3.21.3 Individual Income Tax Returns

Manual Transmittal

November 10, 2017

Note:DO NOT REMOVE AND INSERT PAGES OR DISPOSE OF OBSOLETE TRANSMITTALS PRIOR TO 01/01/2016.

Purpose

(1) This transmits revised Internal Revenue Manual (IRM) 3.21.3, International Returns and Documents Analysis - Individual Income Tax Returns.

Material Changes

(1) Various editorial changes have been made throughout this IRM.

(2) Revised figures and exhibits throughout the IRM.

(3) Updated IRM references throughout the IRM.

(4) Updated money amounts, tax periods, received dates (Julian dates and calendar dates), transcription lines (to reflect current year forms and schedules) and tax years throughout IRM.

(5) IRM 3.21.3.1 -- Added new a new subsection - Program, Scope and Objectives

(6) IRM 3.21.3.1.1 -- Added a new subsection - Background

(7) IRM 3.21.3.1.2 -- Added anew subsection - Authority

(8) IRM 3.21.3.1.3 -- Added a new subsection - Responsibilities

(9) IRM 3.21.3.1.4 -- Added a new subsection - Program and Objectives

(10) IRM 3.21.3.1.5 -- Added new subsection - Terms and Definitions

(11) IRM 3.21.3.1 -- Deleted subsection for Overview

(12) IRM 3.21.3.3 -- Deleted Form 8891, U.S. Information Return for Beneficiaries of Certain Canadian Registered Retirement Plans

(13) IRM 3.21.3.3.2
(2) -- Revise a) and b) and also add two (2) Notes to be
Added new (3) for Closer Connection Exception
Added new (4) for Choosing Resident Alien Status
Revised (6) a)
Revised (7), (8) and (9)

(14) IRM 3.21.3.4 -- Programs worked in Code & Edit
Deleted OFTP from program 46112
Added Program 46175, Form 1040 ITIN - IVO

(15) IRM 3.21.3.4.2(2)d) -- Updated the line numbers for Form 1040NR.

(16) IRM 3.21.3.5.4(2) -- 1st bullet, Added a Note to edit 041718 for April 23rd and later on a timely return with no received date.

(17) IRM 3.21.3.6.1 -- Correspondence When Sending Returns Back to the Taxpayer:
(2) - Added a new (g), Filer’s U.S. status (Form 1040NR indicating resident in the U.S. all year
(3) - Deleted (c), Date stamp the correspondence with the current date . Use any IRS date stamp other than a received date stamp.

(18) IRM 3.21.3.6.2 -- Correspondence When Not Sending Returns Back to the Taxpayer:
IPU 17U0209 issued 1-21-17 Added a new (3), Prepare Form 13900 to initiate Letter 4087C using the following steps
Added a new (6), Remove the return from the batch and place in the designated area.
Deleted (8).

(19) IPU 17U0209 issued 1-21-17 IRM 3.21.3.6.3(1) -- Added 2nd sentence, If a second correspondence is required, remove Form 9143 or Form 13557.

(20) IPU 17U0209 issued 1-21-17 IRM 3.21.3.6.5 -- Added new (3) - When the correspondence sheet (Form 9143 or Form 13557) is not attached, consider all correspondence conditions were included when the correspondence was sent., (4) - If a no reply correspondence condition is not identified in the chart below, edit CCC "U" and take no further action., (5) - If CCC "3" is edited, edit it first.

(21) IRM 3.21.3.6.6 -- Correspondence Action Chart:
(1) -- Form 1040, Added Loose H-PR
(2) -- Form 2555 and Form 2555-EZ, deleted the 1st row of the table
Deleted (5) for Form 8689
(8) -- Form 1040NR, Page 3 (Itemized Deductions), Line 7 -- Changed ≡ ≡ ≡ ≡ ≡ ≡ to ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

(22) IPU 17U1003 issued 6-13-17 IRM 3.21.3.7(2) -- Removed 5th bullet for International Unallowable Codes

(23) IRM 3.21.3.7.2- Sequence of Transcribed Schedules and Forms:
(2) -- Added an Exception, If a current year Form 1042-S is attached to a current year Form 1040NR or Form 1040NR-EZ.
(3) -- Deleted Form 4562-FY and Form 8834 and Note at the end of the table from the list of any form that shares a sequence code with a transcribed form.
(9) -- Deleted Form 8917 from the table of transcribed forms and schedules

(24) IRM 3.21.3.7.4(3) -- Added (d), When computing and editing an entry directed in the line-by-line instructions and an Exception to not edit "00" to indicate no cents.

(25) IRM 3.21.3.7.6(4) -- Deleted Form 8891 from International Audit Code "H" .

(26) IPU 17U1003 issued 6-13-17 - Deleted the entire subsection for International Unallowable Codes

(27) IRM 3.21.3.7.8 -- Added new (1) with the definition of Special Processing Codes (SPC).

(28) IRM 3.21.3.8(5) -- Added a 2nd Note with indications of transshipped returns.

(29) IPU 17U0209 issued 1-31-17 IRM 3.21.3.8.4(5) -- Added a), Do not edit CCC "N" on Form 1040NR and Form 1040NR-EZ. these taxpayers do not qualify for the special extension.
(5)b) -- Deleted the Note and Caution.
(5)h) -- Added a 1st Note for editing CCC "N"

(30) IPU 17U0572 issued 3-28-17 IRM 3.21.3.9(2) -- For RPC "V" , changed four-digit numeric to three-alpha character
IPU 17U0209 issued 1-31-17 (3) -- Added, If the return contains page 1 from Form 1040 and page 2 from Form 1040NR or vice-versa,

(31) IPU 17U0209 issued 1-31-17 IRM 3.21.3.9.1
(1), (2) and (9) -- Added a 1st sentence to the Note
Deleted (5)
Added new (12), Follow local procedures for completing and routing Forms 1040X with an Accounts Management coversheet.

(32) Deleted the subsection for September 1, 2012 -- Streamlined Program

(33) Deleted the subsection for Corresponding on September 1, 2012 -- Streamlined Returns.

(34) IPU 17U0209 issued 1-31-17 IRM 3.21.3.9.1.1 -- Changed the title of the subsection from "July 1, 2014 Streamlined Project" to "2014 Streamlined Filing Compliance Procedures" .
Added a new (2), If a Streamline return is received without a Taxpayer Identification Number (TIN), search the package for a valid TIN. If no TIN is found, route the uncoded package to Entity Control for an IRSN using a Streamline yellow tag. Also added a Note, An IRSN must be assigned before the package can be routed to Statute.

(35) IRM 3.21.3.9.1.2 -- Changed the title of the subsection from "Corresponding on July 1, 2014 Streamline Returns" to "Corresponding for 2014 Streamlined Filing Compliance Procedures"
IPU 17U0350 issued 2-23-17 (1)a) -- Added an Exception after the Note, Any return received from LB&I with the notations of "Process as Streamline" and "Reviewed by LB&I" and there is a copy of the original certification, do not correspond for original certification.
IPU 17U0350 issued 2-23-17 (1)b) -- Added an Exception after the Note, Any return received from LB&I with the notations of "Process as Streamline" and "Reviewed by LB&I" and there is a copy of the original certification, do not correspond for original certification.

(36) IRM 3.21.3.9.1.3 -- Changed title of the subsection from "Amended/Duplicate Submitted for Streamline Processing" to "Amended/Duplicate Returns Submitted for 2014 Streamlined Filing Compliance Procedures"

(37) IRM 3.21.3.9.6 -- Revised the title to include, "Registered Domestic Partnership Returns"

(38) IPU 17U085 issued 2-13-17 IRM 3.21.3.11, Added new (2) for Australian residents often use a June (06) fiscal tax period ending date that coincides with the Australian accounting period. Follow taxpayer intent and YY06 for the tax period when June 30th is indicated as the tax period ending date on the tax return for an Australian resident.
IPU 17U0699 issued 4-18-17 IRM 3.21.3.11, Added new (3) for New Zealand residents often use a June (06) fiscal tax period ending date that coincides with the New Zealand accounting period. Follow taxpayer intent and YY06 for the tax period when June 30th is indicated as the tax period ending date on the tax return for an New Zealand resident.
Added a new (4) for the United Kingdom and their due date is April 5th.

(39) IRM 3.21.3.12.3.2(2) -- Added an "Exception" , Do not underline the foreign mailing address if no province, city or postal code is present.
(3)b) -- Deleted the Note.

(40) IPU 17U0285 issued 2-13-17 IRM 3.21.3.12.3.3(3)h, Corrected the table for Correct Address Coding for Puerto Rico

(41) IRM 3.21.3.12.7(1), Added a Reminder for "Palestine" .

(42) IPU 17U0209 issued 1-31-17 IRM 3.21.3.13.1(1), Added 6b or to existing 6c in a) and b).

(43) IPU 17U0350 issued 2-23-17 IRM 3.21.3.15.1.5, Revised the wording in (2) and moved the Caution from (2) to under b).
Added Hungary to the RPC "S" instruction.

(44) IPU 17U0350 issued 2-23-17 IRM 3.21.3.15.1.10, Revised the wording in (2) and moved the Caution from (2) to under b).

(45) IPU 17U0350 issued 2-23-17 IRM 3.21.3.15.1.11, Revised the wording in (2) and moved the Caution from (2) to under b).
Added Hungary to the RPC "S" instruction.

(46) IRM 3.21.3.15.1.13(1), Added Hungary and India. Also Added a Note.

(47) IRM 3.21.3.15.1.14(1), Removed Form 1099 MISC from the table. Added a Note to IRC § 871. IPU 17U0350 issued 2-23-17, Added a Note to IRC § 893. Added Hungary to Self-Employment Income row and changed (3) to a Note. Added Hong Kong to the Exception for Treaty.

(48) IPU 17U1003 issued 6-13-17 IRM 3.21.15.2.4, Deleted (2) for Unallowable 95.

(49) IRM 3.21.3.15.2.10, Deleted the subsection for Student Loan Interest Deduction

(50) IRM 3.21.3.15.2.11, Deleted (1) and added Reserved.

(51) IRM 3.21.3.15.2.13(4), Deleted bullet for Deduction for Clean Fuel Vehicle and added new bullet for USOC (United States Olympic Committee).
IPU 17U1003 issued 6-13-17 Deleted (9) for Unallowable 99.

(52) IRM 3.21.3.15.3.5, Deleted (2) and (3) and made them a) and b) under (1). Also changed (!) to (y) for correspondence on Form 13900.

(53) IPU 17U0209 issued 1-31-17 IRM 3.21.3.15.4.1(2), Deleted Cuba from the table and (3).

(54) IPU 17U0350 issued 2-23-17 IRM 3.21.3.15.5.1, Revised the wording in (1)

(55) IRM 3.21.3.15.6.1(1), Deleted Form 8959.
(4) IPU 17U0209 issued 1-31-17 Changed Wages to Income.
(5), Deleted Form 8959 and added an Exception to the Then column.
(13)a), Moved note from 2nd bullet and added it to the 1st bullet.
(14) Note, Changed Form W-2 to other withholding documents in the 1st bullet.

(56) IPU 17U0350 issued 2-23-17 IRM 3.21.3.15.6.3(5), Added a Note.
IPU 17U0350 issued 2-23-17 Added a new (9).

(57) IPU 17U0285 issued 2-13-17 IRM 3.21.3.15.6.5, Deleted (6).

(58) IRM 3.21.3.15.6.8, Deleted (Note 1) and (Note 2) and made them a) and b) under (1). Also changed (!) to (y) for correspondence on Form 13900.

(59) IRM 3.21.3.15.11, Added a new (1) for the location of the IP PIN.

(60) IPU 17U1003 issued 6-13-17 IRM 3.21.3.17(4), Deleted Unallowable "95" .

(61) IRM 3.21.3.26(2), added a new figure -- Adjusting Line 1a, Form 1116.
IPU 17U0209 issued 1-31-17 (4), Deleted Cuba from the table.

(62) IRM 3.21.3.29(1), Updated the T-Lines for Form 3800.

(63) IRM 3.21.3.30(1), Updated the T-Lines for Form 4136.

(64) IRM 3.21.3.39.1(2), Revised the wording in the table.

(65) IRM 3.21.3.39.2(1), Deleted the 1st sentence, last row in the If column.

(66) IPU 17U0350 issued 2-23-17 IRM 3.21.3.39.5(3), Changed the Ending Date for Cuba to Still in Effect.
(6), Added a reminder to the 1st row, Then column after the 2nd bullet.

(67) IRM 3.21.3.39.10, Added a Note and a Reminder for RPC "M" .

(68) IPU 17U1064 issued 6-27-17 IRM 3.21.3.45(3), Changed Form 1040 to Form 1040-PR when preparing a "dummy" form.
(3) c), Changed the Form 1040 line numbers to the 1040-PR line numbers.
f), Added a correspondence literal

(69) IRM 3.21.3.54, Deleted (1) for Form 8917 and changed it to "Reserved" .

(70) IRM 3.21.3.57(1), Revised to explain the sequence coding.

(71) IRM 3.21.3.60(1), Updated the T-Lines for Form 8867.

(72) IRM 3.21.3.63(1), Updated the T-Lines for Form 8962.

(73) IRM 3.21.3.66.1.2, Deleted (2).
(4), Deleted b).

(74) IRM 3.21.3.67.1.2(3), Deleted b).

(75) IRM 3.210.3.69.2(1), Deleted 2nd half of the sentence in the last row, Then column.

(76) IRM 3.21.3.70(4), Deleted 2nd half of the sentence in the last row, Then column.
Added a new (8) to research before corresponding.

(77) IPU 17U0209 issued 1-31-17 IRM 3.21.3.70.1, Added dotted portion of Line 11 to T-Line list for Form 1040-Pr and Form 1040-SS.

(78) IRM 3.21.3.70.3.1(2), Revised the Filing Status table.
(3), Deleted the 2nd row in the table.

(79) IPU 17U0350 issued 2-23-17 IRM 3.21.3.70.3.9, Deleted (4).

(80) IRM 3.21.3.70.3.18, Added a new (1) for the location of the IP PIN.

(81) IRM 3.21.3.70.3.19(1), Added E-File Waiver for Form 1040-SS.

(82) IRM 3.21.3.70.7, Deleted (3).

(83) IRM 3.21.3.70.8, Deleted (3).

(84) IRM 3.21.3.71(1), Added new b) and d).

(85) IRM 3.21.3.72(9), added "Exclusions Due to Tax Treaties" to the bullet list.

(86) IRM 3.21.3.72.5(1), Deleted "or Form 1040NR-EZ" .

(87) IPU 17U0209 issued 1-31-17 IRM 3.21.3.72.6, Added a beginning sentence to the "Exception" .

(88) IRM 3.21.3.72.7(1), Added a Note.

(89) IRM 3.21.3.72.7.1, Added a new (3) for Tax Treaty Table footnotes.

(90) IRM 3.21.3.72.9, Added new (1) and Revised (2) and added an alpha list.

(91) IRM 3.21.3.72.11(2), Added Hungary and additional information for India.

(92) IRM 3.21.3.72.13(6), Added a 2nd sentence and a Note.

(93) IRM 3.21.3.73.2(1), Added Special Processing Code to the T-Line table for Form 1040NR
(4), Added Special Processing Code to the T-Line table for Form 1040NR-EZ.

(94) IRM 3.21.3.73.5.1(3), Added a reminder for "Palestine" .

(95) IRM 3.21.3.73.6(4), Added "All boxes checked or" to the beginning of the sentence in the If column, last row.

(96) IRM 3.21.3.73.8.7:
(1), Deleted the 1st bullet, Form W-2.
(3), Revised the instructions and added an Alpha List.

(97) IRM 3.21.3.74(2), Added a new bullet for Article XXV of the U.S.

(98) IRM 3.21.3.74.5.3(1), deleted, 1st bullet , Form W-2.

(99) IPU 17U0209 issued 1-31-17 IRM 3.21.3.74.8.9(3), Added losses to gains in the 1st row, Then column

(100) IRM 3.21.3.73.8.15(1), Deleted the instruction "while performing other required searches" .

(101) IRM 3.21.3.73.8.16, Deleted (4).
(10), Added an alpha list and deleted the Note.

(102) IPU 17U0209 issued 1-31-17 IRM 3.21.3.73.8.17:
(2), Added a 3rd Note for Exchange Visitor.
Added a new (5).
Added a new (8) for Tax Treaty Table footnotes.

(103) IPU 17U1003 issued 6-13-17 IRM 3.21.3.73.9.3, Deleted (2) for Unallowable "95" .

(104) IRM 3.21.3.73.9.7(4), Added examples of school-related expenses to the Then column, 1st row
Revised the Then column, 2nd row.

(105) IRM 3.21.3.73.9.8, Deleted (3) and the bullet list.

(106) IPU 17U0209 issued 1-31-17 IRM 3.21.3.73.9.10(10, revised the wording.

(107) IRM 3.21.33.4.9.11(4), Deleted bullet for Deduction for Clean Fuel Vehicle and added new bullet for USOC (United States Olympic Committee).

(108) IRM 3.21.3.73.9.12(1), Deleted the Exception.

(109) IRM 3.21.3.73.9.13(1), Added an Exception.

(110) IRM 3.21.3.73.10.3, Deleted (5) for Form 4972.

(111) IRM 3.21.3.73.10.5(1), Deleted the Note and made it a). Added a new b) under (1). Also changed (!) to (y) for correspondence on Form 13900.

(112) IPU 17U0285 issued 2-13-17 IRM 3.21.3.73.11(2), Deleted Cuba from the table.
Deleted (3) and (4), Line 46 -- Foreign Tax Credit.

(113) IPU 17U0285 issued 2-13-17 IRM 3.21.3.73.11.4, Deleted (2) and the alpha.

(114) IRM 3.21.3.73.12.4(3), Changed Part VIII to part IX for Line 57.

(115) IPU 17U1181 issued 7-24-17 IRM 3.21.3.73.13.1:
Added a Caution to (3)b).
(4), Changed wages to income.
IPU 17U0905 issued 5-25-17 (4)a), Added "X" line 62a to the start of the sentence.
(7), Changed Form W-2 to other withholding documents in the Note.

(116) IPU 17U0905 issued 5-25-17 IRM 3.21.3.73.13.2(2), Added "X" line 62b after or more,.

(117) IPU 17U0905 issued 5-25-17 IRM 3.21.3.73.13.3(1)a), Added "X" line 62c after attached,
(2), revised the wording.
IPU 17U0285 issued 2-13-17 (2)c), deleted the Reminder and the Note.

(118) IPU 17U0905 issued 5-25-17 IRM 3.21.3.73.13.4(2), Added "X" line 62d after missing.

(119) IPU 17U0285 issued 2-13-17 IRM 3.21.37.3.13.6, Deleted (2) and (3).

(120) IRM 3.21.3.73.13.7, Deleted the Note and made it a). Added a new b) under (1). Also changed (!) to (y) for correspondence on Form 13900.

(121) IPU 17U0905 issued 5-25-17 IRM 3.21.3.73.13.9(2)d), Added a Note to keep both form 843 and Form 8316 together.
(3) Deleted the note under d).

(122) IRM 3.21.3.73.15, Added a new (1) for Rev. Rule 68-500 for Signature.

(123) IRM 3.21.3.73.17, Added a new (1) for the location of the IP PIN.

(124) IPU 17U0823 issued 5-09-17 IRM 3.21.3.73.19(1), deleted and page 4 from the end of the sentence.
(1) Added an Exception, to not "X" page 3 if page 4 has T-Lines present or edited.
(5), 3rd row, then column Added a Note to not compute line 15.
(5), Added a new row to the table for a country other than India claiming a standard deduction
IPU 17U1003 issued 6-13-17, deleted (7) and the Reminder, (8) and the Reminder for Unallowables.
IPU 17U1003 issued 6-13-17, deleted (9) for Unallowables.

(125) IPU 17U1003 issued 6-13-17 , deleted the subsection for Unallowable 95.

(126) IPU 17U0285 issued 2-13-17 IRM 3.21.3.73.19.2, Added a new subsection for Line 2 -- Gifts by Cash or Check

(127) IPU 17U0285 issued 2-13-17 IRM 3.21.3.73.19.3 (2) and (3), "changed or more" to "more than"
Deleted (7) for Unallowables.

(128) IPU 17U0350 issued 2-2-13-17 IRM 3.21.3.73.19.5(1), Added an instruction if "See Note" is present.

(129) IRM 3.21.3.74.19.11(1) -- Added an "Exception" to not adjust or compute.

(130) IPU 17U1003 issued 6-13-17 IRM 3.21.3.73.20, Deleted (5)b) for Unallowables.

(131) IPU 17U0285 issued 2-13-17 IRM 3.21.3.73.20.1(8) Caution, Deleted the last sentence with funny box instructions.

(132) IRM 3.21.3.74(2), 2nd bullet, Changed "more than" to "or more" .
IPU 17U0285 issued 2-13-17 (4), 1st row, "Then column" deleted the Exception.
IPU 17U0285 issued 2-13-17 (4), Gambling row, Added "Compute"
IPU 17U0285 issued 2-13-17 (4), W-2G row, Added "Compute" .

(133) IPU 17U0350 issued 2-23-17 IRM 3.21.3.74.5.1(1), Treaty Exempt Income row, deleted the "And column" information and revised the "Then column" information.

(134) IRM 3.21.3.74.5.4, Added a new (5) for Tax Treaty Table footnotes.

(135) IPU 17U0285 issued 2-13-17 IRM 3.21.3.74.7.1 (1), 3rd row, Then column Deleted for state and local income taxes on line 11.

(136) IPU 17U0285 issued 2-13-17 IRM 3.21.3.74.8.1, Revised (1) and (2).
Deleted (3), (4) and (5).

(137) IRM 3.21.3.74.9.1(4)a), Added to "X" line 18a to the beginning of the sentence.
(7) Changed "Form W-2" to "other withholding documentation."

(138) IRM 3.21.3.74.9.2(2), Added to "X" line 18b and before correspond.
(3) Added incomplete to the sentence.

(139) IRM 3.21.3.74.13, Added a new (1) for the location of the IP PIN.

(140) IPU 17U0294 issued 2-14-17 IRM 3.21.3.75.5(5), Added spouse not claimed on 6b or 6c for FS 3.

(141) IRM 3.21.3.76.3.1.1.1(1), Added Hungary and additional information for India.

(142) IRM 3.21.3.76.2 (3)b), Added more conditions to the Note for when not to send returns to Statute control

(143) IRM 3.21.3.76.3.1.1.2(2), Added Hungary to the list of countries that qualify for RPC "S" .
(3) Added" and line 57 does not have a significant entry" after not attached.

(144) IPU 17U0285 issued 2-13-17 IRM 3.21.3.76.3.1.2.2(1), Revised the wording.

(145) IRM 3.21.76.3.1.2.5, Deleted (1) and Added a new (3) for Form 8903.

(146) Deleted the subsection for Line 46 -- Excess APTC Repayment.

(147) IPU 17U1156 issued 2-14-17 (2), Deleted Cuba.
(3) IPU 17U0285 issued 2-13-17 IRM 3.21.3.76.3.1.3(3), Added Cuba to the table.

(148) Deleted the subsection for Line 67 - Additional Child Tax Credit (Form 8812 and Schedule 8812).

(149) Deleted the subsection for Line 69 - Net Premium Tax Credit.

(150) IPU 17U0572 issued 3-28-17 IRM 3.21.3.76.3.1.5, Added a new subsection for Form 8938

(151) IRM 3.21.3.76.3.2, Deleted (5).
(7) - (13), Changed "Waiver" to "Date of Departure on or after" .
Added new (14) for South Sudan.

(152) Deleted subsection for Line 9 - Additional Child Tax Credit (ACTC).

(153) IRM 3.21.3.76.3.5(3), Deleted "07" from the table for Prior Year (PY) Form 1040-PR and From 1040-SS.

(154) IRM 3.21.3.76.3.7.1, Deleted (1) for Tax Year 2009 - 2016.

(155) IRM 3.21.3.76.3.7.2, Deleted (1) for TY 09 or TY16.

(156) IPU 17U0350 issued 2-23-17 Added a new subsection for Page 3, Schedule A - Other Miscellaneous Deductions.

(157) IPU 17U0285 issued 2-13-17 IRM 3.21.3.76.3.9(1), Changed "correspond for" to "convert" Form 1040NR.

(158) Deleted subsection for Special Returns.

(159) Added a new subsection for Receiving Form 8966, FACTA Report.

(160) Added a new subsection for Receiving Waivers and Extensions of Time to File Form 8966, Foreign Account Tax Compliance Act (FATCA) Report, Requests (Austin Submission Processing Center Only).

(161) Added a new subsection for Receiving Form 8809-I, Application for Extension of Time to File FATCA Form 8966 (Austin Submission Processing Center Only).

(162) Added a new subsection for Receiving Form 8508-I, Application for Extension of Time to File FATCA Form 8966 (Austin Stubmission Processing Center Only).

(163) Added new subsection for Populating Worksheets Excel workbook, Form 8508I (Austin Submission Processing Center Only)

(164) Added new subsection for Populating Worksheets Excel workbook, Form 8809I (Austin Submission Processing Center Only)

(165) Exhibit 3.21.3(1) - Attachment Guide, Added a Reminder.
IPU 17U0350 issued 2-23-17, CP 01H - Added An Exception.
IPU 17U0350 issued 2-23-17, LTR 2358C and LTR 2358C/SP - Deleted the Note and Added an Exception.
IPU 17U0350 issued 2-23-17, LTR 4087C - Deleted the Note and Added an Exception.
IPU 17U0905 issued 5-25-17, Form 843 - Added a Note to keep Form 843 and Form 8316 together.
Form 911 - Changed Detach from "No" to "Yes" and Deleted Action Code instructions in b).
IPU 17U1003 issued 6-13-17, Form 2848 - Deleted the Exception from the Detach column.
Deleted Form 8176 and Form 8176(SP).
IPU 17U0905 issued 5-25-17, Form 8316 - Added a Note to keep Form 843 and Form 8316 together.
IPU 17U1003 issued 6-13-17, Form 8822 -- Deleted (**) for Unallowable "95" in the Forms/Documents column.
Form 8830 - Changed "Take no action" to "Support for line 54, Form 1040 and Form 3800."
IPU 17U0285 issued 2-13-17 Form 8833 - Deleted RPC "9" in the Action Requested column.
Form 8843 - Changed "edit RPC 2" to "Take no action" .
Form 8862 - Corrected the title of the Form and Revised the Action Requested instructions.
IPU 17U1120 issued 7-11-17 Form 8938 - for January through September, Added (Recovery Processing) and for October through December, Added (Simultaneous Processing). Also added a 2nd Note to (4).
Added Form 13441-A, Health Coverage Tax Credit (HCTC) Monthly Registration and Update.
IPU 17U0350 issued 2-23-17 Amended Form 14654 - Added "No" to the Detach column.
Identity Theft Documentation, Added 2 new bullets to the Forms/Documents column.

(166) Exhibit 3.21.3-2, Form 1042-S Income Codes
IPU 17U0285 issued 2-13-17 15, Deleted the instruction for page 1, line 17b and the Note in the Where Income is Reported column.
28, Added or line 11 (depending on country of residence) in the Where Income is Reported column.
43, Deleted For Prior Year Only, the income code is 20 in the 2nd column for Prior Year Income Code.
54, New for TY 2017. Changed line "21" to "19" for Page 1 and added Page 4, line 2.

(167) Exhibit 3.21.3-3, Return Processing Codes (RPCs)
IPU 17U0285 issued 2-13-17, Deleted codes F, 2 and 9.
"G" , Added additional explanations.
"S" , Added and line 57 does not have a significant entry after and Schedule SE is not attached.
"S" , Added Hungary
Added "X" for Indicates LB&I screening of international returns for Revenue Protection.

(168) Exhibit 3.21.3-5, Province, State and Territory Abbreviations
IPU 17U0350 issued 2-23-17 Made corrections to Italy Provincia
Made corrections to The Netherlands Province.

(169) Exhibit 3.21.3-7, Country Codes
IPU 17U0848 issued 5-15-17 Changed Montenegro from "MJ" to "XX" .

(170) Exhibit 3.21.3-8, Housing Limitations for Form 2555 - updated Limitation on Housing Expenses (daily) and Limitation on Housing Expenses (full year).

(171) Exhibit 3.21.3-19, Letter 4087C Fill-in Paragraphs - Deleted Paragraphs (C) and (L).

(172) Exhibit 3.21.3-20, Letter 2894SP and Leter 2894C Fill-in Paragraphs
Letter 2894SP - Deleted PB and PC and Added PD.
Letter 2894C -- Deleted PG and PH and Added PJ.

Effect on Other Documents

IRM 3.21.3 dated November 8, 2017 (effective January 1, 2018) is superseded. The following Interim Procedural Updates (IPUs) issued from January 27, 2016 through September 19, 2016 have been incorporated into this IRM: 17U0209, 17U0285, 17U0294, 17U0350, 17U0524, 17U0572, 17U0699, 17U0823, 17U0848, 17U0905, 17U1003, 17U1064, 17U1101, 17U1120, 17U1156, 17U1181.

Audience

Wage and Investment (W&I) Code and Edit Tax Examiners

Effective Date

(01-01-2018)

Linda J Brown
Director, Submission Processing
Wage and Investment Division

Program Scope and Objectives

  1. Purpose: The Document Perfection Operation, Code & Edit Unit, prepares paper returns for processing by reviewing and editing the documents with specialized processing codes for use downstream. This Internal Revenue Manual (IRM) provides instructions for coding and editing international individual income tax returns for computer processing. Special codes are entered into the computer to perform specific functions. Editing is necessary because many returns are incomplete, contain invalid or misplaced entries, or are computed incorrectly. IRM 3.11.3, Individual Income Tax Returns, must be used for ALL International returns, including Form 1040, Form 1040A, Form 1040EZ, Form 1040NR, Form 1040NR-EZ, Form 1040-PR and Form 1040-SS, including transcribed forms and schedules when specific processing instructions are not outlined in this IRM 3.21.3. International returns will be processed with procedures in this IRM and IRM 3.11.3, jointly

  2. Audience: Tax examiners in Wage and Investment Division (W&I), Austin Submission Processing Service Center, Code & Edit Units are the primary users of this IRM.

