 2

    • 2019 - Line 3

    • 2020 - Line 4

      0796I Net tax liability under Section 965 Page 1, Line 28i Part I, Column (d)
    • 2017 - Line 1

    • 2018 - Line 2

    • 2019 - Line 3

    • 2020 - Line 4

    Form 1120-PC 0796P Net Section 965 tax paid for the reporting year Page 1, Line 14 Part II, Column (k)
    • 2017 - Line 1

    • 2018 - Line 2

    • 2019 - Line 3

    • 2020 - Line 4

      0796I Net tax liability under Section 965 Page 1, Line 15d Part I, Column (d)
    • 2017 - Line 1

    • 2018 - Line 2

    • 2019 - Line 3

    • 2020 - Line 4

    Form 1120-REIT 0796P Net Section 965 tax paid for the reporting year Page 1, Line 24 Part II, Column (k)
    • 2017 - Line 1

    • 2018 - Line 2

    • 2019 - Line 3

    • 2020 - Line 4

      0796I Net tax liability under Section 965 Page 1, Line 25h Part I, Column (d)
    • 2017 - Line 1

    • 2018 - Line 2

    • 2019 - Line 3

    • 2020 - Line 4

    Form 1120-RIC 0796P Net Section 965 tax paid for the reporting year Part I, Line 28 Part II, Column (k)
    • 2017 - Line 1

    • 2018 - Line 2

    • 2019 - Line 3

    • 2020 - Line 4

      0796I Net tax liability under Section 965 Part I, Line 29i Part I, Column (d)
    • 2017 - Line 1

    • 2018 - Line 2

    • 2019 - Line 3

    • 2020 - Line 4

  10. Paper filed Section 965 returns: If the taxpayer has elected to defer payment of tax under Section 965(h), scan the pages of the return with Section 965 tax data, the IRC 965 Transition Tax Statement and/or the Form 965 and E-mail the scan to the Chief Financial Office (CFO) at *CFO Tax Reform 965

Section 965 Returns - Tax Period 201712 - 201811
  1. If a tax period 201712 - 201811 Section 965 return has been identified by ERS and C&E has not edited Action Code “460” and/or CCC "J," Enter CCC "J" in Field 01CCC and SSPND Action Code" 460"

    Note:

    Action Code "460" ensures that Rejects will have the ability to review and adjust any issues that may arise during processing of the Section 965 returns.

  2. Use the table below to correspond for missing information on Section 965 returns for tax period 201712 through 201811:

    If And Then
    Taxpayer pays Section 965 tax in full and the Section 965 tax is less than ≡ ≡ ≡ ≡ ≡ ≡, An IRC 965 Transition Tax Statement is not attached, or the statement does not include at least one significant entry, Do not correspond.

    Exception:

    If other correspondence issues are present, SSPND with Action Code "211" and correspond for all missing information.

    Caution:

    C&E was instructed not to correspond on Section 965 returns.

    Taxpayer pays Section 965 tax in full and the Section 965 tax is ≡ ≡ ≡ ≡ ≡ or more, An IRC 965 Transition Tax Statement is not attached, or the statement does not include at least one significant entry, SSPND with Action Code "211" and correspond. Use the following language: "Internal Revenue Code (IRC) 965 Transition Tax Statement was either not attached or was incomplete. Send us a completed, signed, IRC 965 Transition Tax Statement to support the Section 965 entries on your return. "

    Caution:

    C&E was instructed not to correspond on Section 965 returns. Ensure all correspondence issues on the return are addressed when corresponding for the IRC 965 Transition Tax Statement.

    Taxpayer deferred payment of a portion of the Section 965(h) net tax liability, An IRC 965 Transition Tax Statement is not attached, or the statement is not signed and does not include at least one significant entry, SSPND with Action Code "211" and correspond. Use the following language: "Internal Revenue Code (IRC) 965 Transition Tax Statement was either not attached or was incomplete. Send us a completed, signed, Section 965 Transition Tax Statement to support the Section 965 entries on your return. "

    Caution:

    C&E was instructed not to correspond on Section 965 returns. Ensure all correspondence issues on the return are addressed when corresponding for the IRC 965 Transition Tax Statement.

  3. Suspense Correction for Section 965 returns (Tax Period 201712 through Tax Period 201811)

    1. The following table explains the different elements in a tax period 201712 through 201811 Section 965 return and the likely placement on the form or IRC 965 Transition Tax Statement:

      Caution:

      Line numbers on the IRC 965 Transition Tax Statement can differ depending on the format used by the taxpayer.

      Form Section 965(h) Net Tax Liability (amount to which Section 965(h) election applies) (IRC 965 Transition Tax Statement Total Section 965 Net Tax Liability (IRC 965 Transition Tax Statement Net Section 965 Tax Paid for the Reporting Year
      Form 1120 Page 3, Schedule J, Part II, Line 19d Page 3, Schedule J, Part I, Line 11 Return or IRC 965 Transition Tax Statement
      • Taxpayer may list required installment payments, or

      • Subtract the Section 965 deferred tax from the Section 965 tax liability.

      Form 1120-C Page 1, Line 29i Page 4, Schedule J, Line 9 or Page 1, Line 28 Return or IRC 965 Transition Tax Statement
      • Taxpayer may list required installment payments, or

      • Subtract the Section 965 deferred tax from the Section 965 tax liability.

      Form 1120-L Page 1, Line 29k Page 6, Schedule K, Line 10 Return or IRC 965 Transition Tax Statement
      • Taxpayer may list required installment payments, or

      • Subtract the Section 965 deferred tax from the Section 965 tax liability.

      Form 1120-PC Page 1, Line 14k Page 1, Line 13 Return or IRC 965 Transition Tax Statement
      • Taxpayer may list required installment payments, or

      • Subtract the Section 965 deferred tax from the Section 965 tax liability.

      Form 1120-REIT Page 1, Line 24h Page 3, Schedule J, Line 7 or Page 1, Line 23 Return or IRC 965 Transition Tax Statement
      • Taxpayer may list required installment payments, or

      • Subtract the Section 965 deferred tax from the Section 965 tax liability.

      Form 1120-RIC Page 2, Part I, Line 28i Page 3, Schedule J, Line 7 Return or IRC 965 Transition Tax Statement
      • Taxpayer may list required installment payments, or

      • Subtract the Section 965 deferred tax from the Section 965 tax liability.

    2. Research the IRC 965 Transition Tax Statement and return to determine the Section 965 tax liability amount, the deferred tax amount and the Net Section 965 tax paid for the reporting year.

      If Then
      The tax increase displayed by the computer differs from IRC 965 Transition Tax Statement/return, Research return for math errors before accepting Section 965 tax increase.
      There is a conflict between the return and IRC 965 Transition Tax Statement, Use the IRC 965 Transition Tax Statement amounts.

    3. If an IRC 965 Transition Tax Statement (or similar 965 statement) is attached do the following:

      If And Then
      Section 965 tax liability is present on line 5,

      Caution:

      The Section 965 tax liability could be shown differently depending on the format used.

      The amount is included in Total Tax (Form 1120, Schedule J, Line 11,

      Note:

      Use table in paragraph (3) for corresponding lines for other 1120 series returns.

      Enter the amount in Field 0896I (0796I for other 1120 series returns).
      Section 965 tax liability is not present on line 5 due to either of the following:
      • Taxpayer computed Section 965 tax to zero (0) or a negative amount.

      • No reply to correspondence for the IRC 965 Transition Tax Statement or incomplete statement does not give Section 965 Net Tax amount.

      The amount is not included in Total Tax Form 1120, Schedule J, Line 11,

      Note:

      Use table in paragraph (3) for corresponding lines in other 1120 series returns.

      Enter “0” in Field 0896I (0796I for other 1120 series returns).

    4. Input Net Section 965 total tax paid for the reporting year (Field 0796P) per instructions below:

      If And Then
      The IRC 965 Transition Tax Statement shows the taxpayer is paying the full amount of Section 965 tax, The full amount is included on Form 1120, Line 34 (Amount owed),

      Note:

      Use corresponding line for other 1120 series returns.

      Enter that amount in Field 0796P.
      The IRC 965 Transition Tax Statement shows the installment amount due or the installment amount can be determined by multiplying the total net tax liability by .08. The taxpayer has included that amount on Form 1120, Line 34 (Amount owed),

      Note:

      Use corresponding line for other 1120 series returns.

      Enter that amount in Field 0796P.
      The amount paid for the reporting year cannot be determined from the IRC 965 Transition Tax Statement. The amount on Form 1120, Schedule J, Part II, Line 19d shows the deferred tax amount, and Schedule J, Part I, Line 11 shows the total tax Liability,

      Note:

      Use corresponding line for other 1120 series returns.

      Subtract the Section 965 deferred amount from the Section 965 total tax amount. Enter the difference in Field 0796P.
      For example, The Section 965 tax liability amount is $25,000. The deferred amount is $23,000 (.92 of $25,000). The difference is $2000.00 (.08 percent of $25,000). Enter $2,000 in Field 0796P.

      Reminder:

      It is possible for the taxpayer to pay more than the .08 percent. If they do, enter the amount in Field 0796P.

      The taxpayer has elected under Section 965(h) to defer payment of a portion of the Section 965 net tax liability, Schedule J, Part II, Line 19d has an amount, Delete the amount in Field 0819D.

      Note:

      Computer programing figures the deferred amount by subtracting the amount paid from the total liability. The presence of Field 0819D causes a duplicate deferred amount.

      The return or IRC 965 Transition Tax Statement does not give enough information to determine net Section 965 tax paid for the reporting year,   Correspond for IRC 965 Transition Tax Statement per instructions in paragraph (2).

    5. Resolve Error Codes. Error Code 186 and/or Error Code 188 should generate if more tax and/or credit (deferred tax) was added, see IRM 3.12.251.28.39, Error Code 186 - Total Tax Math Error, and IRM 3.12.251.28.40, Error Code 188 - Balance Due Math Error.

Section 965 - Tax Period 201812 through 202012
  1. If a tax period is 201812 through 202012 and there is an amount on Schedule J, Line 22, and C&E has not edited Action Code “460” and/or CCC "J," Enter CCC "J" in Field 01CCC and SSPND with Action Code" 460"

    Note:

    Action Code "460" ensures that Rejects will have the ability to review and adjust any issues that may arise during processing of the Section 965 returns.

  2. Use the table below to correspond for missing information on Section 965 returns for tax period 201812 through 202012.

    If And Then
    Taxpayer pays Section 965 tax in full and the Section 965 tax is less than ≡ ≡ ≡ ≡ ≡, Form 965 and Form 965-B are not attached, Do not correspond.

    Exception:

    If other correspondence issues are present, SSPND with Action Code "211" and correspond for all missing information.

    Caution:

    C&E was instructed not to correspond on Section 965 returns.

    Taxpayer pays Section 965 tax in full and the Section 965 tax is ≡ ≡ ≡ ≡ or more, Form 965 and Form 965-B are not attached, SSPND with Action Code "211" and correspond. Use the following language: "Form 965 and Form 965-B either were not attached or were incomplete. Send us a completed Form 965 and Form 965-B to support the Section 965 entries on your return. "

    Caution:

    C&E was instructed not to correspond on Section 965 returns. Ensure all correspondence issues on the return are addressed when corresponding for the IRC 965 Transition Tax Statement.

    Taxpayer has elected under section 965(h) to defer payment of a portion of the Section 965 net tax liability, Form 965 and Form 965-B are not attached, SSPND with Action Code "211" and correspond. Use the following language: "Form 965 and Form 965-B either were not attached or were incomplete. Send us a completed Form 965 and Form 965-B to support the Section 965 entries on your return. "

    Caution:

    C&E was instructed not to correspond on Section 965 returns. Ensure all correspondence issues on the return are addressed when corresponding for the IRC 965 Transition Tax Statement.

  3. Suspense Correction for Tax Period 201812 through 202012

    1. If CCC "J" is present on a tax period 201812 through 202012 return, the taxpayer must be reporting their Section 965 tax liability in that year. The Section 965 liability is generally included in either or both tax year 2017 or 2018 (201712-201911).

      Note:

      Installment payments can be reported for up to eight years. A CCC "J" is not applicable when reporting installment payments.

      Note:

      MeF business rules generates a CCC "J" if there is an amount on Form 1120 , Schedule J, Line 22, but if this amount is a misplaced entry and not Section 965 tax liability, the CCC "J" and the amount in Field 0896I must be deleted.

