3.22.261 Foreign Investment in Real Property Tax Act (FIRPTA)

Manual Transmittal

November 10, 2021

Purpose

(1) This transmits revised IRM 3.22.261, International Error Resolution - Foreign Investment in Real Property Tax Act (FIRPTA).

Material Changes

(1) IRM 3.22.261.1.1 - Added information on new Treasury Regulation (TR 9926).

(2) IRM 3.22.261.1.5 - Removed duplicate information and added an accurate description of program controls developed to oversee the Form 8288 processing program.

(3) IRM 3.22.261.4 - Removed outdated TBOR link; deleted and rearrange several paragraphs.

(4) IRM 3.22.261.4(2)(j) - IPU 21U0494 issued 03-30-202. Corrected note to include correct TBOR reference information.

(5) IRM 3.22.261.5(1) - IPU 21U0494 issued 03-30-2021. Taxpayer Bill of Rights (TBOR) content updated based on guidance from the Division Counsel/Associate Chief Counsel (National Taxpayer Advocate Program) and Branch 3 of the Associate Chief Counsel (Procedure and Administration) in the Internal Management Document (IMD) community e-mail dated March 12, 2021.

(6) IRM 3.22.261.5(4) - Added new IRM cross reference.

(7) IRM 3.22.261.5.1 - Removed non-working Service Level Agreements link and added correct link.

(8) IRM 3.22.261.6(1) - Added link to IRS policy for use of fax

(9) IRM 3.22.261.6(5) - Removed outdated IRM reference and added new reference for answering machine and voicemail policies.

(10) IRM 3.22.261.14.3 - Added IRM reference for using related Computer Condition Codes.

(11) IRM 3.22.261.20(1) - IPU 21U0980 issued 07-26-2021. Updated location for Field Reference 01A to reduce processing errors.

(12) IRM 3.22.261.20.1(3) - IPU 21U0980 issued 07-26-2021. Updated instructions for location for Field Reference 01A to reduce processing errors.

(13) IRM 3.22.261.20.1(6) - IPU 21U0696 issued 05-05-2021. Corrected Field Designators 02H and 02G.

(14) IRM 3.22.261.20.6(7) - IPU 21U0696 issued 05-05-2021. Corrected Field Designator 02G.

(15) IRM 3.22.261.20.15(6) - IPU 21U0696 issued 05-05-2021. Corrected Field Designator 02G.

(16) IRM 3.22.261.21(1) - IPU 21U0696 issued 05-05-2021. Corrected multiple Field Designators in the chart.

(17) IRM 3.22.261.21.2(6) - IPU 21U0696 issued 05-05-2021. Corrected Field Designators 02F and 02J.

(18) IRM 3.22.261.21.2(8) - IPU 21U0696 issued 05-05-2021. Corrected Field Designators 02F and 02J.

(19) IRM 3.22.261.21.4 - IPU 21U0696 issued 05-05-2021. Corrected multiple Field Designators.

(20) IRM 3.22.261.21.5 - Corrected multiple Field Designators.

(21) IRM 3.22.261.21.6(5) - IPU 21U0696 issued 05-05-2021. Corrected Field Designator 02H.

(22) IRM 3.22.261.21.7 - IPU 21U0696 issued 05-05-2021. Corrected multiple Field Designators.

(23) IRM 3.22.261.21.8 - IPU 21U0696 issued 05-05-2021. Corrected multiple Field Designators.

(24) IRM 3.22.261.21.9(3) - IPU 21U0696 issued 05-05-2021. Corrected Field Designator 02F.

(25) IRM 3.22.261.21.9(3) - IPU 21U1095 issued 09-13-2021. Corrected Bypass Indicator editing instructions.

(26) IRM 3.22.261.21.10 - IPU 21U0696 issued 05-05-2021. Corrected multiple Field Designators.

(27) IRM 3.22.261.21.11(4) - IPU 21U0696 issued 05-05-2021. Corrected multiple Field Designators.

(28) Exhibit 3.22.261-1 - IPU 21U0696 issued 05-05-2021. Corrected multiple Field Designators.

(29) Exhibit 3.22.261-1 - IPU 21U0980 issued 07-26-2021. Updated Field 01-A location to reduce processing errors.

(30) Exhibit 3.22.261-5 - Removed restriction to match consistency IRM.

(31) Included are several editorial corrections, line number changes, and updated dates throughout the IRM.

Effect on Other Documents

This IRM supersedes IRM 3.22.261 dated November 23, 2020, (effective January 1, 2021). This IRM includes IPU 21U0494 was issued on 03-30-2021, IPU 21U0696 was issued on 05-05-2021, PU 21U0980 was issued on 07-26-2021, and IPU 21U1095 was issued 09-13-2021.

Audience

Wage and Investment, Error Resolution employees (Ogden Submission Processing Campus -- OSPC Only).

Effective Date

(01-01-2022)

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

Program Scope and Objectives

  1. Purpose: This IRM provides Error Resolution instructions for processing Form 8288, U.S. Withholding Tax Return for Dispositions by Foreign Persons of U.S. Real Property Interests to the Business Master File (BMF), with a Date of Transfer of 12/13/2005 or later.

  2. Audience: Supervisory Tax Examining Assistants, Lead Tax Examining Technicians, and Tax Examining Technicians in the International Error Resolution Department team at the Ogden Submission Processing Center, resolve Form 8288 errors.

  3. Policy Owner: The Director, Submission Processing owns the policies in this IRM.

  4. Program Owner: The Code & Edit/ERS IMF Section, Paper Processing Branch, Submission Processing.

  5. Primary Stakeholders: Submission Processing (SP) and Large Business and International (LB&I).

  6. Program Goals: Timely and accurately review and correct all Form 8288 paper returns, and issuing correspondence as necessary.

Background

  1. Form 8288 was previously processed at the Philadelphia Submission Processing Campus (PSPC). It is currently processed at the Ogden Submission Processing Campus (OSPC). The Non-Master File (NMF) Form 8288 returns are processed at the Kansas City Submission Processing Campus (KCSPC).

  2. Also, IRM 3.21.25, Miscellaneous Tax Returns, is used in conjunction with this IRM for processing Form 8288-A, which is attached to Form 8288.

  3. Form 8288 is processed to the BMF under:

    • File Location Code 60 (OSPC), 98 (PSPC) or 09 (KCSPC - for NMF)

    • Tax Class 1

    • Doc Code 40

    • Julian Date 001-366

    • Blocking Series 000-999

    • Sequence Number 00-99

    • List Year 0-9

    • Master File Tax (MFT) 17

    • Program Code 11330

    • Function 270

  4. Transship Form 8288 returns to the Kansas City Submission Processing Campus (KCSPC), NMF Accounting section when the Date of Transfer (DOT) is 12/12/2005 or prior. These returns are processed to the Non-Master File (NMF) at the KCSPC. KCSPC will use "09641" Document Locator Number (DLN).

  5. There is no official extension form for Form 8288.

  6. The Return Due Date (RDD) for Form 8288 is 20 days after the DOT, or, 20 days from the date the withholding certificate, or notification denying the application for a withholding certificate, was mailed by the IRS.

  7. New IRC 1446(f) was added by section 13501 of "the Tax Cuts and Jobs Act," P.L. 115-97 (the "Act" ), which was enacted on December 22, 2017. Section 13501 of the Act also added new section 864(c)(8). On April 2, 2018, the Department of the Treasury and the Internal Revenue Service released Notice 2018-29, 2018-16 I.R.B. 495, which provides temporary guidance under IRC 1446(f) regarding the disposition of a partnership interest that is not publicly traded and announces an intent to issue regulations under IRC 1446(f). On May 13, 2019, the Department of the Treasury (Treasury Department) and the Internal Revenue Services (IRS) issued proposed regulations under IRC 1446(f) (84 FR 21198). On November 30, 2020, the Treasury Department and the IRS published final regulations (TD 9926) in the Federal Register (85 FR 76910) under IRC 1446(f). The Treasury Department and the IRS have determined that, until other guidance, or forms and instructions have been issued under IRC 1446(f), transferees required to withhold under IRC 1446(f)(1) must use the rules in IRC 1445 and the regulations thereunder for purposes of reporting and paying over the tax. The forms specified in those rules include Form 8288, U.S. Withholding Tax Return for Disposition by Foreign Persons of U.S. Real Property Interests, and Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests.

Form 8288 Background
  1. The Foreign Investment in Real Property Tax Act (FIRPTA) of 1980 was amended by the Deficit Reduction Act of 1984. This amendment added Section 1445 to Chapter 3, Subchapter A, of the Internal Revenue Code (IRC) of 1954. Section 1445 requires the withholding (W/H) of tax on dispositions of certain U.S. Real Property Interest (USRPI) by a foreign person or entity such as a Regulated Investment Company (RIC) or Real Estate Investment Trust (REIT).

  2. IRC 897 of the Code (enacted under the 1980 FIRPTA legislation) provides rules for the taxation of Nonresident Alien (NRA) individuals and foreign corporations on sales or other dispositions of U.S. real property interests (including installment sales, exchanges, foreclosures, and deeds in lieu of foreclosure of U.S. real property interests). In addition, RIC and REIT with foreign investors are also subject to the FIRPTA rules under IRC 1445 and IRC 897.