  3. Policy Owner: The Director of Submission Processing is responsible for the policies in this IRM.

  4. Program Owner: The Code & Edit/ERS IMF Section of the Paper Processing Branch of Submission Processing is responsible for the procedures and all updates related to this IRM.

  5. Primary Stakeholders: Submission Processing (SP).

Background

  1. This section of the Internal Revenue Manual (IRM) provides instructions for coding and editing individual income tax returns for computer processing. Special codes are entered into the computer to perform specific functions. Editing is necessary because many returns are incomplete, contain invalid or misplaced entries or are computed incorrectly.

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)

    • IRC 6402(a)

    • IRC 6511

  2. Policy Statements for Submission Processing are contained in IRM 1.2.12,Servicewide Policies and Authorities, Policy Statement for Submission Processing Activities.

Responsibilities

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

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

  3. The Code & Edit team manager and lead is responsible for performance monitoring and ensuring tax technicians have the tools to perform their duties.

  4. The tax technicians are responsible for following the instructions contained in this IRM including all interim procedural updates (IPU).

Program and Objectives

  1. Program Goals: To timely review and edit all returns received in Code & Edit (C&E).

  2. Program Reports: The Monitoring Section under Submission Processing Program Management/Process Assurance monitors the Code & Edit reports.

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

    • Embedded Quality Submission Processing (EQSP)

    • Balanced Measures

    • Managerial Reviews

  4. Annual Review: The processes included in this manual are reviewed annually to ensure accuracy and promote consistent tax administration.

Terms and Definitions

  1. See Exhibit 3.21.3-21 for the glossary of frequently used terms.

Related Resources

  1. International Job Aid (2513-701), Coding and Editing International Income Tax Returns, was developed as a reference guide for this manual. This manual refers the tax examiner to clarifying information or exhibits in the Job Aid, where appropriate. When conflict between any referenced material and the IRM instructions occur, the IRM instructions takes precedence.

IRM Deviations

  1. IRM deviations must be submitted in writing following instructions from IRM 1.11.2.2, Internal Management Documents System - Internal Revenue Manual (IRM) Process, IRM Standards, and elevated through appropriate channels for executive approval.

International Returns

  1. International tax returns are identified by the presence of one of the following:

    • An address outside the 50 United States and Washington D.C. (This does not include APO(Army/Air Post Office)/DPO (Diplomatic Post Office)/FPO (Fleet Post Office) addresses).

    • Form 390 (American Samoa), American Samoa Individual Income Tax Return

    • Form 482.0/Formulario 482 (Puerto Rico), Planilla de Contribucion Sobre Ingresos de Individuous

    • Form 1040CM (CNMI), Commonwealth of the Northern Mariana Islands Territorial Individual Income Tax

    • Form 1040 GUAM, Guam Individual Income Tax Return

    • Form W-2 from American Samoa (W-2AS)

    • Form W-2 from CNMI (W-2CM)

    • Form W-2 from Guam (W-2GU)

    • Form W-2 from Virgin Islands (W-2VI)

    • Form 499R-2/W-2PR (Puerto Rican Withholding)

    • Form 1040NR, U.S. Nonresident Alien Income Tax Return

    • Form 1040NR-EZ, U.S. Income Tax Returns for Certain Nonresident Aliens With No Dependents

    • Form 1040-PR, Planilla para la Declaración de la Contribución Federal sobre el Trabajo por Cuenta Propia (Incluyendo el Crédito Tributario Adicional por Hijos para Residentes Bona Fide de Puerto Rico)

    • Form 1040-SS, U.S. Self-Employment Tax Return

    • Form 1042-S, Form SSA-1042S, or Form RRB-1042S

    • Form 2555, Foreign Earned Income

    • Form 2555-EZ, Foreign Earned Income Exclusion

    • Form 4563, Exclusion of Income for Bona Fide Residents of American Samoa

    • Form 5074, Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands (CNMI)

    • Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests

    • Form 8689, Allocation of Individual Income Tax to the U.S. Virgin Islands

    • Form 8804, Annual Return for Partnership Withholding Tax Under Section 1446

    • Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax

    • Form 8813, Partnership Withholding Tax Payment

    • Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b)

    • Form 8854, Initial and Annual Expatriation Information Statement

    • Form 8898, Statement for Individuals Who Begin or End Bona Fide Residence in a U.S. Possession

    • Form 14653, Certification by U.S. Person Residing Outside of the United States for Streamlined Foreign Offshore Procedures

    • Form 14654, Certification by U.S. Person Residing in the United States for Streamlined Domestic Offshore Procedures

    • Dual Status -- Form 1040 and Form 1040NR filed together for the same tax year, "Dual Status" or "D/S" indicated on the return (taxpayer claims part year residence and part year non - residence). Always leave Form 1040 and Form 1040NR or Form 1040NR-EZ for the same taxpayer together.

    • Nonresident Alien (NRA) -- Primary or both taxpayers are Nonresident Alien

      Exception:

      Primary taxpayer is a Nonresident Alien (NRA) without a Social Security Number (SSN) or an Individual Taxpayer Identification Number (ITIN); however, secondary taxpayer has an SSN/ITIN and reporting income.

    • International Tax Treaty -- taxpayer indicating exemption or exclusion of tax and/or income due to an International Tax Treaty.

      Note:

      An American Indian treaty return is not considered an international return. If no international condition exists, consider it a domestic return.

    • Treaty Trader

    • Fulbright Grantee

    • Internal Revenue Code (IRC) § 871, § 893, § 911, § 913, § 931, § 932, § 933, § 934 or § 935 is notated anywhere on the return.

    • Notation of "Streamlined" on the return or other Streamlined certification

    Caution:

    If none of the International conditions listed above are present, consider it a domestic return and process it accordingly.

  2. International returns are assigned File Location Code (FLC) 20 or 21. A return assigned FLC 20 or 21 that does not meet the definition of an international return must be assigned a new Document Locator Number (DLN). On a numbered return, edit Action Code "610 " (for non-remittance) or "611" (for remittance) as appropriate.

    Note:

    Returns on which taxpayers convert income paid in foreign currency to U.S. currency are not considered International (e.g., Canadian dollars converted to U.S. dollars).

Form 1042 and Form 1042-S

  1. Form 1042 and Form 1042-S are used by withholding agents to report tax withheld at source on certain income paid to foreign persons (nonresident alien individuals, foreign partnerships, foreign corporations or foreign trusts and estates) not engaged in a trade or business in the United States. Form 1042-S is a withholding document that identifies, by type, income that is subject to U.S. tax withholding and that is paid to nonresident aliens by U.S. payers.

  2. See Exhibit 3.21.3-2 which identifies the different types of income by Income Code and where the income is to be reported on Page 1 or 4, Form 1040NR or Page 1, Form 1040NR-EZ.

  3. If Form 1042-S is attached to Form 1040, Form 1040A or Form 1040EZ take the following actions:

    If Then
    Refund and the only income is from the Form 1042-S Correspond for the filer's U.S. status using Form 9143, box 26.

    Exception:

    Do not correspond if the taxpayer states they are a U.S. Resident Alien or the taxpayer has provided a copy of their resident alien card. Delete Form 1042-S withholding from line 64 and edit to the dotted portion of line 74.

    "Worldwide Income" is reported or the return is other than a refund Delete Form 1042-S withholding from line 64 and edit to the dotted portion of line 74 page 2, Form 1040.

    Note:

    If the taxpayer files Form 1040A or Form 1040EZ the return must be converted, unless corresponding for filer’s U.S. status.

  4. If a current year Form 1042-S is attached to a current year Form 1040NR or Form 1040NR-EZ, complete all coding of the return and take the following actions per local procedures:

    If Then
    All Forms 1042-S are in standard published 2017 format Sequence all Forms 1042-S to the back of the return facing out, stapling securely to the upper right corner of the return.
    All Forms 1042-S are a mixture of standard published 2017 format and non-standard format Sequence all standard published 2017 Forms 1042-S to the back of the return facing out, stapling securely to the upper right corner of the return.

    Note:

    Do not sequence non-standard Form 1042-S to the back of the return unless volume requires. Ensure non-standard Forms 1042-S are facing in opposite of standard Forms 1042-S.

    Note:

    Do not follow these steps for Form 1040 or for prior year Form 1040NR or Form 1040NR-EZ.

    Caution:

    If you notice the taxpayer submitted multiple copies of a standard published Form 1042-S, "X" out the duplicates.

    Example:

    Taxpayer submits Copy C and Copies B, D and/or E of Form 1042-S for the same claim, then "X" the additional copies.

International Returns Are Returns Filed By:

  1. Individual U.S. citizens living or traveling outside the United States are generally required to file U.S. income tax returns on which they must report their worldwide income.

  2. A foreign individual is considered a Resident Alien for U.S. tax purposes and must file Form 1040 if he or she meets either the "green card test" or the "substantial presence test" for the calendar year. If the foreign individual does not meet either of these tests, he or she is a nonresident alien for the calendar year and must file either Form 1040NR or Form 1040NR-EZ. See IRM 3.21.3.3.2(4) below.

    1. The Green Card Test is met, and therefore the individual is a resident alien when he or she is a lawful permanent resident of the United States according to the immigration laws at any time during the calendar year (i.e., the taxpayer has been issued an alien registration card also known as a "green card.) and this status has been revoked or administratively judicially determined to have been abandoned"

    2. To meet the Substantial Presence Test, and therefore be treated as a resident alien for the calendar year, the individual must be physically present in the United States on at least:
      • 31 days (or more) during the current tax year; and
      • 183 days (or more) during the 3 year period that includes the current tax year and 2 years immediately before that, counting (1) all the days of physical presence in the tax year, (2) 1/3 of days of physical presence in the first year prior to the current tax year and (3) 1/6 of the number of days of physical presence in the second year prior to the current tax year.

      Note:

      The following days of presence in the United States do not count for the substantial presence test:
      •Days the individual commutes to work in the United States from a residence in Canada or Mexico if he or she regularly commutes from Canada or Mexico. And individual commutes regularly if he or she commutes to work in the United States on more than 75% of the workdays during a working period in the current year.
      • Days the individual is in the United States for less than 24 hours when in transit between two places outside the United States.
      • Days the individual is in the United States as a crew member of a foreign vessel engaged in transportation between the United States and a foreign country or a U.S. possession. However, this exception doesn't apply if the individual is otherwise engaged in any trade or business in the United States on those days.
      • Days the individual intended to leave, but couldn't leave the United States because of a medical condition or medical problem that arose while in the United States. Whether the individual intended to leave the United States on a particular day is determined based on all the facts and circumstances.
      •Days the individual is an "exempt individual" .

      Note:

      An individual is an "exempt individual" , if he or she falls into any of the following categories:
      • An individual temporarily present in the United States as a foreign government-related individual under an A or G visa. However, this category doesn't include household staff of a foreign government-related individual present in the United States under an A-3 or G-5 visa.
      • A teacher or trainee temporarily present in the United States under a J or Q visa, who substantially complies with the requirements of the visa. Generally, an individual is not an exempt individual as a teacher or trainee if he or she was exempt as a teacher, trainee, or student for any part of 2 of the 6 preceding calendar years; however, he or she still may be treated as an exempt individual if all of the following conditions are met:
      + The individual was exempt as a teacher, trainee, or student for any part of 3 (or fewer) of the 6 preceding calendar years
      + A foreign employer paid all compensation during the current year
      * He or she was present in the United States as a teacher or trainee in any of the prior 6 years, and
      + A foreign employer paid all compensation during each of the preceding 6 years the individual was present in the United States as a teacher or trainee.
      + A student temporarily present in the United States under an F, J, M, or Q visa, who substantially complies with the requirements of the visa. An individual is not an exempt individual as a student in the current year if he or she has been exempt as a teacher, trainee, or student for any part of more than 5 calendar years unless he or she meets both of the following requirements:
      + The individual establishes that he or she does not intend to reside permanently in the United States; and
      + He or she substantially complied with the requirements of his or her visa.
      * A professional athlete temporarily present in the United States to compete in a charitable sports event.

  3. Closer Connection Exception -- Even if the individual meets the substantial presence test, he or she may still be treated as a nonresident alien if he or she is present in the United States for fewer than 183 days during the current calendar year, he or she maintains a tax home in a foreign country during the year, he or she has a closer connection to that country than to the United States, and he or she timely files a Form 8840, Closer Connection Exception Statement for Aliens, claiming to have a closer connection to a foreign country or countries. An individual may not claim a closer connection to a foreign country if he or she has applied for status as a lawful permanent resident of the United States or has an application pending for adjustment of status. Sometimes, a tax treaty between the United States and another country will provide special rules for determining residency for purposes of the treaty.

  4. Choosing Resident Alien Status -- Even if a foreign individual does not meet the green card test or substantial presence test, he or she may be able to choose to be treated as a resident alien for part of a calendar year by making the First-Year Choice or, if the individual is a nonresident alien married to a U.S. citizen or resident alien, the individual and his or her spouse may be able to make a joint election under I.R.C. § 6013(g) or (h) to treat the individual as a resident alien for the entire calendar year.

  5. Individuals from a U.S. Territory

    1. American Samoa, see IRM 3.21.3.65.

    2. Guam, see IRM 3.21.3.66.

    3. Commonwealth of Northern Mariana Islands, see IRM 3.21.3.67.

    4. U.S. Virgin Islands, see IRM 3.21.3.68.

    5. Puerto Rico, see IRM 3.21.3.69.

  6. Nonresident Aliens, who are taxed:

    1. On their U.S. source income from which the U.S. tax due has not been fully withheld; and

    2. On income that is effectively connected with a U.S. trade or business.

  7. Nonresident Aliens who are residents of a foreign country under the rules has an income tax treaty between the foreign country and the United States. The U.S. has income tax treaties (conventions) with a number of countries. Under these treaties, residents of the foreign country are (if eligible) taxed at a reduced rate, or are exempt from U.S. income taxes on certain types of income they receive from sources within the U.S. These reduced rates and exemptions vary among tax treaties and specific items of income. An individual is a resident of a foreign country under an income tax treaty if he or she is treated as a resident under the domestic laws of that country for income tax purposes. Some treaties provide that citizenship alone is not sufficient to establish residency for treaty purposes and impose additional requirements, such as physical presence within the purported residence country. See IRM 3.21.3.72.7 for more information about tax treaties.

  8. Dual Status Taxpayers -- A individual who is a resident alien and nonresident alien in the United States within the same tax year. This condition usually occurs in the year of arrival in the U.S. or departure from the U.S. The taxpayer will file Form 1040 and Form 1040NR/Form 1040NR-EZ with Dual-Status Return written across the top of the return for the tax year, based on the taxpayer's residence on the last day of the year.

    1. If the individual is a resident of the U.S. on the last day of the tax year, he or she will file Form 1040 with a statement attached, such as a Form 1040NR/Form 1040NR-EZ for the portion of the year that he or she was a nonresident alien.

    2. If the individual is NOT a resident of the U.S. on the last day of the tax year, her or she will file Form 1040NR or Form 1040NR-EZ with a statement attached, such as a Form 1040 for the portion of the year he or she was a resident alien..

  9. U.S. Citizens and U.S. Residents Living Abroad Who Qualify for Foreign Earned Income Exclusion § 911 -- A taxpayer who meets the specific requirements of IRC§ 911(b)(2)(D) may claim an exclusion of foreign earned income up to the amount currently allowed and for this year the amount is $102,100 and an exclusion of housing expenses. The taxpayer may claim the foreign earned income exclusion and either the housing exclusion or deduction if the taxpayer has a tax home in a foreign country or countries and the taxpayer is:

    1. A U.S. citizen who has been a bona fide resident of a foreign country or countries for an uninterrupted period (regardless of physical presence) that includes an entire taxable year, or

    2. A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty with an applicable nondiscrimination clause, and who is a bona fide resident of a foreign country for an uninterrupted period that includes an entire year, or

    3. A U.S. resident alien who has been physically present in a foreign country or countries for 330 days during a period of 12 consecutive months.

Visas

  1. A visa is assigned to an individual by the United States Immigration and Naturalization Service based on the individual's immigrant or non-immigrant status. These visas are assigned to non-immigrants admitted temporarily to the U.S. for specific purposes and periods of time. See Exhibit 3.21.3-9.

  2. The method of taxation of a visa-holder depends primarily upon whether the individual is as a resident or a nonresident alien for tax purposes.

    1. A nonresident alien, is taxed on all United States source income and on all income that is effectively connected with the conduct of a trade or business in the United States. Non-effectively connected foreign source income is not taxed the same way as U.S. citizens, and their worldwide income is subject to U.S. tax.

    2. Resident aliens are generally taxed the same way as are U.S. citizens.

U.S. Income Reporting Requirements

  1. United States citizens and resident aliens (green card holders) are required to file Form 1040, Form 1040A, or Form 1040EZ and must report 100 percent (%) of their worldwide Income. Worldwide Income is income from ALL sources and includes foreign and United States Income reported on the following lines:

    1. For Form 1040, lines 7 through 21.

    2. For Form 1040A, lines 7 through 15.

    3. For Form 1040EZ, lines 1 through 4.

    Note:

    U.S. resident aliens are individuals who meet either the green card test or the substantial presence test for the calendar year, or if eligible, they choose to be treated as a resident alien..

  2. Nonresident Aliens are generally required to report ONLY U.S. source income on which the amount of tax withheld didn't fully satisfy the tax due and income that is effectively connected to a U.S. trade or business on Form 1040NR or Form 1040NR-EZ. A nonresident alien not otherwise engaged in a U.S. trade or business is not required to report U.S. source income that has been withheld properly at the source or any foreign source income that is not effectively connected to a U.S. trade or business unless the nonresident alien is entitled to a claim for a refund for overpaid taxes. Income received from U.S. payers will in most cases constitute U.S. source income. In addition, income received from foreign payers may also constitute U.S. source income in certain circumstances such as income received for services performed in the U.S. and income received for the use of intangibles in the U.S.

    Exception:

    U.S. tax laws exempt nonresident aliens from U.S. taxation on interest from U.S. bank accounts.

    Note:

    U.S. source income is reported on Form 1042-S, Form W-2, Form SSA-1042S, Form RRB-1042S, Form 1099 series, Form 8805, Form 8288-A or statement of income.

    Note:

    All U.S. source income (which is not effectively connected to a U.S. trade or business) is generally taxed at 30 percent (%) unless a tax treaty exists between the U.S. and the taxpayer's foreign country of residence that reduces the rate or exempts the income.

  3. When Scholarship/Fellowship income is paid to an individual who is a nonresident alien from a country that does not have a tax treaty with the United States:

    • It is NOT exempted

    • It must be reported on line 12, Form 1040NR or line 5, Form 1040NR-EZ.
      + It is generally reported on a Form 1042-S, attached to the return.

    • If the individual is a "Degree Candidate," amounts paid to a qualified educational institute for tuition and education related expenses (such as fees, books, supplies, and equipment) may be deducted on line 31, Form 1040NR, or line 8, Form 1040NR-EZ.
      + If the individual is not a Degree Candidate, the full amount of the scholarship or fellowship is generally taxable.

  4. When Scholarship/Fellowship income is paid to a resident alien (because of the substantial presence test) or nonresident alien who, immediately before coming to the U.S. to study, was a resident of a tax treaty country:

    • It may be excluded in full or part under a tax treaty.

    • It must be reported on line 12, Form 1040NR or line 5, Form 1040NR-EZ if taxable, or on line 22, Form 1040NR or line 6, Form 1040NR-EZ if exempt by treaty.

    • Question "L," Form 1040NR, Page 5 or Question "J," Page 2, Form 1040NR-EZ, must be answered.
      + It is generally reported on a Form 1042-S, attached to the return.

    • The validity of the tax treaty benefit claimed must be verified.

Form 1040 with Form 2555 or Form 2555-EZ Attached -- Purpose of Form

  1. Form 2555 must be attached if any of the following indicators are on Form 1040, (for complete instructions, see IRM 3.21.3.39)

    • IRC § 911 exclusion

    • Notation of Form 2555/Form 2555-EZ

    • Foreign Housing Exclusion on line 21, Form 1040 (negative amount)

    • Foreign Earned Income Exclusion on line 21 of Form 1040 (negative amount)

    • Foreign Housing Deduction on dotted portion of line 36, Form 1040

  2. A taxpayer with foreign earned income is entitled to claim the following exclusions and/or deductions on Form 2555:

    • Foreign Earned Income Exclusion (Part VII) and/or

    • Housing Deduction, if housing is not provided by the employer (Parts VI and IX) or,

    • Housing Exclusion, if housing is provided by the employer (Part VI and VII)

  3. A U.S. citizen or U.S. resident alien living in a foreign country may use Form 2555 to:

    1. Exclude a limited amount ($102,100 - this amount is adjusted annually based on inflation) of their foreign earned income

    2. Claim housing exclusion or deduction

  4. A U.S. citizen or U.S. resident alien living in a foreign country may use Form 2555-EZ if:

    1. They have earned wages/salaries in a foreign country that totals $102,100 or less for the year.

    2. They did not have any income from self-employment.

    3. They did not have any business or moving expenses for the year.

    4. They are not claiming the housing exclusion or deduction.

    5. They are filing a calendar year return that covers a 12 month period.

  5. For purposes of earned income, foreign country is defined as any territory (including the air space, territorial waters, seabed and subsoil) under the sovereignty of a government other than the United States. It does not include U.S. Possessions or territories.

  6. Unearned income may NOT be excluded on Form 2555 or Form 2555-EZ. To avoid double taxation, foreign taxes paid on the unearned foreign income can be:

    1. Claimed as a credit on Form 1116, or

    2. Reported as a deduction on line 8, Schedule A

  7. Individual U.S. Citizens living or travelling outside the United States are generally required to file U.S. income tax returns on which they must report worldwide income.

  8. To qualify for foreign earned income exclusion under IRC section 911, taxpayers must meet the requirements of the "tax home test" and must either:

    1. A U.S. citizen who is a a bona fide foreign resident of a foreign country or countries for an uninterrupted period (regardless of physical presence) which includes an entire taxable year or.

    2. A U. S. citizen or resident alien who has been physically present in a foreign country or countries for at least 330 days out of a period of 12 consecutive months. May have a partial tax years that falls within the qualifying period (and in those cases, the exclusion must be prorated for the partial year).

    3. Have a partial tax year that falls within the qualifying period (the exclusion must be prorated for the partial years).

    Note:

    A taxpayer working for the U.S. Government or who is a member of the armed forces does not qualify for the foreign earned income exclusion.

United States Possessions/Territories -- General Information

  1. The following are the five key U.S. Possessions/Territories

    1. American Samoa (AS)

    2. Commonwealth of Northern Mariana Islands (CNMI)

    3. Guam (GU)

    4. Puerto Rico (PR)

    5. United States Virgin Islands (USVI)

  2. Special tax rules apply to bona fide residents of these five key territories. The taxpayer must be a United States citizen or resident alien AND a bona fide resident of one of AS, CNMI, GU, PR or the USVI for the entire tax year. A bona fide resident of one of these possessions/territories is an individual taxpayer who:

    • Meets the presence test. To satisfy the presence test for the entire year, the taxpayer must meet ONE of the conditions in the table below.

    • Does not have a tax home outside the relevant possession/territory.

    • Does not have a closer connection to the United States or to a foreign country.

    Bona Fide Residence Presence Test for United States Possessions/Territories
    Present in the relevant possession/territory for at least 183 days during the tax year.
    Present in the relevant possession/territory for at least 549 days during the three-year period consisting of the current taxable year and the preceding two tax years, provided the taxpayer was also present in the possession/territory for at least 60 days during each tax year of the three-year period.
    Present in the United States for no more than 90 days during the tax year.
    Earned income (pay for personal services performed, such as wages, salaries or professional fees) from the United States of no more than $3000.00 and was present for more days in the possession/territory than the U.S. during the tax year.
    No significant connection to the U.S. during the tax year, such as a permanent home, voter registration or spouse/minor child in the United States.

    Note:

    It is often difficult to determine bona fide residency based on the test above. Therefore, for purpose of processing income tax returns the following additional guidance is being given. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. U.S. Service Members: A service member's "state of legal residence" generally determines his or her residency for tax purposes. For non-tax purposes, U.S. service members have two types of "residency" : "home of record" and "state of legal residence." A service member's "home of record" is the state where he or she joined the military and it is used to determine certain military benefits (for example, travel allowance back to the state when leaving the military). All service member's "state of legal residence" is his or her permanent home, the state where he or she intends to live after leaving the military. All service members declare their state of legal residence with the Department of Defense or equivalent. By operation of the Servicemembers Civil Relief Act of 2003 (SCRA), if a service member qualifies as a bona fide resident of a U.S. Territory in an earlier tax year, his or her absence from that territory during the current tax year in compliance with military orders will not affect his or her status as a bona fide resident. Similarly, being in a territory solely in compliance with military orders will not qualify a service member for bona fide residency status in that territory.

  4. Service Members Civilian Spouses: In accordance with Military Spouses Residency Relief Act of 2009 (MSRRA), civilian spouses of active duty U.S. Service Members can choose to keep their prior residence or domicile for tax purposes. By operation of MSRRA, if civilian spouses qualify as bona fide residents of a U.S. territory in an earlier tax year, their absence from that territory during the current year when accompanying the service member spouse who is relocating under military orders will not affect the civilian spouse's status as a bona fide resident. Similarly, being in a territory solely to accompany the service member in compliance with military orders will not qualify the civilian spouse for bona fide resident status in that territory. For additional guidance on when and how MSRRA applies to civilian spouses who are working in or claiming tax residency in a U.S. territory, see Notice 2010-30, Notice 2011-16 and Notice 2012-41.

  5. Taxpayers who reside in any U.S. territory are generally not entitled to claim Earned Income Credit (EIC). See IRM 3.21.3.15.6.3

Control of International Returns

  1. International Returns will be assigned the following FLCs:

    1. FLC 20 will be assigned to any Form 1040, Form 1040A, or Form 1040EZ with any International criteria other than U.S. territories, including Form 2555 or Form 2555-EZ and Form 1040NR or Form 1040NR-EZ.

    2. FLC 21 will be assigned to any Form 1040-PR or Form 1040-SS.

    3. FLC 21 will be assigned to any Form 1040, Form 1040A, or Form 1040EZ with any U.S. territory criteria as follows:

    • Territory address in the caption area

    • IRC § 931

    • IRC § 932

    • IRC § 933

    • IRC § 934

    • IRC § 935

    • Form W-2AS, Form W-2GU, Form W-2VI, Form W-2CM, 499R-2/W-2PR

    • Form 4563

    • Form 5074

    • Form 8689

    • Form 8898

      Exception:

      All returns that have a valid Form 2555 or Form 2555-EZ must be blocked under FLC 20.

  2. The following table contains the programs worked in Code & Edit (C&E):

    Program Description
    46110 Form 1040 OTFP Current Year
    46112 Form 1040 Prior Year
    46114 Form 1040 Non Refund
    46115 Form 1040 - Dual Status
    46116 Form 1040 - IVO
    46117 Form 1040 - Streamline
    46126 Form 1040NR-EZ with wages on line 3
    46146 Form 1040NR-EZ with no wages on line 3
    46127 Form 1040-PR OTFP Current and Prior Year
    46128 Form 1040-SS OTFP Current and Prior Year
    46220 Form 1040 Full Paid Current Year
    46130 Form 1040A Current Year
    46132 Form 1040A Prior Year
    46135 Form 1040A - IVO
    46137 Form 1040A - Streamline
    46150 Form 1040EZ Current Year
    46152 Form 1040EZ Prior Year
    46155 Form 1040EZ - IVO
    46157 Form 1040EZ - Streamline
    46120 Form 1040NR (Effectively Connected) Current Year
    46123 Form 1040-PR/Form 1040-SS - IVO
    46124 Form 1040NR (Effectively Connected) Prior Year
    46140 Form 1040NR (Non-Effectively Connected) Current Year
    46142 Form 1040NR (Non-Effectively Connected) Prior Year
    46227 Form 1040-PR Full Paid Current Year
    46228 Form 1040-SS Full Paid Current Year
    46170 Form 1040 ITIN Current Year
    46172 Form 1040 ITIN Prior Year
    46175 Form 1040 ITIN - IVO

Misblocked International Returns

  1. All documents in a block of work must be the same type of return. A misblocked return is one found in a block of work other than the one in which it belongs.

  2. Returns that are blocked in FLC 20 that should be blocked in FLC 21 or vice versa, must be re-sorted.

    Note:

    All returns that have a valid Form 2555 or Form 2555-EZ must be blocked under FLC 20.

  3. If the return is unnumbered, code and edit the return and slot it into the appropriate program.

  4. If the return is numbered, edit Action Code "610" (for non-remittance) or Action Code "611" (for remittance) for renumbering and attach Form 4227 with instructions "re-sort to FLC 20 " or "re-sort to FLC 21," as appropriate.

    Note:

    If a return has been numbered as International and it is a Domestic return (or vice versa), it must be re-sorted.

Uncomputed Returns

  1. An uncomputed return is one filed by a taxpayer who expects the IRS to compute his/her tax. Do not confuse an uncomputed return with a return where the taxpayer has computed no tax due.

  2. An uncomputed return can be identified as follows:

    1. Form 1040 has no entries on lines 44, 45, 46, 47, 56, 63, 75, 76a, 77, and 78.

    2. Form 1040A has no entries on lines 28, 29, 30, 37, 39, 47, 48a, 49, and 50.

    3. Form 1040EZ has a positive entry on line 6 and no entries on lines 10, 11, 12, 13a, and 14.

    4. Form 1040NR has no entries on lines 42, 43, 44, 52, 61, 72, 73a, 74 and 75.

    5. Form 1040NR-EZ has no entries on lines 15, 22, 23a, 24 and 25.

    6. Form 1040-PR and Form 1040-SS has no entries on lines 6, 12, 13a, 14 and 15.

General Instructions for International Forms (Form 1040, Form 1040A, Form 1040EZ, Form 1040-PR, Form 1040-SS, Form 1040NR, Form 1040NR-EZ)

  1. The general instructions for all International returns are provided here. The general instructions in this section include:

    • Stamping Tax Examiner (TE) Numbers

    • Action Trails

    • Attachments

    • Detached Documents

Stamping Tax Examiner (TE) Numbers

  1. For complete instructions, see IRM 3.11.3.3.1 .

Action Trails

  1. For all International returns (Form 1040, Form 1040A, Form 1040EZ, Form 1040-PR, Form 1040-SS, Form 1040NR, Form 1040NR-EZ), see IRM 3.11.3.3.5 for complete instructions.