    2. Determine if the CCC "J" was erroneously input or if the taxpayer is reporting their Section 965 liability for the current year by using the table below:

      If And Then
      The return is tax period 201812 through 202012, The taxpayer is reporting Section 965 tax liability on Form 965-B,
      • Part I, Line 2, Column (d) (2018)

      • Part I, Line 3, Column (d) (2019)

      • Part I, Line 4, Column (d) (2020)

      CCC "J" should be present in Field 01CCC.
      The return is tax period 201812 through 202012, The taxpayer has a misplaced entry on Form 1120, Schedule J, Line 22, Delete CCC "J" and delete the amount in Field 0896I.
      The return is tax period 201812 through 202012, The taxpayer has an entry on Form 1120, Schedule J, Line 22, but an entry is not present on Form 965-B,
      • Part I, Line 2, Column (d) (2018)

      • Part I, Line 3, Column (d) (2019)

      • Part I, Line 4, Column (d) (2020)

      Determine the correct placement of the amount on Form 1120, Schedule J, Line 22 and delete CCC "J" from Field 01CCC.
      The return is tax period 201812 through 202012, The taxpayer reported Section 965 tax liability in a previous year,
      For example, the taxpayer is only reporting installment payments or,
      Form 965-B has an amount in Part I, Line 1, Column (d)(2017),
      Delete CCC "J" from Field 01CCC and continue processing the return.

    3. Use the tables below to verify amounts in Fields 0796P and 0796I/0896I.

      Form 1120

      If And Then
      Form 1120, Schedule C, Line 15, Column (a) and Form 965-B,
      • Part I, Line 2, Column (d) (2018)

      • Part I, Line 3, Column (d) (2019)

      • Part I, Line 4, Column (d) (2020)

      has an amount,
      There is not an amount on Form 1120, Schedule J, Part III, Line 22, Enter the Form 965-B,
      • Part I, Line 2, Column (d) (2018)

      • Part I, Line 3, Column (d) (2019)

      • Part I, Line 4, Column (d) (2020)

      amount in Field 0896I.
      Form 1120, Schedule C, has an amount on Line 15, Column (a) and either Form 965-B,
      • Part II, Line 2, Column (k) (2018)

      • Part II, Line 3, Column (k) (2019)

      • Part II, Line 4, Column (k) (2020)

      or Form 1120, Schedule J, Part II, Line 12 has an amount,
      There is not an amount on Form 1120, Page 1, Line 32, Enter the Form 965-B,
      • Part II, Line 2, Column (k) (2018)

      • Part II, Line 3, Column (k) (2019)

      • Part II, Line 4, Column (k) (2020)

      amount in Field 0796P.
       

      Form 1120-C

      If And Then
      Form 1120-C, Schedule C, Line 15, Column (a) and Form 965-B,
      • Part I, Line 2, Column (d) (2018)

      • Part I, Line 3, Column (d) (2019)

      • Part I, Line 4, Column (d) (2020)

      has an amount,
      There is not an amount on Form 1120-C, Page 1, 30i, Enter the Form 965-B,
      • Part I, Line 2, Column (d) (2018)

      • Part I, Line 3, Column (d) (2019)

      • Part I, Line 4, Column (d) (2020)

      amount in Field 0796I.
      Form 1120-C, Schedule C, has an amount on Line 15, Column (a) and Form 965-B,
      • Part II, Line 2, Column (k) (2018)

      • Part II, Line 3, Column (k) (2019)

      • Part II, Line 4, Column (k) (2020)

      has an amount,
      There is not an amount on Form 1120-C, Page 1, Line 29, Enter the Form 965-B,
      • Part II, Line 2, Column (k) (2018)

      • Part II, Line 3, Column (k) (2019)

      • Part II, Line 4, Column (k) (2020)

      amount in Field 0796P.
       

      Form 1120-L

      If And Then
      Form 1120-L, Schedule A, has an amount on Line 16, Column (a) and Form 965-B,
      • Part I, Line 2, Column (d) (2018)

      • Part I, Line 3, Column (d) (2019)

      • Part I, Line 4, Column (d) (2020)

      has an amount,
      There is not an amount on Form 1120-L, Page 1, 28i, Enter the Form 965-B,
      • Part I, Line 2, Column (d) (2018)

      • Part I, Line 3, Column (d) (2019)

      • Part I, Line 4, Column (d) (2020)

      amount in Field 0796I.
      Form 1120-L, Schedule A, has an amount on Line 16, Column (a) and Form 965-B,
      • Part II, Line 2, Column (k) (2018)

      • Part II, Line 3, Column (k) (2019)

      • Part II, Line 4, Column (k) (2020)

      has an amount,
      There is not an amount on Form 1120-L, Page 1, Line 27, Enter the Form 965-B,
      • Part II, Line 2, Column (k) (2018)

      • Part II, Line 3, Column (k) (2019)

      • Part II, Line 4, Column (k) (2020)

      amount in Field 0796P.
       

      Form 1120-PC

      If And Then
      Form 1120-PC, Schedule C, has an amount on Line 15, Column (a) and Form 965-B,
      • Part I, Line 2, Column (d) (2018)

      • Part I, Line 3, Column (d) (2019)

      • Part I, Line 4, Column (d) (2020)

      has an amount,
      There is not an amount on Form 1120-PC, Page 1, 15d, Enter the Form 965-B,
      • Part I, Line 2, Column (d) (2018)

      • Part I, Line 3, Column (d) (2019)

      • Part I, Line 4, Column (d) (2020)

      amount in Field 0796I.
      Form 1120-PC, Schedule C, has an amount on Line 15, Column (a) and Form 965-B,
      • Part II, Line 2, Column (k) (2018)

      • Part II, Line 3, Column (k) (2019)

      • Part II, Line 4, Column (k) (2020)

      has an amount,
      There is not an amount on Form 1120-PC, Page 1, Line 14, Enter the Form 965-B,
      • Part II, Line 2, Column (k) (2018)

      • Part II, Line 3, Column (k) (2019)

      • Part II, Line 4, Column (k) (2020)

      amount in Field 0796P.
       

      Form 1120-REIT

      If And Then
      Form 965-B,
      • Part I, Line 2, Column (d) (2018)

      • Part I, Line 3, Column (d) (2019)

      • Part I, Line 4, Column (d) (2020)

      has an amount,
      There is not an amount on Form 1120-REIT, Page 1, 25h, Enter the Form 965-B,
      • Part I, Line 2, Column (d) (2018)

      • Part I, Line 3, Column (d) (2019)

      • Part I, Line 4, Column (d) (2020)

      amount in Field 0796I.
      Form 965-B,
      • Part II, Line 2, Column (k) (2018)

      • Part II, Line 3, Column (k) (2019)

      • Part II, Line 4, Column (k) (2020)

      has an amount,
      There is not an amount on Form 1120-REIT, Page 1, Line 24, Enter the Form 965-B,
      • Part II, Line 2, Column (k) (2018)

      • Part II, Line 3, Column (k) (2019)

      • Part II, Line 4, Column (k) (2020)

      amount in Field 0796P.
       

      Note:

      This table is for taxpayers making the Section 965(h) election and not the Section 965(m) election for Form 1120-REIT filers.

      Form 1120-RIC

      If And Then
      Form 965-B,
      • Part I, Line 2, Column (d) (2018)

      • Part I, Line 3, Column (d) (2019)

      • Part I, Line 4, Column (d) (2020)

      has an amount,
      There is not an amount on Form 1120-RIC, Part I, 29i, Enter the Form 965-B,
      • Part I, Line 2, Column (d) (2018)

      • Part I, Line 3, Column (d) (2019)

      • Part I, Line 4, Column (d) (2020)

      amount in Field 0796I.
      Form 965-B,
      • Part II, Line 2, Column (k) (2018)

      • Part II, Line 3, Column (k) (2019)

      • Part II, Line 4, Column (k) (2020)

      has an amount,
      There is not an amount on Form 1120-RIC, Part I, Line 28, Enter the Form 965-B,
      • Part II, Line 2, Column (k) (2018)

      • Part II, Line 3, Column (k) (2019)

      • Part II, Line 4, Column (k) (2020)

      amount in Field 0796P.
       

Documents with Overfilled Money Fields

  1. If the money amount on a return exceeds the maximum field length allowable, enter the maximum amount of tax in Field 07GVT. Prepare Form 3465, Adjustment Request, to have the remainder assessed by Accounts Management.

  2. If a correction causes a difference of≡ ≡ ≡ ≡ ≡ ≡ ≡ or more between taxpayer tax and computer tax, correspond for an explanation or follow local Submission Processing Campus procedures. If no reply, send TPNC 40.

Form 1120 Sections and Fields

  1. Form 1120 has Sections 01 through 12, 14 through 26, and 29.

  2. Information related to ERS screen displays, invalid conditions and correction procedures are included in each section description.

Section 01 Data - Form 1120

  1. This section has instructions for correcting Section 01 Field Errors.

  2. Computer generated fields are described under the correct Error Code(s).

  3. Section 01 has Remittance, Received Date, processing codes, entity data, and miscellaneous information.

Section 01 Field Errors

  1. Correctable Section 01 fields are listed below:

    Field Designator Field Length Field Title Location
    01NC 4 Name Control First Name Line
    01EIN 9 Employer Identification Number EIN Block
    01TXP 6 Tax Period (Ending) Upper right Corner Page 1
    01RCD 8 Received Date Center of Page 1
    01CCC 10 Computer Condition Code Dotted Portion of Lines 1-11, Page 1
    01TXB 8 Tax Period Beginning Date Edited to the left of the Form Title at the top of Page 1
    01NAI 6 NAICS Code Form 1120
    Page 4, Schedule K, Line 2a
    01CBI 1 Preparer Checkbox Indicator Paid Preparer Use Only section
    01CRD 8 Correspondence Received Date ERS only field
    01PSN 9 Preparer SSN Paid Preparer Use Only section
    01PEN 9 Preparer EIN Paid Preparer Use Only section
    01PTN 9 Preparer phone number Paid Preparer Use Only section
    01RPC 35 Return Processing Code Edited to the right of Page 1, Line 1c

Field 01NC - Name Control (XREF EC 002 or 003)

  1. This field is transcribed from the name line in the entity portion of the return. The field is used for the name control (the first four significant characters of the corporation's name).

  2. Invalid Condition - Field 01NC is invalid if:

    • The Name Control is present and the first position is not alpha or numeric.

    • The Name Control 2nd, 3rd and 4th positions are not alpha, numeric, ampersand, hyphen, or blank.

    • There are any intervening blanks between characters.

  3. Correction Procedures:

    1. If the Name Control is invalid initiate research.

    2. If the Name Control has been transcribed incorrectly, enter the correct Name Control.

    3. If the Name Control is missing and cannot be determined, initiate research using local campus procedures.

    4. If found, enter the correct Name Control in Field 01NC and on the return.

    5. If you are still unable to determine the Name Control, SSPND the record with Action Code "320."

Field 01EIN - Employer Identification Number (XREF EC 004)

  1. The EIN is a number assigned by IRS for identification of a business tax account. The field is found in the EIN block on page 1 of the return or on the IRS preprinted label.

  2. Invalid Condition - Field 01EIN is invalid if:

    • The field is less than 9 digits.

    • The EIN is not numerics.

    • The EIN is all zeros or nines.

    • The first two digits are: 00, 07, 08, 09, 17, 18, 19, 28, 29, 49, 69, 70, 78, 79, 89, and 96.

  3. Correction Procedures:

    If Then
    The EIN was transcribed incorrectly or is missing, Check the return and attachments for a valid EIN.
    If found, enter in Field 01EIN and the EIN box on the return.
    Entity Control has assigned an EIN, Enter it in Field 01EIN and on the return.
    GTSEC 01 and enter the entity assignment date in Field 01CRD if it is after the Received Date (Field 01RCD).
    A correct EIN cannot be found, Research using Command Code NAMEB for the correct EIN.
    If found, enter EIN in Field 01EIN and the EIN box on the return.
    If a correct EIN cannot be found using Command Code NAMEB, Research using Command Code NAMEE for the correct EIN. If found, enter in Field 01EIN and the EIN box on the return.
    More than one EIN is found, or if unable to determine a valid EIN, SSPND with Action Code "320" and notate on routing slip "Multiple EIN" or "No Match Found" .
    A remittance return with an EIN change, SSPND with Action Code "351." Rejects will research via IDRS to determine if the payment has posted correctly.
    Research is not possible because IDRS is down, SSPND with Action Code "351."