  3. FIRPTA applies to what it defines as a U.S. real property interest under IRC 897(c), which includes

    • Any interest in real property located in the United States (US) or the Virgin Islands (VI) (including an interest in land or improvements thereon, a mine, well, or other natural deposit).

    • Certain personal property associated with the use of real property.

    • Any interest, other than solely as a creditor, in any domestic corporation, unless the taxpayer can show that the corporation was not a U.S. real property holding corporation during the previous 5 years (or during the period in which the transferor held the interest, if shorter).

  4. Duty to withhold - Under IRC 1445(a) A transferee (buyer) of a USRPI from a foreign transferor (seller) must deduct and withhold tax. The transferee can be a Domestic or Foreign person or entity. If the transferee does not withhold, then the transferee may be held liable for:

    • The payment of the tax, and

    • The payment of any applicable penalties and interest.

  5. The transferee is not liable for tax and penalties if the transferor's tax liability with respect to the transfer is satisfied (or is zero) by:

    1. The transferor's filing of an income tax return (and payment of any tax due) with respect to the transfer, or

    2. The issuance of a withholding certificate establishing that the transferor's maximum tax liability is zero.

      Note:

      There are no withholding certificates issued by the IRS for transfers subject to Section 1446(f)(1) withholding at this time. However, the transferee can pay a lesser amount without an approved withholding certificate. These returns include the statement "Section 1446(f)(1) withholding" (or something similar) at the top of Form 8288 and 8288-A.

  6. Generally, the transferee is liable for interest with respect to the period between:

    1. The last date on which the tax was required to be paid by the transferee, and

    2. The date on which any tax due is paid.

      Note:

      The last date on which the tax must be paid is the later of:
      1. 20 days after the transfer date, or
      2. when an application for a withholding certificate is made prior to or on the date of the transfer, 20 days after the day the IRS takes action to issue the withholding certificate or mail a notice of denial.

      Example:

      US real property was sold by a foreign seller on February 1st. The buyer did not withhold FIRPTA tax. No withholding certificate was applied for. The seller did not file a tax return reporting the sale. IRS assessed the buyer the FIRPTA tax and penalties on November 15th. The buyer paid the tax on December 4th. Interest is charged from February 22nd to December 4th.

      Exception:

      Beginning January 1, 2018, if any forms that were required to be filed, or amounts that were due, under section 1446(f) on or before May 31, 2018, no penalties or interest will be asserted if these forms are filed with, and such amounts are paid over to, the IRS on or before May 31, 2018. Accept as timely filed if Form 8288 was received more than 20 days after the DOT and was received on or before May 31, 2018. See IRM 3.21.261.16(5) for more information on accepting these returns as timely filed.

    3. However, the following two exceptions limit the amount of interest assessed:
      1. If the transferor's tax liability with respect to the transfer was satisfied or was established to be zero, then interest must be payable with respect to the period between:
      • The last date on which the tax was required to be paid by the transferee, and
      • The date established from information supplied to the IRS by the transferee on which any tax due is paid with respect to the transferor's relevant income tax return, or the date the withholding certificate is issued establishing that the transferor's maximum tax liability is zero.

      Example:

      US real property was sold by a foreign seller on February 1st. The buyer did not withhold FIRPTA tax. No withholding certificate was applied for. The seller filed a tax return reporting the sale and paid the tax liability due on the return on June 15th. Interest is charged from February 22nd to June 15th.


      2. If the transferor's tax liability with respect to the transfer was NOT satisfied but a withholding certificate was applied for and issued, then interest must be payable with respect to the period between:
      • The last date on which the tax was required to be paid by the transferee, and
      • The date on which such tax is actually paid. Interest must be payable with respect to the entire amount that must be deducted and withheld. However, if the IRS issues a withholding certificate providing for withholding of a reduced amount, then, for the period after the issuance of the certificate, interest must be payable with respect to that reduced amount.

      Example:

      US real property was sold by a foreign seller on February 1st for $500,000. The buyer withheld 10 percent tax of $50,000. A withholding certificate was applied for by the buyer on January 29th. The IRS issued a withholding certificate on April 1st stating a reduced $30,000 FIRPTA tax was required to be withheld. The buyer was required to file the FIRPTA forms and deposit the tax by April 21st. The seller did not file a tax return reporting the sale. The buyer filed the FIRPTA forms and deposited the $30,000 tax on November 15th. Interest is charged from April 22nd to November 15th.

  7. Agents have a duty to provide notice of false certifications under IRC 1445(d).They are not liable for the withholding tax under IRC 1445(a) due to false certifications made by the seller unless they have actual knowledge that the certification is false. In that case, their liability is capped at the amount of their compensation. See IRC 1.1445-4(e) for possible civil and criminal penalties.

  8. The withholding agent must withhold and remit to the IRS either the amount shown in Line 6 of Part I, or Line 6 of Part II, which consists of the following criteria:

    • 10 percent of the gross sales price for dispositions prior to February 17, 2016, and certain post-February 16, 2016 dispositions, where a property is acquired by the transferee for use by the transferee as a residence and the amount realized by the foreign transferor is more than $300,000, but does not exceed $1,000,000.

    • 15 percent of the gross sales price for dispositions after February 16, 2016, but does not apply to the sale of a personal residence where the amount realized is $1 million or less.

    • 21 percent of the gain recognized with a date of transfer after December 31, 2017, or 35 percent of the gain recognized with a date of transfer before January 1, 2018.

    • A lesser amount established by the IRS and shown on the copy of the approved W/H Cert attached to the return.

  9. Duty to Withhold under an IRC 1445(e) distribution may lie with either the:

    • Foreign Corporation

    • Domestic Corporation

    • Domestic or Foreign Partnership

    • Trustee of Domestic or Foreign Trust

    • Executor of Domestic or Foreign Estate

  10. The IRS issued Treasury Decision (TD) 9082 on August 5, 2003, revising the Income Tax Regulations under IRC 897,IRC 1445, and IRC 6109to require the use of a Taxpayer Identifying Number (TIN) on the submission of FIRPTA documents under IRC 897 and IRC 1445. This TD 9082 became effective August 5, 2003.

  11. Form 8288 , U.S. Withholding Tax Return for Dispositions by Foreign Persons of U.S. Real Property Interests, is due on or before the 20th day from the DOT. There is no official extension form for the Form 8288. However, if a Withholding (W/H) Certificate is applied for by the transferee (buyer) or transferor (seller) prior to or on the date of the transfer, then the Form 8288 is due on or before the 20th day from either the date the W/H Cert is issued, or the date the application for a withholding certificate was denied. If the principal purpose for filing the application for a W/H Cert was to delay paying the IRS the amount withheld, interest and penalties will apply to the period after the 20th day after the DOT.

    Figure 3.22.261-1

    This is an Image: 39747800.gif

    Please click here for the text description of the image.

  12. Beginning January 1, 2018, Form 8288 is required for certain dispositions of partnership interests for which the gain is treated as effectively connected with the conduct of a trade or business within the United States under section 864(c)(8). In general, section 1446(f)(1) provides that if any part of the gain on any disposition of an interest in a partnership would be treated under section 864(c)(8) as effectively connected with the conduct of a trade or business within the United States, then the transferee (buyer) must deduct and withhold a tax equal to 10 percent of the amount realized on the disposition. Under an exception in section 1446(f)(2), however, withholding is generally not required if the transferor (seller) furnishes an affidavit to the transferee stating, among other things, that the transferor is not a foreign person. Notice 2018-29, 2018-16 I.R.B. 495, provides other exceptions for transfers of non-publicly traded partnership interests that occur on after January 1, 2018 and before January 29, 2021. Section 1.1446(f)-2(b) provide exceptions that apply to transfers that occur on or after January 29, 2021. Under Notice 2018-29, and Regulations section 1.1446(f)-2(d) the Treasury Department and the IRS determined that the rules for reporting withholding under section 1445 and the regulations thereunder must be applied to transferees of non-publicly traded partnership interests required to withhold under section 1446(f)(1), including both Forms 8288 and 8288-A. Notice 2021-51, 2021-36 I.R.B. 361 provides that section 1446(f)(1) withholding will not apply with respect to any disposition of an interest in a publicly traded partnership until transfers that occur on or after January 1, 2023. Section 1446(f)(4) provides that if a transferee fails to withhold any amount required to be withheld under section 1446(f)(1), the partnership shall be required to deduct and withhold from distributions to the transferee a tax in an amount equal to the amount the transferee failed to withhold (plus interest under the Code on such amount). This provision will apply to transfers occurring on or after January 1, 2023. See Notice 2021-51.

    Note:

    To identify returns filed under section 1446(f)(1), the transferee will include the statement “Section 1446(f)(1) withholding” at the top of both Form 8288 and Form 8288-A. This or similar information may also be present in Line 2 of Form 8288 or Line 5 of Form 8288-A.