Attachments to Returns

  1. Examine all the attachments to the return. Leave the attachments with the return unless specifically instructed otherwise. Refer to the Attachment Guide in Exhibit 3.21.3-1 for specific attachment-by-attachment instructions. Research either an attachment or a notation on the return, as appropriate.

    Note:

    If an attachment is not found in Exhibit 3.21.3-1, refer to Exhibit 3.11.3-1.

  2. For additional instructions, see IRM 3.11.3.3.6 .

Detached Documents

  1. Always leave an Action Trail on the return when an attachment is removed.

    Example:

    When a form or letter is detached from a return, notations such as "detached 1040X" or "detached TP correspondence" must be made.

  2. An Action Trail must also be written on the detached document, unless it is an original document. If present on the return, all of the following must be present or edited on all detached items:

    • Current date if before April 23, 2018, otherwise use the received date in "MMDDYY" format.

      Note:

      For April 23rd and later on a timely return with no received date, edit a date of "041718" .

    • Tax Period in "YYMM" format.

    • Form from which detached.

    • Taxpayer Name(s).

    • Primary/Secondary taxpayer's identification number(s).

    • Taxpayer's address

      Note:

      When sending a return back to a taxpayer, do not detach documents. Examples include, but are not limited to Powers of Attorney (POA) and taxpayer inquiries (TPI).

      Exception:

      Detach and process any remittance. Do not mail back any remittance to the taxpayer.

International Correspondence Procedures

  1. Correspondence is necessary when a return is incomplete or illegible and cannot be processed. To determine all correspondence issues, you must use both IRM 3.11.3 and IRM 3.21.3 and follow line-by-line instructions.

  2. All missing required information must be requested when corresponding.

    Note:

    WHEN THE FIRST CORRESPONDENCE CONDITION IS IDENTIFIED, CORRESPOND FOR ALL MISSING REQUIRED FORMS, SCHEDULES AND WITHHOLDING DOCUMENTATION REGARDLESS OF CORRESPONDENCE TOLERANCES (with the exception of Form 1116, Form 2106, Form 8283, Form 8812/Schedule 8812 and Schedule EIC) IDENTIFIED IN THE LINE-BY-LINE IRM INSTRUCTIONS.

  3. Do Not Correspond With A Taxpayer More Than One Time.

    Exception:

    Code & Edit will correspond a second time if the taxpayer sends back a return with a signature not located in the appropriate Sign Here area under the jurat. In order for a taxpayer's signature to be valid, it MUST APPEAR in the space provided under the jurat. The only exception to this rule is when the taxpayer him/herself signed in the wrong area and arrowed their signature to the appropriate place.

  4. For additional instructions, see IRM 3.11.3.5.1.

Correspondence When Sending Returns Back to the Taxpayer

  1. A valid, legal signature is an original signature that appears below a jurat statement. Returns missing a valid, legal signature(s) will be sent back via the following:

    1. Form 1040, Form 1040A, Form 1040EZ, Form 1040NR, and Form 1040NR-EZ, use Form 9143 and correspond for ALL missing required information.

    2. Form 1040-PR, use the Spanish side of Form 13557 and correspond for ALL missing required information.

    3. Form 1040-SS, use the English side of Form 13557 and correspond for ALL missing required information.

  2. There are specific circumstances when Submission Processing would send a return back to the taxpayer.

    1. A misfiled return. A misfiled return is a return when the taxpayer is filing what appears to be a business filing requirement on individual tax forms.

    2. Early filed loose Schedule H for tax year 2018. Use Notice 1208, when corresponding.

    3. Current year loose Schedule H received on or before 04/17/18. Use Notice 1207 when corresponding.

    4. Early filed Form 8288-A

    5. Missing or invalid signature.

      Exception:

      Do not send back a secured return with a missing or invalid signature back to the taxpayer. Route the entire return to Collections.

      Exception:

      Do not mail back numbered, secured returns, Streamline returns or signed returns missing documentary evidence.

    6. Filer's U.S. status (Form 1040 with Form 1042-S) See IRM 3.21.3.3.1 and IRM 3.21.3.15.6.1 IRM 3.21.3.73.

    7. Filer’s U.S. status (Form 1040NR indicating resident in the U.S. all year) See IRM 3.21.3.72 .

    8. Form 1040-PR or Form 1040-SS filed with Form W-2 income

    9. Bona Fide Puerto Rico resident with no U.S. filing requirement

    10. Bona Fide PR resident claiming Additional Child Tax Credit (Form 1040 or Form 1040A)

    11. Article XXV of the U.S. - Canada Income Tax Treaty claimed on Form 1040 and missing Form 1040NR

  3. When sending the return back to the taxpayer for correspondence, use the following steps:

    1. Line through your TE number.

    2. Remove Form 3471-E and any other internal documents, if attached.

    3. Delete any IRS Received Date

    4. Attach the correspondence sheet to the return immediately below the caption area.

    5. Edit an Action Trail to notate issued correspondence.

    6. If address is missing or incomplete, perfect from an attached envelope. If unable to perfect from an attached envelope, research.

    7. Do not detach attachments

    8. Remove the return from the batch and place it in the designated area.

  4. When using Form 9143 or Form 13557:

    1. Write legibly to ensure that the taxpayer understands what information is being requested.

    2. Check the appropriate box(es).

    3. Edit or stamp "Returned for Signature" and edit the date in the bottom margin of the tax return when sending the return back for missing signature.

      Note:

      Delete any IRS Received Date when mailing a return back to the taxpayer

      .

Correspondence When Not Sending Returns Back to the Taxpayer

  1. Complete all possible editing and identify all correspondence issues, when you are not sending the return back to the taxpayer.

    Note:

    If address is missing or incomplete, perfect from an attached envelope. If unable to perfect from an attached envelope, research.

  2. A correspondence action sheet (CAS) is a form used to generate a letter requesting information from a taxpayer. A CAS is used with a return that cannot be sent back to the taxpayer. The following CAS forms are used:

    1. Form 13900 is used to generate 4087C letters (International and Streamline returns). See Exhibit 3.21.3-16.

    2. Form 13975 (Form 1040-SS CAS) is used to generate 2894C letter for Form 1040-SS (International returns). See Exhibit 3.21.3-17.

    3. Form 13975 (Form 1040-PR CAS) is used to generate 2894SP letter for Form 1040-PR (International returns). See Exhibit 3.21.3-17.

    4. Form 3696-A is used to generate miscellaneous Correspondex (C) letters (e.g., Letter 369C used to deny reasonable cause.)

  3. Prepare Form 13900 to initiate Letter 4087C using the following steps:

    1. Write legibly.

    2. Check all appropriate boxes.

    3. Complete all information required for each paragraph selected (e.g., forms, lines, amounts, etc.).

    4. Enter money amounts in dollars and cents. Bracket negative amounts.

    5. On prior year returns only, edit the tax period in YYYY format in field (04).

  4. Prepare the CAS and attach to Form 1040, Form 1040A, Form 1040EZ, Form 1040NR, Form 1040NR-EZ, Form 1040-PR, and Form 1040-SS below the caption area.

  5. Edit Action Code "215" on the return.

  6. Remove the return from the batch and place in the designated area.

  7. If a received date is required and not present on the return, edit the received date before corresponding and see IRM 3.21.3.8 for received date editing instructions.

General Response Procedures

  1. Move all correspondence sheets to the back of the return. If second correspondence is required, remove Form 9143 or Form 13557.

Replies to Correspondence

  1. Ensure that the return has been perfected. See the Correspondence Action Chart at IRM 3.21.3.6.5 for instructions to process "no reply," "undeliverable," and "incomplete reply" correspondence.

  2. For missing signatures, follow the instructions in IRM 3.21.3.8.1 (3).

No Reply/Incomplete Reply/Undeliverable Correspondence

  1. Use the Correspondence Action Chart and continue processing the return when any of the following conditions are present:

    • Taxpayer does not provide ALL required information

    • Correspondence is returned by the USPS as "undeliverable"

    • One or more correspondence conditions were not included when the first correspondence was sent.

  2. Edit CCC "U" on all no reply returns, except when any of the following apply:

    1. The correspondence was not required.

    2. One or more correspondence conditions were not included in the first correspondence was sent.

  3. When the correspondence sheet (Form 9143 or Form 13557) is not attached, consider all correspondence conditions were included when the correspondence was sent.

  4. If a no reply correspondence condition is not identified in the chart below, edit CCC "U" and take no further action.

  5. If CCC "3" is edited, edit it first.

Correspondence Action Chart

  1. Form 1040:

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    Article XXV of the U.S. - Canada Income Tax Treaty and Form 1040NR not attached Convert
    Bona Fide Resident of Puerto Rico filing Form 1040 or Form 1040A "X" any exclusion pertaining to IRC § 933 and continue processing.
    Line 21 -- Form 2555 or Form 2555-EZ is not attached and one or more of these indications are present:
    • IRC § 911

    • Form 2555 or Form 2555-EZ

    • Foreign Earned Income Exclusion (line 21)

    • Foreign Housing Exclusion (line 21)

    • Foreign Housing Deduction (line 36 dotted portion)

    1. "X" line(s) 21/36 (dotted portion) Form 1040 and

    2. edit CCC "U"

    Note:

    If there is no other foreign aspect of the return, re-sort the coded return to the domestic program.

    Line 21 -- Incomplete Treaty information "X" line 21 and ensure amount is present on line 7
    Line 21 -- IRC § 893 and the number of the Executive Order and Written evidence not attached "X" line 21
    Line 64 -- ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form W-2, Form 1042-S, Form 8805, Form 8288-A and/or Form 8959 are not attached "X" line 64
    Line 64 -- Early-filed Form 8288-A and Form 843 is not attached "X" line 64
    Line 64 -- Filer’s U.S. Status and Form 1040NR not attached Move amount on line 64 to dotted portion of line 74
    Line 64 -- SSA-1042S or RRB-1042S attached and no Green card and/or declaration statement attached "X" line 64
    Line 74 (dotted portion) -- ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8689 is not attached "X" line 74
    Loose Schedule H -- Cannot determine if Schedule H should be filed loose or attached to a Form 1040 Process Schedule H with a dummied Form 1040. See IRM 3.11.3.41.14 and IRM 3.21.3.46. If signature or documentary evidence missing, also edit CCC "3."
    Loose Schedule H-PR -- Cannot determine if Schedule H-PR should be filed loose or attached to a Form 1040-PR Process Schedule H-PR with a dummied Form 1040-PR. See IRM 3.21.3.45. If signature or documentary evidence missing, also edit CCC "3."
  2. Form 2555 and Form 2555-EZ:

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    incomplete:
    • page 1 missing or incomplete

    • page 2 missing or incomplete

    • page 3 missing or incomplete

    1. "X" line(s) 21/36 (dotted portion) Form 1040 and

    2. "X" Form 2555 or Form 2555-EZ, and

    3. edit CCC "U"

    Note:

    If the deleted Form 2555 or Form 2555-EZ is the only foreign aspect of the return, re-sort the coded return to the domestic program.

    Bona Fide or Physical Dates are missing
    1. "X" line(s) 21/36 (dotted portion) Form 1040

    2. "X" Form 2555 or Form 2555-EZ, and

    3. edit CCC "U"

      Note:

      If the deleted Form 2555 or Form 2555-EZ is the only foreign aspect of the return, re-sort the coded return to the domestic program.

    Form 2555 or Form 2555-EZ is attached and is for more than one taxable year
    1. "X" line(s) 21/36 (dotted portion) Form 1040

    2. "X" Form 2555 or Form 2555-EZ, and

    3. edit CCC "U"

      Note:

      If the deleted Form 2555 or Form 2555-EZ is the only foreign aspect of the return, re-sort the coded return to the domestic program.

    On a joint return and there is an indication each spouse has his/her own income and only one Form 2555 or Form 2555-EZ has been submitted
    1. "X" line(s) 21/36 (dotted portion) Form 1040

    2. "X" Form 2555 or Form 2555-EZ, and

    3. edit CCC "U"

      Note:

      If the deleted Form 2555 or Form 2555-EZ is the only foreign aspect of the return, re-sort the coded return to the domestic program.

      Exception:

      If the joint filers are a missionary team, divide the income equally between the two filers on separate Form 2555 and/or Form 2555-EZ.

  3. Form 2555-EZ Only:

    Correspondence required When the Following Conditions Exist: Action required for Incomplete Reply or No reply to Correspondence
    Form 2555-EZ is attached and any of the following is claimed:
    • foreign earned income of more than $102,100

    • self-employment income

    • business/moving expenses

    • foreign housing exclusion or deduction

    • other than a calendar year return that covers a 12 month period

    Note:

    If the taxpayer uses Form 2555-EZ for prior to 1992, convert to Form 2555.

    1. "X" line(s) 21/36 (dotted portion) Form 1040

    2. "X" Form 2555-EZ, and

    3. edit CCC "U"

      Note:

      If the deleted Form 2555 and/or Form 2555-EZ is the only foreign aspect of the return, re-sort the coded return to the domestic program.

  4. Form 4563 or IRC § 931:

    Correspondence required When the Following Conditions Exist: Action required for Incomplete Reply or No reply to Correspondence
    If Form 1040 indicates IRC § 931 or Income from American Samoa and Form 4563 is not attached
    1. "X" line(s) 21/36 (dotted portion), Form 1040 and

    2. edit CCC "U"

    Note:

    If the deleted Form 4563 is the only foreign aspect of the return, re-sort the return to the domestic program.

  5. Form 1040-PR and Form 1040-SS:

    Correspondence required When the Following Conditions Exist: Action required for Incomplete Reply or No Reply to Correspondence
    W-2 attached and Form 1040 not filed Convert
    Line 3 has an amount and Part V is missing Divide Self Employment Tax amount by .153 to determine Self Employment income subtotal amount, then divide the subtotal amount by .9235 to determine the Self Employment income total amount. Prepare a dummy Part V for the primary taxpayer if the Social Security Wages are $127,200 or less. Edit the Self Employment income total amount on Part V, line 3. For prior year, see IRM 3.11.3.64.3.2.9.
    Line 4 has an amount and Schedule H or Schedule H-PR is not attached. "X" line 4.
    Line 11 has an amount and Form 8959 is not attached. "X" line 11.
    Line 2, Part II has an amount and Additional Child Tax Credit is being claimed and supporting documentation (W-2, W-2AS, W-2CM, W-2GU, W-2VI or 499R-2/W-2PR) is missing "X" line 9 and page 2, Part II.
    One Part V is submitted for 2 taxpayers Divide Self Employment Tax amount by .153 to determine Self Employment income subtotal amount, then divide the subtotal amount by .9235 to determine the Self Employment income total amount. Prepare a dummy Part V for the primary taxpayer if the Social Security Wages are $127,200 or less. Edit the Self Employment income total amount on Part V, line 3. For prior year, see IRM 3.11.3.64.3.2.9.
  6. Form 1040NR, Page 1:

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    Filed for two taxpayers: Two names present, two incomes reported and two signatures
    1. Circle out secondary taxpayer

    2. Edit CCCs "3," "U" and "Y"

    3. Edit action trail: "no reply two taxpayers."

    Invalid treaty information provided or taxpayer does not reference a valid treaty benefit
    1. "X" the exclusion amount,

    2. ensure the amount is included in lines 8 - 21 and

    3. edit CCC "U"

    Line 31
    Missing a valid scholarship/fellowship grant statement and taxpayer claimed an amount.
    1. "X" line 31 and

    2. Edit CCC "U"

  7. Form 1040NR, Page 2:

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    Line 62a is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and supporting Form W-2 series, Form 1099 series, Form 4852, Form 8959 or supporting documentation is not attached. "X" line 62a

    Note:

    DO NOT edit CCC" U."

    Line 62b Section 1446 credit is ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 8805 or similar withholding document is not attached "X" line 62b

    Note:

    DO NOT edit CCC "U."

    Line 62c Entry is present and Form 8288-A is not attached "X" line 62c

    Note:

    DO NOT edit CCC "U."

    Line 62c -- Early-filed Form 8288-A and Form 843 is not attached "X" line 62c

    Note:

    DO NOT edit CCC "U."

    Line 62d shows an entry and Form 1042-S, Form SSA-1042S or Form RRB-1042S is not attached "X" line 62d

    Note:

    DO NOT edit CCC "U."

  8. Form 1040NR, Page 3 (Itemized Deductions):

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    Line 3 -
    • Amount present more than $500 and Form 8283 is not attached

    • $20,000 or more, Art indicated on Form 8283 and separate appraisal not attached

    • $500,000 or more and separate appraisal not attached

    • Form 8283, page 2, has significant entries but not signed

    "X" Line 3
    Line 6 Entry is present and Form 4684 is not attached
    1. "X" line 6 and

    2. edit CCC "U"

    Line 7 is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and Form 2106, Form 2106-EZ or similar statement is not attached
    1. "X" line 13 and

    2. edit CCC "U"

  9. Form 1040NR, Page 4 (Tax on Income Not Effectively Connected With A U.S Trade or Business)

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    Cannot determine correct country of permanent address Multiply the gross not effectively connected income by 30 percent (%) and edit the result to line 54, page 2, Form 1040NR.
  10. Form 1040NR-EZ:

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    Filed for two taxpayers: Two names present, two incomes reported and two signatures
    1. Circle out secondary taxpayer

    2. Edit CCCs "3," "U" and "Y"

    3. Edit action trail: "no reply two taxpayers."

    Invalid treaty information provided or taxpayer does not reference a valid treaty benefit
    1. "X" the exclusion amount,

    2. ensure the amount is included in lines 3 - 10 and

    3. edit CCC "U"

    Line 8
    Missing a valid scholarship/fellowship grant statement and taxpayer claimed an amount
    1. "X" line 8 and

    2. Edit CCC "U"

    Line 18a is ≡ ≡ ≡ ≡ ≡ ≡ and supporting W-2 series or supporting documentation is not attached. "X" line 18a

    Note:

    DO NOT edit CCC "U."

    Line 18b has an entry and Form 1042-S or supporting documentation is not attached. "X" line 18b

    Note:

    DO NOT edit CCC "U."

    1. Tax Period is other than calendar year

    2. Taxable Income is more than $100,000.00

    3. Interest income is taxable

    4. Dividend income is taxable

    5. Entry without appropriate printed line

    6. Exemption(s) claimed in addition to self and spouse

    7. Indication taxpayer is claimed as a dependent on another person’s return

    8. Itemized deductions (other than state and local income taxes)

    9. Indication that line 3 amount includes $434.00 or more of Self-Employment income, Non-Employee Compensation, or Fishing Boat Proceeds

    10. Indication taxpayer is claiming any adjustments to income (other than scholarship/fellowship grants excluded)

    11. Indication taxpayer is claiming any tax credits

    12. Indication taxpayer is filing an "Expatriation Return"

    13. Indication taxpayer is claiming taxes owed (other than from tax rate table or social security/ medicare tax on tip income not reported to your employer)

    14. Non-effectively connected income

    15. Indication of gambling income

    16. Indication of Community Property

    17. Form 1042-S reporting pension

    18. Form W-2G

    19. Unemployment Compensation

    20. Social Security Benefits

    21. Railroad Retirement Benefits

    22. Form 1099-MISC with an amount of $434.00 or more in box 5 or Box 7

    23. Form 1099-R reporting IRA Distributions in Box 7, code 1

    24. Schedule H attached (As of 12-31-2000 Schedule H will not be allowed as an attached schedule to Form 1040NR-EZ).

    25. Transcribed Form 1040NR schedule(s) or form(s) attached

    Convert to Form 1040NR
  11. Dual Status Returns:

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    If a determination cannot be made about which return to process or the Dual Status Statement is missing Edit CCC "U" and do one of the following:
    1. When both Form 1040 and Form 1040NR or Form 1040NR-EZ are present, process Form 1040NR or Form 1040NR-EZ as the "Dual Status Return" and use the Form 1040 as the "Dual Status Statement"

    2. When only one form is present, always process as a Form 1040NR

      Note:

      Dummy Form 1040NR if missing.

    Filing Status Code (FSC) is 2, both taxpayers have income
    1. Circle out the name of the secondary taxpayer.

    2. edit CCCs "3," "U " and "Y"

    3. Edit action trail: "no reply with two incomes."

    T-line amount(s) that do not have corresponding entries on Form 1040NR-EZ Convert to Form 1040NR
  12. Form SSA-1042S/Form RRB-1042S:

    Correspondence Required When the Following Conditions Exist: Action Required for Incomplete Reply or No Reply to Correspondence
    Withholding claimed and no U.S. documentation submitted
    1. "X" withholding amount and income where found,

    2. edit CCC "3," "U" and "Y" and

    3. edit an action trail, "SSA/RRB-1042S"

  13. For additional no reply instructions, see IRM 3.11.3.5.3.2.

Editing for ALL International returns (Form 1040/Form 1040A/Form 1040EZ/Form 1040-SS/Form 1040-PR/Form 1040NR/Form 1040NR-EZ)

  1. Editing is done to prepare returns and attachments for transcription and computer processing.

  2. The editing instructions described in more detail in this subsection are about:

    • Transcription Lines (T-Lines) and Transcription Compute Lines (T-Compute Lines)

    • Sequence of Transcribed Schedules and Forms

    • Form 3471-E

    • Dollars and Cents Editing

    • Action Codes

    • International Audit Codes

    • International Return Processing Codes (RPCs)

    • Special Processing Codes (SPCs)

    • International Computer Condition Codes (CCCs)

  3. In addition to the listed subsections, see IRM 3.11.3.4.1 -- 3.11.3.4.2.6.

Transcription Lines (T-Lines) and Transcription Compute Lines (T-Compute Lines)

  1. For complete instructions, see IRM 3.11.3.3.2.

Sequence of Transcribed Schedules and Forms

  1. In the upper right margin of each form or schedule is a preprinted number called sequence code. The Integrated Submission and Remittance Processing (ISRP) operators transcribe forms and schedules by their sequence order. ISRP sequence code ranges from #02 through #75. Any form or schedule within this range that is not transcribed must be deleted. See the table in (9) for a list of the sequence codes for all transcribed schedules and forms.

  2. Delete any document, form or schedule that will not be transcribed when there is a transcribed form/schedule afterward. For a large number of non-transcribable forms, "X" the top page and combine the remaining pages together with a rubber band, staple, or clip. Leave all non-transcribable forms/schedules intact after the last transcribed page.

    Exception:

    If a current year Form 1042-S is attached to a current year Form 1040NR or Form 1040NR-EZ then follow the steps in paragraph (4) of IRM 3.21.3.3.1.

    Note:

    Form 8938 is transcribed in a separate program. Refer to Exhibit 3.21.3-1

    .

  3. Delete any form that shares a sequence number with a transcribed form.

    Note:

    Examples include but are not limited to the following:

    Form 2106 (Sequence 54A) (TY 2007 and prior)
    Form 3468 (Sequence 52) (TY 2009 and prior)
    Form 3903 (Sequence 62) (TY 2010 and prior)
    Form 4563 (Sequence 68)
    Form 5884-B (Sequence 65)
    Form 8621 (Sequence 69)
    Form 8801 (Sequence 74)
    Form 8829 (Sequence 66) (TY 2009 and prior)
    Form 8862 (Sequence 43A)
    Form 8949 (Sequence 12A)
    Schedule D-1 (Sequence 12A) (TY10 and prior)
  4. "X" a transcribed schedule or form if it is blank or has no significant T-line entries, unless specifically instructed otherwise.

    Exception:

    Do not "X" Form 8938 when there are no significant entries on T-Lines.

  5. If any schedule or form is attached with "Alt Min Tax" , "AMTCR" , "AMT" or "Alternative Minimum Tax" or similar statement notated across the top, "X" the form or schedule.

  6. Delete duplicate forms or schedules with the exact same amounts that are filed for the same taxpayer.

  7. For transcribed forms or schedules with multiple pages, rearrange the pages so they are in the proper order (page 1, page 2, etc.)

  8. Leave Form W-2 and Form 1099, other U.S. withholding documents, Form 1040-V, taxpayer statements, deposit slips, small forms, or other items where found, when they do not obstruct T-lines or any part of the caption area.

    Exception:

    If a current year Form 1042-S is attached to a current year Form 1040NR or Form 1040NR-EZ then follow the steps in paragraph (4) of IRM 3.21.3.3.1.

  9. List of sequence codes for all transcribed schedules and forms:

    Forms/Schedules Sequence Code 1040 1040NR 1040NR-EZ 1040-PR/1040-SS
    Schedule A
    (Form 1040)
    Page 3 Form 1040NR
    07 Yes Yes No No
    Schedule B 08 Yes No No No
    Schedule C or Schedule C-EZ 09, 10, 11 Yes Yes No No
    Schedule D 12 Yes Yes No No
    Schedule E 13 Yes Yes No No
    Schedule F 14, 15 Yes Yes No No
    Schedule R 16 Yes No No No
    Schedule SE 17, 18 Yes Yes (only Sequence Code 17) No Yes
    Form 1116 19 Yes Yes No No
    Schedule J 20 Yes Yes No No
    Form 2441 21 Yes Yes No No
    Form 3800 22 Yes Yes No No
    Form 4136 23 Yes Yes No No
    Form 4137 24, 25 Yes Yes (only sequence code 24) Yes (only sequence code 24) No
    Form 4684 26 Yes Yes No No
    Form 4797 27 Yes Yes No No
    Form 4972 28 Yes Yes No No
    Form 5329 29, 30 Yes Yes (only sequence code 29) No No
    Form 6198 31 Yes Yes No No
    Form 6251 32 Yes Yes No No
    Form 8615 33 Yes Yes No No
    Form 2555 and Form 2555-EZ 34, 35 Yes No No No
    Form 4835 37 Yes Yes No No
    Form 8839 38 Yes Yes No No
    Form 8853 39 Yes Yes No No
    Form 8814 40, 41, 42 Yes Yes No No
    Schedule EIC 43 Yes No No No
    Schedule H and Schedule H-PR 44, 45 Yes Yes (only Sequence Code 44) No Yes
    Schedule 8812 (TY 2011 and prior it was Form 8812) 47 Yes Yes No No
    Form 8606 48, 49 Yes Yes No No
    Form 8863 50 Yes No No No
    Form 4952 51 Yes Yes No No
    Form 8889 52, 53 Yes Yes (only sequence code 52) No No
    Form 8880 54 Yes Yes No No
    Form 8888 56 Yes Yes Yes Yes
    Form 5405 58, 59 Yes No No No
    Form 8919 61, 62 Yes Yes (only sequence code 61) Yes (only sequence code 61) Yes
    Form 8958 63 Yes No No No
    Form 8941 65, 66 Yes Yes (only sequence code 65) No No
    Form 8910 68 Yes Yes No No
    Form 8936 69 Yes Yes No No
    Form 8867 70 Yes Yes No Yes
    Form 8959 71 Yes Yes No Yes
    Form 8960 72 Yes Yes No No
    Form 8962 73, 74 Yes Yes No No
    Form 8965 75 Yes No No No

Form 3471-E

  1. Edit money amounts on Form 3471-E in dollars only for all form types (Form 1040, Form 1040A, Form 1040EZ, Form 1040-SS, Form 1040-PR, Form 1040NR, and Form 1040NR-EZ).

  2. Position the Form 3471-E on the back of the last page of the return even though it has a Sequence Code of "02." Staple Form 3471-E to the last page of the tax return so that the Form is facing out.

Dollars and Cents Editing

  1. Allow the taxpayers to round or truncate (drop the cents) amounts. Use only dollar amounts when computing amounts on forms or schedules.

    Exception:

    Use dollars and cents when computing withholding and excess social security tax.

  2. Draw a vertical line between the dollars and cents figures when dollars or cents are in the wrong column:

    1. on each line that is to be transcribed, or

    2. down the entire front of the form or schedule

  3. Dollars and cents editing is required on certain T-lines if any of the following conditions exist:

    1. A substitute form is used with dollars and cents not clearly separated by a decimal point or slash.

      Exception:

      Do not draw a vertical line to separate dollars and cents when only dollar amounts are present on a dollars and cents T-line.

    2. An entry is illegible.

    3. Other editing requires a change to the taxpayer's entries.

    4. When computing and editing an entry directed in line-by-line instructions.

      Exception:

      Do not edit "00" to indicate no cents.

  4. The following line numbers require dollars and cents editing when adjusting or editing:

    1. Form 1040 -- lines 63 through 79

    2. Form 1040A -- lines 39 through 51

    3. Form 1040EZ -- All lines

    4. Form 1040-PR -- Part I, lines 6 through 15

    5. Form 1040-SS -- Part I, line 6 through 15

    6. Form 1040NR -- lines 61 through 76

    7. Form 1040NR-EZ -- lines 17 through 26

Action Codes

  1. An Action Code is a three digit numeric character used to reject a document and identify the reason for rejection.

  2. This code is edited to the center of the bottom margin of Page 1.

  3. Assign only one Action Code to a document. Edit Action Codes in the following priority:

    1. "310"

    2. "4XX"

    3. "6XX"

    4. "2XX"

    5. "3XX"

  4. Listed below are action codes for international process only:

    1. "215" -- International Correspondence

    2. "420" -- Verification of Form 8288-A withholding for numbered returns

    3. "651" -- Transship International returns to AUSPC

      Note:

      Delete the Action Code of "651" when processing returns that were transshipped and continue processing.

