3.12.251 Corporation Income Tax Returns

Manual Transmittal

November 08, 2019

Purpose

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

Material Changes

(1) IRM 3.12.251.1.6(1) - Terms/Definitions/Acronyms - Changed job aid reference to exhibit reference.

(2) IRM 3.12.251.1.8(1)(2)j Note - IRS Employee Contacts Section - RRA98, 3705(a) - Added Internal Revenue Service (IRS) per IRM 3.11.15 feedback from Chief Counsel and revised "Note." per feedback from chief council.

(3) IRM 3.12.251.1.10(1) - TAS Service Level Agreements (SLA) - Reworded in plain language and removed extra words per IRM 3.11.249 feedback from Internal Management Document (IMD).

(4) IRM 3.12.251.1.11(1) - Business Master File (BMF) Identification (ID) Theft - Added ID and removed quotations and extra spacing per IRM 3.11.249 feedback from Internal Management Document (IMD).

(5) IRM 3.12.251.1.15(2) - Business Master File/ BMF Consistency - Deleted Cincinnati from paragraph (2).

(6) IRM 3.12.251.1.17(4) - Local Desk Procedures - Updated link to the blended rate and Form 1120 calculation Job aid (IPU 190082 issued 01-29-2019).

(7) IRM 3.12.251.1.17(1) - Local Desk Procedures - Clarified contradictory information.

(8) IRM 3.12.251.2(4)b)Note - Customer Account Data Engine (CADE) 2 - Reworded in plain language per IRM 3.12.217 feedback from Chief Counsel.

(9) IRM 3.12.251.3(1)(3) - Error Resolution System (ERS) General Correction Procedures - Added Paragraph (1) and revised instructions for working trails (IPU 19U0732 issued 06-06-2019).

(10) IRM 3.12.251.3.2(6) - Action Codes - Added Action Code 322 to Action Code Table (IPU 19U0312 issued 03-11-2019).

(11) IRM 3.12.251.3.8(3) - Criminal Investigation (CI) Referrals - Removed Cincinnati per Submission Processing (SP) Consolidation.

(12) IRM 3.12.251.3.10(2)(3)Table - Frivolous Arguments - Removed restriction in the Note per IRM 3.21.110 feedback from Privacy, Governmental Liaison and Disclosure (PGLD).

(13) IRM 3.12.251.3.13.8(3) - Priority I Error, Action Code "360" , Other In-House Research - Deleted Paragraph (3) and moved to IRM 3.12.251.3.13.9, Priority I Error, Action Code "410" , Assistance Needed.

(14) IRM 3.12.251.3.13.16(1)(2) - For Action Codes 3XX Status 33X - Reworded for clarity.

(15) IRM 3.12.251.3.14(1)b)(6)(7) - Taxpayer Notice Codes (TPNC) - Changed instructions to be in line with "Working Trail" consistency instructions and TPNC Job Aid (IPU 19U0732 issued 06-05-2019) .

(16) IRM 3.12.251.3.18(1) - Use of Fax for Taxpayer Submissions - Corrected fax submissions link (IPU 190009 issued 01-02-2019).

(17) IRM 3.12.251.3.21 - Refund Returns 45 Day Jeopardy and High Dollar Refunds - Changed title.

(18) IRM 3.12.251.3.22(5) - Correspondence Action - Added instructions to include Modernized e-File (MeF) returns (IPU 19U0312 issued 03-11-2019).

(19) IRM 3.12.251.3.22.1(1)a) - No Reply Cases - Updated Section 965 instructions and Form 4626 instructions.

(20) IRM 3.12.251.3.23 - Working Trail Changed subsection to a consistency section and revised instructions to match consistency template (IPU 19U0732 issued 06-06-2019).

(21) IRM 3.12.251.4(1) - Form 1120 Sections and Fields - Added new sections 19 and 29.

(22) IRM 3.12.251.5.7(3) e) - Field 01CCC - Computer Condition Code (XREF EC 010, 011, 065, 070, 072, 073, 172) - Revised definition for CCC "J" (IPU 19U0198 issued 02-21-2019).

(23) IRM 3.12.251.5.7(3) e) - Field 01CCC - Computer Condition Code (XREF EC 010, 011, 065, 070, 072, 073, 172) - Revised definition for CCC "M" .

(24) IRM 3.12.251.5.8(2)(3)b) - Return Processing Code - 01RPC - Added RPC "9" for Form 8997. Also clarified current valid RPC’s.

(25) IRM 3.12.251.5.10(2)(3) - Field 01NAI - North American Industry Classification System Code (NAICS Code) - Revised instructions to mirror the Form 1120-S NAICS Code instructions.

(26) IRM 3.12.251.7.3(4)d) - Field 03CGC - Controlled Group Personal Service Code (XREF EC 114) - Updated instructions for Controlled Group "4" (IPU 19U0358 issued 03-18-2019).

(27) IRM 3.12.251.8.1(1) - Section 04 Field Errors - Deleted Fields 04TB1, 04TB2, 04TB3, and 04TB4 from Section 04.

(28) IRM 3.12.251.9.1(3)b) Note - Section 05 Field Errors - Added instructions.

(29) IRM 3.12.251.11.1(1)a) - Field Section 07 Field Errors - Deleted Fields 07FTE and 07TRV (Telephone Excise Tax Refund (TETR)).

(30) IRM 3.12.251.12.1(1) - Section 08 Field Errors - Changed line numbers for Field 0819C.

(31) IRM 3.12.251.12.1(1) - Section 08 Field Errors - Made corrections to field names and numbers throughout table (IPU 190082 issued 01-29-2019).

(32) IRM 3.12.251.13.1(2) - Section 09 Field Errors - Added tax period check for section 09 fields (Form 4626).

(33) IRM 3.12.251.14(2)(3) - Section 10 Data-Form 1120 - Changed to include Form 8949 and Form 8996.

(34) IRM 3.12.251.14.1(1) - Section 10 Data-Form 1120 - Added new fields to Section 10 for Form 1120, Schedule D, Form 8949, and Form 8996.

(35) IRM 3.12.251.14.2 - Field 10OID - Added new fields to Section 10.

(36) IRM 3.12.251.14.3 - Fields 101AD through Fields 10014 - Form 1120, Schedule D - Added new fields to Section 10.

(37) IRM 3.12.251.14.4 - Fields 1011A and 1021A - Form 8949 - EIN from Description of Property - Added new fields to Section 10.

(38) IRM 3.12.251.14.5 - Fields 1011B and 1021B - Form 8949 - Date Acquired - Added new fields to Section 10.

(39) IRM 3.12.251.14.6 - Fields 1011G and 1021G - Amount of Adjustment - Added new fields to Section 10.

(40) IRM 3.12.251.14.7 - Fields 1011H and 1021H - Form 8949 Indicator - Added new fields to Section 10.

(41) IRM 3.12.251.14.8 - Field 10I5 - Form 8996 Checkbox - Added new fields to Section 10.

(42) IRM 3.12.251.14.9 - Fields 10II6, 10II7, 10II9 and 10I10 - Form 8996 - Added new fields to Section 10.

(43) IRM 3.12.251.14.10 - Field 1013 - Form 8996 - Part III, Line 13 - Added new fields to Section 10.

(44) IRM 3.12.251.14.11 - Field 1014 - Form 8996 - Part III, Line 14 - Added new fields to Section 10.

(45) IRM 3.12.251.18(3) - Sections 15-18 Data - Form 1120 - Changed field length from 15 to 10 characters (IPU 190009 issued 01-02-2019).

(46) IRM 3.12.251.18.1(4) - Section 15-18 Field Errors - Updated CRN Table with expired credits (IPU 190082 issued 01-29-2019).

(47) IRM 3.12.251.19 - Section 19 Data - Form 8978 - Partner's Audit Liability Under Section 6226 - Added new section for Form 8978.

(48) IRM 3.12.251.19.1(1) - Section 19 Field Errors - Added new section for Form 8978.

(49) IRM 3.12.251.19.2 - Field 1914 - Part I, Line 14 - Added new fields to Section 19.

(50) IRM 3.12.251.19.3 - Fields 1916 and 1918 - Added new fields to Section 19.

(51) IRM 3.12.251.20 - Section 20 Data - Form 965-B - Corporate and Real Estate Investment Trust (REIT) Report of Net 965 Tax Liability and Electing REIT Report of 965 Amounts - Added new section for Form 965-B.

(52) IRM 3.12.251.20.1(1) - Section 20 Field Errors - Added new section for Form 965-B.

(53) IRM 3.12.251.20.2 - Fields 20A1, 20A2, 20A3, 20A4 and 20A5 - Added new fields for Section 20.

(54) IRM 3.12.251.20.3 - Fields 20H1, 20H2, 20H3, 20H4 and 20H5- Added new fields for Section 20.

(55) IRM 3.12.251.20.4 - Fields 20I1, 20I2, 20I3, 20I4 and 20I5 - Added new fields for Section 20.

(56) IRM 3.12.251.20.5 - Field 20IN - Indicator- Added new fields for Section 20.

(57) Deleted Section 3.12.251.20.21 - Error Code 074–TETR Inconsistent with Tax Year.

(58) IRM 3.12.251.23(1) - Section 23 Data - Form 1120 - Added form numbers and titles to table.

(59) IRM 3.12.251.24(1) - Section 24 Data - Form 1120 - Added form numbers and titles to table.

(60) IRM 3.12.251.24.3(1) - Field 2401L - Biodiesel and Renewable Diesel Fuels Credit (Form 8864) - added tax period.

(61) Deleted IRM Section 3.12.251.24.24 - Error Code 116 - Check Taxable Income Bracket Amounts.

(62) IRM 3.12.251.25(1) - Section 25 Data - Form 1120 - Added form numbers and titles to table.

(63) IRM 3.12.251.25.4(1) - Field 2504G - Qualified Railroad Track Maintenance Credit (Form 8900) - added tax period.

(64) IRM 3.12.251.26 - Form 6252 - Installment Sale Income - Added new section for Form 6252.

(65) IRM 3.12.251.26.1(1) - Section 29 Field Errors - Added new section for Form 6252.

(66) IRM 3.12.251.26.2 - Field 2901 - Description of Property - Added new fields to section 29.

(67) IRM 3.12.251.26.3 - Fields 2902A and 2902B - Added new fields to section 29.

(68) IRM 3.12.251.26.4 - Fields 2907, 2921, 2923 - Added new fields to section 29.

(69) IRM 3.12.251.26.5 - Field 2919 - Added new fields to section 29.

(70) IRM 3.12.251.27.1(4) 7) - Section 965 Returns - Added "no balance due" instructions to table in paragraph (4) 7) (IPU 1900009 issued 01-02-2019).

(71) IRM 3.12.251.27.1(6)6) - Section 965 Returns - Added note to 6) table Input Transaction Code 971 with action 114 instructions 2nd bullet in table (IPU 190009 issued 01-02-2019).

(72) IRM 3.12.251.27.1 - Section 965 Returns - General Instructions - New instructions created due to Master File programming changes (IPU 19U0198 issued 02-21-2019).

(73) IRM 3.12.251.27.1 - Section 965 Returns - Tax Period 201712 - 201811 - Subsection added for tax period 201712 -201811 (IPU 19U0198 issued 02-21-2019).

(74) IRM 3.12.251.27.1.1 - Section 965 - Tax Period 201812 and later - Subsection added for tax period 201812 and later (IPU 19U0198 issued 02-21-2019).

(75) IRM 3.12.251.27.1.1 - Section 965 - Tax Period 201812 and later - Clarified "Note" (IPU 19U0614 issued 05-08-2019).