Field 01TXP - Tax Period (XREF EC 007 or 026)

  1. The tax period is found in the upper right corner of the return. It is the ending month and year of the tax period covering the return. If the tax period is not the current calendar year, it is edited in year/month (YYYYMM) format. For example, December 31, 2021 is edited as "202112."

  2. Invalid Condition - Field 01TXP is invalid if:

    • The field is not numeric.

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

    • The tax period is equal to or after the current year and month.

    • The tax period is blank.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. Check the upper right corner of Page 1 of the return for a correct tax period.

      If Then
      Final return, Change the tax period to the month preceding the Received Date.
      Tax period is later than the current year/month by four months or more,
      1. SSPND with Action Code "211"

      2. Attach Form 3696, Correspondence Action Sheet, or other approved Correspondence Action Sheet and request confirmation of the tax period ending.

      Note:

      When confirmed, the return will be processed after the end of that tax period.

      Not more than one month, or
      taxpayer shows inactive, or
      no income or deductions are present,
      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.
      More than one month but less than one year on non-Final returns, Correspond for confirmation of the tax period.

    3. If account shows there are prepaid credits and/or extensions and the return is for a short period, SSPND with Action Code "351" and attach Form 4227 to have the credits and/or extensions moved to the correct period. The following table shows the placement of prepaid credits on the Form 1120 series.

      Form Type Line Numbers
      Form 1120 Page 3, Schedule J, Line 13, 14 or 17 (Line 12, 13, or 16 for 2017-2011)* (2010 and prior revisions Page 1 Line 32a, 32b, or 32e)
      Form 1120-C Line 30a, 30b, or 30e
      Form 1120-F Line 5a, 5b, or 5e
      Form 1120-H Line 23a, 23b, 23d
      Form 1120-L Line 28a, 28b, 28c, or 29f
      Form 1120-PC Line 15a, 15b, 15c, or 15g
      Form 1120-REIT Line 25a, 25b, 25e
      Form 1120-RIC Line 29a, 29b, or 29e

    4. 52-53 Week Rule. Corporations may elect to file a 52-53 week year end return under Treasury Regulation 1.441-2T(a).

      Examples
      52-53 week tax year that ends on the last Friday of the month can end as much as 6 days before the last day of the month. Tax year ends August 25, 2021.
      tax period should be 202108.
      52-53 week tax year that ends on the Friday that is nearest to the last day of the month can end as much as 3 days before, or 3 days after, the last day of the month. Tax year ends June 2, 2021.
      tax period should be 202105.

    If Tax Period Then
    Covers more than 12 months, Correspond for clarification. If no reply, follow instructions in IRM 3.12.38, BMF Error Resolution - General Instructions.
    Does not fall under the 52-53 week rule and does not end on the last day of the month, Continue processing
    Cannot be determined by researching the attachments, Follow local research procedures to obtain the correct tax period (the latest year without a return).
    Can be found through research, Enter it in Field 01TXP and on the return.

    Note:

    If research shows no filing requirement, SSPND with Action Code "320" to Entity Control.

Field 01RCD - Received Date (XREF EC 007)

  1. The Received Date is edited in YYYYMMDD format. The Received Date must be present on all Forms 1120. This field will show on the return in MMDDYY format. On the ERS Screen it displays as YYYYMMDD.

  2. Invalid Condition - Field 01RCD is invalid if:

    • The Received Date is not present.

    • The Received Date is not numerics.

    • The Month is not 01 through 12.

    • The Day is not valid for the month.

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

    • The Received Date is not in YYYYMMDD format.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. Field 01RCD is transcribed from the stamped or edited date in the center of Page 1 of the return.

      If Then
      The Received Date stamp is invalid (i.e., "20210115" in lieu of "20220115" ), Change the Received Date year to the current year.
      The Received Date is illegible or missing, Determine the correct Received Date in the following priority:
      1. U.S. postmark date on envelope or a postmark established by an acceptable designated private delivery service. See IRM 3.10.72, Receiving, Extracting and Sorting,, for more details.

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

      3. Revenue Officer's signature date

      4. Signature date unless information shows it is not valid or the return is for a prior year.

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

Field 01CBI - Checkbox Indicator

  1. The Paid Preparer Checkbox is found next to the Signature area of the return. The Paid Preparer Checkbox is used to show whether or not the taxpayer has elected to allow the preparer shown on the return to discuss the return with the IRS. C&E will enter a "1" in the margin to the right of the box if the "Yes" box is checked.

  2. Invalid Condition - Field 01CBI is invalid if not "1" or blank.

  3. Correction Procedures:

    • Correct coding and transcription errors and misplaced entries.

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

Field 01CCC - Computer Condition Code (XREF EC 010, 011, 065, 070, 072, 073, 172)

  1. The Computer Condition Code (CCC) is transcribed from the dotted portion of the Income section of the return. Computer Condition Codes are used to notate a specific condition, attachment, or computation and will post to the Master File.

  2. Invalid Condition for Form 1120:

    If Then
    CCCs "D," "R," are both present, Field 01CCC is invalid.
    Field 01CCC is not blank and an entry is not A, B, C, D, E, F, G, I, J, K, L, M, N, O, P, Q, R, S, T, V, W, X, Y, Z, 2, 3, 5, 6, 7, 8, or 9, Field 01CCC is invalid
    More than 10 present, Field 01CCC is invalid

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. When the code(s) entered on the return are illegible or invalid, examine the return and refer to the Computer Condition Code Chart below.

    3. Determine the correct code(s) and enter on the screen.

    4. When CCC "Y" is needed you may also need to GTSEC 07 and put the verified tax amount in Field 07MCT. If tax is zero enter .01 in Field 07MCT.

    5. Computer Condition Code Chart:

      Code Edited if: Shows
      A Tax year beginning was before December 31, 1987 and non-penalty Form 2220, Underpayment of Estimated Tax by Corporations, is present. Waiver of the Estimated Tax penalty.
      B Tax Period 2004 or later Form 1120 and
      • Page 1, Box A(4) is checked, or

      • Schedule M-3 is attached.

      Form 1120 with Schedule M-3 attached.
      C Qualified Derivatives Dealers (Form 1120-F) "Yes" answer From Page 2, Question CC.
      D Reasonable cause for failure to pay  
      E Possible Identity Theft filing  
      F The taxpayer checks the "Final Return" box on Page 1 of the return, or there is any other indication that the taxpayer is not liable for future returns. Final return
      G An amended return is identified per IRM 3.11.16, Returns and Document Analysis-Corporate Income Tax Returns.

      Note:

      No other Computer Condition Codes are allowed, except CCC "W," "S," "T" or "3."

      Amended return
      H A Form 1042-S is attached to Form 1120-F and Withholding is claimed. Form 1120-F only. Form 1042-S Recipient's Copy is attached and withholding is being claimed from the Form 1042-S.
      I Form 6781 is attached. Tax Straddles and Regulated Futures Contract claimed are attached to Form 1120, Form 1120-C, Form 1120-F, Form 1120-L and Form 1120-PC.
      J The tax period is 201712 through 202012 and the return being processed shows any of the following and the taxpayer is reporting Section 965 Tax Liability for the reporting year :
      • Form 965, Inclusion of Deferred Foreign Income Upon Transition to Participation Exemption System, 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.

      • IRC 965 Transition Tax Statement is attached to the return.

      See the following IRM references:
      • IRM 3.12.251.3.24, Section 965 Returns - General Instructions.

      • IRM 3.12.251.3.24.1, Section 965 Returns - Tax Period 201712 - 201811.

      • IRM 3.12.251.3.24.2, Section 965 - Tax Period 201812 and later.

      Section 965 (Repatriation Provision), Treatment of deferred foreign income upon transition to participation exemption system of taxation for U.S. Shareholders of Specified foreign corporations per Tax Cuts and Jobs Act (Tax Reform), Provision Section 14103, Public Law 115-97 (H.R.1) is applicable.
      K Form 8697, Interest Computation Under the Look-Back Method for Completed Long-Term Contracts, is attached and shows a balance due in Part I, Line 10 and/or Part II, Line 11.

      Note:

      The tax will be claimed on Form 1120 Schedule J, Line 9c, (2010 and prior: Line 9).

      Form 8697 tax is claimed.
      L Form 8833 is attached to the return, or "Section 6114 Election." The treaty based position statement is not made per IRC 6114 but is subsequently claimed on the return.
      M Form 8949, Sales and Other Dispositions of Capital Assets, Opportunity Zone Enter CCC "M" when:
      • Tax period is 201712 and later, and

      • Form 8949 has a code “Z” and/or "Y" in column (f).

      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 show that they are deferring the gain by entering code "Z" in column (f).
      N An unusual credit more than $5,000,000 is claimed on Form 1120, Page 3, Schedule J, Lines 13 through 23* (Lines 12 through 19 2017-2011) (2010 and prior, Form 1120, Page 1, Lines 32a through 32g) or equivalent lines on Form 1120 and Form 1120-PC. Unusual credits are defined as:
      • Form 1120-PC, Line 14H states: By reciprocal for tax paid by Attorney in Fact under Section 835(d)

      • A credit claimed under Section 1341 or a "Claim of" right for a refund of excessive prior year taxes.

      Form 1120 Joint Committee Case
      O Module Freeze condition is applicable. Manual Refund
      P Field 08FTC has an amount of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ for the following forms:
      • Form 1120, Schedule J, Line 5a.

      • Form 1120-C, Schedule J, Line 5a.

      • Form 1120-REIT, Schedule J, Line 3a.

      • Form 1120-RIC, Schedule J, Line 3a.

      Form 1118, Foreign Tax Credit
      Q Form 8913 (This field is no longer used, but is still in ERS programming. Tax period 2006 to 200711)  
      R Reasonable cause for late filing.  
      S Form 8883, Asset Allocation statement under section 338, is attached. Form 8883 attached to a Form 1120, Form 1120-C, 1120-F, 1120-L, 1120-PC, 1120-REIT and 1120-RIC
      T Form 8886, Reportable Transaction Disclosure Statement. Form 8886 attached to a Form 1120, 1120-C, 1120-F, 1120-H, 1120-L, 1120-PC, 1120-REIT and 1120-RIC
      V Form 3800, Part III, Line 1a or 4a is significant and Form 3468, Line 8 has an entry. Although this credit expired at the end of TY 2010 fiscal filers may qualify for Tax Year 2011 Qualifying Therapeutic Discovery Project Credit is being claimed.
      W Return has been "cleared by Statute" Cleared by the Statute Control Group
      X Refund/Settlement freeze condition is shown Return settlement is frozen
      Y Short period return for change of accounting period is shown Return must be manually verified. Master File will accept return as submitted. Updates the entity fiscal month.
      Z Schedule UTP is attached to Form 1120, 1120-F, Form 1120-L or Form 1120-PC for Tax Year 2011 Uncertain Tax Position Statement with assets that equal or exceed $100 million.
      1 Form 8824 is present on Form 1120-REIT (only) Like Kind Exchange
      2 Shows that a Form 8938 is attached.  
      3 The taxpayer either fails to respond to correspondence or the correspondence is returned undeliverable Account will not receive credit interest
      5 Bank Holding Co. Tax Act Special installment status
      6 Tax Period is 201812 and prior and Form 1120, Page 3, Schedule J, Part III, Line 14 (Part II Line 13 for 2017-2011)(with notation such as Special Estimated Tax Payments (SETP) or 8816); and/or
      Form 1120-L, Page 1 Line 28b (Page 1, Lines 29b and/or 29d for 2017 and prior) ; and/or
      Form 1120-PC, Page 1, Line 15b (Page 1, Lines 14b and/or 14d for 2017 and prior). (Form 1120, Form 1120-L and Form 1120-PC only)
      Section 847 Deduction, Special Estimated Tax Payments
      7 Reasonable cause denied  
      8
      1. Annualized income is computed on Schedule A, Pages 3 and/or 4 of Form 2220, or
        Form 2220, Part II Box 6 or Box 7 (prior year Part I, Box 1 or Box 2) is checked.

      1. Waiver of the Estimated tax penalty

      9 Low-income Housing Credit is shown:
      • Form 1120, Schedule J, Line 9b has a significant entry.

      • Form 1120-C, Schedule J, Line 8 has a significant entry.

      • Form 1120-REIT or Form 1120-RIC, Schedule J, Line 6 has a significant entry.