  5. For a complete list of Action Codes, see Exhibit 3.11.3-2.

International Audit Codes

  1. Audit Codes are alpha characters used to identify questionable conditions for Examination.

  2. For a complete list of Audit Codes, see Exhibit 3.11.3-3.

  3. Audit Codes are edited horizontally to the right bottom margin of page 1 of the tax return.

  4. The following is a list of the most commonly used International Audit Codes:

    Code Explanation
    H Form 926, Form 3520, Form 3520-A, Form 5471, Form 5472 or is attached to the return
    K Expatriation Return (Form 1040NR with Form 8854 attached)
    L
    1. § 6501(d) of IR Code, request for prompt audit or assessment

    2. Form 5074, Allocation of Individual Income Tax to Guam or the Commonwealth of the Northern Mariana Islands is attached to Form 1040

International Return Processing Codes (RPCs)

  1. Return Processing Codes (RPC) are alpha or numeric characters used to alert the computer to a special condition or computation.

  2. RPCs are edited in the margin to the right of:

    1. Line 22 for Form 1040

    2. Line 23 for Form 1040NR

    3. Line 22 for Form 1040NR-EZ

    4. Line 5 for Form 1040-PR

    5. Line 5 for Form 1040-SS

    6. Line 15 for Form 1040A

    7. Line 10 for Form 1040EZ

  3. For a complete list of Return Processing Codes (RPCs), see Exhibit 3.21.3-3 and Exhibit 3.11.3-5.

Special Processing Codes (SPC)

  1. Special Processing Codes (SPC) is an alpha or numeric character used to flag a condition or trigger a computation. These codes are used for center processing and do not post to the Master File. These codes supplement the Return Processing Codes.

  2. Special Processing codes are edited vertically in the following locations:

    • Form 1040 series -- the right margin between the Secondary TIN and the Presidential Election Campaign Fund (PECF) check boxes.

    • Form 1040NR and Form 1040NR-EZ -- the right margin between the Identifying Number and the Individual/Estate or Trust check boxes.

    • Form 1040-PR and Form 1040-SS -- the right margin of the Spouse's Social Security Number.

  3. Special Processing Code "P" is unique to International processing only for Streamline returns. All Streamline returns are edited with SPC "P" .

  4. For a list of additional Special Processing Codes (SPCs), see Exhibit 3.11.3-6.

International Computer Condition Codes (CCC)

  1. Edit Computer Condition Codes:

    1. Form 1040 and Form 1040A -- in the upper center portion of the filing status area

    2. Form 1040EZ -- to the left of line 1, under Foreign Province/State/Country.

    3. Form 1040-PR and Form 1040-SS -- to the right of Part I

    4. Form 1040NR -- in the upper center portion of the filing status area

    5. Form 1040NR-EZ -- to the right of the filing status, under the "Foreign Province/State/County"

  2. Computer Condition Code "C" is unique to International processing only for Form 1040NR and Form 1040NR-EZ. This code is used when Form 8833 (Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b)) is attached.

  3. When CCC "3" is edited, it must appear first.

  4. Always edit an Action Trail when CCC "Y" is edited.

  5. For a list of additional Computer Condition Codes (CCCs), see Exhibit 3.11.3-4.

Received Dates for ALL International Returns (Form 1040/Form 1040A/Form 1040EZ/Form 1040-PR/Form 1040-SS/Form 1040NR/Form 1040NR-EZ)

  1. The received date is the date a return was received by the IRS.

  2. When a received date is required edit it in "MMDDYY" (Month/Month, Day/Day, Year/Year) format using the instructions below:

    1. Form 1040 -- edit to the right of line 6d.

    2. Form 1040A -- edit to the right of line 6d.

    3. Form 1040EZ -- edit in the center to the left of line 6.

    4. Form 1040-PR -- edit to the left dotted portion of line 5.

    5. Form 1040-SS -- edit to the left dotted portion of line 5.

    6. Form 1040NR -- edit to the left of line 7d.

    7. Form 1040NR-EZ -- edit to the dotted portion of line 7.

  3. If the received date is present in the caption area, delete and edit the same received date as instructed above. If page 1 of the return does not contain a received date, search the return and attachments for a received date and edit that date as instructed above.

  4. A received date is always required when the return is:

    1. Amended

    2. Delinquent (received after the grace period)

    3. For a fiscal year, prior year, or short year

    4. Early-filed for a decedent (filed before the close of the current year)

    5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Exception:

    Returns batched in Program 46220, 46227 or 46228 do not require a received date.

  5. If a received date is required and the return was transshipped from any other Submission Processing Campus (Andover, Atlanta, Brookhaven, Cincinnati {Covington}, Fresno, Kansas City, Memphis, Ogden, or Philadelphia), follow the instructions below:

    Note:

    DO NOT refer to any other instructions in this IRM or in IRM 3.11.3 to determine the received date for any return that can be identified as being transshipped from another Submission Processing Campus.

    Note:

    Some indications of a transshipped return include: (This list is not all-inclusive)
    •An SPC received date stamp other than Austin (AUSPC), or
    •A yellow routing form, or
    •A blue routing tag other than Austin uses, or

    IF THEN
    The return has been stamped with an AUSPC received date and another Submission Processing Campus stamped received date. Circle out the other Submission Processing Campus received date, (including those that have ramped down) leaving only the AUSPC date.
    One received date stamped from another Submission Processing Campus
    1. Circle that received date.

    2. Edit a received date (current date minus 10 days).

      Exception:

      Honor the other campus date if today's date minus 10 days makes the received date earlier than the other campus date.

    The return has only an AUSPC received date Take no action
    The return has no received date Edit a received date (current date minus 10 days)

    Exception:

    If the return was transshipped and a determination was made that the return was not foreign or the foreign aspect was deleted, process the return as a domestic return and honor the original received date.

  6. Circle a received date when it is present on a return and it is not required.

  7. Circle all but the earliest received date when a return has multiple received dates and one is required.

    Exception:

    For transshipped returns see (5) above.

    Note:

    Circle all but the earliest valid received dates (including Statute or other valid IRS organization's received dates) when there are multiple received dates present and a received date is required. See IRM 3.21.3.8.1.1. Taxpayer Advocate Service (TAS) received dates are not valid received dates. If multiple received dates are identical, circle all but one received date.

    Exception:

    When the return has been mailed back for missing signature(s), and multiple received dates are present, see IRM 3.21.3.8.1

  8. If a received date is "X" -ed, circle that received date stamp.

  9. Perfect the received date when it is required and it is not legible and/or not in complete "MMDDYY" format, unless stamped with an IRS Date Stamp.

Determining Received Date

  1. Determine the received date in the following priority when it is required, but missing:

    1. Latest postmark on the envelope or latest date from a designated private delivery service or private metered postmark.

      Note:

      When the envelope or air-bill is not attached, use the postmark date stamped or handwritten on the return to determine the received date.

    2. Service Center Automated Mail Processing System (SCAMPS) digital dates stamped on the envelope.

    3. Latest date by the taxpayer's signature.

      Exception:

      Use the signature date on prior year returns only when it is within the current year. Also, do not use the signature date to determine the received date for replies to correspondence.

    4. Julian date in the DLN minus 10 days

    5. Today's date minus 10 days

  2. If the stamped received date on a current year return is three months or more prior to the current date, search the return for an indication the received date is incorrect (e.g., a postmark or signature date after the received date). If the received date is determined to be incorrect, delete it and edit a new received date following instructions at IRM 3.21.3.8

  3. ALWAYS review each return for the words, "Returned for Signature" or similar statement and a date present in the lower left corner of the return. These are returns that were originally received missing a signature and were mailed back to the taxpayer. If a date and the notation "Returned for Signature" or similar statement is present, refer to the following instructions for editing the received date:

    1. If the return is Balance Due and a received date is present showing a date within 30 days after the date present in the lower left corner, use the date sent back for signature as the received date. Delete any other received date(s) that may be present.

    2. If the return is Balance Due and a received date is present showing a date MORE than 30 days after the date present in the lower left corner, honor the latest received date. Delete any earlier received date(s) that may be present.

    3. If the return is a Refund, Credit Elect or Zero balance return, honor the latest received date. Delete any earlier received date(s) that may be present.

    Reminder:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Caution:

    Any Form 1040 with International information, Form 1040 with Form 2555 or Form 2555-EZ, Form 1040NR or Form 1040NR-EZ and Form 1040-PR or Form 1040-SS transshipped from another Campus, Territory Office or Foreign Post, take the following action:

    IF THEN
    there is no Austin Submission Processing Center (AUSPC) received date edit the received date using today's date minus 10 days
Types of Received Dates
  1. Accept these five types of received dates:

    1. AUSPC date stamp

    2. IRS area/territory (e.g., Puerto Rico) office date stamp with the word Received.

      Note:

      The city and functional area within the site (CSCO, Exam, ICT, CIS, AM, for instance) should appear in the date stamp.

    3. Valid handwritten received date

      Reminder:

      A valid handwritten received date by an IRS employee includes those edited by Submission Processing employees.

    4. IRS Offices in London, Paris, Beijing or Frankfurt only.

    5. Field Assistance Offices

  2. To be a valid handwritten received date it must include both of the following:

    1. The word "received" or any abbreviation of the word received and a date.

    2. A signature on the front page of the return with an abbreviated title such as "RO," "RA," "RR," "OCR," "TSR" or "TSSP."

    Exception:

    A handwritten received date edited by an IRS employee in Submission Processing or Integrity and Verification Operation (IVO) is valid. A clear indication that a handwritten received date has been edited by IVO will be the presence of SPC "B" , SPC "M" and/or "IVO" noted or stamped in the upper left margin. Generally, the IVO edited received date will be earlier than the original, stamped received date.

Post Office Marks
  1. For complete instructions, see IRM 3.11.3.8.2.2.

Private Delivery Service (PDS) Marks
  1. For complete instructions, see IRM 3.11.3.8.2.3.

Timely-Filed Returns

  1. For 2018 a current year return is a return filed for tax year 2017. A current calendar year return (1712) is considered to be timely filed when it is received on or before the due date:

    1. April 17, 2018 for Form 1040, Form 1040A, Form 1040EZ, Form 1040-PR, Form 1040-SS

      Note:

      June 15, 2018 is the due date for taxpayers residing outside the United States and Puerto Rico since they are entitled to a two-month extension to file.

    2. April 17, 2018 for Form 1040NR (program code 46120) or Form 1040NR-EZ (program code 46126)

    3. June 15, 2018 for Form 1040NR (program code 46140) or Form 1040NR-EZ (program code 46146)

    Note:

    TAS received dates are not acceptable

    .

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

  3. For current calendar-year (1712) returns, with the exception of Program 46220, 46227 or 46228, received on or before April 17, 2018:

    The document is Then
    processed "before June 4, 2018" Circle the received date when present.

    Exception:

    NEVER circle a received date that has been edited in green ink.

    Numbered with a Julian date of 155 or earlier in the DLN, Circle the received date when present.

    Exception:

    NEVER circle a received date that has been edited in green ink.

    Unnumbered and being processed on "June 4, 2018" or later Edit "041718" as the received date, if one is not present.
    Numbered with a Julian date of 156 or later in the DLN, Edit "041718" as the received date if one is not present.

≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

  4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  5. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Exception:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Exception:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ "
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ "
  6. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  7. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Late-Filed Return/Reasonable Cause

  1. A return is delinquent when it is filed after the due date without an approved extension.

    Note:

    Taxpayers residing outside the United States and Puerto Rico are entitled to a two-month extension to file.

  2. Edit "≡ ≡ ≡ ≡ ≡ " as the received date when the return has no received date and an envelope is attached with both of the following:

    1. A postmark date or designated PDS mark date of April 18, 2018, or later,

    2. The envelope is addressed to a state taxing agency.

  3. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
  4. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
  5. Edit CCC "N" on a return that qualifies the taxpayer for a special extension when the received date is≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and there is an indication (on the return or an attachment) of any of the following:

    1. Do not edit CCC "N" on Form 1040NR and Form 1040NR-EZ. These taxpayers do not qualify for the special extension.

    2. The taxpayer lived outside the United States and Puerto Rico on the due date of the return.

    3. The taxpayer is in the military or naval service on duty outside the United States and Puerto Rico.

    4. The taxpayer has a APO/DPO/FPO address.

    5. The taxpayer qualifies for an automatic two month extension.

    6. Form 2555 or Form 2555-EZ dates indicate still there or continuing.

    7. Form 2555 or Form 2555-EZ has an ending date later than the tax year (e.g., 2018, 2019, etc.).

    8. Return indicates Treasury Regulation 1.6081-5(a).

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    Note:

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

  6. When the taxpayer's reasonable cause statement is not acceptable:

    1. Edit CCC "7"

    2. Correspond using Letter 854C (Penalty Waiver or Abatement Disallowed Appeals Procedure Explained), Paragraph D.

  7. On a late-filed return when reasonable cause is established, take the following action:

    IF THEN
    Late filing, Edit CCC "R" unless CCC "N" has been edited.
    Late payment or a "Section 6020(b)" notation is present, Edit CCC "M."
  8. Edit CCC "R" and delete CCC "N" on a late filed return when the taxpayer has a Form 4868 or Form 6401 attached to the return and an ITIN or IRSN is present in the primary SSN field. Both ITINs and IRSNs begin with a 9.

  9. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Reminder:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  10. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Note:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

    Reminder:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .

General Instructions for ALL International Form 1040/Form 1040A/Form 1040EZ/Form 1040-PR/Form 1040-SS/Form 1040NR/Form 1040NR-EZ

  1. Edit RPC "L" if there are no significant T-line entries present or edited from attachments on lines:

    • 7 through 79, Form 1040

    • 7 through 51, Form 1040A

    • 1 through 14, Form 1040EZ

    • 3 through 15, Form 1040-PR and Form 1040-SS

    • 8 through 76, Form 1040NR

    • 3 through 26, Form 1040NR-EZ

    Reminder:

    When applicable, the Dependency Status Indicator (DSI) is required even if RPC "L" is edited.

  2. Edit RPC "V" when the tax form is computer generated. Computer-generated forms are identified by a three-alpha character software code in the bottom margin of page 1 or 2.

    Exception:

    Do not edit RPC "V" on Form 1040-PR, Form 1040-SS, Form 1040NR or Form 1040NR-EZ.

    Note:

    Do not edit RPC "V" on computer-generated returns when there is an indication the return was prepared by Volunteer Income Tax Assistance (VITA) or Tax Counseling for the Elderly (TCE) (e.g., the presence of an "S" within the P-TIN field).

  3. If the return contains page 1 from Form 1040 and page 2 from Form 1040NR or vice-versa, convert and process as Form 1040NR unless page 5, Form 1040NR is attached and the taxpayer indicates presence in the U.S. for 365 or 366 days. If the taxpayer indicates presence in the U.S. for 365 or 366 days, then convert and process return as Form 1040.

  4. All amounts are to be reported in U.S. currency only. Convert any amounts reported in foreign currency to U.S. dollars using the exchange rate chart appropriate for the tax period of the filer's return.

  5. Edit Action Code "480" for early-filed returns, such as gambling. Also edit the tax period in YYMM format and a received date if not present.

  6. Some special conditions will require special editing procedures. Taxpayers are instructed to note certain conditions on the return, some type of returns require special editing which you must identify. Edit these returns using instructions in IRM 3.11.3 subsection titled "Special Situations and Returns" unless otherwise instructed in line-by-line instructions in IRM 3.21.3:

    Special Situations IRM Reference
    Combat Zone and other Military Operations IRM 3.11.3.6.1.1
    Examination Cases IRM 3.11.3.6.1.5
    Fiduciary Relationship (Minor Child, POA) IRM 3.11.3.11
    Frivolous Filer/Non-Filer Returns

    Note:

    Any return with a 1099-OID should be treated as frivolous.

    Note:

    There are also FRIV 1040NR Sole Proprietor -- UK returns

    IRM 3.11.3.6.1.6
    Hardship

    Caution:

    When W&I Submission processing Liaison for Taxpayer Advocate Service (TAS) issues walks a return through Code & Edit on the basis of hardship, in addition to normal editing, perform all actions below:
    • Edit CCC "O" to freeze the refund
    • Edit CCC "Y" to send the return to Error Resolution System (ERS)
    • "X" the refund line on the return.

    Reminder:

    If correspondence conditions are identified during editing, give the return back to TAS and do not correspond.

    IRM 3.11.3.6.1.4
    Identity Theft - when the taxpayer submits Form 14039, Form 14039 (SP) or police report(s) claiming identity theft Exhibit 3.21.3-1
    Killed in Terrorist Action (KITA) IRM 3.11.3.6.1.2
    Natural Disaster/Emergency Relief Program IRM 3.11.3.6.1.3
    Refund Schemes IRM 3.11.3.6.1.7
    Special Returns IRM Reference
    Amended IRM 3.11.3.6.2.1
    Unprocessable Return IRM 3.11.3.6.2.2
    Blank Returns IRM 3.11.3.6.2.3
    Blocked or Deferred Income IRM 3.11.3.6.2.6
    Correspondence Imaging System (CIS) Returns IRM 3.11.3.6.2.7
    Combined Tax Liabilities IRM 3.11.3.6.2.8
    Community Property/Registered Domestic Partnership Returns IRM 3.11.3.6.2.9 and IRM 3.21.3.9.6
    Form 8938 Exhibit 3.21.3-1 and IRM 3.21.3.76.3.1.5
    Incomplete Returns IRM 3.11.3.6.2.4
    Injured Spouse Returns IRM 3.11.3.6.2.11
    Innocent Spouse Relief Request IRM 3.11.3.6.2.12
    Joint Committee Returns IRM 3.11.3.6.2.14
    Misblocked Returns IRM 3.11.3.6.2.15 and IRM 3.21.3.4.1
    Misfiled Returns IRM 3.11.3.6.2.16
    Reinput Returns IRM 3.11.3.6.2.17
    Returns Secured by Collection IRM 3.11.3.6.2.18
    Short Period Returns IRM 3.11.3.6.2.19

    Note:

    Edit Action Code "215" on International Returns.

    Substitute for Return (SFR) IRM 3.11.3.6.2.20
    52-53 Week Return IRM 3.11.3.6.2.21
    Blind Trust Returns IRM 3.11.3.6.2.22

Streamlined Filing Compliance Procedures

  1. The IRS announced Streamlined Filing Compliance Procedures for Non-Resident, Non-Filer Taxpayers (2012 Streamlined Procedures). The 2012 Streamlined Procedures became effective September 1, 2012 and provided procedures for certain US citizens living abroad who were non-filers to file delinquent tax returns without being charged failure to file (FTF) or failure to pay (FTP) penalties. The 2012 Streamlined Procedures is a legacy procedure no longer available to taxpayers.

  2. Effective July 1, 2014, the IRS will apply a specific program reference number (46117 for Form 1040, 46137 for Form 1040A and 46157 for Form 1040EZ) and blocking series from 850 - 899 to returns submitted under the Streamlined Compliance Procedures.

    Note:

    If a package contains a mixture of Form 1040, Form 1040A and/or Form 1040EZ, convert to Form 1040. If a package contains a mixture of Form 1040NR and Form 1040NR-EZ, convert to Form 1040NR.

  3. Route any package postmarked before July 1, 2014 to Large Business and International (LB&I). Upon receipt of the returns back from LB&I, follow the procedures as outlined by LB&I.

  4. Returns postmarked on or after July 1, 2014 will follow the enhanced Streamlined processing instructions as outlined at IRM 3.21.3.9.1.1 .

    Exception:

    If a new certification is received with a package or "SFO" or "SDO" is notated and postmarked before July 1, 2014, process as New Streamlined.

  5. Streamlined packages may contain a mixture of Forms 1040, Forms 1040NR and Dual Status returns. Fully code all returns and tag Forms 1040NR for rebatch using purple rebatch tag and marking the Streamlined 1040NR box. Edit action trail "Streamlined Package Complete" in the left margin on each return package.

    Note:

    If the Form 1040 is the controlling document in a Dual Status return, do not tag the return for rebatching.

    Reminder:

    Submissions consisting only of Form 1040NR will not be provided the benefits of the Streamlined Filing Compliance Procedures. Forms 1040NR must have been reviewed by LB&I per IRM 3.21.3.9.1.1 . LB&I will indicate this by leaving an action trail in the left margin.

  6. Unless otherwise instructed, it is important that all returns submitted by a taxpayer be kept together. Streamlined packages tagged for rebatching will require special handling. Forms 1040NR will be rebatched into appropriate programs. All program transmittals and returns must stay together through the remainder of the pipeline process.

  7. If a Streamlined package is identified as a "reply to Streamlined correspondence" , route the uncoded package to Rejects using yellow Streamlined tag. This will be identified by an attached 4087C letter and/or an attached explanation stating that the taxpayer is responding to a 4087C letter or an envelope addressed to MS 6126.

    Exception:

    Do not route to Rejects if "Process as Original" or PAO is present on the return.

  8. All returns submitted under the Streamlined Filing Compliance Procedures must have a valid Taxpayer Identification Number (TIN). For U.S. citizens, resident aliens and certain other individuals, the proper TIN is a valid Social Security Number (SSN). If a return submitted to the Streamlined Procedures is received without a Taxpayer Identification Number (TIN), search the package for a valid TIN. If no TIN is found, route the uncoded package to Entity Control for an IRSN using yellow Streamlined tag.

    Note:

    An IRSN must be assigned before the package can be routed to Statute. The assignment of an IRSN to a submission made by a taxpayer required to use and SSN does not constitute waiver by the IRS of the eligibility requirements for the Streamlined Filing Compliance Procedures.

  9. When the Attachment Guide instructs routing the actual return to another department (e.g., Collections, Exam), yellow Streamlined tag the uncoded package for LB&I #4305 by checking the "other" box and then writing the reason for routing to LB&I.

  10. When the Attachment Guide instructs to research, yellow Streamlined tag the uncoded package for LB&I #4305 by checking the "other" box and then writing the reason for routing to LB&I.

  11. Follow local procedures for completing and routing Forms 1040X with an Accounts Management coversheet.

2014 Streamlined Filing Compliance Procedures
  1. For the new enhanced Streamlined Project, taxpayers will notate on the return:

    • Streamlined Foreign Offshore or

    • Streamlined Domestic Offshore

    • Package of returns addressed to Mail Stop 6063 AUSPC

    • Taxpayer specifically mentions the "Streamlined" program in an attached letter

    Note:

    If Form 1040NR, Form 1040NR-EZ, Form 1040-PR or Form 1040-SS are submitted for Streamlined processing after July 2014, route these filings to LB&I at MS #4305 AUSC using yellow Streamlined tag. Upon receipt of the returns back from LB&I, follow procedures as outlined by LB&I. These returns will have LB&I reviewed in the Action Trail area.

  2. If a Streamlined return is received without a Taxpayer Identification Number (TIN), search the package for a valid TIN. If no TIN is found, route the uncoded package to Entity Control for an IRSN using a Streamlined yellow tag.

    Note:

    An IRSN must be assigned before the package can be routed to Statute.

  3. If a return in the package requires Statute Clearance, route the entire uncoded package to Statute using yellow Streamlined tag.

    Exception:

    Statute year Forms 1040X received with an "AM Streamlined Coversheet" already attached do not need to be routed to Statute.

  4. All Streamlined returns should be coded with SPC "P" .

  5. When a completed Streamlined package is received, edit the following Computer Condition Codes (CCC):

    • CCC "M"

    • CCC "P"

    • CCC "R"

      Note:

      Do not edit CCC "N" if editing CCC "M" , CCC "P" and CCC "R" .

      Caution:

      Do NOT edit CCC "M" , "P" and CCC "R" if corresponding for a Streamlined issue such as the certification. If CCC "M" , CCC "P" and CCC "R" are not edited, see IRM 3.21.3.8.4 for CCC "N" instructions.

  6. The instructions for editing CCC "7" on Streamlined returns will not apply if the return has CCC "M" , CCC P and CCC R edited.

  7. Follow normal coding instructions as outlined in IRM 3.21.3 and IRM 3.11.3.

  8. Once it has been determined that a Streamlined Package is complete (See IRM 3.21.3.9.1.2) ensure a copy of the certification is attached to each return. If the taxpayer provides an explanation on a separate statement, the statement must also be copied and attached to the return. Edit the taxpayer’s TIN to the certification if it has been omitted.

    Note:

    Each tax year MUST contain a copy of the signed certification. If only the original certification is in the package, photocopies must be made to place with each return. Use pink tag to indicate the number of copies and which returns need copies. Once all returns have a photocopy of the certification, detach the original certification with original signature. The original will be routed to LB&I at MS 4305, using blue routing tag.

  9. If a package contains Form(s) 1040X AND the certification is complete with all tax years, separate the Form(s) 1040X and place an Accounts Management cover sheet on the Form 1040X and route to AM using blue routing tag. Each Form 1040X must have an Accounts Management coversheet before routing. Edit an action trail Streamlined Package Complete in the left margin on each return in the package. If Streamlined correspondence is required, follow IRM 3.21.3.9.1.2 (2).

    Note:

    A copy of the certification MUST be attached to each Form 1040X. Keep the Form(s) 1040X together if there are multiple forms and place one coversheet on each of the returns. Each 1040X must have an Accounts Management coversheet before routing.

  10. Any Streamlined package that contains any return marked amended/duplicate/copy or indication of Copy to ICT submitted under this program should be routed uncoded to LB&I at MS 4305 AUSPC using yellow Streamlined tag.

    Note:

    If the Certification Form 14653 or Form 14654 is marked "Amended" then the Streamlined package must be reviewed by LB&I before processing. If an amended certification form is attached to an amended return, and there isn’t an indication of prior LB&I review, then route the package to MS AUSC - 4305 using yellow Streamlined tag.

    Note:

    LB&I will review the returns and determine the actions that need to be taken by Submission Processing. Follow the directives provided by LB&I when the return is received back from LB&I review. LB&I will make the notations in the lower left margin.

    Exception:

    If a Statute year Form 1040X without an "AM Streamlined Coversheet" attached has not been cleared by Statute, route the entire package uncoded to LB&I at MS 4305 using yellow Streamlined tag.

  11. When attachments are received separated from returns (FBARs, certifications, correspondence, etc.), attach them to corresponding tax years. If the attachment does not correspond to a tax year, attach to the latest Streamlined tax year.

    Exception:

    If original BMF forms are listed on the certification, route entire package to LB&I at MS 4305. Otherwise, route BMF forms to R&C and leave action trail on related tax year (if any).

Correspondence for 2014 Streamlined Filing Compliance Procedures
  1. If the items below are not submitted with a NEW Streamlined package, correspond.

    1. Items required for a complete Streamlined Foreign Offshore filing:
      - Original signature(s) of the taxpayer(s) under a jurat on at least one Certification.

      Note:

      If the tax return is Married Filing Jointly then correspond if one or both signatures are missing.

      Exception:

      Any return received from LB&I with the notations of "Process as Streamlined" and "Reviewed by LB&I" and there is a copy of the original certification, do not correspond for original certification.


      - Form 14653 (Certification by U.S. Person Residing Outside the United States for Streamlined Foreign Offshore Procedures).

    2. Items required for a complete Streamlined Domestic Offshore filing:
      - Amount of taxpayer's miscellaneous offshore penalty (only packages with Form 1040X require a penalty computation).
      - An original signature is required under a jurat on at least one certification.

      Note:

      If the tax return is Married Filing Jointly then correspond if one or both signatures are missing.

      Exception:

      Any return received from LB&I with the notations of "Process as Streamlined" and "Reviewed by LB&I" and there is a copy of the original certification, do not correspond for original certification.


      - Form 14654 (Certification by U.S. Person Residing in the United States for Streamlined Domestic Offshore Procedures).

      Note:

      If the taxpayer submits Streamlined package with Form 14438 questionnaire instead of a certification, correspond using paragraph "E" instructing the taxpayer to follow current Streamlined procedures.

    Note:

    A substitute certification form is acceptable as long as it contains all of the relevant information listed above including a signature under a jurat. Correspond if missing.

  2. If any Streamlined correspondence is required, follow the instructions below:

    • Use Form 13900 and only correspond on one tax year.

    • Use Action Code "215" on each return, except Form 1040X.

    • Keep the package together - including any Form(s) 1040X.

    • Place an Accounts Management coversheet on each Form 1040X.

      Reminder:

      Keep the package together.

  3. If correspondence is required AND there are NO Streamlined issues, follow the instructions below:

    • Use Form 13900 to correspond.

    • Use Action Code "215" on each return, except Form 1040X.

    • Keep the package together with the exception of Form(s) 1040X,

    • Ensure each return has a copy of the certification and route the original certification to LB&I at MS 4305.

      Caution:

      If you are separating Form(s) 1040X, remember to use the AM coversheet and attach a copy of the certification to the return(s). Edit an action trail "Streamlined Package Complete" on each return in the package.

Amended/Duplicate Returns Submitted for 2014 Streamlined Filing Compliance Procedures
  1. See IRM 3.21.3.9.1.1 for July 1, 2014 instructions.

Frivolous Filer/Non-Filer

  1. The Frivolous Filer Program (FRP), through administration of the Internal Revenue Code section 6702, addresses non-compliance based on unfounded legal or constitutional arguments. The law provided penalties intended to address those situations where a taxpayer is furthering a frivolous argument or demonstrates a prima facie intent to delay or impede the administration of the tax law.

  2. Pull any return identified as Frivolous Review Box Criteria and place in the designated Friv Filer Box. See Exhibit 3.11.3-11.

Criminal Investigation

  1. Criminal Investigation (CI) investigates potential violations of the Internal Revenue Code (IRC) and related financial crimes. Criminal violations of the IRC are willful and deliberate attempts to evade or defeat the income tax. Flagrant criminal activities includes but is not limited to the failure to pay taxes due and/or taxes collected or withheld and claims of false returns based on bogus return information.

IVO (Integrity and Verification Operation) -- RICS

  1. IVO (RICS) performs a revenue protection program. IVO (RICS) utilizes the Electronic Fraud Detection System (EFDS) to screen and verify the accuracy of wages and withholding reported on paper and electronically filed tax returns.