(76) IRM 3.12.251.27.1.2(3)4)Table - Section 965 Returns - Tax Period 201712 - 201811 - Added instructions for Field 0819D (IPU 19U0267 issued 03-05-2019).

(77) IRM 3.12.251.27.1.2(2)1) - Section 965 - Tax Period 201812 and later - Added instructions for misplaced entries on Form 1120, Schedule J, Line 22 (IPU 19U0483 Issued 04-09-2019).

(78) IRM 3.12.251.27.1.2(2)1) - Section 965 - Tax Period 201812 and later - Added instructions for misplaced entries on Schedule J, Line 22. (IPU 19U0796 Issued 06-19-2019).

(79) IRM 3.12.251.27.4(3)7) - Error Code 002 - Name Control Mismatch - Added information to enter the Employer Identification Number (EIN) on the return per Working Trail instructions and new information for consecutive numbers and repeating numbers (IPU 19U0732 issued 06-06-2019).

(80) IRM 3.12.251.27.5(3)3) - Error Code 003 - Check Digit Invalid - Added information to enter the EIN on the return per Working Trail instructions and new information for consecutive numbers and repeating numbers (IPU 19U0732 issued 06-06-2019).

(81) IRM 3.12.251.27.6(3)7) - Error Code 004 - Name Control/EIN Validation - Added information to enter the EIN on the return per Working Trail instructions and new information for consecutive numbers and repeating numbers(IPU 19U0732 issued 06-06-2019).

(82) IRM 3.12.251.27.8(3)b - Error Code 008 - Tax Period Beginning - Added instructions to table (IPU 19U1025 issued 09-07-2019).

(83) IRM 3.12.251.27.9(1) - Error Code 010 - Amended Return "G" Coded - Added new Sections 19 and 29.

(84) Deleted Section 3.12.251.27.21 - Error Code 074–TETR Inconsistent with Tax Year.

(85) IRM 3.12.251.27.22 - Error Code 114 - Check Section 04 Amounts against Field 03CGC - Deleted Fields 04TB1, 04TB2, 04TB3, and 04TB4 from Error Code 114.

(86) IRM 3.12.251.27.24(2) - Section 15-18 Field Errors - Updated CRN Table with expired credits (IPU 190082 issued 01-29-2019).

(87) IRM 3.12.251.27.24(3)c) - Section 15-18 Field Errors - Deleted information for CRNs that are 2000 and prior.

(88) IRM 3.12.251.27.25.1(1) - Invalid Condition - Error Code 124 - Corrected checkbox field name (IPU 19U0469 issued 04-05-2019).

(89) IRM 3.12.251.27.25.2(2)(3)(4)(5)(7)(8)(9)(10)(12)(13) - Correction Procedures - Error Code 124 - Revised instructions (IPU 19U0469 issued 04-05-2019).

(90) IRM 3.12.251.27.26(3)b)Table - Error Code 130 - Check Fields 03PNC and 03PIN against Field 03K04 - Revised table, moved instructions in Row nine to Row two (IPU 19U0176 issued 02-14-2019).

(91) IRM 3.12.251.27.29(3)a)Table - Error Code 160 - Math Verify Total Income and Total Deductions Amounts - Added instruction when Lines 1a and 1b are not present.

(92) IRM 3.12.251.27.35(1) - Error Code 174 - Gross Income Tax - Reorganized section for clarity.

(93) IRM 3.12.251.27.35(1) - Error Code 174 - Gross Income Tax - Deleted Fields 04TB1, 04TB2, 04TB3, and 04TB4 from Error Code 174.

(94) IRM 3.12.251.27.35(5)(6) - Error Code 174 - Gross Income Tax - Added blended rate information to clarify Error Code 174 (IPU 19U0176 issued 02-14-2019).

(95) IRM 3.12.251.27.35(4) Note - Error Code 174 - Gross Income Tax Math Error - Updated link (IPU 19U0198 issued 02-21-2019).

(96) IRM 3.12.251.27.35(22) - Error Code 174 - Gross Income Tax - Added tax from Form 8978, Partners Audit Liability Under Section 6226 to list of additional taxes.

(97) IRM 3.12.251.27.36(4)b)c)d) - Error Code 176 - Alternative Minimum Tax Math Error (Tax Periods 201811 and Prior) - Added instructions to clarify blended rates on Error Code 176 (IPU 190082 issued 01-29-2019).

(98) IRM 3.12.251.27.36(16) - Error Code 176 - Alternative Minimum Tax Math Error (Tax Periods 201811 and Prior) - Deleted table with old prior year conversion instructions.

(99) IRM 3.12.251.27.37(3)d) Table - Error Code 177 - Total Credit from Form 8941, Credit for Small Employer Health Insurance Premiums - Added instructions to clarify correspondence for Form 8941 (IPU 19U0406 issued 03-25-2019).

(100) IRM 3.12.251.27.37(3)b)c)d) - Error Code 177 - Total Credit from Form 8941, Credit for Small Employer Health Insurance Premiums - Revised instructions (IPU 19U0469 issued 04-05-2019).

(101) IRM 3.12.251.27.37(3)c) - Error Code 177 - Total Credit from Form 8941, Credit for Small Employer Health Insurance Premiums - Added TY2019 wage limit.

(102) IRM 3.12.251.27.40(9)c)d) - Error Code 182 - Total Statutory Credits Math Error - Deleted old prior year information.

(103) IRM 3.12.251.27.41(1)(4)i)(8)a)(9)(10) - Error Code 186 - Total Tax Math Error - Made corrections to Error Code 186 (IPU 190082 issued 01-29-2019).

(104) IRM 3.12.251.27.41(3) - Error Code 186 - Total Math Error - Added IRM references for Section 965 returns (IPU 19U0198 issued 02-21-2019).

(105) IRM 3.12.251.27.41(6)a) - Error Code 186 - Total Tax Math Error Added tax from Form 8978, Partners Audit Liability Under Section 6226 to list of additional taxes.

(106) IRM 3.12.251.27.42(1)(5) - Error Code 188 - Balance Due Math Error - Deleted Fields 07FTE, 07TC> and 07TRV (TETR).

(107) IRM 3.12.251.27.42(1)(5) - Error Code 188 - Balance Due Math Error - Made corrections to Error Code 188 (IPU 190082 issued 01-29-2019).

(108) IRM 3.12.251.27.42(3) - Error Code 188 - Balance Due Math Error - Added IRM references for Section 965 returns (IPU 19U0198 issued 02-21-2019).

(109) IRM 3.12.251.27.42(6) - Error Code 188 - Balance Due Math Error - Revised computation formula to delete TETR and add Section 965 tax Liability and deleted Cincinnati from fifth bullet .

(110) IRM 3.12.251.27.43(4)c) - Error Code 192 - Check Balance Due/Overpayment - Changed tolerance amount for manual refunds for Error Code 192 (IPU 19U0176 issued 02-14-2019).

(111) IRM 3.12.251.27.44(4)a) - Error Code 194 - Expedite Processing of Refund - Revised Rejects instructions when clearing EC 194 after issuing manual refund (IPU 19U0176 issued 02-14-2019).

(112) Deleted IRM section 3.12.251.30.3 - Regulated Investment Companies - Outdated information.

(113) Deleted IRM section 3.12.251.30.19.21 - Error Code 116 - Check Taxable Income Bracket Amounts.

(114) IRM 3.12.251.31(2) - Form 1120, Tax Rates - Added "Caution" to clarify that short period and 52-53 filing year returns will need to be manually computed (IPU 19U0009 issued 01-02-2019).

(115) IRM 3.12.251.31(2)Note - Form 1120, Tax Rates - Updated link to blended rate job aid (IPU 19U0176 issued 02-14-2019).

(116) IRM 3.12.251.32(1) - Form 1120 Taxpayer Notice Codes - Added TPNC 06 for Error Code 174 and deleted TPNCs that are not programmed in ERS for Form 1120 series.

(117) IRM 3.12.251.33(2) - Form 1120-C Sections and Fields - Added Section 19.

(118) IRM 3.12.251.33.1.7(2)a)(3)b) - Return Processing Code - Field 01RPC - Added RPC "9" for Form 8997. Also clarified current valid RPC’s.

(119) IRM 3.12.251.33.2.3(1) - Field 02FAD - Foreign Address - Reworded for clarity per IRM 3.12.249 feedback from Internal Management Document (IMD) reviewer.

(120) IRM 3.12.251.33.6.1(1) - Section 06 Field Errors - Added new Field 0622 to Section 06.

(121) IRM 3.12.251.33.7.1(1) - Section 07 Field Errors - Changed description for Field 07ARC (IPU 19U0051 issued 01-14-2019).

(122) IRM 3.12.251.33.7.1(1) - Section 07 Field Errors - Clarified new Section 965 fields (IPU 190082 issued 01-29-2019).

(123) IRM 3.12.251.33.14 - Section 19 Data Form 8978 - Added new section for Form 8978.

(124) Deleted Section IRM 3.12.251.33.20.19 - Error Code 074 - TETR Inconsistent with Tax Year.

(125) IRM 3.12.251.33.20.27(3)a) - Error Code 174 - Gross Income Tax - Added 201712 and prior to instructions referencing controlled groups (IPU 190009 issued 01-02-2019).

(126) IRM 3.12.251.33.20.32(3) - Error Code 186 - Total Tax Math Error - Added IRM references for Section 965 returns (IPU 19U0198 issued 02-21-2019).

(127) IRM 3.12.251.33.20.33(1) - Error Code 188- Balance Due Math Error - Deleted Fields 07FTE, 07TC> and 07TRV (TETR).

(128) IRM 3.12.251.33.20.33(1) - Error Code 188- Balance Due Math Error - Changed description for Field 07ARC (IPU 19U0051 issued 01-14-2019).

(129) IRM 3.12.251.33.20.33(1) - Error Code 188- Balance Due Math Error - Clarified new Section 965 fields (IPU 190082 issued 01-29-2019).

(130) IRM 3.12.251.33.20.33(3) - Error Code 188 - Balance Due Math Error - Added IRM references for Section 965 returns (IPU 19U0198 issued 02-21-2019).

(131) IRM 3.12.251.34(3) - Form 1120-F Sections and Fields - Changed tolerance for Foreign Payments Practice (FPP) review (IPU 190009 issued 01-02-2019).

(132) IRM 3.12.251.34(2)(3)(4) - Form 1120-F Sections and Fields - Added instructions for verifying Line 5i (IPU 19U0312 issued 03-11-2019).

(133) IRM 3.12.251.34.1.7(2)a)(3)b) - Return Processing Code - Field 01RPC - Added RPC "9" for Form 8997. Also clarified current valid RPC’s.

(134) IRM 3.12.251.34.5.1(1) - Section 07 Field Errors - Changed description for Field 07ARC (IPU 19U0051 issued 01-14-2019).

(135) IRM 3.12.251.34.5.1(4) - Section 07 Field Errors - Added instructions to accept "substantial evidence" before corresponding for Form 8288-A IPU 19U0614 issued 05-08-2019).

(136) IRM 3.12.251.34.5.1(4)(5) - Section 07 Field Errors - Added instructions for verifying Line 5i (IPU 19U0312 issued 03-11-2019).

(137) IRM 3.12.251.34.5.1(4)(5) - Section 07 Field Errors - Deleted Fields 07FTE and 07TRV (TETR).

(138) IRM 3.12.251.34.7 - Section 10 Data Form 1120, Schedule D, Form 8949 and Form 8996 - Added new section for Form 1120, Schedule D, Form 8949 and Form 8996.

(139) IRM 3.12.251.34.7.1 - Section 10 Field Errors - Added field errors for Form 1120, Schedule D, Form 8949 and Form 8996.