Form 8288-A Background
  1. Each person who completes a Form 8288, must also complete Form 8288-A, Statement of Withholding on Disposition by Foreign Persons of U.S. Real Property Interests, for each person subject to withholding.

    Note:

    In general, a foreign person is a Non-Resident Alien (NRA), or a foreign entity, but not a Resident Alien (RA) individual.

  2. Prior to the Integrated Submission and Remittance Processing (ISRP), Numbering will forward the Batch work to the Code and Edit FIRPTA unit. The FIRPTA unit will:

    1. Stamp the incoming Batch work (Form 2345, Batch Transmittal) with their "FIRPTA" stamp.

    2. Assign the Batch work to a FIRPTA Tax Examiner (TE) who will populate the Form 8288-A FIRPTA database with each foreign transferor(s) Copy A information, which will be used later to perform the credit verification using Form 13698, International Credit(s) Verification Slip.

      Example:

      Form 1120-F, Form 8804, or Form 1040-NR Fiduciary with a Form 8288-A needs to be credit verified.

    3. Stamp and mail "Copy B of Form 8288-A" to the foreign transferor, and

    4. Stamp Form 8288 with the FIRPTA date stamp to show that they have processed Copy A of Form 8288 to the FIRPTA database.

    5. Release the Batch work (Form 8288 and Copy A of Form 8288-A) to the ISRP clerical function for pipeline processing.

  3. It is very important that the Service Center Replacement System (SCRS) and Rejects tax examiners never remove Forms 8288-A (Copy A) from the Form 8288. However, if Form 8288-A Copy B is still attached to Form 8288, and it has not been stamped by the FIRPTA unit, then:

    1. Photocopy Form 8288

    2. Detach Form 8288-A Copy B, and

    3. Forward these two (or more) items to the OSPC Code and Edit FIRPTA unit.

    Note:

    This action is required so the FIRPTA unit can transcribe the Form 8288-A information to the International Web Applications (INTL WebApps) Database for use in credit verifications.

  4. In general, copy B of Form 8288-A stamped by the IRS must be attached to the transferor's (seller's) return to establish the amount withheld under IRC 1445(a) which is available as a credit. In situations where the tax has been withheld but the transferee (purchaser) does not pay over the amount withheld to the IRS, the transferor (seller) will not receive a stamped copy of Form 8288-A from the IRS. Nonetheless, the transferor (seller) can establish the amount of tax withheld by the transferee (purchaser) by attaching to its tax return substantial evidence (e.g., closing documents) of the amount of tax withheld.

Authority

  1. Internal Revenue Code (IRC) 1445 and IRC 897 regulations provide the authority for withholding of tax on dispositions of certain U.S. Real Property Interests (USRPI) by a foreign seller and taxation of nonresident alien individuals and foreign corporations on sales or other dispositions of U.S. real property interests.

  2. New section 1446(f) was added by section 13501 of the Tax Cuts and Jobs Act, P.L. 115-97, which was enacted on December 22, 2017. Section 13501 of the Act also added new section 864(c)(8). Notice 2018-08, 2018-7 I.R.B. 352, and Notice 2018-29, 2018-16 I.R.B. 495, have been issued. Regulations under section 1446(f) were issued. They generally apply to transfers of non- publicly traded partnership interests that occur after January 29, 2021. Notice 2021-51 provides that the regulations applicable to transfers of publicly traded partnership interests and withholding under section 1446(f)(4) will apply to transfers of occurring on or after January 1, 2023.

Responsibilities

  1. The Director, SP Office monitors operational performance for the Submission Processing campus.

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

  3. The team manager/lead monitor and ensure employees have the tools to perform their duties.

  4. The team employees follow the instructions contained in this IRM and keeping IRM procedures updated.

Program Management and Review

  1. Program Goals: Correct all errors identified by the Service Center Replacement System (SCRS).

  2. Program Reports: The Monitoring Section under Submission Processing Program Management/Process Assurance monitors the Error Resolution Department reports. Daily, weekly, and periodic reports are available to management through Control-D Web Access to manage inventory and capture data for program planning and review.

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

    • Embedded Quality Submission Processing (EQSP)

    • Balanced Measures

    • Managerial Reviews

    • Work-in-Process Reviews

Program Controls

  1. All tax examiners must submit and have approved by management an Online 5081 (OL5081) to gain access to the Service Center Replacement System (SCRS).

  2. Tax returns in SCRS are worked on a First In First Out (FIFO) basis as they are received from input systems through the General Mainline Framework (GMF).

Terms/Definitions/Acronyms

  1. Acronyms and a glossary of terms can be found in Exhibit 3.22.261-7.

Related Resources

  1. The following job aids were developed to help tax examiners in their work:

    • BMF Name Control Job Aid, Document 7071, Catalog Number 63192T.

    • BMF Name Control Job Aid, Document 7071-A, Catalog Number 38048K.

  2. The following are IRMs related to this IRM:

    • IRM 3.21.261 Foreign Investment in Real Property Tax Act (FIRPTA)

    • IRM 3.21.25 Miscellaneous Tax Returns

    • IRM 3.24.25 BMF International Miscellaneous Tax Returns

♦IRM Deviation Procedures♦

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

♦Business Master File (BMF) Consistency♦

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

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

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

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

♦Customer Account Data Engine (CADE) 2♦

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

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

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

    1. Campus Cycle: Thursday – Wednesday

    2. Master File Processing: Friday – Thursday

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

    4. Unpostables: New available Tuesday; Closing Tuesday

  4. BMF transaction posting timeframes are:

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

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

    Note:

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

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

    • 01 Friday

    • 02 Monday

    • 03 Tuesday

    • 04 Wednesday

    • 05 Thursday

    Note:

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

♦Working Trail♦

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

  2. Write all Taxpayer Notice Codes (TPNCs) 90 on the front of the return in the upper left corner (or use Form 12648, Error Correction 90 TPNC). See IRM 3.22.261.20.15, Field 01S - Taxpayer Notice Code, for more information.

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

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

    • Employer Identification Number (EIN) or Social Security Number (SSN)

    • Tax Period

    • Received Date

    • Computer Condition Code (CCC)

    • Correspondence Received Date (CRD)

    Reminder:

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

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

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

♦IRS Employee Contacts♦

  1. The IRS Restructuring and Reform Act of 1998 RRA 98 Section 3705(a), gives identification requirements for all IRS employees working tax-related matters.

  2. All IRS employees who communicate by telephone, face-to-face, or any other method of correspondence with taxpayers or their personal representatives on tax-related matters must give (at a minimum) the following information:

    1. Telephone Contact - Their title (e.g., Mr., Mrs., Ms., Miss), last name and badge identification (ID Card) number. Toll-free employees may also give their location for identification purposes. Treat faxes to taxpayers on tax-related matters as correspondence and include the required information.

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

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

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

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

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

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

♦Taxpayer Advocate Service (TAS)♦

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

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

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

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

    • The issue can be resolved within 24 hours.

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

    See IRM 13.1.7.5 , Same Day Resolution by Operations.

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

♦TAS Service Level Agreements (SLA)♦

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

  2. The SLAs are found at https://irssource.web.irs.gov/TAS/SitePages/SLA.aspx.

♦Use of FAX for Taxpayer Submissions♦

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

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

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

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

    • IRM 21.1.3.2.3, Required Taxpayer Authentication

    • IRM 21.1.3.2.4 Additional Taxpayer Authentication

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

    • IRM 10.5.1.6.7.2, Answering Machine or Voicemail

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

General Disclosure Guidelines

  1. IRC 6103 establishes the taxpayer's (T/P's) right to privacy of tax information. You must be sure that you provide correct information to the correct T/P or authorized representative (check Command Code) (CC) CFINK on the Integrated Data Retrieval System (IDRS) for the Power of Attorney (POA).

  2. Taxpayer returns and return information must remain confidential as provided for in IRC 6103, Confidentiality and disclosure of returns and return information. IRC 7431 provides civil damages for unauthorized disclosure of returns and return information. IRC 7213 and IRC 7213A provide criminal penalties for unauthorized disclosure or unauthorized inspection of returns and return information and require employees be discharged from duty if charged and convicted of these offenses.

  3. For more information on General Disclosure Guidelines refer to IRM 21.1.3, Operational Guidelines Overview and for full discussions refer to IRM 11.3.1, Disclosure of Official Information - Introduction to Disclosure through IRM 11.3.40, Disclosure Involving Trust Fund Recovery Penalty Assessments.

Statute Returns

  1. Any return with a Received Date that is two years and nine months or more after the Return Due Date is a potential statute control return.

  2. Statute return must be routed to the Statute Control Unit daily or more often if needed.

    Note:

    The Form 8288 return is considered unprocessable until it has been cleared by Statute Control.

    Exception:

    If the return has already been cleared by statute, edit Computer Condition Code (CCC) "W" and continue processing. However, if the statute clearance date shows a date cleared more than 90 days earlier, send return back to Statute function for clearance.

  3. Do not route to the Statute Control Unit for clearance if any of the following conditions are present:

    • Compliance Section 6020(b) returns.