  2. Send to IVO multiple returns with matching characteristics such as:

    • Duplicate filing addresses

    • Same writing instruments (matching ink, pencil color)

    • Same/similar handwriting

    • Matching attached envelopes

    • Same paper stock

    • Same amounts entered on similar Form 1040 line entries (including Schedules/Forms)

    • Multiple entries ending in zeros

    • Same occupations

    • Large number of "cookie-cutter" returns submitted in a single envelope/box

    • Duplicate bank Routing number and account numbers

  3. Also send to IVO/RICS any returns with any of the criteria listed in paragraph (2) above when the taxpayer claims any of the following income and/or credits:

    • Adoption Credit

    • First Time Homebuyer Credit

    • Credits from Form 2439 and/or Form 4136

    • Unsubstantiated withholding - no wages reported and no supporting documents attached.

  4. Pull any return identified as IVO (RICS) Criteria and tag for placement in the designated "IVO (RICS) Funny Box" using the following criteria:

    • Refund Schemes

    • Form W-2 is altered, handwritten or a substitute/similar statement

    • Form(s) 4852 attached and no other withholding documentation is present

    • Refund scheme review when there are similarities between returns on Form(s) W-2 such as:
      ♦ Typing or printing
      ♦ Wage amounts
      ♦ Withholding amounts
      ♦ Employer

    • Earned Income Credit (EIC) is being claimed and only the attached Form W-2 is altered, handwritten or a substitute/similar statement

    • IDT/Operation Mass Mailing (OMM) – refund scheme involving bulk filings. Returns are often identical or vary only slightly. See IRM 3.11.3 and Exhibit 3.11.3-12 for a clear breakdown of OMM and non-OMM RICS criteria.

    Note:

    Do Not Send to IVO (RICS):
    ♦ Returns that already have been stamped by IVO (RICS/AMTAP/QRDT).
    ♦ Returns that have a zero balance or balance due

Examination Review

  1. The primary objective in identifying tax returns for Examination is to promote the highest degree of voluntary compliance. Exam will provide support and assist Submission Processing (SP) with any questionable return identified during processing. Exam has a vast multitude of programs and tolerance criteria already identified in various IRM sections. In addition to the criteria listed in Exhibit 3.11.3-13, Exam allows SP to refer questionable returns for review unless restricted by another IRM section.

  2. Pull any return identified as Examination Review Box Criteria and tag for placement in the designated "Exam Funny Box." (See Exhibit 3.11.3-13.)

Community Property or Registered Domestic Partnership Returns -- General Information

  1. If taxpayers are married and are subject to the community property laws of a foreign country, a United States state, or a United States Possession/territory, they generally must follow those laws to determine their income for United States tax purposes unless:

    1. Both taxpayers are nonresident aliens.

    2. One taxpayer is a nonresident alien and the other is a United States citizen or resident and they do not both choose to be treated as United States residents.

  2. If one taxpayer is a nonresident alien, the following rules apply to community income.

    1. Earned Income of a spouse, other than trade or business income and a partners distributive share of partnership income, is treated as the income of the taxpayer whose services produced the income. That taxpayer must report all of it on a separate tax return.

    2. Trade or business income, other than a partner distributive share of partnership income, is treated as the income of the person who exercises substantially all of the management and control over the trade or business. That taxpayer must report all of it on a separate return.

    3. Partnership income (or loss). A partner distributive share of partnership income is treated as the income (or loss) of the partner. The partner must report all of it on a separate return.

  3. Income derived from the separate property of one taxpayer (and which is not earned income, trade or business income, or partnership distributive share income) is treated as the income of that taxpayer. That taxpayer must report all of it on a separate return. Use the appropriate community property law to determine what is separate property.

    Note:

    Income can no longer be split under Community Property provisions.

  4. All other community income is treated as provided by the applicable community property laws.

Decedent Return

  1. For ALL International returns (Form 1040/Form 1040A/Form 1040EZ/Form 1040-SS/Form 1040-PR/Form 1040NR/Form 1040NR-EZ), see IRM 3.11.3.10 - 3.11.3.10.6.

    Exception:

    A refund of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on a Form 1040NR or Form 1040NR-EZ requires documentary evidence when a surviving spouse is signing.

  2. In addition to the instructions above, special editing is required when an Additional Information Line (AIL) is required for a foreign address. If a foreign address AIL is present, and a decedent AIL is present or has been edited as a second AIL, take the following actions for a refund return:

    1. DO NOT edit CCC "L" or CCC "W" .

    2. Edit CCC "Y" and an action trail of "Manual Refund" .

      Exception:

      Do not edit CCC "Y," if CCC "3" has been edited. If the taxpayer has elected to use Direct Deposit or has been issued an IRSN, do not edit CCC "Y" (An IRSN begins with a 9 and the middle 2 digits are other than 50-65, 70-88, 90-92 and 94-99. The middle 2 digits identify the Campus location where it was issued from.)

Tax Period for International Returns

  1. For complete instructions refer to IRM 3.11.3.7.

    Caution:

    See IRM 3.21.3.73.1 for additional Form 1040NR or Form 1040NR-EZ instructions.

  2. Australian residents often use a June (06) fiscal tax period ending date that coincides with the Australian accounting period. Follow taxpayer intent and edit YY06 for the tax period when June 30th is indicated as the tax period ending date on the tax return for an Australian resident.

  3. New Zealand residents often use a June (06) fiscal tax period ending date that coincides with the New Zealand accounting period. Follow taxpayer intent and edit YY06 for the tax period when June 30th is indicated as the tax period ending date on the tax return for a New Zealand resident.

  4. U.K. residents use a fiscal tax period that ends on April 5th.

General Instructions for Editing International Form 1040/Form 1040A/Form 1040EZ/Form 1040-PR/Form 1040-SS/Form 1040NR/Form 1040NR-EZ

  1. The following subsections contain instructions for:

    • Caption Information

    • Taxpayer Identification Number

    • Name and Additional Information Line

    • Mailing Address

    • City and State

    • ZIP Code

    • Country Name

  2. Additional instructions may be found within Form specific instructions.

Caption Information

  1. Required Caption Information Includes:

    1. Primary Taxpayer Identification Number (P-TIN)

    2. Secondary Taxpayer Identification Number (S-TIN), if applicable

    3. Name(s)

    4. Additional Information Line (which may be present to further identify the taxpayer's location or representative)

    5. Mailing Address

    6. City/State

    7. Foreign Province/State or Territory/Foreign Mail Routing Code/Postal Code

    8. Country (if applicable)

    9. ZIP Code when available

  2. Do not change the name control when it has been edited in red by: Entity Unit, ITIN Operation or RPS employee. Use the Entity/ITIN/RPS editing to perfect the:

    1. Name Control for caption.

    2. TIN on attachments - Schedule C, Schedule C-EZ, Schedule H, Schedule SE, Form 4137, Form 5405, Form 8853, Form 8919 and Form 8941.

    Note:

    The name control for a newly assigned TIN or IRSN may have been edited and underlined by the ITIN Operation or Entity Unit.

  3. For general instructions, refer to IRM 3.11.3.9.1 and 3.11.3.9.2. In addition to these instructions, form specific instructions must be followed for Form 1040NR and Form 1040NR-EZ. See IRM 3.21.3.73.3 through IRM 3.21.3.73.5.

Taxpayer Identification Number

  1. For complete instructions see IRM 3.11.3.9.2.1.

Primary TIN
  1. If the P-TIN is missing or incomplete, examine the return and its attachments and edit the P-TIN, if found. Circle an incomplete P-TIN.

    Note:

    If there is an indication the taxpayer has used a TIN that is not her/his own, take no action. (e.g., The taxpayer shows an ITIN on the return and an SSN on attached Form(s) W-2).

  2. If the primary taxpayer is an NRA and the secondary taxpayer has an SSN/ITIN and income, edit the secondary SSN/ITIN as the primary TIN and reverse the order of the names.

  3. See IRM 3.21.3.73.3.1.1 for Form 1040NR and Form 1040NR-EZ specific instructions.

  4. For additional instructions see IRM 3.11.3.9.2.1.1.

Secondary TIN
  1. Edit the S-TIN from the return or attachments if it is missing or incomplete, and the Filing Status (FS) is "2," "3" or "6." Edit the S-TIN in the correct block if it is blank and the taxpayer has entered a TIN on the line to the right of FS box 3.

    Exception:

    A Secondary TIN is not allowed on a Form 1040NR or Form 1040NR-EZ.

  2. For additional instructions see IRM 3.11.3.9.2.1.2 and IRM 3.21.3.73.4.1.

Canadian TIN
  1. Canadian TIN: Canada assigns a Canadian TIN in a 3-3-3 (000-000-000) format. If it can be determined that the TIN is a Canadian TIN, examine the return and attachments for a TIN in a 3-2-4 (000-00-0000) format:

    1. If found, circle the Canadian TIN and edit the correct U.S. TIN (000-00-0000 format).

    2. If not found, circle the Canadian TIN.

ITIN
  1. ITINs are issued to those individuals who are required to have a U.S. taxpayer identification number but who do not have, and are not eligible to obtain, a TIN issued by Social Security Administration. The ITIN is intended for tax purposes only and can be obtained by completing a Form W-7, Application for IRS Individual Taxpayer Identification Number.

  2. Stop editing the return and take the following actions when Form W-7 or Form W-7(SP) is attached to the return:

    1. Unnumbered:
      • Pull the return from the batch. Attach Form W-7 to the front of the return.
      • Edit Received Date "MMDDYY" and route the entire return to the ITIN unit.

    2. Numbered:
      • Edit Action Code "610" (for non remittance) or Action Code 611 (for remittance).

Internal Revenue Service Number (IRSN)
  1. These numbers are used for internal processing only when the taxpayer does not qualify for an SSN or ITIN. An IRSN will start with a 9 (nine) and the middle 2 digits are other than 50-65, 70-88, 90-92 and 94-99. The middle 2 digits identify the Campus location where it was issued from. The fourth and fifth digits for the Austin Campus are 06, 18 and 66.

Name and Additional Information Lines

  1. Each return processed must have a legible last name. Research following local procedures when the name is illegible and cannot be perfected.

  2. There are two (2) lines available for taxpayer identification:

    1. The name line is for the first name, middle initial and last name(s) of the primary and secondary (if present) taxpayer(s). This includes any suffix.

    2. The additional information line (AIL) is used to further identify the taxpayer or contain a foreign street address.

      Example:

      Additional name, address or representative information may be shown.

Name Line
  1. For complete instructions refer to IRM 3.11.3.9.2.2 and IRM 3.11.3.9.2.2.1.

Additional Information Line
  1. An AIL can contain the following information:

    1. A fiduciary, taxpayer representative, or in-care-of (c/o) information

    2. A parent signing for a minor child, see Figure 3.21.3-1

    3. A location other than a street address (e.g., building, college, company), See IRM 3.11.3.9.2.2.2.

    4. Mailing address of a foreign country

      Note:

      A P.O. Box can be an AIL

    5. Puerto Rico address, see IRM 3.21.3.12.3.3.

  2. If any of the above items listed in paragraph (1) are present, edit and/or underline the AIL.

    Exception:

    Do not underline the foreign mailing address if no province, city or postal code is present.

  3. If a foreign address is present on Form 1040/Form 1040A/Form 1040EZ and a name is present or has been edited as a second AIL, underline both. Then take the following actions for REFUND returns:

    1. For Decedent Returns do not edit CCC L or CCC W

    2. Edit CCC "Y" and an action trail of Manual Refund.

      Exception:

      Do not edit CCC "Y," if CCC "3" has been edited. If the taxpayer has elected to use Direct Deposit or has been issued an IRSN, do not edit CCC "Y" (An IRSN begins with a 9 and the middle 2 digits are other than 50-65, 70-88, 90-92 and 94-99. The middle 2 digits identify the Campus location where it was issued from. The fourth and fifth digits for the Austin Campus are 06, 18 and 66.)

  4. For additional instructions, refer to IRM 3.11.3.9.2.2.2.

    Figure 3.21.3-1

    This is an Image: 34010001.gif
     

    Please click here for the text description of the image.

Additional Information Line (Puerto Rico)
  1. The Additional Information Line (AIL) may be found anywhere in the caption area.

    Note:

    See (3) h) below for examples of correct editing of address.

  2. Underline urbanizations, subdivisions and buildings as the AIL unless it is the only element of the mailing address.

  3. For Puerto Rico only, the following are different types of address formats:

    1. Four-line address containing Name, Urbanization, House Number and Street Name, City, State and ZIP Code.

    2. Three-line address containing Name, House Number and Street Name, City, State and ZIP Code.

      Exception:

      Some areas in Puerto Rico do not have street names or repetitive house numbers. The urbanization name substitutes as the street name and becomes the primary identifier.

      Example:

      Name, House Number and Urbanization Name, City, State and ZIP Code.

    3. Public Housing Projects (residenciales) without street names or repetitive apartment numbers. In these cases, the apartment number is the primary number and the public housing project becomes the street name.

      Example:

      Name, Apartment Number and Residential Name, City, State and ZIP Code.

    4. Apartment Buildings and Condominiums with a physical (street) address containing Name, Building Name, Street Number Apartment Number, City, State and ZIP Code.

    5. Buildings without a physical address. Certain Condominiums are located on an unnamed street and may not have an assigned number. The name of the Condominium substitutes as the street name and the number 1 is used when no building number exists.

    6. Do not substitute the prefix Calle with the suffix street. Such substitutes render the address Undeliverable.

    7. Urbanization -- denotes an area, sector or residential development within a geographic area. Commonly used in Puerto Rico urban areas, it is an important part of the addressing format, as it describes the location of a specific street. In Puerto Rico, identical street names and address number ranges can be found within the same ZIP Code. In these cases, the urbanization name is the only element that correctly identifies the location of a particular address. Generally the abbreviation URB is placed before the urbanization name.

    8. Below is a table of examples of correct address coding:

      Tax Return Address Correct Coding
      URB. Jardines de San Blas A-4 URB. Jardines de San Blas A-4
      Estancias De Tortuguero,
      521 Calle Tulipa
      Estancias De Tortuguero
      521 Calle Tulipia
      Bo Rocha Comunidad LaSalle HC 02 Box 12811 Bo Rocha Comunidad LaSalle
      HC 02 Box 12811
      Puerto Nuevo 512 Calle Aragon Puerto Nuevo
      512 Calle Aragon
      Urb San Rafael EST Calle Violeta E-19 Buzon 246 Urb San Rafael EST
      Calle Violeta E-19 Buzon 246
      Cond. Hato Rey Plaza Jesus T Pinero #200 Apt 6-M Cond. Hato Rey Plaza
      Jesus T Pinero #200 Apt 6-M
      URB Ciudad Jardin de Bairoa 88 Calle Franca URB Ciudad Jardin de Bairoa
      88 Calle Franca
      Villa Fortuna / Via Leticia 4LS-10 Villa Fortuna
      Via Leticia 4LS-10
      Plaza Antillana 151 Calle Caesar Gonzalez Apt 6203 Plaza Antillana
      151 Calle Caesar Gonzalez Apt 6203
      Reina de Los Angeles U-11 Calle 1 Reina de Los Angeles
      U-11 Calle 1

Mailing Address

  1. There are two types of international mailing addresses:

    1. U.S. Territory address

    2. Foreign Country address (address not within the 50 United States, District of Columbia, or any U.S. Territory)

  2. For Domestic addresses refer to IRM 3.11.3.9.2.3.

International Mailing Address
  1. A U.S. Territory Address includes:

    1. Street Address

      Caution:

      Do not delete any reference of Urbanization or URB for Puerto Rico.

      Note:

      For Puerto Rico address AIL editing, see IRM 3.21.3.12.3.3.

      Note:

      Multiple Addresses or no Mailing Address, see IRM 3.11.3

      .

    2. City

    3. U.S. Territory -- must be abbreviated with a valid two (2) character state abbreviation. Circle out the U.S. Territory and edit the abbreviation listed below. See Figure 3.21.3-2:
      • AS -- American Samoa
      • FM -- Federated States of Micronesia
      • GU -- Guam
      • MH -- Marshall Islands
      • MP -- Commonwealth of the Northern Mariana Islands
      • PR -- Puerto Rico
      • PW -- Palau
      • VI -- Virgin Islands

    4. ZIP Code -- edit the ZIP code if missing. See Exhibit 3.21.3-6 and Figure 3.21.3-3 if unable to edit the ZIP code.

      Figure 3.21.3-2

      This is an Image: 34010002.gif
       

      Please click here for the text description of the image.

      Figure 3.21.3-3

      This is an Image: 34010003.gif
       

      Please click here for the text description of the image.

  2. A Foreign Country Address includes one name line and three lines of address/location information:

    1. Street Address -- underline the street address or location as the additional information line,

      Caution:

      When an address is short (no city, state, province or postal code is present), such as those from Hong Kong, the use of an AIL is not needed -- Do Not Underline the AIL, but Do /country/$. See Figure 3.21.3-4.

      Note:

      If a P.O. Box and street address are present, underline both as the AIL.

    2. Foreign Province/State/County and Foreign mail routing code/postal code,

    3. Foreign Country Name in a /country name/$ format, see Figure 3.21.3-5.

  3. If a domestic and foreign address are both present, circle out the foreign address.

    Figure 3.21.3-4

    This is an Image: 34010004.gif
     

    Please click here for the text description of the image.

    Figure 3.21.3-5

    This is an Image: 34010005.gif
     

    Please click here for the text description of the image.

City/State

  1. For domestic addresses refer to IRM 3.11.3.9.2.4.

State/Province/County of Foreign Addresses
  1. States/provinces/counties for the countries listed below must be abbreviated. Circle out the state/province/county and edit the abbreviation in its place. See Exhibit 3.21.3-5 for a list of abbreviations.

    • Australia

    • Brazil

    • Canada

    • Cuba

    • Italy

    • Mexico

    • Netherlands

    Caution:

    Many cities share names with states/provinces. Do not delete or abbreviate a city name.

    Note:

    See Figure 3.21.3-6 for coding examples.

    Figure 3.21.3-6

    This is an Image: 34010006.gif
     

    Please click here for the text description of the image.

ZIP Code/International Mail Routing/Postal Code

  1. U.S. territories must have a ZIP Code; edit if missing. See Exhibit 3.21.3-6

  2. A mail routing code/postal code for foreign addresses can contain alpha and/or numeric characters. If missing, edit the mail routing code following the state or province if it can be readily determined. See Figure 3.21.3-7.

    Figure 3.21.3-7

    This is an Image: 34010007.gif
     

    Please click here for the text description of the image.

Country Name

  1. The name of a country for foreign address must be edited using "/Country/$."

    Caution:

    If a foreign city/country is present, along with an APO/DPO/FPO address, circle the foreign address, leaving the APO/DPO/FPO address.

    Reminder:

    If Palestine is listed as the country in the entity, accept as the country on Form 1040.

  2. If a domestic and foreign address are both present, circle out the foreign address.

  3. When an address is short (no city, state, province or postal code), such as those from Hong Kong, the use of an AIL is not needed -- Do Not Underline the AIL, but Do /country/$. See Figure 3.21.3-4.

  4. If the country is missing and it can be readily determined, edit the country. See Exhibit 3.21.3-7.

  5. The country name in a foreign address must be spelled out. See examples below and Figure 3.21.3-8:

    • UAE -- circle and edit /United Arab Emirates/$

    • UK -- circle and edit /United Kingdom/$

    • ROC -- circle and edit /Taiwan/$

    • SAR -- circle and edit /Hong Kong/$

    • PRC or PROC -- circle and edit /China/$

    Exception:

    The countries listed below must be abbreviated as follows:

    Country Abbreviation
    Ashmore and Cartier Islands Ashmore and Cartier Is
    Bosnia and Herzegovina Bosnia Herzegovina
    British Indian Ocean Territory British Indian Oc Terr
    British Virgin Islands British VI
    Central African Republic Central African Rep
    French Southern and Antarctic Lands FR Southern Antarctic
    Heard Island and McDonald Islands Heard Is McDonald Is
    Macedonia, The Former Yugoslav Republic of Macedonia
    Saint Pierre and Miquelon St Pierre Miquelon
    Saint Vincent and The Grenadines St Vincent Grenadines
    Serbia and Montenegro Serbia Montenegro
    South Georgia and The South Sandwich Islands S Georgia S Sandwich
    Turks and Caicos Islands Turks and Caicos Is

    Figure 3.21.3-8

    This is an Image: 34010008.gif
     

    Please click here for the text description of the image.

  6. Hong Kong and China are considered separate countries for tax purposes. If the taxpayer puts "Hong Kong China" as the country in the caption area, circle out China.

  7. If the country name contains "Republic of" edit to leave the country name.

    Exception:

    If R.O.C. or Republic of China is present in the caption, circle and edit "/Taiwan/$."

  8. If any of the countries that are part of the United Kingdom (Great Britain, England, Northern Ireland, Scotland, and Wales) are present in the caption, circle and edit the country as "/United Kingdom/$."

  9. If S.A.R. is present in the caption, circle and edit "/Hong Kong/$."

    Note:

    If there are no city, state, province or postal code present, do NOT edit an AIL.

Filing Status Editing -- General Information for Form 1040/Form 1040A/Form 1040EZ

  1. The filing status (FS) is used to determine the taxpayer’s standard deduction amount, eligibility for the earned income tax credit, and to compute his/her tax.

  2. The instructions in this manual subsection are for determining and editing the correct FS.

  3. Edit the FS by either checking the appropriate box or by editing the FS Code to the left of the filing status 3 box.

  4. The meaning of the Filing Status Codes are:

    1. FS "1" -- single taxpayer

    2. FS "2" -- married taxpayers filing a joint return

    3. FS "3" -- married taxpayer filing a separate return (spouse exemption is not claimed)

    4. FS "4" -- head of household

    5. FS "5" -- qualifying widow(er)

    6. FS "6" -- married taxpayer filing a separate return (spouse exemption is claimed)

    7. FS "7" -- head of household (dependent exemption is not claimed)

Determining the Filing Status

  1. If a taxpayer is a U.S. citizen married to a nonresident alien, they can use FS 4 (head of household) and still claim an exemption for their spouse if they maintain a household for a qualifying child or other relative.

    1. If the spouse is claimed on line 6b or 6c and a qualifying child or other relative is claimed, edit the spouse to exemption position 6.

    2. If the spouse is claimed on line 6b or 6c and no qualifying child or other relative is claimed, "X" the spouse's exemption and change FS to 3.

  2. For additional instructions see IRM 3.11.3.12.2 through IRM 3.11.3.12.2.5.

Exemptions for Form 1040/Form 1040A

  1. For complete instructions see IRM 3.11.3.13.

    Exception:

    The instruction to edit a dependent that did not live in the United States to position 6 does not apply when the dependent lived with the taxpayer in a foreign country or U.S. Territory.

Dependency Status Indicator (DSI)

  1. Edit the Dependency Status Indicator (DSI) on Form 1040/Form 1040A in the blank area directly above line 6c, (column 4) or to the right of the text.

  2. Edit a DSI Code of "1" when the taxpayer indicates on the return or attachment that he/she is claimed on another person's return.

  3. Take the following actions for editing the DSI:

    If And Then
    The "Yourself" box on line 6a is not checked, FS is 1, 3, 4, 5, or 7, Exemption position 1 is "0," dash or blank and the total number of exemptions claimed in the box on line 6d is "0," dash or blank, Edit DSI "1."
    The "Yourself" box on line 6a is not checked, FS is 2 or 6, Exemption position 1 is "1," Edit DSI "1."
    The "Yourself" box on line 6a is checked, FS is 2 or 6, Exemption position 1 is "1," and the Spouse box on line 6b is not checked, Edit DSI "1."

    Reminder:

    When applicable, the DSI is still required if RPC "L" has been edited.

  4. For Form 1040EZ, place an "X" in the applicable "You" and/or "Spouse" boxes on line 5 when neither of the boxes is marked and either of the following conditions is present:

    1. There is a statement that the taxpayer was claimed on another person’s return.

    2. The amount on line 5 is a significant amount less than $10,400 ($20,800 if married filing jointly).

    Note:

    If Filing Status 2 and no taxpayer statement is present and the amount on line 5 is less than $20,800, place an "X" in the "You" box, only.

Exemption Coding

  1. For complete instructions, see IRM 3.11.3.13.2.

Dependent Name Control and TIN

  1. For complete instructions, see IRM 3.11.3.13.3 through IRM 3.11.3.13.3.2.

Form 1040 -- General Information

  1. Some returns may require special editing procedures. The taxpayer is instructed to note certain conditions on the return which the tax examiner must identify and edit according to the instructions found in the Special Returns section in IRM 3.21.3.9 or IRM 3.11.3.

  2. If there is any indication that the taxpayer is claiming the benefit of Article XXV of the U.S. - Canada Income Tax Treaty (e.g., notated by the taxpayer in the top center margin of the tax return) and Form 1040NR is not attached, correspond for Form 1040NR using Form 9143.

    Note:

    Use the following literal when corresponding for Article XXV, "If you are claiming Article XXV, you must file Form 1040NR. Please complete, sign and return Form 1040NR along with all necessary forms, schedules and federal tax withholding statements."

  3. The following line by line instructions refer to a Form 1040. Use the chart below to determine the corresponding line numbers when processing Form 1040A and Form 1040EZ.

    Example:

    When a taxpayer files a Form 1040A, refer to Line 66a instructions to determine the instructions for Line 42a, Form 1040A.

    Form 1040 Line Number Form 1040A Line Number Form 1040EZ Line Number
    7 7 1
    8a 8a 2
    8b 8b  
    9a 9a  
    9b 9b  
    13 10  
    15a 11a  
    15b 11b  
    16a 12a  
    16b 12b  
    19 13 3
    20a 14a  
    20b 14b  
    22 15  
    23 16  
    32 17  
    33 18  
    36 20  
    37 21 4
    43 27 6
    44 28 10
    46 29 11
    49 31  
    50 33  
    51 34  
    52 35  
    54 32 (Schedule R)  
    55 36  
    63 39 12
    64 40 7
    65 41  
    66a 42a 8a
    66b 42b 8b
    67 43  
    68 44  
    69 45  
    74 46 9
    76a 48a 13a
    77 49  
    78 50 14
    79 51  

Income -- Lines 7 Through 22

  1. Edit amounts on lines 7 through 22 in dollars only.

Line 7 -- Wages
  1. If the taxpayer claims exempt income under IRC § 933 on Form 1040, Form 1040A, or Form 1040EZ, see IRM 3.21.3.69.3.

  2. If the taxpayer claims an exclusion under IRC § 931 on Form 1040, Form 1040A or Form 1040EZ, see IRM 3.21.3.65.1.

  3. If the taxpayer claims exempt income under IRC § 893, or § 871, see IRM 3.21.3.15.1.14

  4. If the taxpayer exempts income under IRC § 911 or notates 2555 Exclusion on line 21, see IRM 3.21.3.39.1 (General Information).

    Caution:

    If a foreign earned income exclusion is claimed on line 21, ensure that the income is reported on any of lines 7, 12, 17 and 18.

  5. For additional instructions refer to IRM 3.11.3.

Line 8a -- Taxable Interest Income
  1. For complete instructions refer to IRM 3.11.3.

Line 8b -- Tax Exempt Interest (TEI)
  1. For complete instructions refer to IRM 3.11.3.

Line 9a -- Ordinary Dividends
  1. For complete instructions refer to IRM 3.11.3.

Line 12 -- Business Income or Loss
  1. If a foreign earned income exclusion is claimed on line 21, ensure that the income is reported on any of lines 7, 12, 17 and 18.

  2. If a taxpayer residing in American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico or U.S. Virgin Islands files Form 1040, reporting self-employment taxes on line 57, and the only income on the return is from Schedule C, Schedule C-EZ, Schedule E (Part II) and/or Schedule F, prepare a dummy Form 1040-SS as follows:

    1. Edit the caption and transcription lines.

    2. "X" Form 1040 and attach all information behind the dummy Form 1040-SS.

    Caution:

    If the taxpayer is claiming wages and/or withholding, do not convert.

  3. If line 12 contains Self Employment income of $434 or more and Schedule SE is not attached and line 57 does not have a significant entry:

    • Edit RPC "S" if the taxpayer resides in one of the following countries:

      Australia
      Austria
      Belgium
      Canada
      Chile
      Czech Republic
      Denmark
      Finland
      France
      Germany
      Greece
      Hungary
      Ireland
      Italy
      Japan
      Luxembourg
      Netherlands
      Norway
      Poland
      Slovak Republic (Slovakia)
      Portugal
      South Korea
      Spain
      Sweden
      Switzerland
      United Kingdom (includes notations of Great Britain, England, Northern Ireland, Scotland and Wales)
  4. For additional instructions refer to IRM 3.11.3.

Line 13 -- Capital Gain or Loss
  1. For complete instructions refer to IRM 3.11.3.

Line 14 -- Other Gains and Losses
  1. For complete instructions refer to IRM 3.11.3.

Line 15a and 15b -- Total and Taxable IRA Distributions
  1. For complete instructions refer to IRM 3.11.3.

Line 16a and 16b -- Total and Taxable Pensions and Annuities
  1. For complete instructions refer to IRM 3.11.3.

Line 17 -- Rental Real Estate, Royalties, Partnerships, Estates, Trusts or S Corporations
  1. If a foreign earned income exclusion is claimed on line 21, ensure that the income is reported on any of lines 7, 12, 17 and 18.

  2. If a taxpayer residing in American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico or U.S. Virgin Islands files Form 1040, reporting self-employment taxes on line 57, and the only income on the return is from Schedule C, Schedule C-EZ, Schedule E (Part II) and/or Schedule F, prepare a dummy Form 1040-SS as follows:

    1. Edit the caption and transcription lines.

    2. "X" Form 1040 and attach all information behind the dummy Form 1040-SS.

    Caution:

    If the taxpayer is claiming wages and/or withholding, do not convert.

  3. For additional instructions refer to IRM 3.11.3.

Line 18 -- Farm Income or Loss
  1. If a foreign earned income exclusion is claimed on line 21 then ensure that the income is reported on any of the lines 7, 12, 17 and 18.