(140) IRM 3.12.251.34.9 - Section 19 Data Form 8978 - Added new section for Form 8978.

(141) IRM 3.12.251.34.10.6 - Error Code 010- Amended Return "G" Coded - Added Section 10.

(142) Deleted IRM Section 3.12.251.34.10.16 - Error Code 074 - TETR Inconsistent with Tax Year.

(143) IRM 3.12.251.34.10.19(3)7)Note - Error Code 129 -Total Tax - Updated link for blended Job aid (IPU 19U0176 issued 02-14-2019).

(144) IRM 3.12.251.34.10.19(1) - Error Code 129 -Total Tax - Deleted Fields 07FTE and 07TRV (TETR).

(145) IRM 3.12.251.34.10.20(1) - Error Code 188- Balance Due Math Error - Changed description for Field 07ARC (IPU 19U0051 issued 01-14-2019).

(146) IRM 3.12.251.34.10.20(1) - Error Code 188- Balance Due Math Error - Deleted Fields 07FTE, 07TC> and 07TRV (TETR).

(147) IRM 3.12.251.34.10.20(3)2) - Error Code 188- Balance Due Math Error - Added instructions for verifying Line 5i (IPU 19U0312 issued 03-11-2019).

(148) Delete IRM section 3.12.251.34.17.22 - Error Code 116 - Check Taxable Income Bracket Amounts.

(149) IRM 3.12.251.35(1) - Form 1120-H Sections and Fields - Added Section 19.

(150) IRM 3.12.251.35.6.1 - Section 06 Field Errors - Deleted Fields 0623G and 06TRV (TETR).

(151) IRM 3.12.251.35.8 - Section 19 Data Form 8978 - Added new section for Form 8978.

(152) Deleted Section 3.12.251.35.10.16 - Error Code 074–TETR Inconsistent with Tax Year.

(153) IRM 3.12.251.35.10.17(3)b)Table - Error Code 160 - Math Verify Total Income and Total Deductions Amounts - Added instructions for Error Code (EC) 160 for Form 1120-H.

(154) IRM 3.12.251.36(1) - Form 1120-L and Form 1120-PC - Added Section 19.

(155) IRM 3.12.251.36.5.1(1) - Section 06 Field Errors - Changed line numbers For Schedule F, Line 9 to Line 9c per Work Request Notification (WRN) dated 06-12-2019.

(156) IRM 3.12.251.36.5.3(1) - Section 07 Field Errors - Changed description for Field 07ARC (IPU 19U0051 issued 01-14-2019).

(157) IRM 3.12.251.36.8 - Section 19 Data Form 8978 - Added new section for Form 8978.

(158) IRM 3.12.251.36.9 - Section 20 Data Form 965-B - Added section for Form 965-B.

(159) Deleted Section 3.12.251.36.15.17 - Error Code 074–TETR Inconsistent with Tax Year.

(160) IRM 3.12.251.36.15.23 (4)Note - Error Code 186 - Total Tax Math Error - Updated link for blended Job aid (IPU 19U0176 issued 02-14-2019).

(161) IRM 3.12.251.36.15.23(2)(5) Note - Error Code 186 - Total Tax Math Error - Added IRM references for Section 965 returns and updated link to blended rate job aid (IPU 19U0198 issued 02-21-2019).

(162) IRM 3.12.251.36.15.24(2) - Error Code 188 - Balance Due Math Error - Added IRM references for Section 965 returns (IPU 19U0198 issued 02-21-2019).

(163) IRM 3.12.251.37(1) - Form 1120-REIT and Form 1120-RIC - Added Section 19.

(164) IRM 3.12.251.37.1.7(1) - Return Processing Code - Field 01RPC - Added RPC "9" for Form 8997 Also clarified current valid RPC’s.

(165) IRM 3.12.251.37.7(1) - Section 07 Field Errors - Form 1120-REIT and Form 1120-RIC - Changed line numbers for Field 07EST (IPU 190009 issued 01-02-2019).

(166) IRM 3.12.251.37.7(1) - Section 07 Field Errors - Changed description for Field 07ARC (IPU 19U0051 issued 01-14-2019).

(167) IRM 3.12.251.37.8(1) - Section 08 Field Errors Form 1120-REIT and Form 1120-RIC - Updated instructions for Fields 08AMT for Form 1120-REIT and Form 1120-RIC (IPU 19U0358 issued 03-18-2019).

(168) IRM 3.12.251.37.10 - Section 10 Data - Form 1120, Schedule D, Form 8949 and Form 8996 - Added section 10 for Form 1120, Schedule D, Form 8949 and Form 8996.

(169) IRM 3.12.251.37.10.1 - Section 10 Field Errors - Added field errors for Section 10.

(170) IRM 3.12.251.37.13 - Section 19 Data Form 8978 - Added section for Form 8978.

(171) IRM 3.12.251.37.14 - Section 20 Data Form 965-B - Added section for Form 965-B.

(172) IRM 3.12.251.37.14.1 - Section 20 Field Errors - Added field errors for Section 20.

(173) IRM 3.12.251.37.14.2 - Fields 20B1 through 20B6 - Added field errors to Section 20 for Form 1120-REIT.

(174) Deleted Section 3.12.251.37.20.19 - Error Code 074–TETR Inconsistent with Tax Year.

(175) IRM 3.12.251.37.20.19(1) - Error Code 188- Balance Due Math Error - Changed description for Field 07ARC (IPU 19U0051 issued 01-14-2019).

(176) IRM 3.12.251.37.20.30(4)b)g) - Error Code 176 - Alternative Minimum Tax Math Error (Tax Periods 201811 and Prior) - Updated instructions for Fields 08AMT for Form 1120-REIT and Form 1120-RIC (IPU 19U0358 issued 03-18-2019).

(177) IRM 3.12.251.37.20.34(3) - Error Code 186 - Total Tax Math Error - Added IRM references for Section 965 returns (IPU 19U0198 issued 02-21-2019).

(178) IRM 3.12.251.37.20.35(1) - Error Code 188 - Balance Due Math Error - Added reference to Section 07 field error (IPU 190009 issued 01-02-2019).

(179) IRM 3.12.251.37.20.35(2) - Error Code 188 - Balance Due Math Error - Added IRM references for Section 965 returns (IPU 19U0198 issued 02-21-2019).

(180) Exhibit 3.12.251-1 - Terms/Definitions/Acronyms - Added Exhibit.

(181) Deleted references to Cincinnati Service Processing Center (CSPC) throughout.

(182) IRM references updated throughout the IRM.

(183) Old prior year line numbers deleted throughout the IRM.

Effect on Other Documents

IRM 3.12.251, dated November 16, 2018 (effective January 1, 2019) is superseded. The following IRM Procedural Updates (IPUs), issued January 1, 2019 through September 1, 2019 have been incorporated into this IRM: IPU 19U0009 (issued 01-02-2019), IPU 19U0051 (issued 01-14-2019), IPU 19U0082 (issued 01-29-2019), IPU 19U0176 (issued 02-14-2019), IPU 19U0198 (issued 02-21-2019), IPU 19U0267 (issued 03-05-2019), IPU 19U0312 (issued 03-11-2019), IPU 19U0358 (issued 03-18-2019), IPU 19U0406 (issued 03-25-2019), IPU 19U0469 (issued 04-05-2019), IPU 19U0483 (issued 04-09-2019), IPU 19U0614 (issued 05-08-2019), IPU 19U0732 (issued 06-06-2019), IPU 19U0796 (issued 06-19-2019) and IPU 19U1025 (issued 09-09-2019).

Audience

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

Effective Date

(01-01-2020)

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

Program Scope and Objectives

  1. This IRM section provides instructions for Wage and Investment Error Resolution Tax Examiners to correct errors for 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 contained 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 located 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 3.12.251-1, 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) http://iat.web.irs.gov/
    IRM 3.11.16 Corporate Income Tax Returns
    IRM 3.24.16 ISRP System - Corporation Income Tax Returns
    IRM 3.12.38 BMF General Instructions

♦ IRS Employee Contacts Section - RRA98, 3705(a) ♦

  1. The Internal Revenue Service (IRS) Restructuring and Reform Act of 1998, (RRA98), Section 3705(a) provides identification requirements for all IRS employees working tax- related matters. IRS employees are required to give their name and unique identification number (ID) during taxpayer telephone, face- to- face and written contact. In addition, a telephone number is required on all taxpayer correspondence. This will provide taxpayers with enough information to identify an IRS employee who has previously assisted with tax related matters.

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

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

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

    3. Correspondence— All correspondence must include a telephone number that taxpayers can call for answers to any questions they may have. In addition, manually generated and handwritten correspondence must have the employee’s title (e.g., Mr., Mrs., Ms., Miss), last name and Integrated Data Retrieval System (IDRS) number, letter system number, or their badge identification (ID Card) number.

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

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

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

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

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

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

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

    Note:

    The Taxpayer Bill of Rights (TBOR) was formally adopted by IRS in June 2014. TBOR #2, The Right to Quality Service, provides that taxpayers have the right to receive prompt, courteous and professional assistance in their dealings with the IRS, to be spoken to in a way they can easily understand, to receive clear and easily understandable communications from the IRS, and to speak to a supervisor about inadequate service. IRS employees are responsible for being familiar with and acting in accord with all ten taxpayer rights. For additional information about the Taxpayer Bill of Rights, see http://win.web.irs.gov/Taxpayer_Rights.htm.

♦Taxpayer Advocate Service (TAS)♦

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

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

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

  4. "Same day" includes cases that can be completely resolved in 24 hours as well as cases where steps can be taken within 24 hours to begin resolving the issue. Also refer to IRM 13.1.7.4, Same Day Resolution by Operations.) When making a TAS referral, use Form 911, and forward to TAS in accordance to your local procedures.

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

♦TAS Service Level Agreements (SLA)♦

  1. The National Taxpayer Advocate has reached agreements with the Commissioners of the Wage and Investment (W&I) Division, Small Business and Self Employed (SB/SE) Division, Tax Exempt and Government Entities (TE/GE), Criminal Investigation (CI), Appeals and Large Business 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 located at http://tas.web.irs.gov/policy/sla/default.aspx.

♦Business Master File (BMF) Identification (ID) Theft♦

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

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

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

    3. Provide the entire case to your senior/lead.
      Your senior/lead will expedite the case to the P&A staff for referral to one of the SP BMF ID Theft liaisons. The taxpayer must indicate that they are a victim of "ID Theft" ; do not send cases that are subject to Criminal Investigation (CI), Examination (Exam), or Fraud review.

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 additional 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 contains instructions for correcting records on the screen, document control, inventories, and management reports.

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

Figures and Exhibits

  1. All figures and exhibits that were previously displayed in this IRM have been relocated. This was necessary due to the size of this IRM. All figures and exhibits related to the processing of forms contained in this IRM can now be accessed 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 contained 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. Topics for BMF Consistency have been identified and developed as a coordinated effort between Ogden, Kansas City, and Paper Processing Branch BMF Code and Edit /ERS.

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

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

♦IRM Deviation Procedures♦

  1. IRM deviations must be submitted in writing following instructions from IRM 1.11.2.2.4., When Procedures Deviate from the IRM and elevated through appropriate channels for executive approval.

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.

♦Customer Account Data Engine (CADE) 2♦

  1. The Customer Account Data Engine (CADE) 2 Program Office in Headquarters is charged with the primary goal to implement a single, modernized programming solution which provides daily processing of taxpayer accounts.

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

  3. 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 outlined as follows:

    • Transactions will be viewable using 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 reflected in the CFOL command code displays.