    • Returns with "TC 59X" or Integrated Collection System ("ICS" ) notated on the face of the return.

    • Returns that are substitute returns prepared by Examination Substitute For Return ("SFR" ) in top margin of the return.

    • Returns with a stamp indicating a previous clearance by Statute Control within the last 90 days.

  4. If a Form 12412, Operations Assistance Request (OAR), is received from TAS and the return is a potential statute control return but is not stamped "Cleared by Statute," give the return to your lead. The lead will contact the TAS employee listed on the OAR for rejection of the return and send it back to TAS for clearance by the Statute Unit.

    Note:

    If the return is within 90 days of the statute expiration date, advise the TAS employee of such and route the return directly to statute for clearance.

  5. Statute returns are unprocessable until they are cleared by Statute Control.

    If... Then...
    The return is numbered,
    1. Edit CCC "U" .

    2. Leave the return in the batch and continue processing.

    The return is unnumbered,
    1. Do not continue processing and edit CCC "U" .

    2. Pull the return from the batch.

    3. Attach Form 4227, lntra-SC Reject or Routing Slip, and route to Statute Control Unit.

  6. Once the document is returned by Statute, and it has been cleared by Statute, edit CCC W.

    Note:

    Statute will stamp or indicate clearance on the front of the return.

  7. The Internal Revenue Code (IRC) states that the IRS will assess, refund credit, and collect taxes within specific time limits. These limits are known as Periods of Limitations. When they expire, the IRS can no longer assess more tax, allow a claim for refund by the taxpayer, nor take collection action. There are different periods of limitations for Assessment, Refund, and Collection Statutes. The expiration of these periods is tracked separately.

  8. The different periods of limitations expiration dates that are tracked are:

    • Assessment Statute Expiration Date (ASED): Return filed timely - three years from the Return Due Date (RDD) or three years from approved extended due date; Returns filed late - three years after the return was filed; No return filed - assessment may occur at any time. See IRC 6501(a) and (c)(3).

    • Refund Statute Expiration Date (RSED): three years from the time the return was filed or, if later, two years from the date after the tax was paid. IRC 6511(a) and (b)(2)(A).

    • Collection Statute Expiration Date (CSED) is generally 10 years from the 23-C date or 10 years from the date of the Transaction Code (TC) 29X or 30X adjustment. IRC 6502(a).

    Note:

    Exceptions may apply to change the periods of limitations.

  9. There are several conditions that may change the general Assessment Statute Expiration Date (ASED). They include:

    • IRC 6501 (c) (1) -- False Return

    • IRC 6501 (c) (4) -- Extensions by Agreement

    • IRC 6501 (b) (3) -- Substitute for Return by Authority of IRC 6020(b)

      Caution:

      Per IRC 6020(b), an SFR is not a tax return that triggers the period of limitations on assessment under IRC 6501(a). If the taxpayer subsequently files a return reporting an additional liability, that return makes up an original tax return allowing for the assessment of any additional amount not already assessed under the Substitute for Return program and triggering the running of the period of limitations on assessment for the tax year.

    • IRC 6501 (d) -- Is request for Prompt Assessments, which shortens the Assessment Period

    • IRC 6501 (e) -- Substantial (in excess of 25 percent Omission of Income provides for a 6-year period of limitations.)

    • IRC 6503 (a) -- Issuance of Statutory Notice of Deficiency (90-day Letter, which suspends the running of the period of limitations.)

    • IRC 6503 (h) -- Bankruptcy

    • IRC 6229(a) through (h) -- Partnership Items (effective for tax years beginning before December 31, 2017)

  10. In the case of a partnership subject to the unified partnership audit and litigation procedures of IRC 6221 - 6234, the issuance of a notice of final partnership administrative adjustment suspends the statute under IRC 6229 (d). The partnership can also extend its statute through a Form 872 signed by a general partner on behalf of the partnership, or through a Form 872-P signed by the tax matters partner.

  11. Once a partnership issues Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, to its partners, the partnership may not claim a refund for any amount of tax shown on the Form 8805s as paid on behalf of the partners per Treasury Regulation Section 1.1446-3(d)(2)(iv).

  12. If a partnership subject to the unified partnership audit and litigation procedures of IRC 6221 - 6234 is entitled to a refund, it must file a refund request (Request for Administrative Adjustment - (RAA)) within 3 years of the filing of the partnership return. Under IRC 6227(a), the RAA must be filed using a Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR). If a Form 872-P, Consent to Extend the Time to Assess Tax Attributable to Partnership Items, or Form 872 statute extension is secured from the partnership, the RAA can be filed within this extended period according to IRC 6227.

  13. IRC 1101 of the Bipartisan Budget Act of 2015 (BBA) repeals the TEFRA partnership audit rules for partnership tax years beginning after December 31, 2017. See revised IRC 6221 through 6241. While the new rules generally go into effect for partnership taxable years beginning after December 31, 2017, partnerships may elect into these rules for tax years beginning after November 2, 2015, and before January 1, 2018. See Treas. Reg. 301.9100-22.

  14. Refer to IRM 25.6, Statute of Limitations for more Statute instructions.

Attachments to Form 8288

  1. Use the instructions in the following subsection when handling attachments submitted with Form 8288.

    Note:

    Form 8288 is also used to transmit Form 8288-A to the IRS. Do not detach Form 8288-A from Form 8288 .

  2. Examine all attachments to the return being processed and take action as required by the attachment.

  3. When an attachment has an effect on the document being processed leave it attached, unless a specific instruction requires that it be detached.

    Reminder:

    If the taxpayer requests an address change, the entity on the front of the return should be changed and the request should be left attached to the return.

    Note:

    Form 8288 is also used to transmit Form 8288-A to the IRS. Form 8288-A must be recorded in the International Web Application (INTL WebApps) Database by the FIRPTA unit. Therefore, if the attached Form 8288 does not contain the "FIRPTA Stamped Copy B Mailed" on it, then Form 8288-A has not been recorded in the Treasury Information Executive Repository (TIER) II INTL WebApps Database by the FIRPTA unit.

  4. If the FIRPTA stamp does not appear on Form 8288. See IRM 3.22.261.1.1.2, Form 8288-A Background, for more instructions.

  5. Do not detach from Form 8288.

    • Any Form 8288-A documents, or

    • Any W/H Cert, appearing in the table below.

      Withholding Certificate Letter Numbers for Transferee/Buyer
      Letter 3309 (SC/SG) Withholding Certificate (Zero/Exempt - Generic)
      Letter 3310 (SC/SG) Withholding Certificate (Reduced MTAXL - Generic)
      Letter 3312 (SC/SG) Withholding Certificate (Reduced Installments)
      Letter 3313 (SC/SG) Withholding Certificate (Rejected - RFMI not Rec'd)
      Letter 3314 (SC/SG) Withholding Certificate (Rejected - MTAXL >10 percent)
      Letter 3316 (SC/SG) Withholding Certificate (Rejected - Generic)

    Note:

    These numbers are found in the lower, right corner of the W/H Cert (See Exhibit 3.22.261-4):

  6. Withholding Certificate: This document is attached to Form 8288 when:

    1. The transferee withholds less than the required FIRPTA tax of 10, 15 percent of the amount realized or 21 percent (35 percent with a date of transfer before January 1, 2018) of the gain recognized, or

    2. If the person requested reduced withholding, but was denied in full. The withholding certificate must be attached to Form 8288 to confirm the extended filing due date.

    Note:

    In the case of an IRC 1446(f)(1), the transferee can pay a lesser amount without an approved Withholding Certificate (W/H Cert). These returns include the statement "Section 1446(f)(1) withholding" (or something similar) at the top of Form 8288 and 8288-A.

  7. Form 8288-B , Application for Withholding Certificate for Dispositions by Foreign Persons of U.S. Real Property Interests, should not be attached to Form 8288

    Reminder:

    If the seller requested reduced withholding but the request was denied, the rejection extends the due date of the Form 8288 to 20 days after the Withholding Certificate rejection is received by the applicant. There should be no Form 8288-B for Section 1446(f) returns.

    If Then
    Form 8288-B is attached,
    1. Photocopy Form 8288

    2. Detach Form 8288-A Copy B, and

    3. Forward to the OSPC Code and Edit FIRPTA unit along with any supporting documentation for processing.

  8. Form W-7 and Form W-7SP, Application for IRS Individual Taxpayer Identification Number.

    If Then
    Form 8288with remittance has a Form W-7 or Form W-7 SP attached to it, Forward Form W-7 and copy of Form 8288 to the Individual Taxpayer Identification Number (ITIN) unit located at the Austin Submission Processing Campus (AUSPC). Forward it to the Internal Revenue Service, Attn: ITIN Unit, Austin, TX 73301-0002
    Form 8288without remittance has a Form W-7 or Form W-7 SP attached to it, Forward the original Form 8288 and Form 8288-A along with Form W-7 or Form W-7 SP and all associated documentation to Austin Submission Processing Center (AUSPC) for processing. Forward it to the Internal Revenue Service, Attn: Individual Taxpayer Identification Number (ITIN) Unit, Austin, TX 73301-0002.