      • Form 8611 or Form 8693 is attached,

      • Taxpayer notates "Form 8693,"

      • Form 8609 is attached ,

      • Form 8609-A is attached.

      • Form 8586 with entries on Line 1 or 3.

      The Low-income Housing Credit is claimed

    6. If CCC "G" is present and:

      If Then
      Return is not an amended return, Delete CCC "G" and leave other codes. Input all information from the return.
      Return is an amended return, Delete CCCs other than "G," "W," "S," "T" and "3."

    7. If more than 10 codes are present, retain codes in the following priority: F, N, O, Y and others (up to 10 codes).

Return Processing Code - 01RPC

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

  2. Invalid Condition

    • Characters are not "A" through "F" or "1" through "7" and "9."

    • There are more than 35 characters.

  3. Correction Procedures:

    1. Correct misplaced entries and transcription errors.

    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 have 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 for the Gain Deferral 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.
    1 Form 8991, Tax on Base Erosion Payments of Taxpayers with Substantial Gross Receipts, is attached.
    2 Form 8992, U.S. Shareholder Calculation of Global Intangible Low-Taxed Income (GILTI), is attached.
    3 Form 8993, Section 250 Deduction for Foreign-Derived Intangible Income (FDII) and 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 IRC 163(j), is attached.
    9 Form 8997, Initial and Annual Statement of Qualified Opportunity Fund (QOF) Investments, is attached.

Field 01TXB - Tax Period Beginning Date

  1. Field 01TXB will be an 8 character date edited to the left of the form title at the top of Page 1 of the tax return. It will be edited in YYYYMMDD format.

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

  1. The North American Industry Classification System Code (NAICS) is transcribed from Form 1120, Schedule K, Line 2a (Business activity code no.)

  2. Invalid Condition - Field 01NAI is invalid if:

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

    • The field is not numeric.

    • The field is not 000001 through 999000.

    • The field has six of the same digit.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. Make the following changes if the Form 1120 is not an amended return:

      If Then
      The NAICS Code is found on Form 1120, Schedule K, Line 2a, Enter the code in Field 01NAI.
      The NAICS Code is not found on Form 1120, Schedule K, Line 2a, Enter 999000 in Field 01NAI.
      The taxpayer provides a number that is less than 6 digits, Enter leading zeroes to make it a 6 digit number.

    3. If Form 1120 is an amended return, delete any entry in Field 01NAI. GTSEC 01 and input CCC "G."

Field 01CRD - Correspondence Received Date (XREF EC 034 and EC 073)

  1. Field 01CRD is the date stamped on the reply to correspondence and is an ERS Input Only field.

    1. The 45 day interest free period for processing refund returns does not begin until after the return is considered processable. If correspondence is initiated for missing information, the Correspondence Received Date must be input to the Master File for the purpose of computing credit interest.

    2. This field will show on any correspondence in MMDDYY format. On the ERS Screen it displays as YYYYMMDD.

      Note:

      Code-and-Edit no longer edits the Correspondence Received Date.

  2. Invalid Condition - Field 01CRD is invalid if:

    • The Correspondence Received Date (CRD) is present and it is not numeric.

    • The format is not YYYYMMDD.

    • The month is not 01 through 12.

    • The day is not valid for a particular month.

  3. Correction Procedures:

    1. The Correspondence Received Date may not be required.

      If Then
      • Correspondence was required because of an IRS processing error, such as a request for a return or schedule that we lost during processing,

      • We didn’t ask for all the required information, or

      • The correspondence reply is received before the return due date,

      • Correspondence was not needed,

      Delete Field 01CRD if any of these conditions are present.

    2. If the Correspondence Received Date is applicable, use the date the correspondence reply was received in the Submission Processing campus.

      If Then
      The reply was not date stamped, Use the postmark date on the envelope attached to the reply.
      Enter the Correspondence Received Date in Field 01CRD.
      No reply or the correspondence was undeliverable, GTSEC 01 and enter a CCC "3" on the return and in Field 01CCC.

      Note:

      The CCC "3" suppresses the credit interest.

      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 in Field 01CRD if it is later than the Received Date.
      More than one CRD is present, Use the CRD that made the return complete and processable.

Field 01PSN - Preparer SSN

  1. The Preparer SSN is transcribed from the "Preparer's SSN or PTIN," Preparer Tax Identification Number (PTIN) box in the "Paid Preparer Use Only" section of the return.

    1. Field 01PSN can be blank, or it can be numeric, or

    2. The field may have a "P" followed by eight numbers.

    Note:

    If the Paid Preparer's information is present, either Field 01PSN or 01PEN should have an entry. Only one of these fields is required.

  2. Invalid Condition - Field 01PSN is invalid if:

    • The preparer SSN is present and it is all zeros or all nines.

    • An entry is less than nine characters.

    • A non-numeric entry is not "P" followed by eight numbers. These numbers cannot be eight zeros or eight nines.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If the Preparer SSN on the return is invalid, do not try to correct the taxpayers information. Delete Field 01PSN.

Field 01PEN - Preparer EIN

  1. The Preparer EIN is transcribed from the "EIN" box in the "Paid Preparer Use Only" section of the return. Field 01PEN can be blank, or it can be numeric.

    Note:

    If the Paid Preparer's information is present, either Field 01PEN or Field 01PSN should have an entry. Only one of these fields is required.

  2. Invalid Condition - Field 01PEN is invalid if:

    • The Preparer EIN is present and it is all zeros or all nines.

    • An entry is less than nine characters.

    • A non-numeric character is present.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If the Preparer EIN on the return is invalid, do not try to correct the taxpayer's information. Delete Field 01PEN.

Field 01PTN - Paid Preparer Phone Number

  1. The paid preparer phone number is transcribed from the bottom right hand corner of Page 1, in the Paid Preparer Use Only area of the return. If present, the entry in Field 01PTN must be alpha, numeric or a combination of alpha and numeric characters not to exceed 10 positions.

    Note:

    If the taxpayer checked "Yes" in the Paid Preparer Checkbox, a telephone number for the Paid Preparer should be entered to allow contact. However, this field is not required and may be left blank.

  2. Invalid Condition

    • Field 01PTN is invalid if not blank, alpha, numeric or a combination alpha and numeric characters.

  3. Correction Procedures:

    • Correct coding and transcription errors and misplaced entries.

    • If invalid characters are present, or if the Paid Preparer Phone Number on the return is invalid, do not try to correct the taxpayer's information. Delete Field 01PTN.

Section 02 Data - Form 1120 Address Information

  1. This section gives instructions for correcting Form 1120 Section 02 Field Errors.

  2. Section 02 has address information. It will be present when a change of address has been entered.

  3. This section must not be present on a return with CCC "G."

Section 02 Field Errors

  1. The fields listed below are in Section 02, Form 1120. From left to right are the field designator, maximum field length, title of field and the location where the data is obtained from the return.

    Field Designator Field Length Field Title Location
    02CON 35 "In-Care-of" Name Entity Section of the return
    02FAD 35 Foreign Address Entity Section of the return
    02ADD 35 Address Street address line, or corrected entry on pre-addressed label
    02CTY 22 City City, state, zip line or corrected entry on pre-addressed label
    02ST 2 State City, state, zip line or corrected entry on pre-addressed label
    02ZIP 12 Zip Code City, state, zip line or corrected entry on pre-addressed label

♦Field 02CON - "In-Care-of" Name (XREF EC 002, 014, 016)♦

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

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

    Note:

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

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

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

    • 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 and transcription errors and misplaced entries.

      In Care of Name Correction Procedures

      If Then
      A % (percent) is in the first position,
      1. Verify there is a blank in the second position.

      2. If not blank, enter a blank followed by the "in-care-of" name, beginning with an alpha or numeric in Field 02CON.

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

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

      The first character of the "in-care-of" name is not alpha or numeric,
      1. Verify "in-care-of" name on the return.

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

      Two consecutive blanks are present between significant characters,
      1. Delete any unnecessary blanks in Field 02CON.

       

♦Field 02FAD - Foreign Address♦

  1. Description - Field 02FAD is 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 returns.

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

  3. Invalid Condition - Field 02FAD generates 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:

    • Correct coding and transcription errors and misplaced entries.

      Foreign Address Correction Procedures

      If Then
      Field 02FAD is present, 1. GTSEC 02
      2. Ensure 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.
      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 Field 02FAD.
      A foreign address is not present on the return,
      1. SSPND with Action Code "610."

      2. Renumber return with domestic DLN.

       

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

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

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

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

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

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

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

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

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

      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 Forms 8822-B daily and hand carry them to Entity Control for expedited processing.

Field 02ADD - Street Address (XREF EC 002, 014, 015, 016)

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

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

    • The street address is present and the first position is blank.

    • A character is not alpha, numeric, blank, dash or slash.

    • Any character follows two consecutive blanks.

    • There are more than 35 characters in this field.

      Note:

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

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

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

    3. If unable to correct, DLSEC 02.

Field 02CTY - City (XREF EC 002, 014, 015, 016)

  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 a valid Major City Code.

    • The Foreign country code is not valid or Field 02CTY has "XX."

    Note:

    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. Ignore this procedure if you are in Ogden Submission Processing Campus For Ogden Only: Use the Job Aid to find the correct Foreign Code. Remove the incorrect information and enter the valid information into Field 02CTY.

    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. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If a valid city is not available from the return or envelope, take any of the following steps. Research using INOLES or ENMOD, refer to Document 7475, State and Address Abbreviations, Major City Codes, Zip Codes and Countries, or if Foreign address is shown on the return, enter correct Foreign code.

    3. Follow local procedures.

      Note:

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

    4. If unable to correct, DLSEC 02.

Field 02ST - State (XREF EC 002, 014, 015, 016)

  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:

    Skip this procedure if you are in 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, Zip Codes and Countries, and State Codes and Zip Codes Perfection Chart.

  4. Correction Procedures:

    1. Correct coding and 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, or follow local procedures to determine state.

      Note:

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

    3. If unable to correct, DLSEC 02.

Field 02ZIP - ZIP Code (XREF EC 002, 014, 015, 016)

  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 numeric or all blank.

    • Positions 4 and 5 are "00."

      Exception:

      Zip Code 20500

  3. Correction Procedures:

    1. Correct coding and 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: INOLES or ENMOD, Document 7475, State and Address Abbreviations, Major City Codes, Zip Codes and Countries, and State Codes and Zip Codes Perfection Chart.

Section 03 Data - Form 1120

  1. This section has instructions for correcting Section 03 Field Errors on Form 1120.

  2. Computer generated fields are described under the correct Error Code(s).

  3. Section 03 has codes and indicators relating to attachments and information on the return.

Section 03 Field Errors

  1. Correctable Section 03 fields are listed below:

    Field Designator Field Length Field Title Location
    03ABL 3 ABLM Code Page 1, upper left margin by Box A
    03IRC 1 Initial Return Code Page 1, upper right margin by Box C.
    03EZI 1 Empowerment Zone Indicator The margin to the left of “Deductions” section of the return following "1-."
    03ADC 9 Audit Code The margin to the left of “Deductions” section of the return following "2-."
    03MIC 2 Missing Schedule Code See IRM 3.12.251.7.5, Field 03MIC - Missing Schedule Codes.
    03PIC 1 Penalty and Interest Code The margin to the left of “Deductions” section of the return following "4-."
    03RVC 1 Reserve Code The margin to the left of “Deductions” section of the return following "5-."
    03ISI 1 Installment Sales Indicator The margin to the left of “Deductions” section of the return following "6-. "
    03SDC 1 Special Deduction Code Form 1120, Page 1, right margin by Line 29c
    03CGC 1 Control Group Personal Service Code Form 1120, Page 3, Line 1, Schedule J.
    03AMC 1 Accounting Method Code Form 1120, Schedule K, Left margin Line 1
    03K04 1 Affiliated Group Code Form 1120, Page 4, Schedule K, Line 3
    03PNC   Parent Name Control Form 1120, Page 4, Schedule K, dotted portion of Line 3
    03PIN 9 Parent EIN Form 1120, Page 4, Schedule K, dotted portion of Line 3
    03FCC 2 Foreign Country Code Form 1120, Page 4, Schedule K, Line 7(b)
    03K7C 3 Number of Forms 5472 attached Form 1120, Page 4, Schedule K, Line 7)(c)
    03K12 12 Net Operating Losses (NOL) Carryover Amount Form 1120, Page 4, Schedule K, Line 12
    03Q16 1 80 percent or more question Form 1120, Page 5, Schedule K, Line 16
    03Q17 1 Disposal question Form 1120, Page 5, Schedule K, Line 17
    03Q18 1 Section 351 transfer question Form 1120, Page 5, Schedule K, Line 18
    03Q25 1 Qualified Opportunity Fund question Form 1120, Schedule K, Line 25
    03QOF 15 Qualified Opportunity Fund amount Dotted portion of Form 1120, Schedule K, Line 25

Field 03ABL - ABLM Code

  1. The ABLM Code is determined from the box in the upper left corner of the return. If the document code (4th and 5th positions in the DLN) is "10," Field 03ABL must be blank.