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

    • 01 = Friday

    • 02 = Monday

    • 03 = Tuesday

    • 04 = Wednesday

    • 05 = Thursday

    Note:

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

Error Resolution System (ERS) General Correction Procedures

  1. This IRM cannot address every possibility that may arise while correcting returns or documents. Taxpayer intent must be taken into consideration. In some cases, it may be necessary to refer the issue to your subject matter expert (SME), lead and/or manager to determine the proper corrective action.

  2. Perfecting the Tax Return and Error Screen Displays.

    1. The error screen displays will show 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 appropriate 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 3.12.251.3.23, 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. The Command Codes (CC) needed for correcting and researching the Error Inventory and the Workable Suspense Inventory are briefly described below. They are also explained in IRM 3.12.38, Error Resolution-BMF General Instructions. Any Command Code permitted by the Employees Security file will be available. Command Codes are used to tell the system what function to perform. They must be entered in a valid format, otherwise an error message will display. Correct the data entered with the correction and transmit.

    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.
    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. You may obtain the actual count of records to be worked, at any time, by inputting Command Code ERVOL.
    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.
  2. Additional information can be found at http://serp.enterprise.irs.gov/databases/irm-sup.dr/job_aid.dr/command-code.dr/idrs_command_codes_job_aid.htm.

Action Codes

  1. The ERS Action Code indicates that specific information is missing or that the record is to be suspended from processing. Only one Action Code may be assigned at a time to a record. The priority of the Action Code will be 310, 320, 4XX, 6XX, 3XX, and 2XX.

  2. 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.

  3. Document Perfection Tax Examiners will assign a three digit code to numbered returns when they determine that the document is unprocessable in its present form, needing additional information or some manual intervention. This code will be entered on the bottom left hand corner of the return.

  4. Correspondence Action Sheets are used for initiating correspondence and will be attached by Document Perfection. ERS requires no change in the manner in which this is currently being done. For routing within the Campus (In-House Research), the Action Code with a sufficient explanation concerning the missing information will need to be attached to the return.

  5. 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.

  6. 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 = Code & Edit;
    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
    343 Black Liquor 10 CE, EC, S
    344 Manual Refund - ERS 0 EC
    347 Form 1120S - 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 2006 tax return with refund from Form 8913, Credit for Federal Telephone Excise Tax Paid (TETR) 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 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 Code & Edit 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

Using Action Codes with Command Codes

  1. An ERS tax examiner may enter an Action Code on a record, delete or correct an invalid code, or may overlay the present Action Code with another to either resuspend or reject from ERS. This is done by entering a valid Action Code with a Command Code SSPND, NWDLN, or RJECT.

    1. An ERS tax examiner entering a valid Action Code with SSPND Command Code will be clearing the record from the screen and placing the record in either Workable Suspense or Unworkable Suspense.

    2. A Reject tax examiner entering a valid Action Code with RJECT Command Code will be rejecting the record from ERS. Generally Service Center Control File (SCCF) will be automatically updated for the rejected records.

    3. A Reject tax examiner entering an Action Code with NWDLN Command Code will be rejecting the record from ERS and establishing the new DLN under which the record is to be input.

  2. 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.

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

Error Resolution System Coding

  1. The ERS Action Code indicates that specific information is missing or that the record is to be rejected from processing. The code will indicate if correspondence is to be sent to the taxpayer or the specific in-house research or action required. See the Action Code Chart in Section 1 of the 2519–019 Job Aid for the appropriate codes.

Clear Code "C" and 000

  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 "C" to indicate the possible need of a Clear Code. The Clear Code field will always be located 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 indicate no correction is needed. If corrections are required, they must be entered and transmitted prior to entry of the Clear Code "C" . 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 indicates that you have made the corrections to the action code and now wish to have any other errors on the record displayed.

  4. The "000" is also used as a Clear Code when deleting an action code. It will only be used for invalid or erroneous Action Codes and you have determined there is no reason to suspend the record. The "000" cannot be used in suspense correction.

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

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

  7. 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) you have cleared with a Taxpayer Notice Code or "C" Clear Code. Should this occur, programming will erase 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. There may be instances when you will make a correction erasing an error code which you previously cleared with a "C" and now the error condition no longer exists. Should this occur, the "C" Clear Code for this error and all "C" and TPNCs for all subsequent errors in the record will be deleted. If after deleting the "C" and TPNCs, there are errors remaining on the record, they will continue to be displayed for resolution whether or not they were previously displayed.

  8. The "C" Clear Code will prevent any other corrections to the record to accompany 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.

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 will consist of the first two positions of the Action Code. This will put similar work together on the Workable Suspense Inventory. For example, "321" Suspense period expired, no response to taxpayer correspondence.

  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 will appear on the screen with Error Code 001, unless Computer Condition Code "W" is present on the record. The Computer Condition Code "W" indicates 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, no further CI action is required.

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

    Note:

    If there is no indication 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 identifies 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 identified, and there is no indication 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 indicated 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 appropriate action.

Examination (Exam) "Funny Box"

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

♦ Frivolous Arguments♦

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

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

    Frivolous Return Criteria

    If Then
    The return meets any of the conditions identified as a frivolous return. (See table below),

    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, indicated 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 3.12.251.3.10, Frivolous Returns and Claims. However, do not circle or void the Action Code indicating a frivolous return.

     

    Note:

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

  3. Potential Frivolous Arguments for Examination Review.

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

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

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

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

    Challenges to Authority/Due Process Questions various administrative authorities such as delegation orders, summons authority, Privacy Act, etc. Argues that they must be afforded a hearing or a trial before taxes can be assessed or before property can be seized.
    Challenges to Authority/Title 26 or "law" in Other Documents Argues that Title 26 of the United States Code is not law because it was never enacted as named.
    Collections Issues Files frivolous documents contending that various collections issues are invalid (e.g., Offers in Compromise, Collection Due Process Requests, Installment Agreements, Appeals Requests, etc.) because they are not filed and/or signed by someone with delegated authority. They may have no certificate of assessment attached, do not comply in form or content with a State or Local law, are not in a certain format or lack a valid OMB (Office of Management and Budget) number or other frivolous positions.
    Disclaimer Submits a disclaimer stating, "disclaims the liability for the tax due" , making the liability on the return zero.
    Fifth Amendment Assertion of the Fifth Amendment right against self-incrimination as a basis for not providing any financial information.
    Foreign Income Argues that United States citizens and residents are not subject to tax on their wages or other income derived from sources within the United States, as only foreign-based income or income received by nonresident aliens and foreign S Corporations from sources within the United States is taxable.
    Form 1099-OID, Original Issue Discount An individual or business files a return reporting false amounts of income (generally "Other" or "Miscellaneous" income) and claims a false amount of income tax withholding approximately equal to the amount of falsely reported income. Although the returns report income, they do not calculate any tax due. Some of the returns have Form 1099-OID attached and some have Form 1096, Annual Summary and Transmittal of U.S. Information Returns. Other false financial instruments may be filed in the place of or in addition to the Form 1099-OID such as Form 2439, promissory notes, bonds, sight drafts, etc.
    IRC 861 Business Employment Tax (BMF 861) Argument targets employers and advises them that wages are exempt from withholding. Based on 26 Code of Federal Regulations (CFR) Section 1.861, promoters of this scheme advise employers to stop withholding and paying payroll taxes on their employee's wages. In addition, some employers file amended payroll tax returns and request refunds of previously paid payroll taxes.
    IRS is a Private Organization /Collects Tribute, Not Taxes Argues that the IRS is an entity named the Internal Revenue and Tax Service, Inc., which was incorporated in Delaware in 1933, it is a collection agency for the Federal Reserve Bank, or is part of the United Nations and is clandestinely leading the tax-paying public into a “new world order”.
    Not a Person Argues that a taxpayer is not a "person" within the meaning of IRC 7701(a)(14).
    Obscene, Vulgar, Harassing Submits documents or other materials indicating that non-filing is due to dissatisfaction with tax policies or taxation in general. Often, this argument is expressed with obscene, vulgar, or crude language and characters in an extremely demeaning manner.
    Protest Against Government Action/Inaction Argues that refusal to file or pay is justified because they disagree with government policies or spending plans.
    Sixteenth Amendment Argues the Sixteenth Amendment was not properly ratified and therefore the federal government does not have the legal authority to collect an income tax without apportionment.
    Straw Men Argues the government has created an entity separate and distinct from the taxpayer - a "straw man" and any tax obligations are exclusively those of the "straw man" .
    Taxes are Voluntary/Law Does Not Require Submits a return, amended return, or correspondence that argues income taxes are voluntary.
    U.S. v. Long Submits a return with zero money amounts. To explain the zeroes inserted on the form the individual references "U.S. vs. Long" .
    Unsigned Returns The individual completes a return but fails to sign. A statement indicating disagreement with the tax system is attached or added to the return
    Valuation Income is not taxable because of the declining fair market value of the dollar, because the dollar is not backed by gold/silver, because the value of services is offset by the value of the labor (barter income), etc.
    Zero Returns Submits a return with zero money amounts on all or most of the line items on the form (e.g., IRC 861. Forms 2439. OID, and other BMF filings that claim no income and request refunds). See Rev. Rul. 2004–34. A statement is attached claiming there is no section of the Internal Revenue Code that established an income tax liability. The statement may also contain arguments regarding the definition of income. There are several variations on this type of filing such as those bearing the words "nunc pro tunc" and "not liable" .

    Note:

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

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

    Note:

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

Charge-Out (Form 8161 or Form 4251)

  1. A charge-out (Form 8161, ERS Return Charge-Out or Form 4251, Return Charge Out) will be computer generated 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 additional 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 appropriate block by entering the correct Action Code and date.

Non-Perfectable Conditions

  1. When perfection is not possible, the record may be rejected from ERS and action initiated to have the Document Locator Number (DLN) voided. If remittance is involved, remittance may be transferred to the "Unidentified Remittance File" .

  2. Perfection may be possible but the record may require renumbering (DLN or remittance amount may need correcting; therefore, the record will require rejecting for renumbering). Reject the record by entering the Command Code RJECT followed by the Action Code "640" . If a new DLN is to be assigned, use Command Code NWDLN, with the appropriate Action Code, the new DLN and Master File ID Code if required.

  3. A charge-out will be generated for all Rejected Records. The charge-out will remain in the SC files for future reference. ERS will automatically control 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 will identify errors according to type and priority. The record heading will show 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. This IRM will furnish the solution for the displays of the errors.

  3. There may be records where the tax examiner finds that programming has not furnished a section that is needed to correct an error. In this event, the tax examiner can use CC GTSEC.

    Note:

    This must be reported to the Headquarters for correction of the display.

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

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

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

  2. Display - The Action Code for the record with the literal description of the action or unpostable condition will be 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 contain 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.

Correction Procedures Priority I Errors, Action Code 21X, Correspondence
  1. Status 321: If the reply is available, follow instructions in the reply before clearing Priority I error. For correspondence with no reply, follow the "no reply instructions" found under "Correspondence Action" before clearing the Priority I Error.

  2. Status 421: Follow instructions in the reply before clearing the Priority I Error.

Priority I Error, Action Code "310" , Statute Control
  1. Status 331 or Status 431: Document will be received from Statute Control with instructions. If the Statute Control Group requests that the record be voided to them for non-remittance documents, use "RJECT 640" and for remittance documents use NWDLN 611, (See IRM 3.12.38, BMF Error Resolution - General Instructions), and the DLN of the payment posting voucher (Form 3244, Payment Posting Voucher) that posts the remittance to the year and Master File Transaction (MFT) OF THE VOIDED Statute document), or

  2. If the Statute Control Group indicates clearance, use GTSEC for Section 01, verifying Field 01TXP, tax period, and entering CCC "W" in Field 01CCC. Transmit and then clear the Priority I Error with the "C" Clear Code.