    Note:

    Once an ITIN is assigned Austin Submission Processing Campus (AUSPC) will notate ITIN number on Form 8288 and send back to Ogden Submission Processing Campus (OSPC) for return processing.

    Form W-7 or Form W-7 SP and Form 8288-B are attached to Form 8288,
    1. Forward to Austin Submission Processing Center (AUSPC) Form W-7 or Form W-7 SP and Form 8288-B to the Austin Submission Processing Campus, Attn: ITIN Unit for processing.

    2. Enter the following remarks on the transshipping transmittal; Edit the ITIN number on Form 8288-B and forward it to the
      Ogden Internal Revenue Service
      Attn: Accounts Management
      P.O. Box 409101
      Ogden Utah 84409, along with any supporting documentation for processing.

General Correspondence Procedures

  1. All taxpayer correspondence is governed by the guidelines in IRM 21.3.3, Incoming and Outgoing Correspondence/Letters.

  2. Correspondence includes all written communication from a taxpayer or their representative, excluding tax returns, whether solicited or unsolicited, and includes:

    • Responses to IRS requests for information or data

    • Requests for information, including that which may accompany tax returns

    • Annotated notice responses

    • Other correspondence providing more information or disputing a notice

  3. Completely examine the return to ensure all missing information is requested in the same letter anytime you are instructed to correspond for missing information on Form 8288 . Initiate correspondence one time only.

Processing Taxpayer Correspondence

  1. Enter a Correspondence Received Date (CRD) in the right margin of the address line in Line 1.

  2. Enter the "CRD" date (in YYYYMMDD format) except in the following situations:

    1. The reply from the taxpayer was received before the due date of the return.

    2. The correspondence was required because of an IRS processing error (e.g., a request for an attachment that was lost during processing).

  3. If there is no reply edit document with Computer Condition Code (CCC) "3" .

Pre-Master File Processing of Form 8288

  1. Reject (Action Code 3) any Form 8288 which has a Date of Transfer (DOT) of 12/12/2005 or prior.

  2. Rejection Action:

    1. Prepare Form 4227, Intra-SC Reject or Routing Slip, indicating the reason for rejection.

    2. If there is NO remittance in Field 01A: Annotate on Form 4227 "Renumber to NMF - DOT prior to 12/13/05." Void the DLN in Rejects (2-D on the register and line-thru the DLN on the return) and transship Form 8288 to KCSPC Accounting Branch NMF with Form 4227 attached.

    3. If there is remittance in Field 01A: Annotate on Form 4227 "Renumber to NMF," prepare Form 3244, attach Form 4227 to Form 3244, Payment Posting Voucher, line thru the DLN on the return, release Form 3244 with the register (to be numbered), and transship Form 8288 to KCSPC Accounting Branch NMF with Form 4227 attached.

Unprocessable Conditions

  1. A return must contain the following specific items before it is considered processable.

    • A Taxpayer Identifying Number (TIN)

    • A legible name (for the Name Control)

    • A valid Tax Period (200512 and subsequent)

    • Legible data

    • Signature

  2. Perfect all documents to the extent possible from other attachments.

  3. Conditions which make a document unprocessable are:

    • The name is so illegible or incomplete that the Name Control cannot be determined.

    • The TIN contains other than nine numeric characters and cannot be perfected from information on the return or attachments.

    • The document has more than one TlN.

    • The filer has stated that they have combined information for more than one transfer or more than one type of return.

    • Data entries are so incomplete or illegible that they cannot be perfected or transcribed.

    • The document has been mis-blocked.

    • The return is unsigned.

    • The return has only entity data and no other statements or attachments from the taxpayer.

    • Any condition set forth as unprocessable in the sections on processing specific documents.

  4. Correspond with the taxpayer for the required information using IDRS Letter 3104C (FIRPTA and Foreign Partnership Withholding Tax Return Processing and Unsubstantiated Refundable Cr) or the proper IDRS Letter when Form 8288 is unprocessable.

Illegible or Missing Data

  1. IF the error condition involves an Illegible or Missing Name and/or Address, and the required data cannot be perfected through research of the document, then:

    1. Enter Action Code 3.

    2. Re-charge the return out of the block.

    3. Prepare Form 4227, Intra-SC Reject or Routing Slip, attach it to the return.

    4. Route it to the Rejects unit.

  2. Rejects will input a Notice of Action on the Master File as discussed below by using IDRS Command Code REQ77/FRM77.

    1. When an unprocessable return is rejected and sufficient information is available: enter TC 599 and enter Closing Code 17 to defer the normal delinquency check.

    2. When the TIN, Name Control, MFT, and Tax Period are present; enter TC 599 and enter Closing Code 17.

Fiscal Year/Calendar Year Returns

  1. Form 8288, U.S. Withholding Tax Return for Disposition by Foreign Persons of U.S. Real Property Interests. is filed only as the result of a specific transaction on a United States Real Property Interest (USRPI). The entries on the return refer only to that one transaction.

    Note:

    Form 8288 is an ad-hoc return, which can be filed every month by the same withholding agent (a.k.a. transferee/buyer). For example: A transferee who purchases a USRPI in January 2021 from a foreign person will have to file Form 8288 with the IRS no later than the 20th day from the Date of Transfer (purchase date). The same transferee may purchase another USRPI from the same or different foreign person in February 2021, thus another Form 8288 filing will be required.

    Reminder:

    "Ad-Hoc," in this case refers to a tax return that deals with one specific purpose. Form 8288 is filed with data from only one specific real estate transaction happening at one specific time.

  2. Due to this uniqueness in processing, there will never be Filing Requirements appearing on INOLE for Form 8288, MFT 17.

  3. The tax period can end with any month 01-12, but the tax period shows the month when the transaction took place (refer to the DOT). Therefore, there are no fiscal or calendar year Form 8288 returns.

    Note:

    A Form 8288 can be filed every month of the year by the same withholding agent (transferee). In a situation like this, the same withholding agent can have a Form 8288 processed for 202012, 202101, 202102, 202103, 202104, 202105, 202106, etc., and even have multiple filings in a month, thus creating an amended return (CCC G) condition.

  4. If the tax period is later than the current date, compare the tax period to the DOT to be sure it is correct. If it is correct, ERS will reject the return (Action Code 3) and Rejects will hold it until the first day after the month of the tax period, when it will be worked.

Special Returns

  1. Use the following instructions in processing Collection or Examination secured or prepared returns.

♦Compliance Secured/Prepared Returns♦

  1. Compliance functions secure returns from the taxpayer and also prepare returns if the taxpayer does not provide them.

  2. Compliance notates:

    1. Prepared tax returns with "6020(b)" or "SFR" (Substitute for Return).

    2. Secured tax returns with "TC 59X" or "ICS" or "Process as Original" with a Form 13133, Expedite Processing Cycle, attached with the "Delinquent Return" box checked.

    Note:

    If "RD" (Return Delinquency) is notated on the front of the return and not circled, remove from the batch and route to Collections.

♦IRC 6020(b) - Prepared by Collection♦

  1. When the taxpayer does not file a required return, IRC 6020(b) is the authority for the IRS to prepare the return.

  2. These returns are identified by the notation: "PREPARED AND SIGNED UNDER THE AUTHORITY OF SECTION 6020(b) OF THE INTERNAL REVENUE CODE" which is located in the center bottom of Page 1 of the return.

    1. Returns must have a Received Date. If no Received Date is present per the Compliance Function, follow the normal procedures for editing the Received Date.

    2. Compliance Function representatives must sign returns. If not, route to Compliance using Form 4227, Intra-SC Reject or Routing Slip.

      Note:

      Accept Revenue Officer (RO) typed or electronic signatures as valid signatures on the return.

    3. Enter CCC "4" .

      Note:

      Do not use CCC "R" with CCC "4" .

    4. Do Not correspond with the taxpayer for unprocessable conditions. If the return is completely unprocessable, enter CCC "3" and continue processing.

    5. Enter CCC "W" if the Received Date is more than two years and nine months after the Return Due Date. Do Not send the return to Statute Control.

♦Collection Secured♦

  1. These returns are identified by the notations: "TC 59X" or "ICS" .

    1. Do Not enter CCC "G" on these returns.

    2. Use approved Correspondence Action Sheet to correspond for conditions that are unprocessable (e.g., missing signatures, missing schedules, etc.).

    3. Enter CCC "W" if the Received Date is more than two years and nine months after the Return Due Date. Do Not send the return to Statute Control.

      Note:

      If there is indication penalties require suppression, edit the appropriate Computer Condition Code(s). See IRM 3.22.261.18.8, Computer Condition Codes (CCC) – Form 8288, for more information.

♦Examination Prepared♦

  1. These returns are identified by the notation "SFR" or "SUBSTITUTE RETURN" on Page 1.

    1. Return must have a Received Date. If no Received Date is present, follow the normal procedures for editing the Received Date.

    2. Do Not correspond with the taxpayer for unprocessable conditions. If the return is completely unprocessable, use No Reply procedures and enter CCC "3" and continue processing.