  2. Invalid Condition - Field 03ABL is invalid if:

    • The field is not 001, 010, 400 or blank.

    • The doc code is 10 and 03ABL is not blank.

    • The doc code is 11 and 03ABL is not 001, 010, or 400.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. Check the return to see if it was given the correct document code.

      If Then
      Form 1120 with Box (1), (2), or (3) in upper left corner of the return is checked, Doc Code is 11.
      Form 1120 with none of the boxes mentioned above is checked, Doc Code is 10.
      Doc Code is 11, but should be 10, Reprocess return to correct the DLN. If TP caused the error (checked box in error) correct received date to reflect the date the correspondence was received.

    3. If the return was misblocked, reject with Action Code "610" and notate "misblocked return."

    4. If the document code is correct, and:

      If Then
      Doc Code is 10, Delete Field 03ABL.
      Doc Code is 11,
      1. Refer to the chart below for ABLM Codes.

      2. If ABLM Code 400, 010, or 001 does not apply, delete Field 03ABL.

    5. ABLM Codes are:

      ABLM Code Explanation
      001 Box A(2) is checked on Page 1 of the return, or
      Form 1120-PH is attached, or
      Schedule J, Line 8 has an amount
      010 Box A(1) on Page 1 of Form 1120 is checked, or
      Form 851 or Form 1122 is present,
      If the consolidated return has mixed component members (Example: taxpayer onsolidates a Form 1120-L with a Form 1120) and minimum edit or math verification is impossible, then see Audit Code "3" instructions.
      400 Box A(3) on Page 1 of Form 1120 is checked, or
      Box on Form 1120, Page 3, Schedule J, Line 2 is checked

      Note:

      ABLM Code 400 has precedence over 010 or 001.

Field 03CGC - Controlled Group Personal Service Code (XREF EC 114)

  1. This section only applies to returns for tax periods 201811 and prior.

  2. The Control Group Code is edited on the dotted portion of Form 1120, Schedule J, Line 1.

  3. Invalid Condition - Field 03CGC is invalid if:

    • The tax period is 201812 and later.

    • The field is not blank, "2" or "1."

  4. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. For more guidance on this field, see EC 174, IRM 3.12.251.28.33, Error Code 174 - Gross Income Tax Math Error.

    3. Valid codes and explanations are listed below:

      If Then
      • Schedule O is attached or Question 1, Schedule J, Page 3 is checked; or

      • Statement of an apportionment schedule under "Section 1561" is attached; or

      • On a consolidated return (Field 03ABL is 010) only when the box on Line 1 is checked and Taxable Income Bracket amounts or Controlled Group Additional Tax amounts more than zero are present,

      Enter "1" in Field 03CGC.
      Form 1120 only

      Caution:

      If "4" is edited by C&E refer to the Controlled Group" 4" instructions below.

      Tax Period began after 12/31/87 and
      • The box on Schedule J, Line 2, is checked, or

      • The taxpayer has not checked the box but has computed the tax at a flat rate of 35 percent,

      Enter "2" in Field 03CGC.

      Note:

      Code "2" takes priority over codes "4" and "1."

      Coded "4" by Code-and-Edit when the Taxable Income of the Controlled Group is $100,000.00 or more, Refer to the Controlled Group Code" 4" instructions below.

    4. If Controlled Group Code is "4," follow the instructions in the table below:

      Caution:

      The field error for Controlled Group "4" is set for ERS verification. ERS must take action if the taxpayer did not pay additional taxes when total taxable income is over $100,000.

    If And Then
    Schedule O or an apportionment plan is attached,

    Note:

    An attachment with an apportionment plan may be shown by any of the following: "Allocation/Apportionment plan," "Consent to apportionment," "Controlled Group apportionment plan," "Surtax apportionment plan" or "allocation schedule."

    The taxpayer is paying maximum tax of 35 percent,

    Note:

    Maximum tax can be identified by an entry on Schedule O (2012 revision), Part II, Column (f).

    Replace Controlled Group Code "4" with "1."
    Schedule O or an apportionment plan is attached, There are amounts on Schedule O, Page 3, Part III (2012 revision):
    1. Column (f) 5 percent if total taxable income is over $100,000 (additional tax amount not to exceed $11,750).

    2. Column (g) 3 percent if total taxable income is over $15,000,000 (additional tax amount not to exceed $100,000).

    Replace Controlled Group Code "4" with "1."
    The taxpayer has not computed the additional tax, or
    The taxpayer has incorrectly computed the additional tax,
    A Schedule O or an apportionment plan is present and there are taxable income allocations for the 15 percent, 25 percent, and /or 34 percent tax brackets, Compute the taxpayer's share of additional tax according to Schedule O or the apportionment plan.
    1. GTSEC 04 and enter the result in Field 04AT1 and Field 04AT2 (if applicable).

    2. Replace Controlled Group Code "4" with "1."

    3. Send TPNC 05 if EC 174 generates.

    Note:

    Field 04AT1 is 5 percent of the total taxable income over $100,000 (additional tax amount not to exceed $11,750) and Field 04AT2 is 3 percent of the amount over $15,000,000 (additional tax amount not to exceed $100,000).

    Schedule O or an apportionment plan is not present or is incomplete, C&E has not corresponded, Correspond for Schedule O.
    No reply is received from the taxpayer,   Do the following:
    1. Replace Controlled Group Code "4" with "1."

    2. Manually compute the tax using the additional 5 percent of taxable income over $100,000 (additional tax amount not to exceed $11,750).

    3. Enter the amount in Field 04AT1.

    4. Also manually compute 3 percent of taxable income over $15,000,000 (additional tax amount not to exceed $100,000).

    5. Enter the amount in Field 04AT2.

    6. When Error Code 174 is displayed assign TPNC 40.

    TP replies and shows they checked the box in error and are not a control group,   Reprocess the return after editing out any indication form is for a control group. If TP caused error, change the received date on the return to the received date of the correspondence.

Field 03IRC - Initial Return Code

  1. The Initial Return Code is transcribed from the right of Box C, Page 1. The valid codes are "2" or blank.

  2. Invalid Condition - Field 03IRC is invalid if it is not blank or "2."

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. Enter "2" in Field 03IRC if: the initial box is checked or the date of incorporation is within 12 months of the tax period ending, or there is any indication of initial filing written on the return or the incorporation date is within 24 months (or is not shown) and the beginning balance sheet is blank or all zeroes.

Field 03MIC - Missing Schedule Codes

  1. Missing Schedule Codes will no longer be edited by Code and Edit. Code and Edit is now instructed to correspond for missing forms/schedules.

  2. Correction Procedures:

    1. Delete the entry in Field 03MIC.

    2. If there is no indication Code and Edit has requested the missing form(s)/schedule(s), SSPND with Action Code "21X" and correspond if credit is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

      Exception:

      Correspond for a missing Schedule D if any significant entry is present in Field 0508.

Field 03PIC - Penalty and Interest Code (XREF EC 030)

  1. The Penalty and Interest Code is edited to and transcribed from the margin to the left of “Deductions” section of the return following “4-”. Field 03PIC should be coded "≡ ≡ ≡" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, and an amount for precomputed penalty and interest is shown on the return, see IRM 3.12.251.28.13, Error Code 030 - Penalty and Interest Code Check, for more information.

  2. Invalid Condition - Field 03PIC is invalid if it is not blank or "1."

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

Field 03RVC - Reserve Code (XREF EC 164)

  1. The Reserve Code is transcribed from the margin to the left of “Deductions” section of the return following “5-”. Valid codes are "1" and "4."

  2. Invalid Condition - Field 03RVC is invalid if not blank, "1" or "4."

    Note:

    Reserve Code "3" is generated if a valid amount for Orphan Drug Credit is present (Form 1120 only). It causes Error Code 164 to generate.

  3. Correction Procedures:

    1. Code "1" will be used by Error Correction when a manual refund has been issued.

    2. Code "4" will be used if Form 2220 is attached and the taxpayer has checked the box on Line 8, Part II, Form 2220, "Large Corporations."

Field 03SDC - Special Deduction Code (XREF EC 168 or 170)

  1. The Special Deduction Code is used by Error Correction only. It will be used only when Special Deductions or Excess Contributions are present with certain waiver conditions.

  2. Invalid Condition - Field 03SDC is invalid if it is not blank, "1," "2," or "3."

  3. Correction Procedures:

    1. Check to see if any of the conditions listed below exist.

      If Then
      Excess Special Deductions are present with the waiver conditions that are identified in the Error Code 170 instructions, Enter "1" in Field 03SDC
      Excess Contributions are present with the waiver conditions that are identified in the Error Code 168 instructions, or
      The return is a short period due to "Initial," "Final" or "Change in Accounting Period" ,
      Enter "2" in Field 03SDC
      Domestic Production activities are reported on Form 1120 Line 25 (2017 and prior), Enter "2" in Field 03SDC
      If the conditions for Codes "1" and "2" are present, Enter "3" in Field 03SDC
      If none of the conditions listed above are present, Delete Field 03SDC

Field 03K04 - Affiliated Group Code (XREF EC 130)

  1. The Affiliated Group Code is transcribed from Line 3, Schedule K.

  2. Invalid Condition - Field 03K04 is invalid if:

    • The field is not blank, "1," "2" or "3" for Form 1120.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

      If Then
      A statement or Form 851, Affiliations Schedule, shows the parent EIN to be the same as the EIN on the return (Field 01EIN), Delete Field 03K04
      The "Yes" box is checked in response to the question on Line 3, Schedule K, Enter "1" in Field 03K04
      The "No" box is checked in response to the question on Line 3, Schedule K, Enter "2" in Field 03K04
      Both the "Yes" and "No" boxes are checked in response to the question on Line 3, Schedule K, Enter "3" in Field 03K04
      No box is checked in response to the question on Line 3, Schedule K, Delete Field 03K04

Field 03PNC - Parent Name Control (XREF 130)

  1. The Parent Name Control is transcribed from the underlined name control on Schedule K, Line 3.

  2. Invalid Condition - Field 03PNC is invalid if:

    • The field is present and the first position is not alpha or numeric.

    • The 2nd, 3rd and 4th positions are not alpha, numeric, ampersand, hyphen, or blank.

    • There are any intervening blanks between characters.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If it appears the EIN is the same as Field 01EIN, GTSEC 03 and delete Field 03K04.

    3. If unable to determine a valid Parent Name Control, enter "XXXX" in Field 03PNC.

Field 03PIN - Parent EIN (XREF EC 130)

  1. The Parent EIN is transcribed from the underlined EIN on Schedule K, Line 3.

  2. Invalid Condition - Field 03PIN is invalid if:

    • The parent EIN is not numeric.

    • The field is less than 9 digits.

    • The field is all zeros or all nines.

    • The same as the EIN on the return (Field 01EIN).

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If a statement or Form 851, Affiliations Schedule, shows the parent EIN to be the same as the EIN on the return (Field 01EIN), GTSEC 03 and delete Field 03K04.

    3. If unable to find a valid Parent EIN, enter "129999999" in Field 03PIN.

Field 03FCC - Foreign Country Code

  1. The Foreign Country Code is transcribed from Form 1120, Page 4, right margin of Question 7b.

  2. Invalid Condition - Field 03FCC is invalid if the code is not in the Foreign Country Code Table.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. See Document 7475, State and Address Abbreviations, Major City Codes, Zip Codes and Countries, and State Codes and Zip Codes Perfection Chart or your job aid book for a list of valid country codes.

Field 03ADC - Audit Code

  1. The Audit Code is transcribed from the margin to the left of “Deductions” section of the return following “2-”.

  2. The valid codes are blank or 1 through 4 and 6 through 8.

  3. Invalid Condition - Field 03ADC is invalid if:

    • Any code is not blank, or 1-4, or 6-8 for Form 1120.

    • Any code is repeated.