Priority I Error, Action Code "320" , Entity Control
  1. Status 332 or 432: Document will be furnished to the tax examiner with instructions from Entity Control.

  2. Follow instructions from Entity Control before clearing the Priority I Errors Enter the correct fields using Command Code GTSEC for Section 01 if the return was referred to Entity for the Name Control or Employer Identification Number (EIN).

Priority I Error, Action Code 33X, Review/Routing to Criminal Investigation (CI)
  1. Status 333 or 433: Document will have been referred to CI before giving it to the tax examiner.

  2. If instructed to void the record and refer the Form 1120 to CI, use Command Code RJECT or NWDLN, Action Code "640" , following Criminal Investigation instructions. NWDLN 611 is for the voided Form 1120 with a remittance. The new DLN is the DLN of the payment posting voucher that posts the remittance to the year and MFT of the voided document sent to CI or Unidentified Remittance File (URF) if CI instructs that the money is to be applied to the URF.

  3. Follow CI instructions before clearing Priority I Errors if processing the Form 1120 will continue.

Priority I Error, Action Code 34X, Routing-Accounting
  1. When forms are received from Accounting the tax examiner should follow instructions furnished by Accounting before clearing the Action Code.

Priority I Error, Action Code 35X, Key Index File (KIF)/MFTRA Research
  1. Action Code "351" , Status 435: Indicates KIF was not available when record was on the Error Inventory. If after researching the KIF with NAMEB, the EIN is located, enter in Field 01EIN after using Command Code GTSEC for Section 01. If researching the KIF with NAMEB and the EIN cannot be located, follow the instructions for resuspending (SSPND "320" ) for referral of document to Entity for EIN.

  2. Action Codes 352, 354 or 355, Status 335 or 435: If after researching, you are unable to solve, resuspend to Entity with Action Code "320."

  3. Action Code "353" will not be used on Form 1120, unless correspondence is necessary and there is no address.

Priority I Error, Action Code "360" , Other In-House Research
  1. Status 336 or 436: Document and instructions from other area will be furnished to the tax examiner.

  2. Follow instructions furnished by other areas of the Campus before clearing Priority Error.

Priority I Error, Action Code "410" , Assistance Needed
  1. Clear the Priority I Error with the "C" Clear Code, so that other errors in the record might display.

Priority I Error, Action Codes "420" thru "460" , Management Suspense
  1. Management may direct either that you work or resuspend the record.

  2. If resuspending, use Command Code SSPND and the Action Code as directed.

  3. When instructed to work the record, clear the Priority I Error with the "C" Clear Code, so if other errors exist in the record, they can be displayed.

Priority I Error, Action Code "490" , System Problem
  1. Instructions are needed from the Computer Branch through your supervisor for working. If instructions are not furnished for Status 349, you may be advised to resuspend, using SSPND "490."

  2. Once you clear Action Code "490," if no other error exists in the record, the record will go to good. It is imperative to await instructions from the Computer Branch or RP.

Priority I Error, Action Code 51X, Status 451 or 351
  1. Suspend record with Action Code 51X to initiate special search. The charge-out issued for missing document may be used for the initial search. It may also be used for subsequent searches by marking "Second Request" , "Third Request" , etc., on the charge-out returned from files. Special search is continued as indicated in IRM 3.12.38, BMF Error Resolution - General Instructions, until document is located or record is rejected from ERS with Action Code "670" .

    If Then
    The missing document is a non-remittance document, Use "RJECT 670"
    The missing document is a remittance document, Use NWDLN 670 and the DLN of Form 3244, Payment Posting Voucher for the payment.
    Unable to designate where remittance should be applied, Use "NWDLN 670 URF" . Action Code "551 " "Contradiction within the Mag Record" is not used for Forms 1120.
Priority I Error, Action Code 6XX, Rejects
  1. If suspended to Workable Suspense, with Action Code 6XX, review document to see if you agree with the recommended reject action. If so, delete with Command Code RJECT or NWDLN and the appropriate Action Code.

  2. If you determine not to delete the record, clear the Priority I Error with the Clear Code "C" deleting the action code so that any other errors that might exist can display.

Priority I Error, Action Code "700" , Duplicate Block DLN
  1. Clear the Priority I Error with the "C" Clear Code so that other errors in the record might display.

Priority I Error, Action Code "900" , Unpostable Records
  1. The literal for the Action Code "900" will include the Unpostable Code. For Action Code "900" returns, determine if the record can be resolved. If so, use Command Code GTSEC for the desired section(s) and make the correction(s). After all corrections are made and transmitted, enter a "C" in the Clear Code field. Once the Action Code "900" is cleared, all other errors on the record will be displayed for correction. If no other errors exist, the record will clear the screen. The record has never posted to Master File. Fields displayed will be as processed prior to being an "Unpostable" . The record may contain coding and transcription errors and misplaced entries. All Clear Codes and Taxpayer Notice Codes assigned when previously processed will have been deleted from the record and will need to be assigned again if still applicable.

  2. If the error on the Unpostable Record (Action Code "900" ) cannot be resolved, resuspend the record using Command Code SSPND with the appropriate Action Code. Attach Form 4227, Intra-SC Reject or Routing Slip notating corrective action and route as necessary.

For Action Codes 3XX Status 33X
  1. ERS Suspense records are automatically returned to the workable inventory when the designated suspense period has expired. Review to determine if the document can be worked or if circumstances warrant resuspending the document. If document is ready to work, continue processing. If resuspending is necessary, refer to IRM 3.12.38-1 to assign the Action Code.

  2. If the document cannot be located, and suspense period expired, resuspend with Action Code 511. Use Command Code ESTAB to initiate a Form 4251 to obtain the document from Files.

  3. If the Form 4251 comes back without the document, wait until the suspense period for Action Code "511" expires, resubmit original Form 4251 indicating on it "SPECIAL SEARCH" and resuspend the record with Action Code "512" .

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 indicated 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 containing 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), will be displayed in columnar format with or without data. The error type will also be indicated for ISRP Problem Code errors. Only one section (error) will be 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 will show all input fields except for the Remittance in Section 01 of the section in error. Transcribed data will be present. Computer generated data will not be 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 of the fields within the group are the same for any one of the available combinations, then generate value. Bypass the check if the field contains 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, other than 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 of the data for the displayed section. When all of 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) will be shown as a Priority III error. Consistency and/or relationships with other fields will not be a factor. Individual field validity errors to be bypassed after initial consideration will be 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 will be displayed in columnar format in the order encountered in the record. The Action Code and Taxpayer Notice Codes will never be 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 3.12.251.27, 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, blank 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

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" .

    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. Prior to 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.dr/sp-portal/bmf.dr/bmf_ers/job_aid.dr/TPNC-90-Math-Error-Code-Job-Aid.doc DOC.

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

    1. Write on the returns “TPNC 90 - ##” (where ## represents the programmed TPNC 90 Math Error Code number) or use Form 12648, Error Correction 90 TPNC.

    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 contain none of the TPNCs that were assigned to the records that were not completely worked.

  10. See IRM 3.12.251.32, 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 appropriate 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 attempt 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 3.12.251.3.22.1, No Reply Cases.

  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 prior to issuing correspondence to ensure all needed information is requested the first time. Check CC BMFOLI to ensure the return is not a duplicate document prior to 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 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 indicate 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" . Provide for a purge date at least 10 days after the date provided 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 contains 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" identified " 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 640 to have the DLN voided.

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

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

    The "CIS" return has a Form 13596 attached and the return is incomplete (e.g., missing signature, schedules, or forms), There is an indication on the return that correspondence has been sent (e.g., CCC "3" is edited on the return), Do not route the return to AM. Continue processing the return.
    The "CIS" return does not have a Form 13596, Reprocessing Returns, attached, The return is incomplete (e.g., missing signature, schedules or forms) Research for prior posting (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. Tax return information can be received via fax as part of return perfection even if a taxpayer signature is required. In circumstances where contact with the taxpayer has been made and documented, fax signatures are acceptable. For more information about accepting signed taxpayer documents by fax, see the most recent revision of the IRS Policy for Use of Fax, available at http://win.web.irs.gov/SP/News/Updates/Scanned_Revision_of_Policy_for_Use_of%20Fax_in_Taxpayer_Submissions.pdf#search=Revision%20of%20Policy%20for%20Use%20of%20Fax%20in%20Taxpayer%20Submissions PDF

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

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

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

    • IRM 21.1.3.2.3, Required Taxpayer Authentication

    • IRM 21.1.3.2.4Additional Taxpayer Authentication

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

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

    • IRM 11.3.1.14, Facsimile Transmission of Tax Information

Unprocessable Conditions

  1. An error record must be rejected when:

    1. The tax period is prior to 198412 or after 200711 for Form 1120-A.

    2. It is International related and it contains 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).

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

    4. It is misblocked.

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

    6. Subsidiary returns are detached from parent returns.

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

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

    9. The return is stamped "Pro Forma" or bears other designation that indicates it was intended to demonstrate income calculation for any and all states which might require such tax filing requirements.

    10. The return is determined to be a supporting document for Form 1139, Corporation Application for Tentative Refund.

    11. The return is determined to be a supporting document for Form 6166, Certification Program Letterhead.

  2. When a record is rejected, it will be 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.

Qualified Cellulosic Biofuel known as "Black Liquor"

  1. These instructions apply to: 2009 tax year returns only including fiscal year returns filed for periods 200901 through 201011.

  2. The following procedures are for returns claiming a nonrefundable credit on Form 6478, Biofuel Producer Credit Lines 5 and/or 8 (2010 revision), Lines 5 and/or 7 (2009 revision), or Lines 7 and/or 9 (2008 revision).

  3. For 2010 and prior, the credit was reported on Form 3800, General Business Credit, Page 2, Line 29c. (For TY 2011 and later, it was reported on Page 3, Line 4c.)

  4. These returns should have "CBR" notated at the top of the return by the taxpayer and should be identified in C&E by Action Code "343" .

Refund Returns 45 Day Jeopardy and High Dollar Refunds

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

    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 Code & Edit 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 appropriate correspondence request form and request all information that is missing or incomplete.

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

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

      Note:

      The W&I liaison will contact the 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 appropriate 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 appropriate TPNC.

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

  8. Rejects Suspense Procedures:

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

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

Correspondence Action

  1. General Information—This sub-section contains general instructions for processing correspondence items. If instructions contained 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 prior to the due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ of the return or the correspondence was required because of an IRS processing error, we failed to 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 (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 Dispositions by Foreign Persons of U.S. Real Property Interests must be verified on the INTLWebApps Application. See IRM 3.12.251.34, Form 1120-F Sections and Fields, IRM 3.12.251.34.5.1, Section 07 Field Errors and IRM 3.12.251.34.10.20, 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" cases 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 Cases
  1. "No reply" cases require the following action:

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

    If Then
    Section 965 return,
    1. 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 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 indicate a different amount was received. As such, we have adjusted your return.

    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 accordingly.
    Form 4626, Alternative Minimum Tax - Corporations is required (Tax Period 201811 and prior), Assess AMT per computer and assign appropriate 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, Credits for Affected Disaster Area Employers 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 3.12.251.3.14, Taxpayer Notice Codes (TPNC), for additional 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. Money amounts are to be written 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

    • Computer Condition Code

    • Received Date

    • Correspondence Received Date (CRD)

    Reminder:

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

  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 1120S to Form 1120

  1. If a taxpayer filed Form 1120S 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 1120S must be converted to Form 1120 in order to be processed.

  2. Entity Control Unpostables will edit the name control, CCC "3" (if applicable), Received Date, NAICS, 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 1120S 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 indicates 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.