  2. If a taxpayer residing in American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico or U.S. Virgin Islands files Form 1040, reporting self-employment taxes on line 57, and the only income on the return is from Schedule C, Schedule C-EZ, Schedule E (Part II) and/or Schedule F, prepare a dummy Form 1040-SS as follows:

    1. Edit the caption and transcription lines.

    2. "X" Form 1040 and attach all information behind the dummy Form 1040-SS.

    Caution:

    If the taxpayer is claiming wages and/or withholding, do not convert.

  3. If line 18 contains Self Employment income of $434 or more and Schedule SE is not attached and line 57 does not have a significant entry:

    • Edit RPC "S" if the taxpayer resides in one of the following countries:

      Australia
      Austria
      Belgium
      Canada
      Chile
      Czech Republic
      Denmark
      Finland
      France
      Germany
      Greece
      Hungary
      Ireland
      Italy
      Japan
      Luxembourg
      Netherlands
      Norway
      Poland
      Slovak Republic (Slovakia)
      Portugal
      South Korea
      Spain
      Sweden
      Switzerland
      United Kingdom (includes notations of Great Britain, England, Northern Ireland, Scotland and Wales)
  4. For additional instructions refer to IRM 3.11.3.

Line 19 -- Unemployment Compensation (UEC)
  1. For complete instructions refer to IRM 3.11.3.

Line 20a and 20b -- Total and Taxable Social Security Benefits
  1. If the taxpayer resides in one of the countries listed below, "X" any reported Social Security Benefits where found.

    • Canada

    • Egypt

    • Germany

    • Hungary

    • India (Must both be a resident and a National of India if the benefits are for services performed for the United States, its subdivisions, or local government authorities)

    • Ireland

    • Israel

    • Italy (must also be a citizen of Italy for the exemption to apply)

    • Romania

    • United Kingdom (includes notations of Great Britain, England, Northern Ireland, Scotland, and Wales)

      Note:

      If the taxpayer is a resident of Switzerland, the total benefit amount is taxed at a 15% rate.

      Caution:

      If the taxpayer indicates on an attachment that they are U.S. citizens, they are not exempt from U.S. tax. Do not "X" the Social Security Benefits.

  2. If Social Security income, Form SSA-1042S/Form RRB-1042S, and withholding are the only income/withholding reported on the return, see IRM 3.21.3.15.6.1

  3. If the taxpayer reports WORLDWIDE INCOME (i.e., there are multiple types of income and/or withholding reported on the return) AND the only "questionable" aspect of the return is the presence of Form SSA-1042S, PROCESS THE RETURN AS SUBMITTED and edit Form SSA-1042S withholding to the dotted portion of line 74.

  4. For additional instructions, see IRM 3.11.3.

Line 21 -- Other Income
  1. For International entries on Line 21, follow the chart below:

    Line Entry And Action
    Article XXV of the U.S. - Canada Income Tax Treaty Form 1040NR is not attached Correspond for Form 1040NR. See IRM 3.21.3.72.5.

    Note:

    Use Form 9143 and the following literal when corresponding for Article XXV, "If you are claiming Article XXV, you must file Form 1040NR. Please complete, sign and return Form 1040NR, along with all necessary forms, schedules and federal tax withholding statements."

    Form 2555 or Form 2555-EZ
    1. Form 2555 or Form 2555-EZ is missing

    2. Taxpayer either:

      1. resides in

        • Baker Island

        • Howland Island

        • Jarvis Island

        • Johnston Atoll

        • Kingman Reef

        • Midway Islands

        • Palmyra Atoll

        • Wake Island


        or

      2. is excluding income earned at:

        • "Raytheon" (Christchurch, New Zealand)

        • "Antarctic Support Associates" (Englewood, Co.)

        • "Honeywell International, Inc." , (Tempe, AZ)

    3. Two Forms 2555 and/or Form 2555-EZ are submitted and only one Form 2555 and/or Form 2555-EZ is valid

    4. Positive amount

    1. Correspond

    2. Take the following actions:

      • "X" line 21, Form 1040 (Foreign Earned Income Exclusion)

      • "X" the dotted portion of line 36, Form 1040

      • "X" Form 2555 or Form 2555-EZ

      • Ensure the income is reported on the appropriate line(s) 7 - 21

      • If the deleted Form 2555 or Form 2555-EZ is the only foreign aspect of the return, rebatch the coded return to a Domestic Program

    3. Adjust line 21, Form 1040 (if necessary) to exclude the amount for the invalid Form 2555 or Form 2555-EZ

    4. Take the following actions:

      1. Amount has been verified to be an exclusion, bracket the amount

      2. Amount is income, "X" the line 21 entry and edit to line 7

    IRC § 871 (Capital Gains) Taxpayer excludes income on line 21 Ensure the income is included on line 13 and/or 14.

    Note:

    If the income is not included on line 13 or 14, edit the income to line 13.

    IRC § 893 or "Employee of International Organization and Foreign Government"
    1. Taxpayer provides:

      • The number of the Executive Order

      • Written evidence of their acceptance or Designation by the Secretary of State.

    2. Taxpayer does not provide ALL items listed

    1. Allow the exempt amount on line 21 and ensure the income is reported on Lines 7, 12, 17 and/or 18

      Note:

      If the income is not included on lines 7, 12, 17 or 18, edit the income to line 7.

    2. Correspond

    Exception:

    North Atlantic Treaty Organization (NATO) also known as the Ottawa Agreement and the organizations listed at Exhibit 3.21.3-4 have already been designated by the president and do not require correspondence with the taxpayer.

    IRC § 911   See Form 2555
    IRC § 931   See IRM 3.21.3.65.1.
    IRC § 933   See IRM 3.21.3.69.3.
    Negative amount Taxpayer notates Foreign income Correspond for an explanation.
    Self Employment Income or Form 1099-MISC, box 7 amount present
    1. Form 2555 or Form 2555-EZ is attached to exclude the income

    2. Self Employment income is $434 or more and Schedule SE is not attached and line 57 does not have a significant entry

    1. Edit the Self Employment income or Form 1099-MISC, box 7 amount present to line 7

    2. Edit RPC "S" if the taxpayer resides in one of the following:

      • Australia

      • Austria

      • Belgium

      • Canada

      • Chile

      • Czech Republic

      • Denmark

      • Finland

      • France

      • Germany

      • Greece

      • Hungary

      • Ireland

      • Italy

      • Japan

      • Luxembourg

      • Netherlands

      • Norway

      • Poland

      • Portugal

      • Slovak Republic (Slovakia)

      • South Korea

      • Spain

      • Sweden

      • Switzerland

      • United Kingdom (includes notations of Great Britain, England, Northern Ireland, Scotland and Wales)

      Note:

      If the taxpayer does not reside in one of the countries listed above, edit RPC "N"

    Treaty
    1. Taxpayer provides:

      • The name of the foreign country of which the taxpayer is a citizen or resident and whose tax treaty with the U.S. provides the exempt status.

      • The treaty article number that allows the exemption.

      • The amount of "exempt" income during the tax year.

    2. Taxpayer does not provide ALL items listed above.

    1. Validate the treaty using Exhibit 3.21.3-11

      1. If valid and the taxpayer has not already reported the income, edit the income to the appropriate line and edit the exempt income on line 21 as a negative amount, if not already present.

        Exception:

        Taiwan and Hong Kong are not considered to be China and are not allowed to exclude income per China treaties.

      2. If valid, but the taxpayer excludes more than the amount allowed by the treaty, adjust the excluded amount to the allowable limit of the exclusion. Ensure the income is reported.

        Note:

        If the line 21 treaty amount exceeds the allowable deduction, "X" line 21. Edit the allowable amount per the treaty to line 21.

      3. If invalid, "X" line 21 and make sure the income is reported.

    2. Correspond

  2. A Fulbright Grant received by a U.S. citizen or U.S. resident alien taxpayer for the purpose of lecturing or teaching in a foreign country is considered a payment for services and is subject to U.S. tax.

    Note:

    If the Fulbright Grant was paid by an agency of the U.S. Government, the income may be excluded under the provisions of the law regarding Bona Fide Residence or Physical Presence in a foreign country, provided the taxpayer is not a U.S. government employee.

  3. If the housing deduction amount (line 50, Form 2555) is entered on line 21, "X" the entry and edit to the dotted portion of line 36. Adjust line 21 to exclude the housing deduction if both housing deduction and foreign income exclusion are claimed on line 21 and edit the housing deduction to the dotted portion of line 36. See IRM 3.21.3.39.9 (7).

  4. Qualified airline employees may exclude some income reported as wages in box 1, Form W-2. This income will be included on line 7 and excluded as a negative on line 21 as "airline payment" . Accept as filed.

  5. For additional instructions refer to IRM 3.11.3.

Line 22 -- Total Income
  1. For complete instructions refer to IRM 3.11.3.

    Exception:

    Do not adjust or compute line 22 if making an adjustment to lines 7 - 21.

Adjustments to Income -- Lines 23 Through 37

  1. Edit amount on lines 23 through 37 in dollars only.

Line 23 -- Educator Expense
  1. Reserved

Line 24 -- Certain Business Expenses of Reservists, Performing Artists and Fee Basis Government Officials (Form 2106 or Form 2106-EZ)
  1. For complete instructions, see IRM 3.11.3.

Line 25 -- Health Savings Account Deduction (Form 8889)
  1. For complete instructions, see IRM 3.11.3.

Line 26 -- Moving Expenses (Form 3903)
  1. Form 3903 (or similar statement) must be attached ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ If missing, correspond for Form 3903.

    Note:

    If the taxpayer is only claiming an expense for storage fees while out of the United States, Form 3903 is not required.

Line 27 -- Deduction for Self-Employment Tax
  1. Reserved

Line 28 -- Self-Employed SEP, SIMPLE and Qualified Plans
  1. For complete instructions, see IRM 3.11.3.

Line 29 -- Self-Employed Health Insurance Deduction
  1. For complete instructions, see IRM 3.11.3.

Line 31a and 31b -- Alimony Paid and Alimony Recipient's TIN
  1. For complete instructions refer to IRM 3.11.3.

Line 32 -- IRA Deductions
  1. For complete instructions refer to IRM 3.11.3.

Line 34 -- Tuition and Fees
  1. Reserved

Line 35 -- Domestic Production Activities Deduction (Form 8903)
  1. For complete instructions, see IRM 3.11.3.

Line 36 -- Dotted Portion (Total Adjustments)
  1. If an amount claimed on line 36 or near the dotted portion of line 36 is identified as "Form 2555," "IRC § 911" or "IRC § 931:"

    IF AND THEN
    The U.S. citizen resides in any of the following territories:
    • Baker Island

    • Howland Island

    • Jarvis Island

    • Johnston Atoll

    • Kingman Reef

    • Midway Island

    • Palmyra Atoll

    • Wake Islands

     
    1. "X" line 21 and the dotted portion of line 36 Form 1040.

    2. "X" Form 2555, if attached.

    The taxpayer does NOT reside in one of the areas mentioned above Form 2555 is missing Correspond for Form 2555.
  2. Edit the housing deduction amount from line 50, Form 2555 to the dotted portion of line 36, if not already entered by the taxpayer.

    Note:

    If the housing deduction amount is entered on any line other than the dotted portion of line 36, "X" the entry and edit it to the dotted portion of line 36.

  3. Edit any amount claimed on lines 23 through 36 identified as "MSA" or "Archer MSA Deduction" to the blank area between lines 22 and 36. This amount must be deleted from lines 23 through the dotted portion of line 36 and edited in dollars only with the label "MSA" to the left of the amount.

  4. Delete the following adjustments from lines 23 through 35 and edit the amount to the dotted portion of line 36 .

    Note:

    Include these amounts in the line 36 total.

    • "403(b)" -- Contributions by certain chaplains to section 403(b) plans

    • "501(c)(18)(D)"

    • "UDC"

    • "WBF"

    • Jury Duty Pay

    • "PPR" -- Personal Property Rental

    • "Reforestation," "RFST" -- Forestation/reforestation amortization

    • "Sub-Pay TRA" -- Repayment of Supplemental Unemployment Benefit (SUB) payments received in a prior year under the Trade Act of 1974 (TRA).

      Exception:

      "X" the SUB pay amount where found and subtract the amount from line 7 when there is no indication that the adjustment is for benefits received in a prior year.

    • "Housing Deduction" -- line 50, Form 2555

    • "USOC" -- United States Olympic Committee

  5. Delete these adjustments where found and edit the amount to the dotted portion of line 36 when any of the adjustments in (4) are claimed elsewhere on the return.

  6. "X" the amount if a taxpayer claims an adjustment to income on the dotted portion of line 36 for anything other than the items listed in (1) or (4) above.

  7. "X" the amount when there is no explanation present for an adjustment amount.

Line 36 -- Total Adjustments
  1. For complete instructions, see IRM 3.11.3.

Line 37 -- Adjusted Gross Income (AGI)
  1. Perfect line 37 in the following priority when it is blank or illegible:

    1. Edit the amount from line 22 when there are no amounts on lines 23 through 36.

    2. Compute by subtracting line 36 from line 22.

    3. Edit the amount from line 38 on page 2 of Form 1040.

    Exception:

    Do not adjust or compute line 37 if adjusting line 7 - 36.

Tax Computation -- Lines 38 Through 47

  1. Edit amounts on lines 43 and 44 in dollars only.

    Note:

    The only T-lines on lines 38 through 42 are the Age/Blind Indicator boxes on line 39a.

Line 40 -- Itemized Deductions or Standard Deduction
  1. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

  3. For additional instructions refer to IRM 3.11.3.

Line 43 -- Taxable Income
  1. For complete instructions, see IRM 3.11.3.

Line 44 -- Tax
  1. For complete instructions, see IRM 3.11.3.

Line 45 -- Alternative Minimum Tax (Form 6251)
  1. For complete instructions, see IRM 3.11.3.

Line 46 -- Excess Advance Premium Tax Credit Repayment (PTC)
  1. If an amount is claimed on line 46, Form 8962 must be attached. Correspond if missing.

    1. When corresponding for Form 8962 on Form 13900, also correspond for Form 1095-A if not attached, using paragraph (y).

    2. When corresponding for Form 8962 on Form 9143, also correspond for Form 1095-A if not attached, using the following literal:
      "Send us a copy of your Form 1095-A, Health Insurance Marketplace Statement, to support your entries on Form 8962, Premium Tax Credit. If you didn't receive a Form 1095-A or it is incorrect, visit www.healthcare.gov or your state Marketplace website."

Credits -- Lines 48 Through 55

  1. Edit amounts on lines 48 through 55 in dollars only.

  2. Do not correspond for missing schedules or forms to support entries on lines 48 through 54 when line 43 of Form 1040 is (or can be determined to be) zero or a negative amount. Instead, "X" the unsupported credit amount and adjust the total on line 55.

Line 48 -- Foreign Tax Credit (Form 1116)
  1. If an amount of more than $300 (more than $600 for FS 2) is claimed, Form 1116 or similar statement must be attached. Correspond for Form 1116 if missing or if no significant entry is present on lines 7, 8, 22 or 30, Form 1116.

  2. Taxpayers earning income in the following countries are not allowed to take a foreign tax credit for foreign taxes paid. If the taxpayer takes the foreign tax credit (see Form 1116 Part II, line 8) with respect to taxes paid to any of the following countries (see Form 1116 Part I, letter g, column A, B, or C), "X" both line 8, Form 1116 and line 48, Form 1040.

    Country Starting Date Ending Date
    Iran January 1, 1987 Still in Effect
    North Korea January 1, 1987 Still in Effect
    Sudan February 12, 1994 Still in Effect
    Syria January 1, 1987 Still in Effect
Line 49 -- Credit for Child and Dependent Care Expenses (Form 2441)
  1. For complete instructions, see IRM 3.11.3.

Line 50 -- Education Credits (Form 8863)
  1. For complete instructions, see IRM 3.11.3.

Line 51 -- Retirement Savings Contribution Credit (Form 8880)
  1. For complete instructions, see IRM 3.11.3.

Line 52 -- Child Tax Credit (Schedule 8812)
  1. For complete instructions, see IRM 3.11.3.

Line 53 -- Residential Energy Credit (Form 5695)
  1. For complete instructions, see IRM 3.11.3.

Line 54 -- Other Credits
  1. For complete instructions, see IRM 3.11.3.

Line 55 -- Dotted Portion (Not Transcribed)
  1. For complete instructions, see IRM 3.11.3.

Line 55 -- Total Credits
  1. For complete instructions, see IRM 3.11.3.

Other Taxes -- Lines 57 Through 63

  1. Edit amounts on lines 57 through 62 in dollars only. Line 63 must be edited in dollars and cents when adjusting or computing and editing amounts.

Line 57 -- Self-Employment Tax (Schedule SE)
  1. If a taxpayer residing in American Samoa, the Commonwealth of the Northern Mariana Islands, Guam, Puerto Rico or U.S. Virgin Islands files Form 1040, reporting self-employment taxes on line 57, and the only income on the return is from Schedule C, Schedule C-EZ, Schedule E (Part II) and/or Schedule F, prepare a dummy Form 1040-SS as follows:

    1. Edit the caption and transcription lines.

    2. "X" Form 1040 and attach all information behind the dummy Form 1040-SS.

    Caution:

    If the taxpayer is claiming wages and/or withholding, do not convert.

  2. For additional instructions, see IRM 3.11.3.

Line 58 -- Unreported Social Security and Medicare Tax (Form 4137 and Form 8919)
  1. For complete instructions, see IRM 3.11.3.

Line 59 -- Additional Tax on IRAs, other Qualified Retirement Plans, etc. (Form 5329)
  1. For complete instructions refer to IRM 3.11.3.

Line 60a -- Household Employment Taxes from Schedule H
  1. For complete instructions, see IRM 3.11.3.

Line 60b -- First-time Homebuyer Credit Repayment (Form 5405)
  1. Reserved

Line 61 -- Health Care Individual Responsibility
  1. If the taxpayer marked the full-year coverage checkbox, edit a check mark (✓) to the left of the checkbox.

Line 62 -- Other Taxes
  1. For complete instructions, refer to IRM 3.11.3.

Line 63 -- Total Tax
  1. Edit line 63 in dollars and cents when adjusting or computing and editing amounts.

  2. For additional instructions refer to IRM 3.11.3.

Payments -- Lines 64 Through 74

  1. Edit lines 64 through 74 in dollars and cents when adjusting or computing and editing amounts.

  2. Line 74 is a T-Compute line.

Line 64 -- Withholding
  1. U.S. source income is reported on Form W-2, Form 1042-S, Form SSA-1042S, Form RRB-1042S, Form 1099 series, Form 8805, Form 8288-A, or statement of income.

  2. Valid sources of U.S. Withholding include Form W-2, Form SSA-1042S, Form RRB-1042S, Form 1042-S, Form 1099 series, Form 8805, Form 8288-A and Form 8959. Review all withholding documents to ensure that the withholding amounts claimed by the taxpayer are U.S. Withholding (Federal Income Tax Withheld). Withholding from Guam and CNMI can be claimed on line 64.

    Caution:

    If the only income on the return is from Guam, see IRM 3.21.3.66 or the Commonwealth of the Northern Mariana Islands, see IRM 3.21.3.67.

  3. If the return contains withholding from American Samoa (Form W-2AS), Puerto Rico (Form 499R-2/Form W-2PR) or Virgin Islands (Form W-2VI) take one of the following actions:

    1. If all of the withholding is from American Samoa (Form W-2AS), Puerto Rico (Form 499R-2/Form W-2PR) or Virgin Islands (Form W-2VI) "X" the withholding amount.

      Caution:

      If the only income on the return is from American Samoa, see IRM 3.21.3.65, Virgin Islands, see IRM 3.21.3.68 or Puerto Rico, see IRM 3.21.3.69.

    2. If U.S. withholding is also claimed, adjust the withholding amount to include only the U.S. withholding.

  4. If line 64 is ≡ ≡ ≡ ≡ ≡ ≡ and a source of withholding (Minimum requirements for substitute statement must include: Name of Employer or EIN, Income and Withholding) is not attached, correspond for withholding support if unable to verify the amount through research.

    Note:

    IRP data may be available as early as February.

  5. Follow the instructions below for line 64:

    If Line 64 is And Then
    Blank, Dash, or Zero (0) At least one source of withholding is present (i.e. Form W-2, Form 1099 (series) or Form W-2G) Edit the withholding amount(s) to line 64.

    Exception:

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    Any amount and support for the withholding is present Any withholding is from:
    • Form 1099-OID or

    • Form 1099-A

    Refer the return to Frivolous Return Program (FRP).
    Any amount The supporting withholding document is a foreign document "X" line 64.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
  6. If Form 1042-S is attached to Form 1040, take the following actions:

    If Then
    Refund and the only income reported is from the Form 1042-S Correspond for filer's U.S. status, using Form 9143, box 26.

    Exception:

    Do not correspond if the taxpayer states they are a U.S. Resident Alien or the taxpayer has provided a copy of their resident alien card. Delete Form 1042-S withholding from line 64 and edit to the dotted portion of line 74.

    "Worldwide Income" is reported or the return is other than a refund Delete Form 1042-S withholding from line 64 and edit to the dotted portion of line 74.

    Note:

    If the taxpayer files Form 1040A or Form 1040EZ the return must be converted, unless corresponding for filer’s U.S. status.

  7. Delete Form 8805, Foreign Partner’s Information Statement of Section 1446 Withholding Tax, withholding from line 64 and edit to the dotted portion of line 74, Form 1040.

    1. If the TIN on Form(s) 8805 is missing or other than the TIN in the caption area, and the credit is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "X" the credit where reported.

      Exception:

      If a TIN has been newly assigned, but is not on Form 8805 Do Not "X" the credit.

      Note:

      Any statement or document from a withholding agent that is submitted in lieu of Form 8805 must include the name and address of the U.S. withholding agent, the agent’s U.S. TIN (EIN or SSN), and the name in which the tax withheld was reported. If the name or TIN of the taxpayer claiming the refund is different or withholding agent information is not included, follow no reply procedure.

  8. If Form 8288-A is attached or noted on any line, follow the instructions in (9) - (11).

  9. If any credit is claimed, verify that Form 8288-A is attached and the Date of Transfer on Form 8288-A (box 1) is within the Tax Period of the return being filed.

    1. If Form 8288-A is not attached, correspond.

    2. If the Date of Transfer on Form 8288-A (box 1) is not within the Tax Period of the return (for fiscal year returns, see instructions below), "X" the entry where reported and edit only the credit(s) that are within the tax period of the return.

      Reminder:

      If the return is being filed for a fiscal period, allow only credit(s) for which the Date of Transfer on Form 8288-A (box 1) falls within the fiscal period of the return being filed.

      Note:

      Form 8288 may not be used as verification of 8288-A withholding.

  10. If the Date of Transfer on Form 8288-A is in 2018 and:

    1. The return is numbered, "X" the credit(s).

    2. The return is unnumbered and Form 843 is attached, detach Form 843 along with Form 8288-A and route to Accounts Management. "X" line 64 and process the return.

    3. The return is unnumbered, send the return back to the taxpayer, use Form 9143 and the following fill-in literal:
      "A Form 1040 may not be filed prior to the end of the tax year. Please resubmit after December 31 of this year. If you wish to receive your refund sooner, you may file Form 843 including the following; Your (the seller's) signature, your (seller's) Social Security Number (SSN), Individual Taxpayer Identification Number (ITIN) or Employer identification Number (EIN), a copy of the withholding certificate and Form 8288-A, copy B."

  11. Form 8288-A -- Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests. All Form 8288-A credits must be verified. If Form 8288-A is attached and the return is:

    1. Numbered, attach a verification slip to request verification of the credit from the FIRPTA Unit and edit Action Code "420" .

    2. Unnumbered, follow the chart below:

      If And Then
      Credits have not been verified   Completely code and edit the return, then place return in designated basket for verification.

      Note:

      The verification slip (Form 13698) or printout is attached to the tax form after the credit verification is completed.

      Credits are verified, The verified amount is the same or greater than the amount the taxpayer reported, Delete the Form 8288-A credit from line 64 and edit the taxpayer’s entry on the dotted portion of line 74.
      Credits are verified, The verified amount is less than the amount the taxpayer reported,
      1. "X" the amount reported by the taxpayer.

      2. Delete the amount from line 64 and edit the verified amount to the dotted portion of line 74.

  12. Form 1040 filed with Form SSA-1042S/Form RRB-1042S:

    1. Forms 1040 on which the taxpayer reports worldwide income (wages, interest, investment income, self-employment income, SE tax, etc.) along with Form SSA-1042S/Form RRB-1042S benefits are not subject to the 30 percent (%) tax rate and should be processed without citizenship or residency documentation. Process per normal Form 1040 procedures. Delete the Form SSA-1042S/Form RRB-1042S withholding from line 64 and edit Form SSA-1042S/Form RRB-1042S withholding to the dotted portion of line 74, Form 1040.

    2. Nonresident aliens who file jointly with a U.S. citizen and elect to be treated as resident aliens for tax purposes are not subject to the 30 percent (%) tax rate. Such joint returns are to be processed per normal Form 1040 procedures. Delete the Form SSA-1042S/Form RRB-1042S withholding from line 64 and edit Form SSA-1042S/Form RRB-1042S withholding to the dotted portion of line 74, Form 1040.

    3. Residents of U.S. Territories are not subject to the 30 percent (%) tax rate. Such returns are to be processed per normal Form 1040 procedures. Delete the Form SSA-1042S/Form RRB-1042S withholding from line 64 and edit Form SSA-1042S/Form RRB-1042S withholding to the dotted portion of line 74, Form 1040.

      Note:

      If the taxpayer files Form 1040A, "X" the withholding and do not convert.

  13. A resident alien (without worldwide income) can receive a refund for incorrectly withheld taxes on Social Security Benefits reported on Form SSA-1042S/Form RRB-1042S from SSA or IRS. If SSA cannot refund the taxes withheld, the IRS will process a tax return and refund the withholding when ALL the criteria below is met:

    • The taxpayer files either Form 1040 or Form 1040A

    • A copy of the "green card" is attached

    • A signed declaration is attached that includes the following statement (or a signed statement with similar wording):
      "The SSA withheld taxes erroneously because I am a U.S. permanent resident and my green card has neither been revoked nor administratively or judicially determined to have been abandoned. I am filing a U.S. income tax return for the taxable year as a resident alien reporting all of my worldwide income. I have not yet claimed benefits for the taxable year under an income tax treaty as a nonresident alien."

    Note:

    If the taxpayer has filed Form 1040EZ, convert to Form 1040.

    1. If the taxpayer is filing to claim a refund and does not attach a green card and/or declaration statement (see criteria above), "X" the withholding and correspond for the following if missing:
      • Green Card

      Note:

      The reference made to green card includes, Form I-551 for all years after 1996 and Form I-151 is only acceptable as proof of permanent residency for TY96 and prior. See Exhibit 3.21.3-14


      • A signed declaration statement

    2. If the taxpayer is claiming a refund, both green card and declaration statement are attached, and none of the conditions in paragraph (12) are met, "X" the withholding.

  14. Edit CCC "8" on a refund return when withholding is significant and there is only a single supporting document attached that is one of the following:

    • A substitute statement (e.g., substitute Form W-2 or employer-provided earnings statement with year-to-date totals) or attachment or worksheet.

      Note:

      If the only support for withholding is from a single or multiple Forms 4852 and there are no other withholding documentation is present, edit CCC "8" .

    • Handwritten

    • Other than computer-printed Form W-2

    • Altered name, SSN, wages, or federal income tax withheld

      Exception:

      Do not edit CCC "8" when Form 1099-R, Form W-2G, or IRS income document is attached, or if the return is identified as a military or combat zone return.

      Note:

      To be considered a "single supporting document," the document must show support from only one employer. Consider Form 4852 and an employer-provided earnings statement with the same employer and identical amounts to be a "single supporting document" .

  15. Remove from the batch and route to IVO (RICS) any returns meeting all the following criteria:

    • Paper filed return

    • Refund claimed on return

    • Form(s) 4852 attached with no other withholding documentation present

  16. Remove from the batch any refund return for IVO (RICS) Refund Scheme review when there are similarities between returns on Forms W-2 such as the following:

    • Typing or printing

    • Wage amounts

    • Withholding amounts

    • Employer

Line 65 -- Estimated Tax Payment (ES)
  1. For complete instructions, see IRM 3.11.3.

Line 66a -- Earned Income Credit (EIC)
  1. Taxpayers residing outside of the U.S. are generally not entitled to EIC.

  2. If the taxpayer is not claiming EIC, edit RPC "B"

  3. If a taxpayer is claiming EIC and attaches a valid Form 2555 or Form 2555-EZ, and excludes foreign earned income, "X" both the line 66a amount, Form 1040 and Schedule EIC.

  4. If the taxpayer is claiming EIC and claims income is exempt under IRC § 933, disallow EIC. "X" both line 66a, Form 1040 and Schedule EIC, if attached.

  5. If the taxpayer is claiming EIC and resided outside of the U.S. for the entire year, disallow EIC. "X" both line 66a, Form 1040 and Schedule EIC, if attached.

    Note:

    Do not use the caption address to determine if the taxpayer resided outside the U.S. for the entire year.

  6. If the return has a U.S. address and all income is from a U.S. territory (e.g., wages or self-employment) then "X" both line 66a, Form 1040 and Schedule EIC, if attached.

  7. If none of the conditions in paragraphs (3) through (6) are present, the taxpayer may qualify for EIC if they resided inside the U.S. for part of the tax year and they also meet all requirements for EIC at IRM 3.11.3.14.7.3. Indications that the taxpayer resided inside the U.S. for part of the tax year are either:

    • The taxpayer's address on Form(s) W-2 is one of the 50 states or District of Columbia or

    • The taxpayer paid state or local taxes to one of the 50 states or District of Columbia

    Note:

    The taxpayer’s address in the caption and the employer’s address on Form(s) W-2 are not indications.