    • Any code follows a blank.

  4. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. Refer to the following chart. Nine codes may be entered. There is no priority numbering for audit codes.

      Audit Code Explanation
      1 Disclosure Statement, Inconsistent Treatment, or Joint Committee Case
      • Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR) is attached.

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

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

      • Joint Committee Case (unusual credit of≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ claimed on Lines 19a-19d of Form 1120.

      2 International Income or Credit
      • An entry of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ appears on Page 2, Schedule C, for any of the following Lines: 3, 6, 7, 8, 12, 13, 14, 15 16a, 16b, 16c, 17, 18, and/or 19 (Lines 3, 6, 7, 8, 12, 13, 14, 15 and/or 16 for 2017 and prior). (Form 1120-PC, Page 4, Schedule C, Lines 3, 6, 7, 8, 10, 11, 12a, 12b, 12c, 13 and/or 14. (Lines 3, 6, 7, 8, 10, 11, and/or 12 for 2017 and prior).

      • Form 5471, Information Return of U.S. Persons with Respect to Certain Foreign Corporations, is attached or Schedule N, Line 4a (2019 and prior revision) is marked "Yes" , or Schedule N, Line 4b has an entry.

      • 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.

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

      • Form 8621, Return by a Shareholder of a Passive Foreign Investment Company or Qualifying Electing Fund, is attached and Part V, Distributions From and Dispositions of Stock of a Section 1291, Lines 15a through 16f, have an entry of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ *(Part IV, Lines 10a through 11f for 2011 and prior).

      • Form 1116, Foreign Tax Credit, is attached and credit is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

      • Form 1118, Foreign Tax Credit - Corporations, is attached and credit is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, and reported on Line 5a, Schedule J.

      • Form 1120, Schedule M-3 is attached and any entry on Part II, Column (c) Lines 2-5 or 10 is a negative amount of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.
        Any entry Part III, Column (c), Lines 5-7 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or
        The sum of Columns (b) plus (c), Lines 9, 23, 24 or 25 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

      • Form 1120, Schedule N, is attached and any box other than question 6 is checked "Yes."

      • Form 3520, Annual Return to Report Transactions with Foreign Trusts and Receipt of Certain Foreign Gifts, or Form 3520-A, Annual Return of Foreign Trust with a U.S. Owner, is attached.

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

      • Form 8621, Return by a Shareholder of a Passive Foreign Investment Co. or Qualified Electing Fund , is attached and any line in Part V, Distributions From and Dispositions of Stock of a Section 1291, (Lines 15a through 16f have an entry of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡) *(Part IV, Lines 10a through 11f for 2011 and prior).

      • Form 8832, Entity Classification Election, is attached and either Box 6(d), (e), or (f) is checked (Box 2(d), (e) or (f) for 2006 and earlier).

      • Form 8833, Treaty-Based Return Position Disclosure Under Section 3114 or 7701(b), is attached.

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

      • Form 8902, Alternative Tax on Qualifying Shipping Activities, is attached.

      3 Examination Classification Criteria
      • Form 8283, Noncash Charitable Contributions, is attached and Part I, Question 2, Art Contributions of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, is checked (Page 2, Part I, Question 4 for 2019 and prior).

      • Form 8283, Noncash Charitable Contributions, is attached and Part I, Question 3, Column (c) has an entry of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ (Page 2, Part I, Question 5, Column (c) for 2019 and prior).

      • Form 8883, Asset Allocation statement under section 338, is attached and the amount in Box 5a (Stock price) is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

      • Form 8594, Asset Acquisition Statement, is attached and the amount in Box 3 (Total sales price) is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

        Note:

        Attach Form 4227, Intra-SC Reject or Routing Slip, indicating the condition.

      4 A Form 1120-S without a valid election is processed as a Form 1120.
      5 Reserved
      6 Form 3115, Application for Change in Accounting Method, is attached
      7
      • An entry of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ appears on Page 2, Schedule C, for any of the following Lines: 3, 6, 7, 8, 12, 13, 14, 15 16a, 16b, 16c, 17, 18, and/or 19 (Lines 3, 6, 7, 8, 12, 13, 14, 15 and/or 16 for 2017 and prior). (Form 1120-PC, Page 4, Schedule C, Lines 3, 6, 7, 8, 10, 11, 12a, 12b, 12c, 13 and/or 14. (Lines 3, 6, 7, 8, 10, 11, and/or 12 for 2017 and prior).

      • Form 1116 is attached and reflects ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ in foreign tax credits on Part IV, Line 33.

      • Form 1118 is attached and reflects ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ in foreign tax credits on Form 1120, Schedule J, Line 5(a).

      • Schedule M-3 is attached and any entry on Part II Column (c) Lines 2-5 or 10 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, any entry on Part III Column (c) Lines 5-7 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or the sum of Columns (b) plus (c), of any of Lines 9, 23, 24 or 25 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

      • Form 1120, Schedule N is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

      • Form 5713 is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡"

      • Form 8621 is attached and Part V, Distributions From and Dispositions of Stock of a Section 1291, Lines 15a through 16f have an entry of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ (Part IV, Lines 10a through 11f for 2011 and prior).

      8 Schedule M-3 Entry of more than ≡ ≡ ≡ ≡ ≡ on any line.
      9 Reserved

    3. If no code applies, delete Field 03ADC.

Field 03ISI - Installment Sales Indicator

  1. The Installment Sales Indicator Code is transcribed from the margin to the left of “Deductions” section of the return following “6-”. The valid codes are "0," "1," "2," "3" or blank. The codes are based on the taxpayer's response to Question 3, Form 6252, Installment Sale Income.

  2. Invalid Condition - Field 03ISI is invalid if:

    • The field is not blank, "0," "1," "2" or "3."

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. Refer to the chart below:

      If Then
      The "Yes" box is checked in response to Question 3, Form 6252, Enter "1" in Field 03ISI.
      The "No" box is checked in response to Question 3, Form 6252, Enter "2" in Field 03ISI.
      Form 6252 is present and neither box is checked in response to Question 3, Enter "3" in Field 03ISI.
      None of the above, Delete Field 03ISI.

      Note:

      Code "0" is input by ISRP when no Installment Sales Code is present.

Field 03AMC - Accounting Method Code

  1. The Accounting Method Code is transcribed from the left margin of Line 1, Schedule K. This field will not post to the Master File.

  2. Invalid Condition - Field 03AMC is invalid if it is not "0," "1," "2" or "3."

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. Refer to the chart below:

      If Then
      Schedule K, Question 1, box "a" is checked, Enter "1" in Field 03AMC.
      Schedule K, Question 1, box "b" is checked, Enter "2" in Field 03AMC.
      Schedule K, Question 1, box "c" is checked, Enter "3" in Field 03AMC.
      No or multiple boxes are checked, Enter "0" in Field 03AMC.

Field 03K12 - NOL Carryover Amount

  1. Field 03K12 is transcribed from the Form 1120, Schedule K, Line 12. This is a POSITIVE only and DOLLARS only field.

  2. Invalid Condition - Field 03K12 is invalid if:

    • Form 1120 amount exceeds the maximum length (12).

  3. Correction Procedures - Correct coding and transcription errors and misplaced entries.

Field 03K7C-Number of Forms 5472 Attached

  1. Field 03K7C is transcribed from the Form 1120, Page 4, Schedule K, Line 7. This is a numeric only field that can have only 3 characters.

  2. Invalid Condition - Field 03K7C is invalid if:

    • The edited entry is more than 3 characters.

    • Any entry is non numeric.

  3. Correction Procedure - Correct coding and transcription errors and misplaced entries.

Field 03Q16-80 Percent or More Question

  1. Field 03Q16 is transcribed from Form 1120, Pg 5, Schedule K, Line 16.

  2. Invalid Condition - Field 03Q16 is invalid if:

    • An entry other than blank or "1" is present.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If only the "Yes" box is checked on Schedule K, Question 16, enter a "1" in Field 03Q16. Otherwise, delete the field.

Field 03Q17-Disposal of Assets Question

  1. Field 03Q17 is transcribed from Form 1120, Pg 5, Schedule K, Line 17.

  2. Invalid Condition - Field 03Q17 is invalid if:

    • An entry other than blank or "1" is present.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If only the "Yes" box is checked on Schedule K Question 16, enter a "1" in Field 03Q16. Otherwise, delete the field.

Field 03Q18-Section 351 Transfer Question

  1. Field 03Q18 is transcribed from Form 1120, Schedule K, Line 18.

  2. Invalid Condition - Field 03Q18 is invalid if:

    • An entry other than blank or "1" is present.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If only the "Yes" box is checked on Schedule K, Question 18, enter a "1" in Field 03Q18. Otherwise, delete the field.

Field 03Q25 - Qualified Opportunity Fund Question (Form 8996)

  1. Field 03Q25 is transcribed from Form 1120, Schedule K, Line 25.

  2. Invalid Condition - Field 03Q25 is invalid if:

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

    • Tax Period is before 201812.

  3. Correction Procedure:

    1. Correct coding and transcription errors and misplaced entries.

      If Then
      Form 1120, Schedule K, Line 25 is "Yes," Enter "1" in Field 03Q25.
      Form 1120, Schedule K, Line 25 is "No," Enter "2" in Field 03Q25.
      Both the "Yes" and "No" boxes are checked, Enter "3" in Field 03Q25.
      Neither box is checked, Enter “0” in Field 03Q25.
      Tax Period is before 201812, Enter “0” in Field 03Q25.

      Note:

      If Form 8996 is attached, verify “6” is present in Field 01RPC.

Field 03QOF - Qualified Opportunity Fund Amount (Form 8996)

  1. Field 03QOF is transcribed from the dotted portion of Form 1120, Schedule K, Line 25.

  2. Invalid Condition - Field 03QOF is invalid if:

    • The field is not numeric.

    • The field is negative.

    • The entry exceeds the maximum field length (15 characters).

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If the amount is negative, delete Field 03QOF.

    3. If the Tax Period is before 201812, delete Field 03QOF.

Section 04 Data - Form 1120

  1. This section has instructions for correcting Section 04 Field Errors.

  2. Section 04 has the taxable income bracket amounts, and other money amounts.

  3. Fields 04TAE, 04A01, 04A06, and 04A07 are transcribed in dollars only. The remaining fields are transcribed in dollars and cents.

  4. Field 04TAE may be positive or negative. All other fields in this section must be positive only.

Section 04 Field Errors

  1. Correctable Section 04 fields are listed below:

    Field Designator Field Length Valid Entry Field Title Location XREF EC
    04TAE 15 Dollars only
    Positive or Negative
    Total Assets Ending Form 1120, Box D, right of entity 150
    04A01 11 Dollars only
    Positive
    Inventory at Beginning of year Form 1125-A, Line 1  
    04A06 11 Dollars only
    Positive or negative
    Total Cost of Sales Form 1125-A, Line 6  
    04A07 11 Dollars only
    Positive or negative
    Inventory End amount Form 1125-A, Line 7  
    04TB5 7 Dollars and cents
    Positive
    5th Taxable Income Bracket Schedule O (Form 1120), Part II, Line 1, Column (c) (2012 revision/Tax Periods 201811 and prior) 118, 174
    04TB6 7 Dollars and cents
    Positive
    6th Taxable Income Bracket Schedule O (Form 1120), Part II, Line 1, Column (d) (2012 revision/Tax Periods 201811 and prior) 118, 174
    04TB7 9 Dollars and cents
    Positive
    7th Taxable Income Bracket Schedule O (Form 1120), Part II, Line 1, Column (e) (2012 revision/Tax Periods 201811 and prior) 118, 174
    04AT1 7 Dollars and cents
    Positive
    Control Group Additional 5 percent Tax Schedule O (Form 1120), Part III, Line 1, Column (f) (2012 revision/Tax Periods 201811 and prior) 114, 174
    04AT2 8 Dollars and cents
    Positive
    Control Group Additional 3 percent Tax Schedule O (Form 1120), Part III, Line 1, Column (g) (2012 revision/Tax Periods 201811 and prior) 114, 174

  2. Invalid Condition - Section 04 field errors displays if:

    • The field is not numeric.

    • An entry exceeds the maximum field length.

    • A "positive only" field is negative.

    • Field 04AT1 is more than $11,750.

    • Field 04AT2 is more than $100,000,

    • Fields 04TB5, 04TB6, 04TB7, 04ATI or 04AT2 are for tax periods 201812 or later.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If a "positive only" field is negative, delete the field.