Form 1120 Sections and Fields

  1. Form 1120 contains Sections 01 through 12, 14 through 25, 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 provides instructions for correcting Section 01 Field Errors.

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

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

Section 01 Field Errors

  1. Correctable Section 01 fields are listed below:

    Field Designator Maximum 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 located 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 all 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 "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 located 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, 2016 is edited as "201612. "

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

    • The field is not all 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 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 indicates 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 indicates there are prepaid credits and/or extensions and the return is for a short period, SSPND 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, 2018.
      tax period should be 201808.
      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, 2018.
      tax period should be 201805.
    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 indicates 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 will display as YYYYMMDD.

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

    • The Received Date is not present.

    • The Received Date is not all 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., 20190115 in lieu of "20200115" ), 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 indicates 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 located next to the Signature area of the return. The Paid Preparer Checkbox is used to indicate 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 other than "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 other than 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: Indicates
      A Tax year beginning was prior to 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 with Withholding being claimed on it. 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 return being processed indicates any of the following and the taxpayer is reporting Section 965 Tax Liability for the reporting year (TY2017 or TY2018):
      • 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 Part II, Column (k), Line 3.

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

      See the following IRM references:
      • IRM 3.12.251.27.1, Section 965 Returns - General Instructions.

      • IRM 3.12.251.27.1.1, Section 965 Returns - Tax Period 201712 - 201811.

      • IRM 3.12.251.27.1.2, 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 in accordance with 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 contains 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 indicate that they are deferring the gain by entering code "Z" in column (f).
      N An unusual credit greater 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 contains 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 (TETR) is only figure on complete income tax return for 2006 (no other entries). Line 32g (Form 1120) 2010 revision and prior
      Line 23g (Form 1120-H)
      Line 5i (Form 1120-F)
      Line 29g (Form 1120-C)
      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, 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 indicated Return settlement is frozen
      Y Short period return for change of accounting period is indicated 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 Indicates 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 Form 1120, Page 3, Schedule J, Part III, Line 14 (Part II Line 13 for 2017-2011)(with notation such as 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 indicated 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 other than "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.

  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 other than 000001 through 999000.

    • The field contains 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 located on Form 1120, Schedule K, Line 2a, Enter the code in Field 01NAI.
      The NAICS Code is not located 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 in a processable format. Therefore, if we correspond 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 will display 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 all 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 failed to ask for all of the required information, or

      • The correspondence reply is received prior to 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 all numeric, or

    2. The field may contain 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 other than "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 attempt 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 all 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 attempt 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 other than 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 attempt to correct the taxpayer's information. Delete Field 01PTN.

Section 02 Data - Form 1120 Address Information

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

  2. Section 02 contains 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 Maximum 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 contain an entry when there is a foreign address present on the return.

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

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

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

    • The first position is blank.

    • Any character follows two consecutive blanks.

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

      Note:

      ISRP is instructed to input a pound sign (#) as the 35th character if there are more than 35 characters present for this field on the return.

  4. Correction Procedures:

    • Correct coding and transcription errors and misplaced entries.

      Foreign Address Correction Procedures

      If Then
      Field 02FAD is present, 1. GTSEC 02
      2. Ensure Field 02CTY contains a foreign country code and Field 02ST (State) contains a "." period/space. See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.
      Exception: Use the Country Code based on the Province in Field 02CTY if the foreign address is from Canada and the address contains 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 appropriate position in Field 02FAD.
      A foreign address is not present on the return,
      1. SSPND 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 of the following applies:
      • Mailing address information is the same,

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

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

      1. Enter address shown on Form 8822/Form 8822-B 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 is required to 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 other than alpha, numeric, blank, dash or slash is present.

    • 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 indicate 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 contains "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 appropriate 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 appropriate 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 all 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 contains instructions for correcting Section 03 Field Errors on Form 1120.

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

  3. Section 03 contains 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 Title Location
    03ABL 3 ABLM Code Page 1, upper left margin by item A
    03CGC 1 Control Group Personal Service Code Form 1120, Page 3, Line 1, Schedule J.
    03IRC 1 Initial Return Code Page 1, upper right margin
    Form 1120
    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-”.
    03SDC 1 Special Deduction Code Form 1120, Page 1, right margin by Line 29c
    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)(ii)
    03ADC 9 Audit Code The margin to the left of “Deductions” section of the return following “2-”.
    03ISI 1 Installment Sales Indicator The margin to the left of “Deductions” section of the return following “6-”.
    03AMC 1 Accounting Method Code Form 1120, Schedule K, Left margin Line 1
    03K12 12 Net Operating Losses (NOL) Carryover Amount Form 1120, Page 4, Schedule K, Line 12
    03K7C 3 Number of Forms 5472 attached Form 1120, Page 4, Sch K, Line 7
    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 other than 001, 010, 400 or blank.

    • The doc code is 09 and 03ABL is other than blank or 400.

    • The doc code is 10 and 03ABL is other than blank.

    • The doc code is 11 and 03ABL is other than 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, however 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 09,
      1. Refer to the chart below for ABLM Codes.

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

      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 contains 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 attempts to consolidate 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 apples to returns for tax periods 201811 and prior.

  2. The Control Group Code is edited on the dotted portion of Line 1, Schedule J, Page 3, Form 1120.

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

    • The tax period is 201812 and later.

    • The field is other than blank, "2" or "1" .

  4. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. For additional guidance on this field, see EC 174, IRM 3.12.251.27.35, 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 greater 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 Line 2, Schedule J, Page 3 is checked (Line 3 2005 and prior), 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 indicated 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 indicates 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 other than 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 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 EC 030 IRM 3.12.251.27.15, Error Code 030 - Penalty and Interest Code Check for more information.

  2. Invalid Condition - Field 03PIC is invalid if it is other than 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 other than 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 other than 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 other than 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 Line 3, Schedule K.

  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 Line 3, Schedule K.

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

    • The parent EIN is not all 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 Page 4, right margin of Question 7b, Form 1120. (For 1999 – Page 3, right margin of Question 10b, Form 1120)

  2. Invalid Condition - Field 03FCC is invalid if the code is not contained 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 Conditions - Field 03ADC is invalid if:

    • Any code is other than 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 no longer is any 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 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

      2 International Income or Credit
      • An entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ 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 is marked "Yes" , or Schedule N, Line 4b has an entry.

      • Form 5472, Information Return of a Foreign Owned Corporation 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 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ *(Part IV, Lines 10a through 11f for 2011 and prior).

      • Form 1116, Foreign Tax Credit is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

      • Form 1118, Foreign Tax Credit - Corporations is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , 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 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .
        Any entry Part III, Column (c), Lines 5-7 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or
        The sum of Columns (b) plus (c), Lines 9, 23, 24 or 25 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

      • 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, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ *(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 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

      • Form 8283, Noncash Charitable Contributions, is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

      • Form 8883, Asset Allocation statement under section 338, is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

      • Form 8594, Asset Acquisition Statement is attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

        Note:

        Attach Form 4227, Intra-SC Reject or Routing Slip indicating the condition.

      4 A Form 1120S 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 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ 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 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ foreign tax credits on Part IV, Line 33.

      • Form 1118 is attached and reflects ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ 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 greater 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 it is other than 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 other than "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 Procedure - Correct coding and transcription errors and misplaced entries.

Field 03K7C-Number of Forms 5472 Attached

  1. Field 03K7C is transcribed from the Form 1120, Pg 4, Schedule K, Line 7. This is a numeric only fields that can contain only 3 characters.

  2. Invalid Condition- Field 03K7C is invalid if:

    • The edited entry is greater 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 Procedure

    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, blank the field.

Field 03Q17-Disposal 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 Procedure

    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, blank the field.

Field 03Q18-Section 351 Transfer Question

  1. Field 03Q18 is transcribed from Form 1120, Pg 5, Schedule K, Line 18.

  2. Invalid Condition-Field 03Q18 is invalid if:

    • An entry other than blank or "1" is present.

  3. Correction Procedure

    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, blank 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 prior to 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 prior to 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 all numeric.

    • The field is negative.

    • The entry exceeds the maximum field length (15 characters).

  3. Correction Procedure

    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 contains instructions for correcting Section 04 Field Errors.

  2. Section 04 contains the taxable income bracket amounts, and several 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 Maximum Length Valid Entry Field Title Location XREF EC
    04TAE 15 Dollars only
    Positive or Negative
    Total Assets Ending Box D right of entity Form 1120 150
    04A01 11 Dollars only
    Positive
    Inventory at Beginning of year Page 2, Form 1125-A, Line 1, Form 1120  
    04A06 11 Dollars only
    Positive
    Total Cost of Sales Page 2, Form 1125-A, Line 6, Form 1120  
    04A07 11 Dollars only
    Positive
    Inventory End amount Page 2, Form 1125-A, Line 7, Form 1120  
    04TB5 7 Dollars and cents
    Positive
    5th Taxable Income Bracket Schedule O (Form 1120), Part II, Line 1, Column (c) 118, 174
    04TB6 7 Dollars and cents
    Positive
    6th Taxable Income Bracket Schedule O (Form 1120), Part II, Line 1, Column (d) 118, 174
    04TB7 9 Dollars and cents
    Positive
    7th Taxable Income Bracket Schedule O (Form 1120), Part II, Line 1, Column (e) 118, 174
    04AT1 7 Dollars and cents
    Positive
    Control Group Additional 5 percent Tax Schedule O (Form 1120), Part III, Line 1, Column (f) 114, 174
    04AT2 8 Dollars and cents
    Positive
    Control Group Additional 3 percent Tax Schedule O (Form 1120), Part III, Line 1, Column (g) 114, 174
  2. Invalid Condition - Section 04 field errors will display if:

    • A field is not all numeric.

    • An entry exceeds the maximum field length.

    • A "positive only" field is negative.

    • Field 04AT1 is greater than $11,750.

    • Field 04AT2 is greater than $100,000,

  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.

Section 05 Data - Form 1120

  1. This section contains instructions for correcting Section 05 Field Errors.

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

  3. Section 05 contains the income information. It must contain 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 appropriate 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 Title Location
    0501A 15 Dollars only
    Positive
    Gross Receipts Line 1(a), Page 1
    0501B 15 Dollars only
    Positive
    Returns and Allowances Line 1(b), Page 1
    0502 15 Dollars only
    Positive or Negative
    Cost of Goods Sold Line 2, Page 1
    0504 15 Dollars only
    Positive
    Dividends Line 4, Page 1
    0505 13 Dollars only
    Positive
    Interest Line 5, Page 1
    0506 15 Dollars only
    Positive
    Gross Rents Line 6, Page 1
    0507 15 Dollars only
    Positive
    Gross Royalties Line 7, Page 1
    0508 15 Dollars only
    Positive
    Capital Gain Net Income Line 8, Page 1
    0509 15 Dollars only
    Positive or Negative
    Net Gain/Loss Line 9, Page 1
    0510 15 Dollars only
    Positive or Negative
    Other Income Line 10, Page 1
    0511 15 Dollars only
    Positive or Negative
    Total Income Line 11, Page 1
    05MCV 15   Merchant Card Payments Verified Line 1(a), Page 1 TY 2011 ONLY
  2. Invalid Condition - Section 05 field errors will display if:

    • A field is not all 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 3.12.251.27.2, Documents With Overfilled Money Fields if any money amount exceeds the maximum field length allowable.