    3. If Form 13133 is attached, enter the Computer Condition Code(s) that are checked on the form.

      Note:

      CCC "R" should not be used with a CCC "4" .

    4. Enter CCC "W" if the Received Date is more than two years and nine months after the Return Due Date. Do Not send the return to Statute Control.

♦Examination Secured♦

  1. These returns are identified by the notation: "Process as Original" on Page 1 of the return and a Form 13133, Expedite Processing Cycle, attached with the "Delinquent Return" box checked.

    1. Do not edit CCC "G" on these returns.

    2. Use approved Correspondence Action Sheet to correspond for conditions that are unprocessable (e.g., missing signatures, missing schedules, etc.).

    3. Enter the Computer Condition Codes that are checked on Form 13133

      Note:

      CCC "X" (Hold Credits on Module) is valid for Form 8288.

    4. Enter CCC "W" if the received date is more than two years nine months after the Return Due Date. Do Not send to Statute Control function.

    Note:

    If there is indication penalties require suppression, edit the appropriate Computer Condition Code(s). See IRM 3.22.261.18.8, Computer Condition Codes (CCC) – Form 8288, for more information.

♦Frivolous Arguments♦

  1. Businesses use frivolous arguments for expressing dissatisfaction with the substance, form or administration of the tax laws by trying to illegally avoid or reduce tax liabilities. See IRM 25.25.10, Frivolous Arguments, and Exhibit 3.22.261-5, Potential Frivolous Arguments for Examination Review, for a list of recognized frivolous arguments made by businesses.

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

    Frivolous Return Criteria

    If... Then...
    The return meets any of the conditions shown as a frivolous return. See Exhibit 3.22.261-5, Potential Frivolous Arguments for Examination Review.

    Exception:

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

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

  3. Do not consider the following as frivolous:

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

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

    • Returns showing no evidence of a frivolous argument.

♦Criminal Investigation (CI) Referral♦

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

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

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

    Caution:

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

    Refund Claim Ogden and Kansas City
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    1. Make a copy of the return.

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

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

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

    5. Continue processing the return.

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

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

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

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

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

      CI Referral Routing

      Ogden Kansas City
      Mail Stop 9001, Criminal Investigation (CI) Mail Stop S2 9000, Criminal Investigation (CI)
       

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

    5. Continue processing the return.

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

♦Examination (Exam) Funny Box

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

"Amended" Form 8288, U.S. Withholding Tax Return for Disposition by Foreign Persons of U.S. Real Property Interests Return

  1. Process all Form 8288 returns as originals.

  2. Never assign Computer Condition Code G. Delete CCC G from the error register. Use Action Code 6.

  3. Use Action Code 5 to add Section 02 to the error register. Then process the Form 8288 record as an original return.

  4. Do not enter a CCC "G" on a Form 8288 document, even if it clearly indicates it is an:

    • "AMENDED"

    • "SUPERSEDING"

    • "DUPLICATE"

    • "REPLACEMENT"

    • A positive statement that the return is not the first one filed for the same tax period is attached.

Definitions for Use in Processing Form 8288 Error Register

  1. The following definitions are for terms used in the FIRPTA Error Correction Program.

Error Register

  1. A listing of documents on which the transcribed data failed one or more of the consistency, math verification, or validity tests in the computer program.

  2. The register is made up of Sections and Fields that are directly or indirectly related to the Data Sections and items transcribed and input to the computer.

Loop Register

  1. An error or reject record that has had a correction record input but still contains an invalid or math error condition that requires correction.

Section

  1. A part or segment of a record containing data fields related to a specific schedule or part of the source document.

  2. Each Section is identified by a two-digit numeric section number.

Field

  1. A specific item transcribed from a form, schedule, or other document.

  2. Each Field may contain data, or be blank, and is identified by an Alpha/Numeric Field Designator.

    1. Fixed Field – All spaces must be accounted for as there is no Field Breaker at the end of a Fixed Field.

    2. Variable Field – All spaces need not be accounted for. However, all variable fields must contain a field breaker.

Field Breaker

  1. A special symbol which indicates the end of a field.

  2. It appears at the end of a field, even if no data is in the field.

  3. A field that ends with a field breaker is known as a "Variable field."

  4. In addition to indicating the end of a field, the field breaker can also indicate if the amount of money in the field is positive (+) or negative (-). If it is not a money field, and a field breaker is required, a "+" is used.

  5. If it is necessary to change a field breaker on the error register (both for Error Resolution System (ERS) and Rejects) then:

    1. Enter a positive field breaker as a comma ","

    2. Enter a negative field breaker as a pound sign "#"

    3. These two entries convert to the usual "+" and "-" after they are transcribed.

  6. Some fields (noted in the text) do not end with a field breaker. There is nothing to show the end of these particular fields. This type of field is known as a "Fixed field."

  7. When data is entered into a fixed field on the error register, and the data does not completely occupy the allotted number of spaces for the fixed field, then the unused spaces must be accounted for by entering the number of unused spaces in a circle immediately (See Figure 3.22.261-5) after the last character entered. This is most commonly required in the name control, but also occurs if the entry in a non-essential fixed field is deleted.

Action Codes

  1. Action Codes (AC) are used to show specific information is missing or the record needs to be rejected from processing. The AC must contain enough details to show if correspondence should be sent to the taxpayer or which specific in-house research or action is required.

    Action Code Number Action Purpose Location May use more than one code
    0 Accepts the taxpayer’s figure Use when the record is correct, disregard computer computation To the left of Section 01 No
    1 Taxpayer math error To issue Taxpayer Notice Code (TPNC) to the taxpayer To the left of Section 01 along with the TPNC number No
    2 Rejects use only Used with Reject Designator D, R, or N To the left of Section 01 No
    3 To delete a record from the correction system To reject a document that is unprocessable To the left of Section 01 No
    4 To delete a section from the error register Whenever a section is not needed To the left of the section being deleted Yes with AC
    5 To add a section to the error register When data is present for a section but has not been entered To the left of the section being added Yes with AC
    6 To correct data fields with a section When data is missing or incorrect in a field To the left of the section being corrected Yes with AC
    7 To clear the error register Whenever there is a validity check and no correction is necessary To the left of Section 01 No
    9 Rejects use only To put a loop register into Re-reject (RAW) Status. To the left of Section 01 on a reject loop No
Action Code "0"
  1. Action Code "0" accepts the taxpayers or examiners figures.

  2. Enter to the left of Section "01" when the record is correct and the computer computation should be disregarded.

  3. Never use Action Code "0" unless the error register already contains the correct tax data.

  4. When Action Code "0" is used, no other Action Code is valid.

Action Code "1"
  1. Action Code "1" -- Taxpayer math error above tolerance.

  2. Action Code "1" is entered to the left of Section 01 with a taxpayer notice code to indicate that the taxpayer has made a math error.

    1. Enter Action Code "1" when the data in a record has been transcribed correctly, but the taxpayer made an error on the return and the computer's tax computation should be accepted by the Master File.

    2. All taxpayer entries have been transcribed correctly but the total tax is in error.

  3. Action Code "1" must be followed by a TPNC that is valid for the type of return and correctly advises the taxpayer of the reason for the error. Use a two-digit numeric code when a math error is present which affects the tax liability or settlement amounts. Enter this code to the right of AC "1" , preceded by a hyphen (e.g., 1 - 01).

    Note:

    The maximum number of TPNCs that can be entered are two (2). For example: 01, 02.

Action Code "2"
  1. Enter to the left of Section "01" .

  2. Action Code "2" is used only in the Rejects unit.

  3. Action Code "2" must be used with reject designator:

    • D -- Delete (void) record

    • N -- Re-number

    • R -- Re-input (with Form 3893, Re-Entry Document Control)

  4. "D" and "R" can be used on Rejects Loop Register.

Action Code "3"
  1. Enter to the left of Section "01" .

  2. Action Code "3" is used only in SCRS, not rejects.

  3. Use Action Code "3" to reject a document that is unprocessable or Non-ADP.

    Note:

    Do not use any other Action Code when using Action Code "3."

  4. Use of this code will send the entire record to Rejects.

Action Code "4"
  1. Enter to the left of the section that needs to be deleted.

  2. Use Action Code "4" to delete any section of a record when the section is not required.

    Exception:

    DO NOT USE Action Code "4" in Section "01" of a record.

  3. Do not use Action Code "4" to delete any section with an asterisk appearing before the section number.

  4. Action Codes "4" , "5" , and "6" may be used on the same Error Register, but only in different sections.

  5. If an entity section appears on the Error Register but contains no significant data it is not necessary to delete the section, because the section will be automatically deleted when the record posts.

Action Code "5"
  1. Enter to the left of a section that needs to be added.

  2. Action Code "5" is used to:

    • Add a missing section to the record.

    • To add a missing section that must be present, but which has not printed on the Error Register.

      Exception:

      DO NOT USE Action Code "5" in Section "01" of a record.

  3. When adding a section,

    1. Enter only the fields which have significant data.

    2. Enter the Alpha Field Designation and the proper field breakers for each field entered (e.g., "5 06A1000," Action Code 5, Section 06, field A, positive amount 1000).