    3. If the taxpayer has reported more than $11,750 for Field 04AT1, reduce the amount to $11,750, and correct the return.

    4. If the taxpayer has reported more than $100,000 for Field 04AT2, reduce the amount to $100,000, and correct the return.

    5. If Fields 04TB5, 04TB6, 04TB7, 04ATI or 04AT2 are for tax periods 201812 or later, delete the fields.

Section 05 Data - Form 1120

  1. This section has instructions for correcting Section 05 Field Errors.

  2. Computer generated fields are described under the correct Error Code(s).

  3. Section 05 has the income information. It must have money amounts only.

  4. All fields in Section 05 are transcribed in dollars only.

  5. Fields 0502, 0509, 0510, and 0511 may be positive or negative. All other Section 05 fields are positive only.

  6. If the income or deductions amount is blank, or if Lines 10 and 11 or 26 and 27 constitute the only entries, C&E should enter the correct transcription lines.

    Exception:

    If the return does not require a transcription of the Balance Sheet (Section 11), editing may be restricted to Lines 10, 11, 26, 27, Form 1120 (refer to C&E IRM 3.11.16, Returns and Document Analysis-Corporate Income Tax Returns, for Minimum Edit guidelines).

Section 05 Field Errors

  1. Correctable Section 05 fields are listed below:

    Field Designator Field Length Valid Entry Field Title Location on Page 1
    0501A 15 Dollars only
    Positive
    Gross Receipts Line 1(a)
    0501B 15 Dollars only
    Positive
    Returns and Allowances Line 1(b)
    0502 15 Dollars only
    Positive or Negative
    Cost of Goods Sold Line 2
    0504 15 Dollars only
    Positive
    Dividends Line 4
    0505 13 Dollars only
    Positive
    Interest Line 5
    0506 15 Dollars only
    Positive
    Gross Rents Line 6
    0507 15 Dollars only
    Positive
    Gross Royalties Line 7
    0508 15 Dollars only
    Positive
    Capital Gain Net Income Line 8
    0509 15 Dollars only
    Positive or Negative
    Net Gain/Loss Line 9
    0510 15 Dollars only
    Positive or Negative
    Other Income Line 10
    0511 15 Dollars only
    Positive or Negative
    Total Income Line 11
    05MCV 15   Merchant Card Payments Verified Line 1(a) (TY 2011 ONLY)

  2. Invalid Condition - Section 05 field errors displays if:

    • The field is not numeric.

    • A "positive only" field is negative.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If a "positive only" field is negative, delete the field. GTSEC 05 and include the "deleted amount" in Field 0510 (Other Income).

      Note:

      If a negative amount is present for Field 0508, delete the field.

    3. See IRM 3.12.251.3.25, Documents With Overfilled Money Fields, if any money amount exceeds the maximum field length allowable.

Section 06 Data - Form 1120

  1. This section has instructions for correcting Section 06 Field Errors.

  2. Computer generated fields are described under the correct Error Code(s).

  3. Section 06 has the deduction amounts. All fields in this section are money amounts and dollars only.

  4. Fields 06BD, 06OTH, and 06TOT can be positive or negative. All other fields must be positive only.

Section 06 Field Errors

  1. Correctable Section 06 fields are listed below:

    Field Designator Field Length Valid Entries Field Title Location on Page 1 XREF EC
    06COF 15 Dollars only
    Positive
    Compensation Of Officers Line 12 160
    06SAW 15 Dollars only
    Positive
    Salaries and Wages Line 13 160
    06REP 15 Dollars only
    Positive
    Repairs and Maintenance Deduction Line 14  
    06BD 15 Dollars only
    Positive or Negative
    Bad Debts Deduction Line 15  
    06REN 15 Dollars only
    Positive
    Rents Deduction Line 16  
    06TAX 15 Dollars only
    Positive
    Taxes and Licenses Deduction Line 17  
    06INT 15 Dollars only
    Positive
    Interest Deduction Line 18  
    06CHR 15 Dollars only
    Positive
    Charitable Contributions Line 19 168
    06DPR 15 Dollars only
    Positive
    Depreciation Deduction Line 20  
    06DPL 15 Dollars only
    Positive
    Depletion Deduction Line 21 160
    06ADV 15 Dollars only
    Positive
    Advertising Deduction Line 22 160
    06PEN 15 Dollars only
    Positive
    Pension Plans Deduction Line 23 160
    06CON 15 Dollars only
    Positive
    Employee Benefit Plans Line 24 160
    06DOM 15 Dollars only
    Positive
    Domestic Production Activities (2017 and prior) Line 25 160
    06OTH 15 Dollars only
    Positive or Negative
    Other Deductions Line 26 160
    06TOT 15 Dollars only
    Positive or Negative
    Total Deductions Line 27 160
    06NOL 15 Dollars only
    Positive
    Net Operating Loss Deduction Line 29a 160
    06SPD 15 Dollars only
    Positive
    Special Deductions Line 29b 170

  2. Invalid Condition - Section 06 field errors displays if:

    • The field is not numeric.

    • A "positive only" field is negative.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If a "positive only" field is negative, delete the field. GTSEC 06 and include the "deleted amount" in Field 06OTH (Other Deductions).

Section 07 Data - Form 1120

  1. This section has instructions for correcting Section 07 Field Errors.

  2. Computer generated fields are described under the correct Error Code(s).

  3. Section 07 has the tax, credits and payments section of Form 1120.

  4. All fields in this section are to be transcribed in dollars and cents.

  5. Field 07B/R can be either positive or negative, while all other fields must be positive.

  6. Consolidated return procedures are below:

    If And Then
    Prepaid credits are claimed on a consolidated return on Form 1120, Schedule J, Lines 13, 14, and 17, The total amount of Form 851, Affiliation Schedule, Line 1, does not agree with the sum of Form 1120, Schedule J, Lines 13, 14 and 17,
    or
    Credits are claimed on Lines 2 through 10 of Form 851,
    1. The return is unprocessable.

    2. SSPND with Action Code "342" if Code-and-Edit has not already done so, and

    3. Prepare Form 4227, Intra-SC Reject or Routing Slip, with an explanation for routing to Accounting Branch.

Section 07 Field Errors

  1. Correctable Section 07 fields are listed below:

    Field Designator Field Length Valid Entry Field Title Location XREF EC
    07TTX 15 Dollars and cents
    Positive
    Total Tax Taxpayer Page 1, Line 31 186
    0796P 15 Dollars and cents
    Positive
    Net 965 tax liability paid for the reporting year (Tax Periods 201712 through 202012) Page 1, Line 32 188
    07TPC 15 Dollars and cents
    Positive
    Total Payments and Refundable Credits Page 1, Line 33 (Line 32 2017-2011)  
    07FIR 15 Dollars and cents
    Positive
    Foreign Investors Real Property Tax Act (FIRPTA) Bottom Center Margin (from Form 8288-A) 188
    07ESP 15 Dollars and cents
    Positive
    Estimated Tax Penalty Page 1, Line 34 (Line 33 2017-2011) 188
    07B/R 15 Dollars and cents
    Positive or Negative
    Balance Due/Over payment Page 1, Lines 35/36 (Line 34/35 2017-2011)  
    07CRE 15 Dollars and cents
    Positive
    Credit Elect Amount Page 1, Line 37 (Line 36 2017-2011) 192
    07GIT 15 Dollars and cents
    Positive
    Gross Income Tax Page 3, Schedule J, Line 2 174
    07MCT 15 Dollars and cents
    Positive
    Manually Corrected Total Tax Manually computed amount of Total Tax and is a correction only field 186
    07GVT 15 Dollars and cents
    Positive
    Gross Verified Tax Manually computed amount of Gross Tax and is a correction only field 174
    1. Field 07FIR - Any Form 1120 with this credit must be transferred to OSPC.

    2. Field 07GVT - This Field is not transcribed. It will be used to enter the manually computed amount of "Gross Verified Tax" by the ERS Tax Examiner.

    3. Field 07MCT - This Field is not transcribed. It will be used to enter the manually computed amount of "Manually Corrected Total Tax" by the ERS Tax Examiner.

  2. Invalid Condition - Section 07 field errors displays if:

    • The field is not numeric.

    • A "positive only" field is negative.

    • Entries are present in both Fields 07B/R (with a minus sign behind it) and 0819C.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If a "positive only" field is negative, delete the field.

    3. Suspend return with Action Code "470," attach a special, colored Form 4227, Intra-SC Reject or Routing Slip, to the front of the return and leave the return in the pack of work, when no other error is present.

Section 08 Data - Form 1120

  1. This section has instructions for correcting Section 08 Field Errors.

  2. Computer generated fields are described under the correct Error Code(s).

  3. Section 08 has the statutory credits and other taxes. The information is transcribed from:

    • Form 3800, General Business Credit, or,

    • Form 1120, Page 3, Schedule J.

  4. All fields are positive only and transcribed in dollars and cents.

Section 08 Field Errors

  1. Correctable Section 08 fields are listed below:

    Note:

    Fields 08ESC, 08TRI, 08ENV, 08ORC, 08CDC, 08WTW, 08QZA, 08NYL, and 08ERC are displayed on the Section 08 ERS screen, but are no longer transcribed.

    Field Designator Field Length Valid Entry Field Title Location
    08BET 15 Dollars and cents
    Positive
    Form 8991, Tax on Base Erosion Payments of Taxpayers with Substantial Gross Receipts Form 1120, Schedule J, Line 3 (201812 and later)
    08AMT 15 Dollars and cents
    Positive
    Form 4626, Alternative Minimum Tax - Corporations Form 1120, Schedule J, Line 3(201811 and prior)
    08FTC 15 Dollars and cents
    Positive
    Form 1118, Foreign Tax Credit - Corporations Form 1120, Schedule J, Line 5a
    08EVC 15 Dollars and cents
    Positive
    Form 8834, Qualified Electric Vehicle Credit
    Or, Form 5735, American Samoa Economic Development Credit.
    Form 1120, Schedule J, Line 5b
    08GBC 15 Dollars and cents
    Positive
    Form 3800, General Business Credit Form 1120, Schedule J, Line 5c
    08GBV 15 Dollars and cents
    Positive
    General Business Credit Verified ERS Input only (manually computed amount)
    08PYM 15 Dollars and cents
    Positive
    Form 8827, Credit for Prior Year Minimum Tax - Corporations Form 1120, Schedule J, Line 5d
    08CEB 15 Dollars and cents
    Positive
    Form 8912, Credit to Holders of Tax Credit Bonds, (previously called Clean Renewable Energy Bond Credit)
    (Form 1120 only)
    Form 1120, Schedule J, Line 5e
    08TSC 11 Dollars and cents
    Positive
    Total Statutory Credits Form 1120, Schedule J, Line 6
    08SCV 15 Dollars and cents
    Positive
    Statutory Credits Verified ERS only (manually computed amount)
    08PHC 15 Dollars and cents
    Positive
    Form 1120, Schedule PH, U.S. Personal Holding Company (PHC) Tax Form 1120, Schedule J, Line 8
    08RIC 15 Dollars and cents
    Positive
    Form 4255, Recapture of Investment Credit Form 1120, Schedule J, Line 9a
    08RLI 15 Dollars and cents
    Positive
    Form 8611, Recapture of Low-Income Housing Credit Form 1120, Schedule J, Line 9b
    08ULB 15 Dollars and cents
    Positive
    Form 8697, Interest Computation Under the Look-Back Method Completed Long Term Contracts Form 1120, Schedule J, Line 9c
    08IFM 15 Dollars and cents
    Positive
    Form 8866, Interest Computation under the Look-Back Method for Property Depreciated under the income Forecast Method Form 1120, Schedule J, Line 9d
    08QSA 15 Dollars and cents
    Positive
    Form 8902, Alternative Tax on Qualifying Shipping Activities Form 1120, Schedule J, Line 9e
    08453 15 Dollars and cents
    Positive
    IRC 453A Tax Form 1120, Schedule J, Line 9f
    08OTH 15 Dollars and cents
    Positive
    Other Form 1120, Schedule J, Line 9g
    08EST 15 Dollars and cents
    Positive
    Estimated Tax Credit (balance of Lines 13, 14 and 15)(Lines 12, 13 and 14, 201812 and prior) Form 1120, Schedule J, Line 16
    08EXT 15 Dollars and cents
    Positive
    Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns Form 1120, Schedule J, Line 17
    08WTH 15 Dollars and cents
    Positive
    Withholding Form 1120, Schedule J, Line 18
    0819A 15 Dollars and cents
    Positive
    Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains Form 1120, Schedule J, Line 20a (Line 19a 2017-2011)(2010-2005, Line 32f(1)
    0819C 15 Dollars and cents
    Positive
    Form 8827, Credit for Prior Year Minimum Tax - Corporations Form 1120 , Schedule J, Line 20c (2019 and prior revisions)
    0819D 15 Dollars and cents
    Positive
    Other Form 1120, Schedule J, Line 20d
    0896I 15 Dollars and cents
    Positive
    Inclusion Year Section 965 Net tax liability (Tax Periods 201712 through 202012) Form 1120, Schedule J, Line 22
    1. Any time there is a credit claimed of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ that should be or is claimed on Form 3800, General Business Credit, all three pages of the Form 3800 must be present. C&E will correspond when all pages are not attached. For more guidance, see IRM 3.12.251.28.33, Error Code 174 - Gross Income Tax Math Error.