Section 06 Data - Form 1120

  1. This section contains instructions for correcting Section 06 Field Errors.

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

  3. Section 06 contains 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 Title Location XREF EC
    06COF 15 Dollars only
    Positive
    Compensation Of Officers Line 12, Page 1 160
    06SAW 15 Dollars only
    Positive
    Salaries and Wages Line 13, Page 1 160
    06REP 15 Dollars only
    Positive
    Repairs and Maintenance Deduction Line 14, Page 1  
    06BD 15 Dollars only
    Positive or Negative
    Bad Debts Deduction Line 15, Page 1  
    06REN 15 Dollars only
    Positive
    Rents Deduction Line 16, Page 1  
    06TAX 15 Dollars only
    Positive
    Taxes and Licenses Deduction Line 17, Page 1  
    06INT 15 Dollars only
    Positive
    Interest Deduction Line 18, Page 1  
    06CHR 15 Dollars only
    Positive
    Charitable Contributions Line 19, Page 1 168
    06DPR 15 Dollars only
    Positive
    Depreciation Deduction Line 20, Page 1  
    06DPL 15 Dollars only
    Positive
    Depletion Deduction Line 21, Page 1 160
    06ADV 15 Dollars only
    Positive
    Advertising Deduction Line 22, Page 1 160
    06PEN 15 Dollars only
    Positive
    Pension Plans Deduction Line 23, Page 1 160
    06CON 15 Dollars only
    Positive
    Employee Benefit Plans Line 24, Page 1 160
    06DOM 15 Dollars only
    Positive
    Domestic Production Activities (2017 and prior) Line 25, Page 1 160
    06OTH 15 Dollars only
    Positive or Negative
    Other Deductions Line 26, Page 1 160
    06TOT 15 Dollars only
    Positive or Negative
    Total Deductions Line 27, Page 1 160
    06NOL 15 Dollars only
    Positive
    Net Operating Loss Deduction Line 29a, Page 1 160
    06SPD 15 Dollars only
    Positive
    Special Deductions Line 29b, Page 1 170
  2. Invalid Condition - Section 06 field errors will display if:

    • A field is not all 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 contains instructions for correcting Section 07 Field Errors.

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

  3. Section 07 contains 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 Title Location XREF EC
    07TTX 15 Dollars and cents
    Positive
    Total Tax Taxpayer Line 31 Page 1 186
    0796P 15 Dollars and cents
    Positive
    Net 965 tax liability paid for the reporting year. Line 32, Page 1 188
    07TPC 15 Dollars and cents
    Positive
    Total Payments and Refundable Credits Line 33 (Line 32 2017-2011) Page 1  
    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 Line 34 (Line 33 2017-2011)Page 1 188
    07B/R 15 Dollars and cents
    Positive or Negative
    Balance Due/Over payment Lines 35/36 (Line 34/35 2017-2011), Page 1  
    07CRE 15 Dollars and cents
    Positive
    Credit Elect Amount Line 37 (Line 36 2017-2011), Page 1 192
    07GIT 15 Dollars and cents
    Positive
    Gross Income Tax Schedule J, Line 2, Page 3 174
    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 will display if:

    • A field is not all 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 contains instructions for correcting Section 08 Field Errors.

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

  3. Section 08 contains the statutory credits and other taxes. The information is transcribed from:

    • Form 3800, General Business Credit or,

    • Form 1120, Page 3, Schedule J.

  4. Fields 08BET, 08AMT, 08FTC, 08EVC, 08GBC, 08GBV, 08TSC, 08SCV, 08PYM, 08PHC, 08TRI, 08ENV, 08CEB, 08RIC, 08RLI, 08ULB, 08IFM, 08QSA, 08OTH, 08EST, 08EXT, 08WTH, 0819A, 0819C, 0819D and 0896I are transcribed in dollars and cents. All other Section 08 fields are dollars only.

  5. All fields are positive only.

Section 08 Field Errors

  1. Correctable Section 08 fields are listed below:

    Field Designator Maximum Length Valid Entry Title Location
    08BET 15 Dollars and cents
    Positive
    Form 8991, Tax on Base Erosion Payments of Taxpayers with Substantial Gross Receipts Schedule J, Line 3, Page 3 (201812 and later)
    08AMT 15 Dollars and cents
    Positive
    Form 4626, Alternative Minimum Tax - Corporations Schedule J, Line 3, Page 3 (201811 and prior)
    08FTC 15 Dollars and cents
    Positive
    Form 1118, Foreign Tax Credit - Corporations Schedule J, Line 5a, Page 3
    08EVC 15 Dollars and cents
    Positive
    Form 8834, Qualified Electric Vehicle Credit Form 1120, Schedule J, Line 5b
    08ESC 15 Dollars only
    Positive
    Form 8007, Credit for Employee Stock Ownership Plan 198412–198711 only ERS only
    08GBC 15 Dollars and cents
    Positive
    Form 3800, General Business Credit Schedule J, Line 5c, Page 3
    08GBV 15 Dollars and cents
    Positive
    General Business Credit Verified Schedule J, Line 5c, Page 3 ERS Input only (manually computed amount)
    08TSC 11 Dollars and cents
    Positive
    Total Statutory Credits Schedule J, Line 6, Page 3
    08SCV 15 Dollars and cents
    Positive
    Statutory Credits Verified Schedule J, Line 6, Page 3 ERS only (manually computed amount)
    08PYM 15 Dollars and cents
    Positive
    Form 8827, Credit for Prior Year Minimum Tax - Corporations Schedule J, Line 5d, Page 3
    08PHC 15 Dollars and cents
    Positive
    Form 1120, Schedule PH, U.S. Personal Holding Company (PHC) Tax Schedule J, Line 8, Page 3
    08TRI 15 Dollars and cents
    Positive
    Tax on Recomputed Investment Credit This field is no longer transcribed.
    08ENV 15 Dollars and cents
    Positive
    Environmental Tax

    Note:

    Environmental Tax expired after 1995

    ERS only
    08ORC 15 Dollars only
    Positive
    Form 8830, Enhanced Oil Recovery Credit Form 3800, Part III, Line 1t
    08CDC 15 Dollars only
    Positive
    Form 8847, Credit for Contributions to Selected Community Development Corporations  
    08WTW 15 Dollars only
    Positive
    Form 8861, Welfare-to-Work Credit  
    08QZA 15 Dollars only
    Positive
    Form 8860, Qualified Zone Academy Bond Credit
    (Form 1120 only)
    2008 and later Form 8860 is obsolete and replaced with Form 8912, Credit to Holders of Tax Credit Bonds
     
    08NYL 15 Dollars only
    Positive
    Form 8884, New York Liberty Zone Business Employee Credit (200201–200511 only) ERS only
    Schedule J, Line 6d (write in)
    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)

    2009 and later page 3, Schedule J, Line 5e
    08ERC 15 Dollars only
    Positive
    2006 revision, Form 5884-A, Credits for Employers Affected by Hurricane Katrina, Rita, or Wilma
    2008 revision, Form 5884-A, Credits for Affected Midwestern Disaster Area Employers
     
    08RIC 15 Dollars and cents
    Positive
    Form 4255, Recapture of Investment Credit Schedule J, Line 9a.
    08RLI 15 Dollars and cents
    Positive
    Form 8611, Recapture of Low-Income Housing Credit Schedule J, Line 9b, Page 3
    08ULB 15 Dollars and cents
    Positive
    Form 8697, Interest Computation Under the Look-Back Method Completed Long Term Contracts  
    08IFM 15 Dollars and cents
    Positive
    Form 8866, Interest Computation under the Look-Back Method for Property Depreciated under the income Forecast Method  
    08QSA 15 Dollars and cents
    Positive
    Form 8902, Alternative Tax on Qualifying Shipping Activities  
    08OTH 15 Dollars and cents
    Positive
    Other Credits, Schedule J, Line 9f  
    08EST 15 Dollars and cents
    Positive
    Estimated Tax Credit (balance of Lines 12, 13 and 14)  
    08EXT 15 Dollars and cents
    Positive
    Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns  
    08WTH 15 Dollars and cents
    Positive
    Withholding  
    0819A 15 Dollars and cents
    Positive
    Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains 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 Schedule J, Line 20C
    0819D 15 Dollars and cents
    Positive
    Other  
    0896I 15 Dollars and cents
    Positive
    2018 Section 965 Net tax liability 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 additional guidance, See IRM 3.12.251.27.35, 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.

    3. Field 08QSAForm 8902, Alternative Tax on Shipping Activities is reported on Schedule J, Line 9e *(Schedule J, Line 9 for 2010-2006 revisions).

  2. Invalid Condition - Section 08 field errors will display if:

    • A field is not all 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 a credit is claimed from Form 8834, Qualified Electric Vehicle Credit, enter the credit into Field 08EVC.

    4. If a credit is claimed from Form 5735, American Samoa Economic Development Credit enter the credit into Field 08EVC.

    5. If there are other valid credits claimed then the total of ALL credits must be included in Field 08SCV.

Section 09 Data - Form 1120

  1. This section contains instructions for correcting Section 09 Field Errors.

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

  3. Section 09 contains 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 Maximum Length Valid Entry 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 will display if:

    • The tax period is after 201812

    • A field is not all 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-Form 1120

  1. This section contains instructions for correcting Section 10 Field Errors.

  2. Section 10 contains data from Form 1120, Schedule D, Capital Gains and Losses, 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 Max 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 $ +
    1011A 9 EIN from description of property Form 8949, Part I, Line 1 Column (a) N/A N/A
    1011B 8 Date Acquired (YYYYMMDD) Form 8949, Part I, Line 1, Column (b) N/A N/A
    1011G 15 Amount of Adjustment Form 8949, Part I, Line 1, Column (g) $ +
    1011H 1 Form 8949 Indicator Form 8949, right margin of Part I, Line 1, Row 1 N/A N/A
    1021A 9 EIN from description of property Form 8949, Part II, Line 1 Column (a) N/A N/A
    1021B 8 Date Acquired (YYYYMMDD) Form 8949, Part II, Line 1, Column (b) N/A N/A
    1021G 15 Amount of Adjustment Form 8949, Part II, Line 1, Column (g) $ +
    1021H 1 Form 8949 Indicator Form 8949, right margin of Part II, Line 1, Row 1 N/A N/A
    10I5 1 Checkbox - Form 8996, Part I, Line 5 N/A N/A
    10II6 15 Total qualified opportunity zone property held 6-month Form 8996, Part II, Line 6 $ +
    10II7 15 Total assets held 6-month Form 8996, Part II, Line 7 $ +
    10II9 15 Total qualified opportunity zone property held last day of year Form 8996, Part I, Line 9 $ +
    1010 15 Total assets held last day of year Form 8996, Part I, Line 10 $ +
    1013 3 Divide Line 12 by 2.0 (Line 13 is expressed as a decimal amount 0.00) Form 8996, Part III, Line 13 N/A N/A
    1014 15 Is Line 13 equal to or more than .90 Form 8996, Part III, Line 14 $ +

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 other than "1" , "2" or "3" .

    • The field length is greater than 1.

    • The tax period is prior to 201712.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If the tax period is prior to 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 will display if Fields 101AD through Fields 10014 are not all numeric.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

Fields 1011A and 1021A - Form 8949 - EIN from Description of Property

  1. Fields 1011A and 1021A 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 1011A and 1021A field errors will display if:

    • The EIN is not all numeric.

    • The EIN is other than 9 characters.

    • The tax period is prior to 201712.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If the tax period is prior to 201712, delete the field.

    If And Then
    Field 1011A 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 1011A has an entry, The EIN is incomplete or invalid, Delete the EIN.
    Field 1021A 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 1021A has an entry, The EIN is incomplete or invalid, Delete the EIN.

Fields 1011B and 1021B - Form 8949 - Date Acquired

  1. Fields 1011B and 1021B 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 1011B and 1021B are invalid if:

    • A field is other than 8 characters (YYYYMMDD).

    • A field is other than numeric.

    • The month is zero or greater than 12.