  4. Action Codes "4" , "5" , and "6" may be used on the same Error Register, but only in different sections.

Action Code "6"
  1. Enter to the left of any sections containing fields which need to be corrected.

  2. Action Code "6" is used to correct a field in error within a section of the Error Register.

    Note:

    Correct as many fields as necessary within every section on one correction attempt.

  3. Action Codes "4" , "5" , and "6" may be used on the same Error Register, but only in different sections.

  4. When this code is used, at least one field within the section where it is entered must be changed.

    1. Line through the data following a field designator.

    2. Enter the corrected data above the lined-through data.

    3. When blanking a field in a section with fixed length fields, always encircle the number of positions (characters) prescribed for the field.

  5. If any transcription entry is in error, illegible, entered on the wrong line, or entered on an attachment:

    1. Enter information on the return itself, and

    2. Enter the proper information in the correct field on the Error Register.

Action Code "7"
  1. Enter to the left of Section "01."

  2. Action Code "7" is used to indicate that the data on the error register is correct and that no action is necessary.

  3. Use Action Code "7" to clear an error record that is on the register for a one-time only validity condition.

    Note:

    Action Code "7" must not be used unless all other information on the register is correct.

  4. Action Code "7" will not clear a math error condition.

  5. When Action Code "7" is used, no other Action Code is valid.

Action Code "9"
  1. Enter to the left of Section 01 on a reject loop register.

  2. Action Code "9" is used on loop reject registers to put the document into re-reject (RAW) status.

    Note:

    The reason for this action is that if a return requires correspondence to the taxpayer or needs to be sent to a different area (such as Statutes, renumbering, or Entity), it must be in RAW status (or the record will continue to loop). It is not necessary to use Action Code "9" to re-input or void a record, which can be done on a loop register.

Validity Errors

  1. Three general types of errors that will cause a record to print on the Error Register are:

    • Field Validity Errors,

    • Section Validity Errors, and

    • Math/Consistency Errors.

Field Validity Errors
  1. These errors result when required data is missing, or when incorrect data is present.

  2. These errors are identified by an asterisk (*) printed before the invalid field.

  3. An asterisk may also be printed before a field for verification purposes.

  4. Correction procedures:

    1. Compare the return entry with the Error Register field.

    2. Enter Action Code "6" .

    3. Line out the incorrect field.

    4. Enter the correct data immediately above the lined-out data.

    5. Do not line through the Field Breaker, unless you are changing it.

Section Validity Errors
  1. These errors include:

    • Missing data

    • Extraneous data

    • ISRP errors

    • Terminus errors

Missing Section Errors
  1. Caused by the absence of data for required sections.

  2. These errors are identified by an asterisk (*) to the left of the section number.

Extraneous Section Errors
  1. Caused by the transcription of an unnecessary section.

  2. These errors are identified by one pound sign (#) preceding the section number.

ISRP Errors
  1. Caused when too many characters have been entered for a field.

  2. Extra characters are dropped when the data is converted to Error Register format.

  3. These errors are printed to the left of the Section Number and are shown on the Error Register as described in (4), (5), (6) and (7) below:

  4. "#1" : Split screen transmission.

    • The Key Verifier tried to change Check Digit

    • The Key Verifier changed four or more digits of TIN

    • The Original Entry operator entered required Section as "missing" .

  5. "#3" : Invalid Section ending point.

  6. "#4" : Invalid field length.

  7. "#5" : Questionable section. A section was entered twice or entered out of sequence by ISRP.

Terminus Errors
  1. Caused when a non-numeric character is entered in a numeric field or when the format of a section is incorrect.

  2. These errors are identified by two asterisks (**) printed to the left of the section number.

Correcting Section Validity Errors
  1. Compare the section(s) entry with the Error Register fields.

  2. Line out each incorrect field and enter the correct data immediately above the lined-out data.

  3. Enter Action Code "6" .

  4. If no error is found, use Action Code "7" to clear the Error Register.

  5. For Terminus Errors, if a return entry is truly larger than the maximum size field that is acceptable for computer processing,

    1. Reject the return record with Action Code "3" .

    2. Attach Form 4227, Intra-SC Reject or Routing Slip, with an explanation.

Math/Consistency Errors
  1. These errors are caused when the computer computation differs from the taxpayer's computation or the transcribed amount.

  2. Math Errors occur when:

    • There is a transcription error

    • The taxpayer reports more entries than can be transcribed

    • The taxpayer makes a mistake in a calculation

  3. When a Math Error occurs,

    • The computed amount in question will underprint with the computer's calculation.

    • The tax verified field is Field 02K.

  4. Use the "tax verified" field to bypass the math check on a loop. Use Action Code "0" on Loop.

  5. If the transcription is correct, use Action Code "6" to enter the computer's calculation in the "tax verified" field.

  6. If the computer cannot compute the amount correctly (because there are more taxpayer entries than can be transcribed),

    1. Verify the taxpayer's computation, and

    2. Enter Action Code "6" to enter the verified total into the "tax verified" Field 02K.

  7. To correct math/consistency errors:

    1. Compare the transcribed amount listed above the underprinted figure on the Register to the Form 8288 to ensure that the information was transcribed accurately.

    2. If the transcription is correct, and the error is within tolerance, bring up the underprinted amount into the tax verified field. Use Action Code "0" on Loop.

    3. If the transcription is correct, and the error is not within tolerance, use "Action Code 6" to enter the correct amount in the "tax verified" field.

    4. Always leave a working trail to ensure that any correction made on the Error Register is also made to the return itself.

Error Correction

  1. Error Register fields are identified by a letter designation in the left most position of the field. See IRM 3.22.261.20, Section 01 - Form 8288, and IRM 3.22.261.21, Section 02 - Form 8288.

  2. On the Error Register, an asterisk "*" designates an invalid field.

  3. However, any field may be corrected even if not designated invalid.

  4. When making corrections to the Error Register, the correction must also be made to the corresponding area on the return.

  5. When an invalid or math error condition is present, determine whether correction of the transcription errors resolve the situation.

Correcting Invalid Correction Attempts

  1. An invalid correction attempt error is caused by:

    • An incorrect entry on the Error Register

    • A ISRP error when transcribing data from the Error Register.

  2. A complete description of invalid attempts may be found in IRM 3.12.38, BMF General Instruction.

  3. When an invalid correction attempt is detected, "AA" is printed to the right of the Batch Number on the Document Identification Line of the Loop Error Register.

  4. If the cause of the invalid correction attempt can be determined, correct the Loop Register as if no attempt had been made to correct it.

    Note:

    It may be necessary to examine the correction made on the prior Error Register.

  5. If the cause of the invalid correction attempt cannot be determined, enter Action Code "7" .

    Note:

    Not every condition that causes the "AA" to appear on the error register will appear in the error register.

♦Received Date♦

  1. The date a document is received in the Campus or IRS Office is the date stamped as the "IRS Received Date."

  2. All Form 8288 returns require an IRS Received Date. Use the chart below to perfect the received date.

    If... Then...
    The return is received within ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡. The return is considered timely.
    The due date falls on a weekend or legal holiday, The return is timely if postmarked by the first business day following the weekend or legal holiday.
    The IRS received date stamp is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ of the legal or extended due date and the postmark or shipment date is on or before the legal or extended due date. Edit the Received Date to agree with the postmark date or shipment date.

    Note:

    The postmark or shipment date includes returns delivered by:

    • U.S. Postal Service,

    • Private Delivery Services, e.g., Federal Express Corporation (FedEx) or United Parcel Service (UPS), "designated" by the IRS. See IRM 3.10.72, Receiving, Extracting, and Sorting, for a list of designated private delivery services, or

    • Returns with a Foreign Postmark.

    Caution:

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

     

    Note:

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

  3. The IRS Received Date may or may not be stamped on the face of the return.

  4. A valid Received Date Stamp consists of the following:

    • The word "Received"

    • Month (alpha or numeric)

    • Day (for example 1 or 01)

    • Year - four digits

    • "Area Office," "Campus," "Field Office," "Taxpayer Assistance (TAC)" Site plus the "City" location or a functional area within one of these sites (e.g., Compliance Services Collection Operations (CSCO), Examination, Image Control Team (ICT), Correspondence Imaging System (CIS), Accounts Management (AM), etc.)

      Exception:

      Not all IRS offices are designated places for filing, and not all IRS employees are authorized to accept a tax return for processing. If a return contains a received date stamp from other than a Taxpayer Assistance Center (TAC), Lockbox, or IRS campus (Compliance, Accounts Management (AM), or Submission Processing (SP)), circle out the invalid received date and edit the correct received date according to instructions below. For example, returns received by the Taxpayer Advocate Service (TAS) or the IRS Office of Chief Counsel are not properly filed and a received date by that office is not the IRS Received Date.