    2. Field 08SCV - This field is not transcribed. Field 08SCV will be used to enter the manually computed amount for "Statutory Credits" by the ERS tax examiner.

  2. Invalid Condition - Section 08 field errors displays if:

    • The field is not numeric.

    • An entry exceeds the maximum field length.

    • A "positive only" field is negative.

    • Entries are present in both Fields 0819C and 07B/R (with a minus sign behind it).

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If a "positive only" field is negative, delete the field.

    3. If there are other valid credits claimed then the total of ALL credits must be included in Field 08SCV.

Section 09 Data - Form 4626, Alternative Minimum Tax-Corporations

  1. This section has instructions for correcting Section 09 Field Errors.

  2. Computer generated fields are described under the correct Error Code(s).

  3. Section 09 has data from Form 4626, Alternative Minimum Tax-Corporations. All fields in this section will be transcribed in dollars and cents.

  4. Field 0904E can be positive or negative. All other fields in this section must be positive only.

Section 09 Field Errors

  1. Correctable Section 09 fields are listed below:

    Field Designator Field Length Valid Entry Field Title Location - Form 4626
    0903 15 Dollars and cents
    Positive
    Total Pre-adjustment Alternative Minimum Taxable Income (AMTI) Line 3
    0904E 15 Dollars and cents
    Positive or Negative
    Adjusted Current Earnings Line 4e
    0906 15 Dollars and cents
    Positive
    Alternative Tax Net Operating Loss Deduction Line 6
    0911 15 Dollars and cents
    Positive
    Alternative Minimum Foreign Tax Credit Line 11
    09VER 15 Dollars and cents
    Positive
    Alternative Minimum Tax Verified Manually computed amount of Alternative Minimum Tax

    Note:

    Field 09VER - This field is not transcribed. Field 09VER will be used to enter the manually computed amount of Alternative Minimum Tax by the ERS tax examiner.

  2. Invalid Condition - Section 09 field errors displays if:

    • The tax period is after 201812

    • The field is not numeric.

    • An entry exceeds the maximum field length.

    • A "positive only" field is negative.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If a "positive only" field is negative, delete the field.

Section 10 Data - Schedule D, Form 4797, Form 8949, and Form 8996

  1. This section has instructions for correcting Section 10 Field Errors.

  2. Section 10 has data from Form 1120, 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.

Section 10 Data-Form 1120

  1. Correctable Section 10 fields are listed below:

    Field Designator Field Length Field Title Location on Form 1120, Schedule D, Form 8949 and Form 8996 Dollars/cents Pos/Neg
    10OID 1 Qualified Opportunity Fund Investments
    Checkbox - Did the corporation dispose of any investment(s) in a qualified opportunity fund during this year?
    Schedule D, above Part I N/A N/A
    101AD 15 Line 1a Short Term Proceeds (Sales Price) Schedule D, Part I, Line 1a, Column (d) $ +
    101AE 15 Line 1a Short Term Cost or other basis Schedule D, Part I, Line 1a, Column (e) $ +
    101BD 15 Line 1b Short Term Proceeds (Sales Price) Schedule D, Part I, Line 1b, Column (d) $ +
    101BE 15 Line 1b Short Term Cost or other basis Schedule D, Part I, Line 1b, Column (e) $ +
    101BG 15 Line 1b Short Term Adjustments to gain or loss Schedule D, Part I, Line 1b, Column (g) $ +/-
    1002D 15 Line 2 Short Term Proceeds (Sales Price) Schedule D, Part I, Line 2, Column (d) $ +
    1002E 15 Line 2 Short Term Cost or other basis Schedule D, Part I, Line 2, Column (e) $ +
    1002G 15 Line 2 Short Term Adjustments to gain or loss Schedule D, Part I, Line 2, Column (g) $ +/-
    1003D 15 Line 3 Short Term Proceeds (Sales Price) Schedule D, Part I, Line 3, Column (d) $ +
    1003E 15 Line 3 Short Term Cost or other basis Schedule D, Part I, Line 3, Column (e) $ +
    1003G 15 Line 3 Short Term Adjustments to gain or loss Schedule D, Part I, Line 3, Column (g) $ +/-
    108AD 15 Line 8a Long Term Proceeds (Sales Price) Schedule D, Part II, Line 8a, Column (d) $ +
    108AE 15 Line 8a Long Term Cost or other basis Schedule D, Part II, Line 8a, Column (e) $ +
    108BD 15 Line 8b Long Term Proceeds (Sales Price) Schedule D, Part II, Line 8b, Column (d) $ +
    108BE 15 Line 8b Long Term Cost or other basis Schedule D, Part II, Line 8b, Column (e) $ +
    108BG 15 Line 8b Long Term Adjustments to gain or loss Schedule D, Part II, Line 8b, Column (g) $ +/-
    1009D 15 Line 9 Long Term Proceeds (Sales Price) Schedule D, Part II, Line 9, Column (d) $ +
    1009E 15 Line 9 Long Term Cost or other basis Schedule D, Part II, Line 9, Column (e) $ +
    1009G 15 Line 9 Long Term Adjustments to gain or loss Schedule D, Part II, Line 9, Column (g) $ +/-
    1010D 15 Line 10 Long Term Proceeds (Sales Price) Schedule D, Part II, Line 10, Column (d) $ +
    1010E 15 Line 10 Long Term Cost or other basis Schedule D, Part II, Line 10, Column (e) $ +
    1010G 15 Line 10 Long Term Adjustments to gain or loss Schedule D, Part II, Line 10, Column (g) $ +/-
    10014 15 Capital gain distributions Schedule D, Part II, Line 14 $ +
    101B 15 Gain due to partial dispositions of modified accelerated cost recovery system (MACRS) assets Form 4797, Line 1b $ +
    101C 15 Loss due to partial dispositions of MACRS assets Form 4797, Line 1c $ +
    101AZ 9 EIN from description of property Form 8949, Part I, Line 1 Column (a), if Code "Z" in Column (f) N/A N/A
    101BZ 8 Date Acquired (YYYYMMDD) Form 8949, Part I, Line 1, Column (b),if Code "Z" in Column (f) N/A N/A
    101GZ 15 Amount of Adjustment Form 8949, Part I, Line 1, Column (g), if Code "Z" in Column (f) $ +
    101Z 1 Form 8949 Indicator Form 8949, right margin of Part I, Line 1, Row 1, if Code "Z" in Column (f) N/A N/A
    101AY 9 EIN from description of property Form 8949, Part I, Line 1 Column (a), if Code "Y" in Column (f) N/A N/A
    101CY 8 Date sold or disposed of (YYYYMMDD) Form 8949, Part I, Line 1, Column (c), if Code "Y" in Column (f) N/A N/A
    101GY 15 Recaptured amount Form 8949, Part I, Line 1, Column (g), if Code "Y" in Column (f) $ +
    101Y 1 Form 8949 Indicator Form 8949, right margin of Part I, Line 1, Row 1, if Code "Y" in Column (f) N/A N/A
    102AZ 9 EIN from description of property Form 8949, Part II, Line 1 Column (a), if Code "Z" in Column (f) N/A N/A
    102BZ 8 Date Acquired (YYYYMMDD) Form 8949, Part II, Line 1, Column (b), if Code "Z" in Column (f) N/A N/A
    102GZ 15 Amount of Adjustment Form 8949, Part II, Line 1, Column (g), if Code "Z" in Column (f) $ +
    102Z 1 Form 8949 Indicator Form 8949, right margin of Part II, Line 1, Row 1, if Code "Z" in Column (f) N/A N/A
    102AY 9 EIN from description of property Form 8949, Part II, Line 1 Column (a), if Code "Y" in Column (f) N/A N/A
    102CY 8 Date sold or disposed of (YYYYMMDD) Form 8949, Part II, Line 1, Column (c), if Code "Y" in Column (f) N/A N/A
    102GY 15 Recaptured amount Form 8949, Part II, Line 1, Column (g), if Code "Y" in Column (f) $ +
    102Y 1 Form 8949 Indicator Form 8949, right margin of Part II, Line 1, Row 1, if Code "Y" in Column (f) N/A N/A
    10I5 1 Checkbox Form 8996, Part I, Line 5 N/A N/A
    10Q6 1 Reserved for Future Use Form 8996, Part I, Line 6 N/A N/A
    10II6 15 Total qualified opportunity zone property held 6-month Form 8996, Part II, Line 7
    • Line 6 - 2020 and 2019

    • Line 5 - 2018 and 2017

    $ +
    10II7 15 Total assets held 6-month Form 8996, Part II, Line 8
    • Line 7 - 2020 and 2019

    • Line 6 - 2018 and 2017

    $ +
    10II9 15 Total qualified opportunity zone property held last day of year Form 8996, Part II, Line 10
    • Line 9 - 2020 and 2019

    • Line 8 - 2018 and 2017

    $ +
    1010 15 Total assets held last day of year Form 8996, Part II, Line 11
    • Line 10 - 2020 and 2019

    • Line 9 - 2018 and 2017

    $ +
    1013 3 Divide Line 14 by 2.0 (Line 14 is expressed as a decimal amount 0.00) Form 8996, Part III, Line 14
    • Line 13 - 2020 and 2019

    • Line 12 - 2018 and 2017

    N/A N/A
    1014 15 Is Line 15 equal to or more than .90 Form 8996, Part III, Line 15
    • Line 14 - 2020 and 2019

    • Line 13 - 2018 and 2017

    $ +

Field 10OID - Qualified Opportunity Fund Investments

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

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

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

    • The field length is more than 1 character.

    • The tax period is before 201712.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If the tax period is before 201712, delete the field.

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

Fields 101AD through Fields 10014 - Form 1120, Schedule D

  1. Fields 101AD through Fields 10014 are transcribed from Form 1120, Schedule D, Parts I and II.

  2. Invalid Condition - Section 10 field errors displays if Fields 101AD through Fields 10014 are not numeric.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

Fields 101B and 101C - Form 4797

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

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

    • The field is more than 15 characters.

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

    • The tax period is before 201712.

  3. Correction Procedures:

    1. Correct coding and 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.

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

  1. Fields 101AZ and 102AZ must be entered if Form 8949, Part I, Column (f) or Part II, Column (f) are coded with a "Z" by the taxpayer.

  2. Invalid Condition - Fields 101AZ and 102AZ field errors displays if:

    • The EIN is not numeric.

    • The EIN is not 9 characters.

    • The tax period is before 201712.

  3. Correction Procedures:

    1. Correct coding and 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 by the taxpayer in that 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 by the taxpayer in that same row, Delete the EIN.
    Field 102AZ has an entry, The EIN is incomplete or invalid, Delete the EIN.

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

  1. Fields 101AY and 102AY must be entered if Form 8949, Part I, Column (f) or Part II, Column (f) are coded with a "Y" by the taxpayer.

  2. Invalid Condition - Fields 101AY and 102AY field errors displays if:

    • The EIN is not numeric.

    • The EIN is not 9 characters.

    • The tax period is before 201712.

  3. Correction Procedures:

    1. Correct coding and 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 by the taxpayer 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.

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

  1. Fields 101BZ and 102BZ must be entered if Form 8949, Part I, Column (f) or Part II, Column (f) are coded with a "Z" by the taxpayer.

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

    • The field is not 8 characters (YYYYMMDD).

    • 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 201712.

  3. Correction Procedures:

    1. Correct coding and 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 not complete,
      For example, only the year is present,
      Delete the date.
      Field 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 not complete,
      For example, only the year is present,
      Delete the date.