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

    • The tax period is prior to 201712.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If the tax period is prior to 201712, delete the field.

Fields 1011G and 1021G - Amount of Adjustment

  1. Fields 1011G and 1021G 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 1011G and 1021G are invalid if:

    • A field is more than 15 characters.

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

    • The tax period is prior to 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 prior to 201712, delete the field.

Fields 1011H and 1021H - Form 8949 Indicator

  1. An indicator will be entered in Fields 1011H and 1021H when Form 8949, Part I, has more than one row with a "Z" in Column (f) or Part II, has more than one row with a "Z" in Column (f). The indicator is edited in the right margin of Part I, Line 1, Row 1 or Part II, Line 1, Row 1.

  2. Invalid Condition - Fields 1011G and 1021G are invalid if:

    • A field is more than 1 character.

    • A field is other than "0" (default) or "1" (more than one row with a "Z" in column (f).

    • The tax period is prior to 201712.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If the tax period is prior to 201712, delete the field.

Field 10I5 - Form 8996, Qualified Opportunity Fund Checkbox

  1. Field 10I5 - Checkbox is located on Form 8996, Part I, Line 5.

  2. Invalid Condition - Field 10I5 is invalid if:

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

    • The field length is greater than 1.

    • The tax period is prior to 201712.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

      If Then
      Form 8996, Part I, Line 5 box is "Yes" , Enter "1" in Field 10I5.
      Form 8996, Part I, Line 5 box is "No" , Enter "2" in Field 10I5.
      Both the "Yes" and "No" boxes are checked, Enter "3" in Field 10I5.
      Neither box is checked, Delete Field 10I5.
    2. If the tax period is prior to 201712, delete the field.

Fields 10II6, 10II7, 10II9 and 10I10 - Form 8996

  1. Fields 10II6, 10II7, 10II9 and 10I10 are entered from Form 8996,

  2. Invalid Condition - Fields 10II6, 10II7, 10II9 and 10I10 are invalid if:

    • A field is more than 15 characters.

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

    • The tax period is prior to 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 prior to 201712, delete the field.

Field 1013 - Form 8996 - Part III, Line 13

  1. Field 1013 is located on Form 8996, Part III, Line 13 and is a percentage. It is expressed as a decimal amount (0.00).

    Note:

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

  2. Invalid Condition - Field 1013 is invalid if:

    • The field is not numeric.

    • The field is more than 3 characters.

    • The value exceeds 1.00.

    • The tax period is prior to 201712.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

      If Then
      Field 1013 is more than 3 characters,
      For example, 0.456,
      Enter the first 3 characters,
      For example, enter 0.45.
      Field 1013 is greater than 1,
      For example, 1.456
      Delete the field.
      The tax period is prior to 201712, Delete the field.

Field 1014 - Form 8996 - Part III, Line 14

  1. Field 1014 is located on Form 8996, Part III, Line 14.

  2. Invalid Condition - Field 1014 is invalid if:

    • The field is more than 15 characters.

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

    • The tax period prior to 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 prior to 201712, delete the field.

Section 11 Data - Form 1120

  1. This section contains instructions for correcting Section 11 Field Errors.

  2. Section 11 contains data from the Balance Sheets per Books (Form 1120, Schedule L).

  3. Fields 11DAE, 11CSE, AND 11TLE must be positive only. All other fields may be positive or negative.

  4. All fields in this section are transcribed in dollars only.

  5. When the balance sheet should not be transcribed, (amended, final, etc.), Code-and-Edit will cross out the balance sheet.

Section 11 Field Errors

  1. Correctable Section 11 fields are listed below:

    Field Designator Field Length Valid Entry Title Form 1120 Schedule L
    11TNE 15 Dollars only
    Positive or Negative
    Trade Notes and Accounts Receivable Line 2a(c)
    11LTE 15 Dollars only
    Positive or Negative
    Loans to Shareholders (Ending) Line 7(d)
    11DAE 15 Dollars only
    Positive
    Depreciable Assets Less Depreciation Ending Line 10b(d)
    11TAB 15 Dollars only
    Positive or Negative
    Total Assets (Beginning) Line 15(b)
    11TAE 15 Dollars only
    Positive or Negative
    Total Assets (Ending) Line 15(d)
    11CLO 15 Dollars only
    Positive or Negative
    Current Liabilities Other (Ending) Line 18(d)
    11LFE 15 Dollars only
    Positive or Negative
    Loans from Shareholders (Ending) Line 19(d)
    11OLE 15 Dollars only
    Positive or Negative
    Other Liabilities (Ending) Line 21(d)
    11CSE 15 Dollars only
    Positive
    Capital Stock (Ending) Line 22b(d)
    11REB 15 Dollars only
    Positive or Negative
    Retained Earnings (Beginning) Line 25(b)
    11TLE 15 Dollars only
    Positive
    Total Liabilities and Equity (Ending) Line 28(d)
  2. Invalid Condition - Section 11 field errors will display if a field is not all numeric.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If a "positive only" field is negative, delete the field.

Section 12 Data - Form 1120

  1. This section contains instructions for correcting Section 12 Field Errors.

  2. Section 12 contains data from Form 8050, Direct Deposit of Corporate Tax Refund.

    Note:

    Direct Deposit refunds are not valid for prior year returns.

  3. Form 8050 is not edited. The taxpayer's information must be processed as reported.

Section 12 Field Errors

  1. Section 12 fields are listed below:

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

Field 12RTN - Routing Transit Number (RTN)

  1. Field 12RTN is transcribed from Line 1, Form 8050. Field 12RTN is a 9 digit numeric or blank field.

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

    • It is between 01 through 12.

    • It is between 21 through 32.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. If the information on the return is not valid, delete Field 12RTN.

Field 12DAN - Depositor Account Number (DAN)

  1. Field 12DAN is transcribed from Line 2, Form 8050. Field 12DAN may be up to 17 characters.

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

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

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

  3. Correction Procedures:

    1. Correct any transcription errors.

    2. Check Line 2 of Form 8050.

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

Field 12DDC - Direct Deposit Code

  1. Field 12DDC is a computer generated field and is not correctable. The Direct Deposit Code is included in the Section 12 screen display for information only.

  2. Field 12DDC may be blank or it may contain a two-digit number that's used by the Master File to generate a notice to the taxpayer.

Field 12TDA - Type Depositor Account

  1. Field 12TDA is transcribed from Line 3, Form 8050. Field 12TDA may be blank or a one-digit alpha code ("C" or "S" ).

  2. Invalid Condition - Field 12TDA is invalid if:

    • It is present and the entry is not "C" for Checking or "S" for Savings.

  3. Correction Procedures:

    1. Correct any transcription errors.

    2. If both or neither box (Checking or Savings) is marked, enter "C" in Field 12TDA.

Section 14 Data - Form 1120

  1. This section contains instructions for correcting Section 14 Field Errors.

  2. Section 14 contains data from Form 1120, Schedule N, Foreign Operations of U.S. Corporations.

  3. Section 14 data is valid for tax periods beginning after 199912.

Section 14 Fields Errors

  1. Correctable Section 14 fields are listed below:

    Field Designator Field Length Title Location
    14Q01 1 Disregarded Entity Schedule N, Line 1a
    14Q02 3 Number of Forms 8865 Schedule N, Line 2
    14Q03 1 Direct/Indirect Interest Schedule N, Line 3
    14Q4A 1 Controlled Foreign Corporation Schedule N, Line 4a
    14Q4B 3 Number of Forms 5471 Schedule N, Line 4b
    14Q05 1 Foreign Trust Distribution Schedule N, line 5
    14Q6A 1 Foreign Country Financial Account Schedule N, Line 6a
    14Q6B 2 Foreign Country Code Schedule N, Line 6b
    14Q7A 1 Extraterritorial Income Exclusion (EI) Schedule N, Line 7a
    14Q7B 3 Number of Forms 8873 Schedule N, Line 7b
    14Q7C 11 Total EI Exclusion Schedule N, Line 7c

Field 14Q01 - Disregarded Entity

  1. Field 14Q01 is transcribed from the left of Form 1120, Schedule N, Line 1.

  2. Invalid Condition - Field 14Q01 is invalid if it is not blank or an entry other than "1" , "2" or "3" is present.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

      If Then
      Form 1120, Schedule N, Line 1 box is "yes" , Enter "1" in Field 14Q01.
      Form 1120, Schedule N, Line 1 box is "no" , Enter "2" in Field 14Q01.
      Both the "yes" and "no" boxes are checked, Enter "3" in Field 14Q01.
      Neither box is checked, Delete Field 14Q01.

Field 14Q02 - Number of Forms 8865

  1. Field 14Q02 is transcribed from the dotted line area of Form 1120, Schedule N, Line 2.

  2. Invalid Condition - Field 14Q02 is invalid if it is not all blank or numeric 001 through 999.

  3. Correction Procedure - Correct coding and transcription errors and misplaced entries.

Field 14Q03 - Direct/Indirect Interest

  1. Field 14Q03 is transcribed from the left of line Form 1120, Schedule N, Line 3.

  2. Invalid Condition - Field 14Q03 is invalid if it is not all blank or an entry other than "1," "2" or "3" is present.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

      If Then
      Form 1120, Schedule N, Line 3 box is "yes" , Enter "1" in Field 14Q03.
      Form 1120, Schedule N, Line 3 box is "no" , Enter "2" in Field 14Q03.
      Both the "yes" and "no" boxes are checked, Enter "3" in Field 14Q03.
      Neither box is checked, Delete Field 14Q03.

Field 14Q4A - Controlled Foreign Corporation

  1. Field 14Q4A is transcribed from the left of Form 1120, Schedule N, Line 4a.

  2. Invalid Condition - Field 14Q4A is invalid if it is not all blank or an entry other than "1," "2" or "3" is present.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    If Then
    Form 1120, Schedule N, Line 4a box is "yes" , Enter "1" in Field 14Q4A.
    Form 1120, Schedule N, Line 4a box is "no" , Enter "2" in Field 14Q4A.
    Both the "yes" and "no" boxes are checked, Enter "3" in Field 14Q4A.
    Neither box is checked, Delete Field 14Q4A.
  4. If Form 1120, Schedule N, Line 4a is checked "yes" or Forms 5471 are attached, GTSEC 03. Enter "2" in Field 03ADC and in the margin to the left of “Deductions” section of the return following "2" .

Field 14Q4B - Number of Forms 5471

  1. Field 14Q4B is a 3 digit field. It is transcribed from the dotted line area of Form 1120, Schedule N, Line 4b.

  2. Invalid Condition - Field 14Q4B is invalid if it is not blank or numeric 001 through 999.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

    2. Enter preceding zeros if a one-digit or two-digit number is shown on the return. Example: "5" must be entered as "005."

Field 14Q05 - Foreign Trust Distribution

  1. Field 14Q05 is transcribed from the left of Form 1120, Schedule N, Line 5.

  2. Invalid Condition - Field 14Q05 is invalid if it is not all blank or an entry other than "1" , "2" or "3" is present.

  3. Correction Procedures:

    1. Correct coding and transcription errors and misplaced entries.

      If Then
      Form 1120, Schedule N, Line 5 box is "yes" , Enter "1" in Field 14Q05.
      Form 1120, Schedule N, Line 5 box is "no" , Enter "2" in Field 14Q05.
      Both the "yes" and "no" boxes are checked, Enter "3" in Field 14Q05.
      Neither box is checked, Delete Field 14Q05.

Field 14Q6A - Foreign Country Financial Account

  1. Field 14Q6A is transcribed from the left of Form 1120, Schedule N, Line 6a.

  2. Invalid Condition - Field 14Q6A is invalid if it is not all blank or an entry other than "1," "2" or "3" is present.