    1. If the taxpayer qualifies, allow EIC.

    2. If the taxpayer does not qualify, "X" line 66a and Schedule EIC.

  8. U.S. military personnel stationed outside of the U.S. on extended active duty are considered to live in the U.S. during that duty period for purposes of the EIC. They must also meet all requirements for EIC at IRM 3.11.3.14.7.3. If the taxpayer meets all requirements, allow EIC. To determine whether the taxpayer is military personnel, search the signature area, Forms W-2(s) and/or attachments for any of the following indications:

    1. The occupation in signature area indicates U.S. Air Force, U.S. Army, U.S. Coast Guard, U.S. Marines, U.S. Navy, etc.

    2. DCPS CIVPAY DIRECTORATE

    3. DFAS - PE/P

    4. DFAS - ATTN: DFAS - PMTC/IN

    5. Defense Finance and Accounting Service Cleveland Center

    6. USAF - Active Duty

    7. DFAS - PMJFC/DE

    8. Commanding Office USCG Human Resources Service Information Center

  9. Correspond when EIC is being claimed and the source of income is not indicated or attached (W-2) and cannot be determined through research:

    1. If using Form 13900, use paragraph (g).

    2. If using Form 9143, use the following literal:
      "You must explain the source of income you used to compute your Earned Income Credit and attach documents (such as Forms W-2, Forms 1099-MISC, or a check stub with year-to-date totals) to support your entry" .

  10. For additional instructions refer to IRM 3.11.3.

Line 66b -- Nontaxable Combat Pay Election
  1. Reserved

Line 67 -- Additional Child Tax Credit (Schedule 8812)
  1. If the taxpayer is a resident of Puerto Rico, reporting earned income in Puerto Rico (Form(s) 499R-2/W-2PR) and claiming additional child tax credit, see IRM 3.21.3.69.

    Exception:

    If you can determine the taxpayer is U.S. military personnel, see instructions below.

    Note:

    Do not convert Form 1040 or Form 1040A to Form 1040-PR

  2. If the taxpayer is a resident of CNMI, Guam, American Samoa or Virgin Islands "X" line 67 unless (4) applies.

  3. If the taxpayer is an employee of a U.S. Government Agency (e.g., United States Postal Service), and they claim less than 3 dependents in exemption positions 2, 3 or 5 take no action.

  4. If the taxpayer is a resident in any of the U.S. territories and you can determine the taxpayer is U.S. Military personnel, the taxpayer is considered a resident of the U.S. for the entire year and the return should be processed using the domestic instructions in IRM 3.11.3. Search the occupation area, Forms W-2, and/or attachments for any, such as the following indications:

    1. The occupation in the signature area indicates military, U.S. Air Force, U.S. Army, U.S. Coast Guard, U.S. Marines, or U.S. Navy.

    2. DCPS CIVPAY DIRECTORATE

    3. DFAS-PE/P

    4. DFAS-ATTN:DFAS-PMTC/IN

    5. Defense Finance and Accounting Service Cleveland Center

    6. USAF- Active Duty

    7. DFAS-PMJFC/DE

    8. Commanding Office USCG Human Resources Service Information Center

  5. Correspond for Schedule 8812 when there is an amount present on line 67, and either condition below applies:

    • An ITIN is shown for a child claiming eligibility for Child Tax Credit on line 6c, Form 1040

    • Three or more children with SSNs are claimed on line 6c, Form 1040

    Exception:

    If Form W-2 series or Form 499R-2/W-2PR is attached, dummy Schedule 8812 (line 7).

Line 68 -- (Refundable) American Opportunity Credit (Form 8863)
  1. For complete instructions, see IRM 3.11.3.

Line 69 -- Premium Tax Credit (Form 8962)
  1. If an amount is claimed on line 69 Form 8962 must be attached. Correspond if missing.

    1. When corresponding for Form 8962 on Form 13900, also correspond for Form 1095-A if not attached, using paragraph (y).

    2. When corresponding for Form 8962 on Form 9143, also correspond for Form 1095-A if not attached, using the following literal:
      "Send us a copy of your Form 1095-A, Health Insurance Marketplace Statement, to support your entries on Form 8962, Premium Tax Credit. If you didn't receive a Form 1095-A or it is incorrect, visit www.healthcare.gov or your state Marketplace website."

Line 70 -- Amount Paid with request for extension (Form 4868)
  1. For complete instructions, see IRM 3.11.3.

Line 71 -- Excess Social Security and Tier 1 RRTA Tax Withheld
  1. Citizens of U.S. Territories may claim excess Social Security and RRTA taxes withheld. However, the withholding must be verified via attached Form(s) W-2AS, Form W-2CM, Form W-2GU, Form W-2VI, Form 499R-2/W-2PR and Form W-2.

  2. For additional instructions, see IRM 3.11.3.

Line 72 -- Credit for Federal Tax on Fuels (Form 4136)
  1. For complete instructions, see IRM 3.11.3.

Line 73 -- Other Payments
  1. For complete instructions, see IRM 3.11.3.

    Reminder:

    If there is an indication of Form 8689, see IRM 3.21.3.68.1.

Line 74 -- Total Payments
  1. Take one of the following actions when there is an amount on line 74 and lines 64 through 73 are blank and no withholding documents are present.

    If there is an amount on line 74 of And Then
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ there are significant entries on lines 7, 15b, 16b, or 19, Correspond for an explanation of line 74.
    ≡ ≡ ≡ ≡ ≡ ≡ there are no significant entries on lines 7, 15b, 16b or 19, Edit the amount to line 65.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ there is a significant entry on line 7, 15b, 16b or 19, Edit the amount to line 64 and edit RPC "G."
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ there is no significant entry on line 7, 15b, 16b or 19, Edit the amount to line 65.
  2. For additional instructions, see IRM 3.11.3.

Refund or Owed Amount -- Lines 75 Through 79

  1. Edit lines 76a, 77, 78 and 79 in dollars and cents when adjusting or computing and editing amounts.

    Note:

    Line 75 is not a T-line. Line 76a and 78 are T-Compute lines.

Line 76a -- Refund
  1. For complete instructions refer to IRM 3.11.3.

Line 76b, Line 76c and Line 76d -- Direct Deposit Information
  1. For complete instructions, see IRM 3.11.3.

Line 77 -- ES Credit Elect
  1. For complete instructions refer to IRM 3.11.3.

Line 78 -- Amount You Owe (Balance Due)
  1. For complete instructions refer to IRM 3.11.3.

Line 79 -- Estimated Tax Penalty (Form 2210 and Form 2210F)
  1. For complete instructions refer to IRM 3.11.3.

Third Party Designee

  1. Reserved

Signature Line

  1. For complete instructions, see IRM 3.11.3.

Occupation

  1. For complete instructions, see IRM 3.11.3.

Identity Protection Personal Identification Number (IP PIN)

  1. Identity Protection Personal Identification Number (IP PIN) is located in the "Sign Here" area of the return.

  2. If blank and CP-01A is attached, verify the taxpayer name(s) matches the name(s) on the CP-01A and the tax return. If the name(s) match and the IP PIN on CP-01A is not present on the tax return, edit the IP PIN in the boxes designated for Identity Protection PIN (located below the Daytime phone number box in the signature area of the Return)

    Note:

    If FS 2 and both spouses have an IP PIN, edit the primary taxpayer’s IP PIN.

  3. If the name(s) do not match between an attached CP-01A and the tax return, see Exhibit 3.21.3-1, Attachment Guide.

  4. If multiple IP PINs are present, circle all but the IP PIN assigned to the primary taxpayer.

  5. Circle IP PIN if it is more or less than 6 numbers.

Paid Preparer Data

  1. For complete instructions refer to IRM 3.11.3.

Preparer Code
  1. For complete instructions refer to IRM 3.11.3.

Preparer TIN
  1. For complete instructions refer to IRM 3.11.3.

Preparer Phone Number
  1. For complete instructions refer to IRM 3.11.3.

Conversion of Form 1040A and Form 1040EZ

  1. Certain conditions found on a Form 1040A or Form 1040EZ may require that the return be converted to a Form 1040. The following is a list of specific International conditions which require conversion from a Form 1040A/Form 1040EZ to a Form 1040:

    • Form 1042-S attached

    • Form SSA-1042S attached to Form 1040EZ

    • Form 4563

    • Form 8288-A

    • Form 8689

    • Form 8805

    • Housing Deduction

    • IRC § 871

    • IRC § 893

    • IRC § 911

    • IRC § 931

    • Valid Form 2555 and/or Form 2555-EZ

    • Valid treaty exempt income

  2. For additional Form 1040A conversion conditions, see IRM 3.11.3.61.1.1.

  3. For additional Form 1040EZ conversion conditions, see IRM 3.11.3.62.1.1.

  4. For general conversion instructions, see IRM 3.11.3.63.

Editing Form 1040 from Either Form 1040A or Form 1040EZ

  1. Use the following table to convert Forms 1040A and Forms 1040EZ to Form 1040:

    Attached to or Entry on Form 1040A/Form 1040EZ Action on Form 6114
    • Form 1042-S with "Worldwide" income

    • Form SSA-1042S attached to Form 1040EZ

    • Form 8288-A (after FIRPTA verification)

    • Form 8689

    • Form 8805

    Edit withholding to dotted portion of line 74.
    Form 4563 or IRC § 931 Edit exclusion on line 21 as a negative.
    Housing Deduction Edit housing deduction from line 50, Form 2555 to the dotted portion of line 36, Form 1040.
    IRC § 871 Edit capital gain income to line 13 and edit exempt amount on line 21 as a negative.
    IRC § 893 Edit earned income to line 7 and edit exempt earned income on line 21 as a negative.
    Valid Form 2555 or Form 2555-EZ or IRC § 911 Edit foreign earned income to line 7, edit foreign earned income exclusion on line 21 as a negative.
    Valid Treaty Exempt Income Edit treaty exempt income to line 7 and edit treaty exempt income exclusion on line 21 as a negative.
  2. For additional instructions, see IRM 3.11.3.63.2.

Schedule A (Sequence 07) -- Itemized Deductions

  1. The following lines on Schedule A are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 1 Line 4
    Lines 3 through 12 Line 9
    Lines 14 through 21 Line 15
    Lines 24 Line 19
    Lines 27 through 30 Line 24
      Line 29
  2. If the taxpayer is prorating their itemized deductions (Schedule A) under IRC § 933, accept the taxpayer’s prorated amount for itemized deductions. When two amounts are present on line 29, Schedule A, "X" out the larger amount.

  3. A taxpayer may take a deduction for taxes paid or accrued during the year to:

    • a foreign country or certain U.S. Territory

    • any political subdivision, agency or instrumentality of the country or territory

    Note:

    This deduction is claimed on line 8, Schedule A.

  4. For additional instructions refer to IRM 3.11.3.

Schedule B (Sequence 08) -- Interest and Ordinary Dividends

  1. The following lines on Schedule B are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 2 - edited to the left of line 2 There are no T-Compute Lines for this schedule.
    Line 3  
    Line 6 - edited above the instructions for line 6  
    Foreign Account Indicator  
    FinCEN Form 114 Indicator, Report of Foreign Bank and Financial Accounts (FBAR)  
  2. For additional instructions refer to IRM 3.11.3.

Schedule C (Sequence 09, 10, 11) -- Profit or Loss from Business

  1. The following lines on Schedule C are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    SSN Line 1
    Lines A, B, C, D, F, H, I and J Line 2
    Statutory Employee Indicator Box Line 3
    Lines 1 through 4 Line 28
    Line 6  
    Line 9  
    Line 13  
    Line 15  
    Line 16a  
    Line 17  
    Line 18  
    Line 21  
    Lines 24a and 24b  
    Line 25  
    Lines 26 through 27a  
    Line 28  
    Line 30  
    Line 32, At Risk Indicator (No editing required)  
    Line 35  
    Line 41  
  2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    1. "X" the schedule

    2. Prepare a dummy schedule

    3. For Schedule C, edit $1 for Gross Receipts (line 1) and edit the NAICS code if furnished by the taxpayer. Do not compute line 3.

  3. For additional instructions refer to IRM 3.11.3.

Schedule C-EZ (Sequence 09, 10, 11) -- Net Profit From Business

  1. The following lines on Schedule C-EZ are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    SSN Line 1
    Lines A, B, C, D, F and G Line 2
    Lines 1 and 2  
  2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    1. "X" the schedule

    2. Prepare a dummy schedule

    3. For Schedule C-EZ, edit $1 for Gross Receipts (line 1) and edit the NAICS code if furnished by the taxpayer.

  3. For additional instructions refer to IRM 3.11.3.

Schedule D (Sequence 12) -- Capital Gains and Losses

  1. The following lines on Schedule D are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 1a, columns (d) and (e) Line 7
    Lines 1b - 3, columns (d), (e) and (g) Line 15
    Line 5  
    Line 7  
    Line 8a, columns (d) and (e)  
    Lines 8b - 10, columns (d), (e) and (g)  
    Line 12  
    Line 13  
    Line 15  
    Line 18  
    Line 19  
  2. For additional instructions, refer to IRM 3.11.3.

Schedule E (Sequence 13) -- Supplemental Income and Loss

  1. The following lines on Schedule E (Sequence 13) are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Checkboxes A and B Lines 23a through 23e
    Line 14, columns (a) - (c) Lines 24 and 25
    Lines 23a through 23e Line 29a, column (g) and column (j)
    Lines 24 and 25 Line 29b, column (f) and column (h)
    Line 27, checkboxes Line 30
    Line 29a, column (g) and column (j) Line 31
    Line 29b, column (f) and column (h) Line 35
    Line 30 Line 36
    Line 31 Line 39
    Line 34a, column (d)  
    Line 34b, column (c)  
    Line 35  
    Line 36  
    Line 37 - edited to the left of line 37  
    Line 39  
    Line 40  
    Line 42  
    Line 43  
  2. For additional instructions refer to IRM 3.11.3.

Schedule F (Sequence 14, 15) -- Profit or Loss from Farming

  1. The following lines on Schedule F are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines B, D, F and G Line 9
    Line 1b Line 33
    Line 2 Line 44
    Line 3a and 3b Line 50
    Line 4a and 4b  
    Line 5b  
    Lines 6a and 6b  
    Line 7  
    Line 9  
    Line 13  
    Lines 19, 21a, 25, 28 and 33  
    Line 36, At Risk Indicator (no editing required)  
    Line 38a, 38b and 39a  
    Line 40b  
    Line 44  
    Line 50  
  2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ :

    1. "X" the schedule

    2. Prepare a dummy schedule

    3. For Schedule F, edit $1 for Gross Receipts (line 9) and edit the NAICS code if furnished by the taxpayer.

  3. For additional instructions refer to IRM 3.11.3.

Schedule R (Sequence 16) -- Credit for the Elderly or Disabled

  1. The following lines on Schedule R are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 1 through 9 Line 13c, Part III
    Line 11, Part III  
    Line 13c, Part III  
  2. For additional instructions refer to IRM 3.11.3.

Schedule SE (Short and Long) (Sequence 17, 18) -- Self-Employment Tax

  1. The following lines on Schedule SE are T-Lines and T-Compute Lines for Section A and Section B:

    T-Lines T-Compute Lines
    TIN Line 3, Section A
    Lines 1a through 3, Section A Lines 3 and 8d, Section B
    Line 4, Section A -- edited to the right of line 4  
    Lines 1a through 3, Section B  
    Line 4c, Section B -- edited to the right of line 4c  
    Line 5a, Section B  
    Line 8d, Section B  
    The center-bottom margin of page 2  
  2. For additional instructions refer to IRM 3.11.3.

Form 1116 (Sequence 19) -- Foreign Tax Credit

  1. The following lines on Form 1116 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    To the right of Part I Line 1a
    Line 1a Lines 6, 7 and 8
    Lines 6, 7 and 8 Line 14
    Line 14 Line 17
    Lines 16 and 17 Line 30
    Lines 21 and 22  
    Lines 29 and 30  
  2. If the amount on line 1a Form 1116, is the same as the amount reported on line 26, Form 2555/line 17, Form 2555-EZ, then adjust line 1a, Form 1116 by subtracting the greater of line 42 or 45, Form 2555/line 18 Form 2555-EZ from line 1a, Form 1116. See Figure 3.21.3-9 .

    Caution:

    If more than one Form 2555 or Form 2555-EZ (both taxpayers can use either Form 2555 or Form 2555-EZ, or any combination) is attached, use the combined amounts for line 26, Form 2555/line 17 Form 2555-EZ to compare to line 1a.

  3. If the taxpayer's intent is not to use Form 1116 or if the taxpayer claims a negative or zero on line 30, Form 1116 "X" Form 1116.

  4. Taxpayers earning income in the following countries are not allowed to take a foreign tax credit for foreign taxes paid. If the taxpayer takes the foreign tax credit (see Form 1116, Part II, Line 8) with respect to taxes paid to any of the following countries (see Form 1116, Part I, letter g, column A, B, or C), "X" both line 8, Form 1116 and line 48, Form 1040.

    Country Starting Date Ending Date
    Iran January 1, 1987 Still in Effect
    North Korea January 1, 1987 Still in Effect
    Sudan February 12, 1994 Still in Effect
    Syria January 1, 1987 Still in Effect
  5. For additional instructions refer to IRM 3.11.3.

    Exception:

    Do not refer to IRM 3.11.3 when Form 1116 has been deleted per (3) above.

    Figure 3.21.3-9

    This is an Image: 34010009.gif
     

    Please click here for the text description of the image.

Schedule J (Sequence 20) -- Income Averaging for Farmers and Fishermen

  1. The following lines on Schedule J are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 2a There are no T-Compute Lines for this schedule
    Line 2b  
    Line 8  
    Line 12  
    Line 16  
    Line 19  
    Line 20  
    Line 21  
  2. For additional instructions refer to IRM 3.11.3.

Form 2441 (Sequence 21) -- Child and Dependent Care Expenses

  1. The following lines on Form 2441 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 1, column (a) Care Provider's Name Control Line 3
    Line 1, column (c) Care Provider's TIN  
    Line 2, Qualifying Persons  
    Line 2, column (a) -- Qualifying Person's Name Control  
    Line 2, column (b) -- Qualifying Person's TIN  
    Line 2, column (c) -- Qualified Expenses  
    Lines 3 through 5  
    Line 12  
    Line 16  
    Line 25  
  2. For additional instructions refer to IRM 3.11.3.

Form 3800 (Sequence 22) -- General Business Credit

  1. The following lines on Form 3800 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 1 through 5 There are no T-Compute Lines for this form.
    Line 24  
    Line 25  
    Line 26  
    Line 36  
    Part III, Checkbox I  
    Form 3468 Indicator {to the right of line 1a, column (c)}  
    Lines 1a, column (c)  
    Lines 1c through 1zz, column (c)  
    Line 3, column (c)  
    Line 4h, column (c)  
    Line 5, column (c)  
    Bottom of right margin, page 3  
  2. For additional instructions refer to IRM 3.11.3.

Form 4136 (Sequence 23) -- Credit for Federal Tax Paid on Fuels

  1. The following lines on Form 4136 are T-Lines and T-Compute Lines (all amounts are understood to be in column (d)):

    T-Lines T-Compute Lines
    Lines 1 through 17 There are no T-Compute Lines for this form.
  2. For additional instructions refer to IRM 3.11.3.

Form 4137 (Sequence 24, 25) -- Social Security and Medicare Tax on Unreported Tip Income

  1. The following lines on Form 4137 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Taxpayer TIN Line 2
    Lines 1A through 1E, columns (a) through (d)  
    Lines 2 and 3  
    Line 5  
    Line 6  
    Line 8  
  2. For additional instructions refer to IRM 3.11.3.

Form 4684 (Sequence 26) -- Casualties and Thefts

  1. The following lines on Form 4684 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 16 Line 16
  2. For additional instructions refer to IRM 3.11.3.

Form 4797 (Sequence 27) -- Sale of Business Property

  1. The following lines on Form 4797 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 1 Line 9
    Line 7  
    Line 8  
    Line 9  
    Bottom center margin  
  2. For additional instructions refer to IRM 3.11.3.

Form 4972 (Sequence 28) -- Tax on Lump Sum Distributions

  1. The following lines on Form 4972 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 1 through 5b Line 12
    Line 6  
    Lines 11 and 12  
    Line 18  
    Line 30  
  2. For additional instructions refer to IRM 3.11.3.

Form 5329 (Sequence 29, 30) -- Additional Taxes On Qualified Plans (including IRAs) and other Tax-Favored Accounts

  1. The following lines on Form 5329 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Spousal Indicator - edited to the left of the form title Line 4
    Loose form indicator - edited to the right of the entity area Line 8
    Line 4 Line 55
    Line 8  
    Line 17  
    Line 25  
    Line 33  
    Line 41  
    Line 49  
    Line 51  
    Line 55  
    Bottom-right margin, IRA Condition Code  
  2. For additional instructions refer to IRM 3.11.3.

Form 6198 (Sequence 31) -- At-Risk Limitations

  1. The following lines on Form 6198 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 5 Line 5
    Lines 20 and 21  
  2. For additional instructions refer to IRM 3.11.3.

Form 6251 (Sequence 32) -- Alternative Minimum Tax -- Individuals

  1. The following lines on Form 6251 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 4 There are no T-Compute Lines for this form.
    Lines 8 through 27  
    Line 32  
  2. For additional instructions refer to IRM 3.11.3.

Form 8615 (Sequence 33) -- Tax for Certain Children Who Have Unearned Income

  1. The following lines on Form 8615 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines A and B There are no T-Compute Lines for this form.
    Line C  
    Lines 1 and 2  
    Lines 6 and 7  
    Line 18  
  2. For additional instructions refer to IRM 3.11.3.

Form 2555 and Form 2555-EZ (Sequence 34, 35) -- Foreign Earned Income Exclusion

  1. The following are T-Lines and T-Compute Lines on Form 2555:

    T-Lines T-Compute Lines
    Post of Duty (POD) Code -- Top Center Margin Line 22g (Total Allowances)
    Line 10 (Beginning Date -- Bona Fide Residence) Line 33 (Housing Expense)
    Line 10 (Ending Date -- Bona Fide Residence) Line 42 (Foreign Earned Income Exclusion)
    Line 13a (Declaration Questions -- Right Margin) Line 50 (Housing Deduction)
    Line 14 (Number of Days in U.S. on Business -- Right Margin just above 15a)  
    Line 16 (Beginning Date -- Physical Presence)  
    Line 16 (Ending Date -- Physical Presence)  
    Line 18 (Number of Days in U.S. on Business -- Right Margin)  
    Line 19 (Form 2555 Wages)  
    Line 22g (Total Allowances)  
    Line 25 (Meals and Lodging)  
    Line 33 (Housing Expenses)  
    Line 36 (Housing Exclusion)  
    Line 42 (Foreign Earned Income Exclusion)  
    Line 45 (Housing Exclusion, Foreign Earned Income Exclusion, or Both)  
    Line 50 (Housing Deduction)  
  2. The following are the T-Lines and T-Compute Lines for Form 2555-EZ:

    T-Lines T-Compute Lines
    Post of Duty (POD) Code -- Top Center Margin Line 18
    Line 1b (Beginning and Ending Dates -- Bona Fide Residence)  
    Line 2b (Beginning and Ending Dates -- Physical Presence)  
    Line 12 (Number of Days in U.S. on Business -- Right Margin just above Part IV)  
    Line 17 (Form 2555-EZ Wages)  
    Line 18 (Foreign Earned Income Exclusion)  

General Information for Form 2555 and Form 2555-EZ

  1. U.S. citizens or resident aliens of the United States living abroad are taxed on worldwide income and may qualify to exclude from income up to $102,100 (per IRC § 911 (d)(2)(4)) of their foreign earnings. In addition, they can exclude or deduct certain foreign housing amounts.

  2. To claim the foreign earned income exclusion, the foreign housing exclusion, or foreign housing deduction, the taxpayer must satisfy all three of the following requirements:

    • The tax home must be in a foreign country

    • The taxpayer must have foreign earned income

    • The taxpayer must be one of the following:

    A U.S. Citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes any tax year in its entirety and includes part of the tax year of the return.

    Note:

    An entire tax year is from January 1 through December 31 for taxpayers who file their income tax returns on a calendar year basis.

    A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect that has a nondiscrimination clause and who is a bona fide resident for an uninterrupted period that includes an entire tax year and includes part of the tax year of the return .
    A U.S. citizen or a U.S. resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months and includes part of the tax year of the return.
  3. If the tax home on Form 2555 and Form 2555-EZ is in a foreign country, the taxpayer is entitled to the IRC § 911 exclusion even if the address on the Form 1040 is an address in the U.S. or in a U.S. territory.

  4. Taxpayers claiming a foreign earned income exclusion are not entitled to claim the same amount on line 1a, Form 1116. See IRM 3.21.3.26.

General Editing Instructions for Form 2555 and Form 2555-EZ

  1. Use the following chart for general editing instructions for Form 2555 and Form 2555-EZ:

    If And Then
    Taxpayer claims unearned income, including any of the following:
    • Alimony

    • Annuities

    • Capital gains

    • Dividends

    • Gambling Winnings

    • Interest

    • Pensions

    • Social Security Benefits

    • Unemployment Benefits

    1. earned income is also claimed

    2. no earned income is included

      • Adjust line 21 to only exclude the earned income

      • "X" the amount on lines 42 and/or 45, Form 2555 (Line 18, Form 2555-EZ)

      • "X" line 21, Form 1040

      • "X" the dotted portion of line 36, Form 1040

      • "X" Form 2555 or Form 2555-EZ*

      • Ensure foreign earned income is reported on the appropriate line(s) 7 -- 21, Form 1040.

    The taxpayer claims self-employment income from Schedule C, Schedule C-EZ or Schedule F Reports a net amount on line 12 or 18 and claims an exclusion for the gross amount on line 21 Adjust line 21 to only exclude the net amount.
    Taxpayer:
    1. U.S. Military or

    2. Lives and works in a U.S. territory or

    3. Resides in:

      • Baker Island

      • Howland Island

      • Jarvis Island

      • Johnston Atoll

      • Kingman Reef

      • Midway Islands

      • Palmyra Atoll

      • Wake Islands

    4. Is excluding income earned at:

      • "Raytheon" (Christchurch, New Zealand)

      • "Antarctic Support Associates" (Englewood, CO.)

      • "Honeywell International, Inc." (Tempe, AZ.)

     
    • "X" line 21, Form 1040

    • "X" the dotted portion of line 36, Form 1040

    • "X" Form 2555 or Form 2555-EZ*

    • Ensure foreign earned income is reported on the appropriate line(s) 7 -- 21, Form 1040.

    Exception:

    If a return shows income earned in the Federated States of Micronesia, Marshall Islands or Palau Islands and Form 2555 or Form 2555-EZ is attached and valid, ALLOW the exclusion.

    Taxpayer's intent is not to use Form 2555 or Form 2555-EZ Taxpayer makes no attempt to exclude income on Form 1040 and the Form 2555 or Form 2555-EZ does not include a claim for excluded income "X" Form 2555 or Form 2555-EZ
    Multiple Forms 2555 and/or Form 2555-EZ are attached for 1 Taxpayer  
    • Combine related T-lines

    • "X" the other Form(s) 2555 or Form 2555-EZ

    • Use the appropriate POD code for the Form 2555 or Form 2555-EZ with the most income on Line 26, Form 2555 or Line 17, Form 2555-EZ

    • Edit dates to include the entire period reported on forms.

    • When combining Form(s) 2555 with Form(s) 2555-EZ, always combine onto Form 2555. Combine line 17, Form 2555-EZ with line 19, Form 2555, and line 18, Form 2555-EZ with lines 42 and 45, Form 2555.

    Note:

    Correspond for Form 2555 when combined foreign earned income from Forms 2555-EZ is over $102,100.

    Taxpayer enters beginning and ending dates that do not include part of the tax year of the return.   Correspond using the following literal:
    "To exclude foreign income, the qualifying dates on Form 2555/2555-EZ must cover a part of the tax year of your tax return. Please verify your beginning and/or ending dates, and re-submit your Form 2555"

    Note:

    * If the deleted Form 2555 and/or Form 2555-EZ is the only foreign aspect of the return, rebatch the coded return to a Domestic Program.

  2. If Form 2555 or Form 2555-EZ is valid:

    • ensure income is included on lines 7, 12, 17, and/or 18 and

    • the exclusion is a negative on line 21

  3. If the Form 2555 or Form 2555-EZ is invalid:

    • ensure income is included on lines 7, 12, 17, and/or 18 and

    • "X" line 21

    • "X" Form 2555 or Form 2555-EZ

    • If the deleted Form 2555 or Form 2555-EZ is the only foreign aspect of the return, re-sort return to domestic program.

Form 2555 and Form 2555-EZ for Joint Filers

  1. Only two (2) forms can be processed:

    • One for the primary taxpayer (sequence code 34)

    • One for the secondary taxpayer (sequence code 35)

    Note:

    Both taxpayers can use either Form 2555 or Form 2555-EZ or any other combination.

  2. If one Form 2555 or Form 2555-EZ is attached to the return and it is submitted for the secondary taxpayer, edit Sequence Code "35" .

  3. If two (2) Forms are submitted and only one is valid:

    1. Adjust line 21, Form 1040 by deleting the amount for the invalid Form 2555 or Form 2555-EZ, if applicable.

    2. Adjust line 36 dotted portion, Form 1040 by deleting the amount for the invalid Form 2555 or Form 2555-EZ, if applicable.

    3. "X" the invalid Form 2555 or Form 2555-EZ.

    4. Make sure foreign earned income is reported on the appropriate line(s) 7 - 21.

  4. If two (2) Forms are submitted and neither one is valid:

    1. "X" line 21 of Form 1040 (foreign earned income exclusion).

    2. "X" line 36 (dotted portion) of Form 1040 (foreign earned housing deduction).

    3. "X" both Forms 2555 or Form 2555-EZ.

    4. Make sure foreign earned income is reported on the appropriate line(s) 7 - 21.

    5. If the deleted Forms 2555 or Form 2555-EZ are the only foreign aspect of the return, re-sort to domestic program.

  5. If only one Form 2555 or Form 2555-EZ is submitted for both taxpayers, correspond for separate Form(s) 2555 or Form(s) 2555-EZ, see Figure 3.21.3-10.

    Caution:

    If the spouses are a missionary team, see (6) below.

  6. If the spouses are a missionary team and only one Form 2555 or Form 2555-EZ is submitted, DO NOT correspond. Divide the income equally between the two filers on separate Form(s) 2555 or Form(s) 2555-EZ.

    Exception:

    If it can be determined that the income was earned by only one spouse, DO NOT divide the income. Process the Form 2555 or Form 2555-EZ as filed.

    Figure 3.21.3-10

    This is an Image: 34010010.gif
     

    Please click here for the text description of the image.

Post of Duty (POD) Code

  1. A POD Code must be edited to all Forms 2555 or Forms 2555-EZ.

  2. Edit the appropriate 2 alpha character POD Code in the top center margin of Page 1, Form 2555 or Form 2555-EZ according to Exhibit 3.21.3-7. See Figure 3.21.3-11 .

    Figure 3.21.3-11

    This is an Image: 34010011.gif
     

    Please click here for the text description of the image.

  3. Examine Form 2555 or Form 2555-EZ to determine where the foreign income was earned. Use the following priority order when determining the POD assignment:

    1. Address: line 1, Form 2555; line 4, Form 2555-EZ

    2. Tax Home: line 9, Form 2555; line 11a, Form 2555-EZ

    3. Principal Country: line 17, Form 2555

    4. Foreign address on Form 1040

    5. Employer’s foreign address: line 4b, Form 2555; line 8, Form 2555-EZ

    6. Income Statement

    Note:

    If multiple countries are present, edit the first with a listed POD.

    Reminder:

    If combining Forms 2555 or Form 2555-EZ, edit the POD for the Form 2555 or Form 2555-EZ with the most income on line 26, Form 2555 or line 17, Form 2555-EZ.

  4. If the country in which the foreign income is earned is not listed in the POD Chart, edit POD Code "XX."

  5. If you cannot determine the POD after using instructions in (3) above, edit POD Code "XX."

Determining Bona Fide Residence and Physical Presence Dates

  1. A U.S. citizen is considered to be a Bona Fide resident of a foreign country if his tax home has been in that foreign country for an uninterrupted period of time which includes a full calendar year and part of the tax year of the return. Before editing bona fide dates for restricted countries (Cuba, Iraq and Libya), see IRM 3.21.3.39.5(3).

    Note:

    Waiver of minimum time requirements -- the minimum time requirements for bona fide residence can be waived if the taxpayer must leave a foreign country because of war, civil unrest, or similar adverse conditions in that country. The following are the only countries that can claim a waiver for 2017.

    Country Date of Departure on or after
    Reserved  

    Note:

    Edit dates to cover a full calendar year using the dates provided by the taxpayer if available. Otherwise, use the tax year of the return to determine the applicable dates.

  2. To qualify for bona fide residence, the taxpayer must reside in a foreign country for an uninterrupted period that includes an entire tax year and includes part of the tax year of the return.

    Note:

    An entire tax year is from January 1 through December 31 for taxpayers who file their income tax returns on a calendar year basis.

    Example:

    For tax year 2017, the taxpayer enters bona fide dates of 11/01/2015 to 01/15/2018. The taxpayer completed an uninterrupted period of residence for a full tax year (2017) and therefore meets the bona fide residence test. The taxpayer would also qualify for tax years 2015, 2016, and 2018.

    Example:

    For TY 2017, the taxpayer enters bona fide dates of 10/01/2016 to 11/30/2017. The taxpayer did not complete an uninterrupted period of residence for a full tax year (2016 or 2017) and therefore does not meet the bona fide residence test in either year, but qualifies for physical presence.

  3. A taxpayer living and working in a restricted country cannot claim the benefits under "IRC § 911:"

    Caution:

    If the taxpayer meets either bona fide or physical presence but the beginning date was within the restricted period, edit qualifying dates based on the end of the restriction.

    Restricted Country Beginning Date Ending Date
    Cuba

    Exception:

    If a nonmilitary taxpayer files a Form 1040 with a Form 2555 exclusion from United States Naval base at Guantanamo Bay, allow the exclusion.

    January 1, 1987 Still in effect
    *Iraq August 2, 1990 July 29, 2004
    *Libya January 1, 1987 September 20, 2004
  4. Edit Beginning and Ending Dates in YYMM format on:

    1. For Bona Fide Dates – Part II line 10 area, Form 2555 and Part I, below line 1b, Form 2555-EZ.

    2. For Physical Presence Dates – Part III line 16 area, Form 2555 and Part I, below line 2b, Form 2555-EZ.

    Exception:

    If the beginning date is 1950 or earlier, then perfect the date in a YYYYMM format. (Example: September 1947 will be edited as "194709" ).

  5. If both beginning and ending dates are present or can be determined (see paragraph (6)), follow the chart below:

    IF AND THEN
    Entries are present only for Bona Fide Dates
    1. The dates cover any full calendar year and includes a part of the current tax year

    2. The dates do not cover any full calendar year but cover at least 330 days

    3. The dates do not cover any full calendar year or are less than 330 days

    1. Edit the dates in YYMM format in the Bona Fide section.

      1. The taxpayer indicates the beginning date as January, 2017 and the ending date as December, 2017 -- edit "1701" as the beginning date and "1712" as the ending date.

      See Figure 3.21.3-12.

    2. Edit the dates in YYMM format in the Physical Presence section. See Figure 3.21.3-13.

    3. Complete the following:

      • "X" line 21 of Form 1040 (foreign earned income exclusion) amount.

      • "X" line 36 (dotted portion) of Form 1040 (foreign earned housing deduction)

      • "X" Form 2555 or Form 2555-EZ

      • If the deleted Form 2555 or Form 2555-EZ is the only foreign aspect of the return, re-sort to domestic program.

    Entries are present only for Physical Presence Dates
    1. The dates cover at least 330 days

    2. The dates do not cover at least 330 days

    1. Edit the dates in YYMM format in the physical presence section

      • "X" line 21 of Form 1040 (foreign earned income exclusion) amount.

      • "X" line 36 (dotted portion) of Form 1040 (foreign earned housing deduction)

      • "X" Form 2555 or Form 2555-EZ

      • If the deleted Form 2555 or Form 2555-EZ is the only foreign aspect of the return, re-sort to domestic program

    Entries are present for both Bona Fide and Physical Presence Dates
    1. The dates are different

    2. The dates are the same

    3. The dates do not qualify for either Bona Fide or Physical Presence

    1. Edit the dates for the longest period in the appropriate section. See Figure 3.21.3-14.

    2. Edit Bona Fide Dates unless the dates only qualify for Physical Presence. See Figure 3.21.3-15.

      • "X" line 21 of Form 1040 (foreign earned income exclusion) amount.

      • "X" line 36 (dotted portion) of Form 1040 (foreign earned housing deduction)

      • "X" Form 2555 or Form 2555-EZ

      • If the deleted Form 2555 or Form 2555-EZ is the only foreign aspect of the return, re-sort to domestic program

    Caution:

    If the taxpayer enters an ending date beyond the received date of the return, edit the received date as the ending date (e.g., if the taxpayer’s ending date is June 1, 2018 and the return received date is April 25, 2018, then edit the ending date as "1804" ).

    Figure 3.21.3-12

    This is an Image: 34010012.gif
     

    Please click here for the text description of the image.

    Figure 3.21.3-13

    This is an Image: 34010013.gif
     

    Please click here for the text description of the image.

    Figure 3.21.3-14

    This is an Image: 34010014.gif
     

    Please click here for the text description of the image.

    Figure 3.21.3-15

    This is an Image: 34010015.gif
     

    Please click here for the text description of the image.

  6. If beginning and/or ending dates are not present, follow the chart below:

    IF AND THEN
    The taxpayer indicates the tax home in the country is for a full calendar year including notations as:
    • "since birth"

    • "all my life"

    • "still here"

    • "continues"

    • "N/A"

    Reminder:

    These notations are not all inclusive

     
    • If the beginning date is unknown, edit January of the tax year as the beginning date (1701), see Figure 3.21.3-16.

    • If the ending date is unknown, edit the current date until "042218" , then use the received date. (for a return with a received date of June 2018, edit "1806" as the ending date), see Figure 3.21.3-17.

    Reminder:

    ≡ ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ " .

    Note:

    If the ending date is unknown on a Prior Year Return, edit the received date as the ending date.

    Any of the following conditions are present:
    • No beginning date (ending date is present)

    • No ending date (beginning date is present)

    • No dates

    • Only months are present (e.g., Jan. - Dec.)

    1. The number of days on line 31 or 38, Form 2555 (line 14, Form 2555-EZ) is 365 or 366

    2. The number of days on line 31 or 38, Form 2555 (line 14, Form 2555-EZ) is 330-364

    3. The number of days on line 31 or 38, Form 2555 (line 14, Form 2555-EZ) is less than 330

    1. Edit qualifying Bona Fide dates to cover a full calendar year see Figure 3.21.3-18.

      Note:

      If the beginning date is unknown, edit January and if the ending date is unknown, edit December.

    2. Edit qualifying Physical Presence Dates to cover a full calendar year, see Figure 3.21.3-19.

      Note:

      If the beginning date is unknown, edit January and if the ending date is unknown, edit December.

    3. Correspond

      Note:

      Do not "X" the exclusion (Form 2555 or Form 2555-EZ) based on the number of days being less than 330 days before corresponding with the taxpayer.

    Figure 3.21.3-16

    This is an Image: 34010016.gif
     

    Please click here for the text description of the image.

    Figure 3.21.3-17

    This is an Image: 34010017.gif
     

    Please click here for the text description of the image.

    Figure 3.21.3-18

    This is an Image: 34010018.gif
     

    Please click here for the text description of the image.

    Figure 3.21.3-19

    This is an Image: 34010019.gif
     

    Please click here for the text description of the image.

Form 2555 -- Page 1, Parts I and II

  1. If Page 1 is missing, correspond.

    Exception:

    If page 2 is complete, including physical presence dates, and page 1 is missing, dummy page 1 of Form 2555. If Part III is complete, do not correspond for Part II.

  2. POD Code (top center of Form 2555) -- see IRM 3.21.3.39.4 and Exhibit 3.21.3-7. If the country cannot be determined, edit POD "XX."

  3. Line 10 -- Bona Fide residence dates, see IRM 3.21.3.39.5

  4. Declaration Questions -- Edit a “4” in the margin to the right of line 13a if any of the following conditions are found. See Figure 3.21.3-20.

    1. Line 13(a) -- YES box checked

    2. Line 13(b) -- NO box checked

    3. Line 15(c) -- YES box checked

    4. Line 15(d) -- YES box checked

    Caution:

    Do not edit "4" for declaration questions if dates are being moved from bona fide residence to physical presence or if the only dates present are physical presence dates.

  5. Line 14 columns (c) -- Days in the United States on business:

    1. Add the number of days listed in the column titled "Number of days in U.S. on business" (third and seventh column under line 14). See Figure 3.21.3-20.

      Exception:

      Do not include days in the U.S. due to illness, personal or vacation.

    2. Edit the sum in the margin to the right of line 14 and just above line 15a, see Figure 3.21.3-20.

    Note:

    If dates are being moved from bona fide residence to physical presence, also move number of days in the U.S. on business, if present. If only physical presence dates are present, move the number of days entered by the taxpayer from page 1 to page 2.

    Figure 3.21.3-20

    This is an Image: 34010020.gif
     

    Please click here for the text description of the image.

Form 2555 -- Page 2, Part III

  1. Line 16 -- Physical Presence Dates (see IRM 3.21.3.39.5).

  2. Line 18 column (e) -- Days in the United States on Business:

    1. Add the number of days listed in the column title "Number of days in U.S. on business" (fifth column under line 18). See Figure 3.21.3-20.

      Exception:

      Do not include days in the U.S. due to illness, personal or vacation.

    2. Edit the sum in the margin to the right of line 18 and just above the Part IV.

    3. If Line 18 column (e) is blank and only Physical Presence dates are present, edit number of days in U.S. on business from line 14c.

Form 2555 -- Page 2, Part IV

  1. Page 2 of Form 2555 must be completed by the taxpayer. If page 2 is missing or there are no significant T-line entries present or edited, correspond.

    Note:

    All amounts are to be reported in U.S. currency ONLY. Convert any amounts reported in foreign currency to U.S. dollars using the exchange rate chart appropriate for the tax period of the filer’s tax return.

  2. Line 19 -- Total Wages

    1. If blank, dash or zero and an amount is present on line 26, edit the line 26 entry to line 19.

    2. If lines 19 and 26 are blank, dash or zero and an entry appears on line 20a, edit the amount to line 19.

  3. Line 22g -- Total Allowances

    • Compute and enter when blank, dash or zero and there are entries present on lines 22a through 22f.

  4. Line 26 -- Taxpayers claiming a foreign earned income exclusion are not entitled to claim the same amount on line 1a, Form 1116. See IRM 3.21.3.26.

Form 2555 -- Page 3, Parts V, VI, VII, VIII and IX

  1. If the taxpayer is claiming an exclusion from Form 2555, then page 3 must be completed. Either line 42 or line 45 must be present or edited. If both are missing, correspond for Page 3, Form 2555.

    Note:

    If the taxpayer enters zero on line 42 and/or 45, do not correspond; continue processing.

  2. Line 33 -- Housing Expense

    • Compute and enter when blank, dash or zero by subtracting line 32 from line 30.

  3. Line 36 -- Housing Exclusion

    1. Qualified individuals may separately elect to claim the housing exclusion or the housing deduction, in addition to the foreign earned income exclusion. The housing exclusion applies only to amounts considered paid for with employer-provided amounts. The housing deduction applies only to amounts paid for with self-employment earnings.

    2. The Tax Increase Prevention and Reconciliation Act of 2005 (TIPRA) made the following changes to IRC § 911 which are effective for tax periods beginning on or after January 1, 2006.

    3. The calculation of the base housing amount (line 32 of Form 2555) is now related to the maximum foreign earned income exclusion. The amount is 16 percent of the exclusion amount (computed on a daily basis) multiplied by the number of days in the qualifying period that fall within the tax period.

    4. The amount of qualified housing expenses is limited to 30 percent (%) of the maximum foreign earned income exclusion (computed on a daily basis) for the calendar year in which the taxable year of the individual begins multiplied by the number of days within the applicable period. However, the law provides for adjustments to the percentage based on geographic differences in foreign housing costs relative to housing costs in the United States.

    5. The housing expense may not exceed a certain limit. This limit on housing expenses varies depending upon the location in which you incur housing expenses. Exhibit 3.21.3-8 lists the housing limitations (per Notice 2010-27) based on geographic difference in foreign housing costs relative to housing costs in the United States.

      Note:

      If line 31 shows 364 days or less, then use the daily rate. If line 31 shows 365 or 366 days, then use the maximum rate.

  4. Line 42 -- Foreign Earned Income Exclusion

    • If blank, enter the smaller of line 40 or line 41.

    • If lines 40 - 42 are blank, compute line 42 (follow the line instructions on Form 2555).

  5. Line 45 -- Housing Exclusion/Foreign Earned Income Exclusion

    1. The taxpayer may include an amount for a prior year exclusion by making a notation on the dotted portion of line 45, Form 2555. If this notated amount is included in the total on line 45, accept the taxpayer’s figure. If this amount is the only Form 2555 exclusion claimed, accept the taxpayer’s figures. DO NOT correspond for dates. DO NOT edit POD or dates.

    2. Verify that the line 45 amount (or combined line 45 amounts if the primary and secondary taxpayers each submitted a Form 2555) has been reported on line 21, Form 1040. If line 21 (Form 1040) is blank, edit the line 45 amount to line 21 as a negative entry (bracket the amount). If line 21 (Form 1040) already has an entry, follow the instructions below:

      IF THEN
      The line 21 amount is equal to the line 45 (Form 2555) amount(s), Take no action
      No clear breakdown of the line 21 amount is provided, Take no action
      The taxpayer has provided a clear breakdown of the line 21 amounts and the line 45 (Form 2555) amount(s) is included, Take no action
      The taxpayer has provided a clear breakdown of the line 21 amounts and the line 45 (Form 2555) amount(s) is NOT included, "X" the line 21 amount and if line 21:
      1. Has a positive amount, subtract the line 45 amount from it and edit the result to line 21 (bracket if the result is negative).

      2. Has a negative amount, add the line 21 and 45 amounts together. Edit the result to line 21 as a negative number (bracket).

  6. Line 50 -- Housing Deduction:

    1. If blank, compute the housing deduction amount by adding lines 48 and 49.

    2. Edit the housing deduction amount to the dotted portion of line 36, Form 1040 if not already entered by the taxpayer.

    3. If the housing deduction amount is entered on any other line, "X" the entry and edit it to the dotted portion of line 36.

General Editing For Form 2555-EZ

  1. Edit RPC "M" on all Forms 1040 with a valid Form(s) 2555-EZ attached, see Figure 3.21.3-21.

    Note:

    Do not edit RPC "M" when correspondence is for dates or a missing/incomplete page 1 and/or 2 of Form 2555-EZ.

    Reminder:

    Do not edit RPC "M" for a Form 2555-EZ that has been X’d.

    Figure 3.21.3-21

    This is an Image: 34010021.gif
     

    Please click here for the text description of the image.

  2. Correspond for Form 2555 if the taxpayer reports any of the following on Form 2555-EZ:

    • Foreign earned income is over $102,100

      Note:

      Correspond for Form 2555 when combined foreign earned income from Forms 2555-EZ for any one taxpayer is over $102,100.

      Reminder:

      The limitation is based on the amount of income, not the exclusion.

    • Self employment income (for example: Schedule C, Schedule C-EZ, Schedule E Part II or Schedule F), see Figure 3.21.3-22

    • Form 2106, Employee Business Expenses

    • Form 2106-EZ, Unreimbursed Employee Business Expenses

    • Form 3903 Moving Expenses

    • Housing exclusion or housing deduction (including for a prior year)

    • An other than a calendar year, 12 month tax period

    Note:

    Do not edit RPC "M" when corresponding for Form 2555.

    Figure 3.21.3-22

    This is an Image: 34010022.gif
     

    Please click here for the text description of the image.

Form 2555-EZ -- Page 1

  1. POD Codes (top center of Form 2555-EZ): see IRM 3.21.3.39.4 and Exhibit 3.21.3-7.

  2. Line 1b and line 2b -- Bona Fide Residence Test and Physical Presence Test: see IRM 3.21.3.39.5.

  3. If page 1 is missing, correspond.

Form 2555-EZ -- Page 2

  1. If the taxpayer is claiming an exclusion from Form 2555-EZ, then page 2 must be completed. Correspond if missing or incomplete.

    Note:

    If the taxpayer enters zero on line 18, do not correspond; continue processing.

    Note:

    Ensure that the taxable amount is on line 7, Form 1040 and the exclusion is on line 21, Form 1040.

  2. Days in U.S. on Business:

    1. Add the number of days listed in column (c) titled "Number of days in U.S. on business" (Part III, line 12c).

      Note:

      Do not include days in the U.S. due to illness, personal or vacation in the total number of days in the U.S. on business.

    2. Edit the sum in the margin to the right of line 12d just above Part IV.

  3. Line 17 -- Total Foreign Earned Income -- Ensure income is included on line 7, Form 1040.

  4. Line 18 -- Foreign Earned Income Exclusion -- If blank, edit the smaller of line 16 or line 17

    1. Verify that the line 18 amount (or combined amounts if the primary and secondary both submitted a Form 2555) has been reported on line 21, Form 1040. If line 21 (Form 1040) is blank, edit the line 18 amount to line 21 as a negative entry (bracket the amount).

      Note:

      Prior Year Exclusion is not valid on Form 2555-EZ. Convert to Form 2555 by editing line 45 on page 3 only. No other editing is required. Do not correspond for dates

      .

Form 4835 (Sequence 37) -- Farm Rental Income and Expenses

  1. The following lines on Form 4835 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 1 There are no T-Compute Lines for this form.
    Line 2a  
    Line 3a  
    Lines 4a and 4b  
    Line 5a  
    Line 6  
  2. For additional instructions refer to IRM 3.11.3

Form 8839 (Sequence 38) -- Qualified Adoption Expenses

  1. The following lines on Form 8839 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 1, columns (a) through (g) Line 21
    Line 3 -- edited for Child 1, Child 2 and Child 3 Line 29
    Line 5 -- edited for Child 1, Child 2 and Child 3  
    Line 11 -- edited for Child 1, Child 2 and Child 3  
    Line 21  
    Line 27 - Edited for Child 1, Child 2 and Child 3  
    Line 28  
    Line 29  
    Documentation Indicator Code  
  2. For additional instructions refer to IRM 3.11.3

Form 8853 (Sequence 39) -- Archer MSAs and Long-Term Insurance Contacts

  1. The following lines on Form 8853 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    TIN There are no T-Compute Lines for this form
    Lines 1-4  
  2. For additional instructions refer to IRM 3.11.3

Form 8814 (Sequence 40, 41, 42) -- Parent's Election to Report Child's Interest and Dividends

  1. The following lines on Form (s) 8814 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Child's Name Control Line 15
    Child's TIN  
    Lines 1a and 1b  
    Line 2a  
    Line 3  
    Line 15  
  2. For additional instructions refer to IRM 3.11.3.

Schedule EIC (Sequence 43) -- Earned Income Credit

  1. The following lines on Schedule EIC are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 1 -- Child's Name Control (Child 1, 2 and 3) There are no T-Compute lines for this schedule.
    Line 2 -- Child's TIN (Child 1, 2 and 3)  
    Line 3 -- Year of Birth (Child 1, 2 and 3)  
    Line 4a -- Under age 24 checkbox (Child 1, 2 and 3)  
    Line 4b -- Disabled checkbox (Child 1, 2 and 3)  
    Relationship Code - edited to the right of relationship box, Line 5  
    Line 6  
  2. If the taxpayer's address is outside the U.S., see IRM 3.21.3.15.6.3

  3. For additional instructions refer to IRM 3.11.3.

Schedule H (Sequence 44, 45) -- Household Employment Taxes

  1. The following lines on Schedule H are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Employer's Name Control Line 8
    Employer's TIN Line 19
    Employer's EIN  
    Lines 1 and 3  
    Lines 5 through 8  
    FUTA Indicator Code - edited under the Yes/No boxes, page 2, Part II  
    Lines 13 through 16  
    Line 17, column (a)  
    Line 18, column (h)  
    Lines 19 and 20  
    Line 23  
    Line 24  
    Additional States Indicator -- edited in the bottom left margin  
    MID Code -- edited in the bottom right margin (Prior Year)  
  2. If a current year loose Schedule H-PR contains no money amount entries, give the Schedule H-PR to your work leader. The work leader will dispose of the loose Schedule H-PR in accordance with classified waste procedures.

  3. Prepare a "dummy" Form 1040-PR for a loose Schedule H-PR. Follow these procedures when preparing a "dummy" Form 1040-PR:

    1. Complete the caption information using the information from the Schedule H-PR name line and from Part IV address area of the Schedule H-PR.

    2. Edit FSC "1" or "2" based on the Schedule H-PR name line.

    3. Edit lines 4, 6 and 15, Form 1040-PR from the Schedule H-PR tax total. (If Part II was not completed, use the amount from line 8, Schedule H-PR).

    4. Edit CCC "3"

    5. Edit RPC "Y"

    6. If Schedule H-PR is missing a valid signature or documentary evidence, correspond with Form 13975, (Form 1040-PR CAS) using the following fill-in:
      If you are not required to file a tax return, send us a completed Part IV, Schedule H-PR, with your original signature. If someone other than the taxpayer is signing Schedule H-PR, include a power of attorney, court certificate or Form 2848

  4. When a loose Schedule H is received, process the Schedule H using instructions in IRM 3.11.3.41.14.

  5. For additional instructions, see IRM 3.11.3.

Schedule 8812 (Sequence 47) -- Child Tax Credit

  1. The following lines on Schedule 8812 are a T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line A There are no T-Compute Lines for this schedule.
    Line B  
    Line C  
    Line D  
    Checkbox at the bottom of Part I to indicate more than 4 dependents with ITINs  
    Line 4b  
    Line 7  
  2. If the taxpayer is a bona fide resident of Puerto Rico (i.e. the only address on the return or attachments is PR) and is filing Form 1040/Form 1040A, correspond following the instructions at IRM 3.21.3.69.

  3. Edit the total Social Security and Medicare tax amounts from all Forms W-2 (boxes 4 and 6), Form 499R-2/W-2PR (boxes 18 and 20), or attachments on line 7 when both of the following conditions are present:

    • Line 1 is $3000 or more, and

    • Line 7 is blank, dash, or zero and there is an amount on Line 67, Form 1040 (Line 43, Form 1040A).

  4. If you can determine that all income is from self-employment or HSH or if there is an indication that the taxpayer has filed Form 4029, take no action.

  5. If unable to edit an amount to line 7 using the instructions above, "X" line 67, Form 1040 (line 43, Form 1040A).

  6. For additional instructions, refer to IRM 3.11.3.

Form 8606 (Sequence 48, 49) -- Nondeductible IRAs

  1. The following lines on Form 8606 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Spousal Indicator - edited to the left of the form title There are no T-Compute Lines for this form.
    Line 7  
    Line 15  
    Line 16  
    Line 17  
    Line 18  
    Line 22  
  2. For additional instructions refer to IRM 3.11.3.

Form 8863 (Sequence 50) -- Education Credits (American Opportunity Credit and Lifetime Learning Credits)

  1. The following lines in Part I -- Refundable American Opportunity Credit on Form 8863 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 1 Line 1
  2. The following lines in Part II -- Nonrefundable Education Credits on Form 8863 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 10 Line 10
  3. The following lines in Part III --Student and Education Institution Information on Form 8863 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 20 There are no T-Compute Lines.
    Line 21  
    Line 22, Column A, Line 4  
    Line 22, Column B, Line 4  
    Line 23  
    Line 24  
    Line 25  
    Line 26  
  4. For additional instructions refer to IRM 3.11.3.

Form 4952 (Sequence 51) -- Investment Interest Expense Deduction

  1. The following lines on Form 4952 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 4e There are no T-Compute Lines.
    Line 4g  
  2. For additional instructions refer to IRM 3.11.3.

Form 8889 (Sequence 52, 53) -- Health Savings Account (HSAs)

  1. The following lines on Form 8889 (Sequence Codes 52 for the primary taxpayer and 53 for the secondary taxpayer) are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 1 through 21 Line 16
  2. For additional instructions refer to IRM 3.11.3

Form 8880 (Sequence 54) -- Credit for Qualified Retirement Savings Contributions

  1. The following lines on Form 8880 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 6a and 6b There are no T-Compute Lines on this form.
  2. For additional instructions refer to IRM 3.11.3.

Form 8888 (Sequence 56) -- Allocation of Refund (Including Savings Bond Purchases)

  1. The following lines on Form 8888 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Lines 1a through 1d There are no T-Compute Lines on this form.
    Lines 2a through 2d  
    Lines 3a through 3d  
    Line 4  
    Lines 5a through 5c  
    Line 5c checkbox  
    Lines 6a through 6c  
    Line 6c checkbox  
    Line 7  
  2. For additional instructions refer to IRM 3.11.3.

Form 5405 (Sequence 58, 59) -- Repayment of the First-Time Homebuyer Credit

  1. The following lines on Form 5405 (Sequence Code 58 for the primary taxpayer and 59 for the secondary taxpayer) are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    TIN There are no T-Compute Lines on this form.
    Line 1  
    Line 3 checkboxes  
    Line 4  
    Line 5  
    Line 7  
    Line 8  
  2. For additional instructions refer to IRM 3.11.3.

Form 8917 (Sequence 60) -- Tuition and Fees

  1. Reserved

Form 8919 (Sequence 61, 62) -- Uncollected Social Security and Medicare Tax on Wages

  1. The following lines on Form 8919 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Taxpayer TIN Line 6
    Lines 1 through 3, columns (a) through (f) Line 13
    Line 6  
    Line 8  
    Line 13  
  2. For additional instructions refer to IRM 3.11.3.

Form 8958 (Sequence 63) -- Allocation of Tax Amounts Between Certain Individuals in Community Property States

  1. The following lines on Form 8958 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Spouse's or Partner's First Name There are no T-Compute Lines on this form.
    Spouse's or Partner's Last Name  
    Spouse's or Partner's Social Security Number  
  2. For additional instructions refer to IRM 3.11.3.

Form 8941 (Sequence 65, 66) -- Credit for Small Employer Health Insurance Premiums

  1. Only 2 forms can be processed:

    • One for the primary taxpayer (sequence code 65)

    • One for the secondary taxpayer (sequence code 66)

  2. The following lines on Form 8941 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Identifying Number (Top Right) There are no T-Compute lines on this form.
    A - SHOP (Small Business Health Options Program) Checkbox  
    B - Employment Taxes via Employer Identification Number  
    C - Two-Year Declaration Checkbox  
    Line 1  
    Line 2  
    Line 3  
    Line 4  
    Line 5  
    Line 10  
    Line 13  
    Line 14  
    Line 15  
    Line 16  
  3. For additional instructions, refer to IRM 3.11.3.

Form 8910 (Sequence 68) -- Alternative Motor Vehicle Credit

  1. The following lines on Form 8910 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 1, column (a) There are no T-Compute Lines on this form.
    Line 1, column (b)  
    Line 2, column (a)  
    Line 2, column (b)  
  2. For additional instructions, refer to IRM 3.11.3.

Form 8936 (Sequence 69) -- Qualified Plug-In Electric Drive Motor Vehicle Credit

  1. The following lines on Form 8936 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Line 1, column (a) There are no T-Compute Lines on this form.
    Line 1, column (b)  
    Line 2, column (a)  
    Line 2, column (b)  
  2. For additional instructions, refer to IRM 3.11.3.

Form 8867 (Sequence 70) -- Paid Preparer's Due Diligence Checklist

  1. The following lines on Form 8867 are T-Lines and T-Compute Lines:

    T-Lines T-Compute Lines
    Additional Forms Indicator (Right Margin of Part I) There are no T-Compute Lines on this form.
    EIC Column Checkbox  
    CTC Column Checkbox  
    AOTC Column Checkbox  
    Line 1)  
    Line 2  
    Line 3  
    Line 4  
    Line 5  
    Line 6