  5. If the IRS Received Date stamp is not present or the date is illegible or invalid, edit the IRS Received Date in MMDDYYYY format according to the following priority:

    1. The earliest legible Postmark Date (U.S. Postal Service, foreign postmark or Private Delivery Service) on the envelope. Rules for using the U.S. Postal Service Postmark (USPS) or foreign postmark date are as follows:

      If... Then...
      An envelope is not attached Use the postmark date stamped on the face of the return.
      A document was returned for insufficient postage, Use the postmark date that coincides with the correct delivery of the return.
      The postmark is missing and the envelope is certified, Look for the "USPS.com Track & Confirm" record that was attached to the return (should be in front of the envelope). Use the "acceptance" date on the record to determine timeliness and follow normal editing procedures.
      If the USPS.com Track & Confirm record is not attached, take no action.
      An envelope has a USPS and private metered postmark Always use the USPS postmark.
      An envelope has a foreign and private metered postmark Always use the foreign postmark.
      An envelope has two private metered postmarks Use the latest private metered postmark.
      An envelope has only one private metered postmark Use the private metered postmark.

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

    3. Revenue Officer's signature date.

    4. Signature date (only if within current year).

    5. Julian control date minus 10 days.

    6. Current date minus 10 days.

  6. Edit the Received Date as follows:

    If Then
    A timely IRS Received Date is the only received date stamped on the return, Do not edit.
    Two or more dates stamped on the return.
    1. Use the earliest IRS Received Date stamped on the return.

    2. Circle out all other dates.

    Note:

    Treat Received Dates that are circled out by another function as if they are not present.

    A Federal return is addressed to the IRS but delivered to a State agency, Use the Postmark Date as the IRS Received date.
    A Federal return is addressed to a State agency, Use the IRS Received Date stamp as the IRS Received Date.
    The only Received Date on the return is a TAS Received Date, Edit the IRS Received Date according to instructions.

    Reminder:

    Check any envelope attached to the return for remittance. If found, hand carry remittance to manager.

  7. If a return is faxed to another area of the IRS and then sent to Submission for processing, do not edit the Enterprise Electronic Fax (EEFax) Date as the IRS Received Date. Edit a Received Date according to normal procedures.

    Caution:

    Do not use the EEFax Date as the IRS Received Date.

Correcting Common Fields - Form 8288, U.S. Withholding Tax Return for Disposition by Foreign Persons of U.S. Real Property Interests

  1. Use the following instructions when entering the described fields in subsequent sections.

Dates

  1. When correcting dates or tax periods use the following formats:

    • YYYYMMDD for Received Date.

    • YYYYMM for Tax Periods.

  2. The month value edited must be in the range 01-12.

  3. The day value edited must be in the range 01-31.

  4. Always edit the tax period.

    Example:

    202012, 202101, 202209, etc.

    Note:

    Transcription under this program is permitted ONLY for those Form 8288 returns containing a "Date Of Transfer (line 3)" of December 13, 2005, and subsequent.

    See IRM 3.22.261.21.2, Field 02B - Date of Transfer (DOT), Line 3.

Names

  1. Name fields permit the entry of up to forty (40) characters.

  2. Valid characters are alpha (a-z) and numeric (0-9).

Taxpayer Identifying Numbers (TIN)

  1. Entries in this field may be one of the following:

    • Employer Identification Number (EIN) (entered in NN-NNNNNNN format).

    • Social Security Number (SSN) (entered in NNN-NN-NNNN format).

    • Individual Taxpayer Identification Number (ITIN) (entered in 9NN-NN-NNNN format with 4th and 5th digit ranges from 70-88, 90-92, and 94-98).

    • IRS Number (IRSN) (entered in 9NN-NN-NNNN* format with valid 4th and 5th digit ranges of 02, 04, 05, 06, 07, 08, 09, 10, 17, 18, 19, 28, 29, 37, 38, 39, 49, and 89; e.g., 9NN-05–NNNN* (PSPC) 9NN-04–NNNN* (OSPC) format)

      Note:

      When the TIN is a Social Security Number (SSN) or Individual Taxpayer Identification Number (ITIN) number, one must place a "(V = a valid SSN or ITIN)" or "W = an invalid SSN or Internal Revenue Service Number (IRSN)" at the end of the SSN/ITIN/IRSN number (e.g., 9NN-7N-NNNN V, NNN-NN-NNNN V, 9NN-05-NNNN W).

      Reminder:

      If there is a TC 000 edited (orange ink) next to the TIN with a "V" or "W" do not route to Entity, because it has already been established on BMF. However, if the TC 000 is not present on the return, then ROUTE to ENTITY.

  2. The valid characters are numeric 0-9.

  3. Form 8288 Only: When the TIN entered is an SSN, IRSN or an ITIN, a TIN Type indicator of "0" must be entered immediately to the right of the TIN. If the TIN entered is an EIN, the TIN Type field is to be left "blank."

  4. If more than one TIN is entered in a field:

    1. Enter or perfect the first TIN entered

    2. Circle out the second or subsequent TIN(s)

      Note:

      If both an SSN/ITIN and EIN are present, use the SSN/ITIN and the individual’s entity name associated with the SSN/ITIN for transcription, unless the entity name is a business name, then use the EIN. Depending on the TIN you select, circle out the other TIN, and adjust the TIN TYPE indicator as necessary.

  5. If the filer does not provide a TIN on Line 1 then correspond using IDRS Letter 3104C. However, first:

    1. Research the return and its attachments

    2. Research the name using local procedures

  6. Be sure to enter the correct TIN Type indicator "0" after each SSN, ITIN, or IRSN number.

Street Address

  1. These instructions apply to the following fields:

    • Field 01J (must always be present)

    • Field 01I, Foreign Address.

    • Field 02A, Property description (must always be present - but will not always be a street address)

      Example:

      The property description might be written as, "2311 Rosebud Way" or say, "timeshare week 6, unit 231" or say, "parcel 231, Lot 231 in Rose County, ledger # 1132, page 645," or "Butternut Mall at 11th and 65th Ave"

  2. This is a 35-position field which must be present.

    Note:

    When a foreign address is present, then there is an additional 35-position field used to capture the entire address.

  3. Valid characters are alpha (a-z) and numeric (0-9).

  4. If both a P.O. Box and a Street Address are shown on the return, enter the street address into the error register field.

    Caution:

    The Form 8288 instructs the taxpayer not to enter a P.O. Box on the address line.

  5. Both domestic (U.S.) and foreign addresses should include:

    • The street number.

    • The street name.

    • Any proper room or suite designation (i.e., "Suite 2000" ).

    • The City, State, and Zip Code (for domestic and U.S. possession addresses).

    • In general, a foreign address consists of the following: Line 1 (Foreign Address) - Address or P.O. Box number; Line 2 (Street Address) - City or town name, other principal subdivision (i.e., province, state, county etc.) and postal code if present; Line 3 (City) - Foreign country (expanded from foreign country code).

  6. If necessary, abbreviate the street address.

City

  1. This is a 22-position field for which an entry must be present. Valid characters are, alpha (a-z), and/or foreign country code.

    Note:

    Numbers are not valid, only alpha characters.

  2. Research the ZIP Code directory to determine the city and/or state if the address is a U.S. address, and the ZIP Code is present.

  3. If the city and/or state cannot be determined from the ZIP Code or other available information (i.e., envelope, if attached or telephone contact, if a number is provided) enter the filer's address to the address line.

  4. If the city listed is a major (U.S.) city, enter the Major City Code (MCC) in place of the city and state information.

    Reminder:

    The MCC must be followed by the ZIP Code.

  5. Major City codes are not available for foreign cities, except "XJ" for San Juan, PR.

  6. The foreign city will also be entered in the city field, followed by the province code, and foreign country code. Use the foreign country code. See Document 7475 (State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries).

    Note:

    There is no separate field for the foreign country code in this program.

  7. If the address is a foreign address which includes a Province designation,

    1. Circle out the name of the province on the State/Province line.

    2. Enter the province abbreviation. See Figure 3.22.261-2.

    3. A two-position alpha code must be present for Canadian addresses.

    Figure 3.22.261-2

    Province Abbreviation Postal Codes Begin With
    Alberta AB T
    British Columbia BC V
    Manitoba MB R
    New Brunswick NB E
    Newfoundland NF A
    Northwest Territories NT X
    Nova Scotia NS B
    Nunavut NU X
    Ontario ON K, L, M, N, P
    Prince Edward Island PE C
    Quebec QC G, H, J
    Saskatchewan SK S
    Yukon Territory YT Y

State

  1. State fields are two-position fields for which entries must be present for all U.S. and U.S. possessions addresses.

  2. Valid characters are alpha (a-z).

  3. When the address is a non-possession foreign country, enter a period followed by a space into the State Code field.

    Figure 3.22.261-3

    This is an Image: 39747003.gif

    Please click here for the text description of the image.

ZIP Code

  1. These are 12-position fields for which entries must be present for U.S. addresses.

  2. The valid characters are alpha (a-z) and numeric (0-9).

  3. The U.S. ZIP Code must contain at least five (5) and may contain up to twelve (12) characters.

  4. If the address is a U.S. address and the ZIP Code is missing or incomplete,

    1. Look through any attachments first, then

    2. Research the ZIP Code Directory, and

    3. Enter the correct ZIP Code.

  5. If the address is a foreign address, enter the foreign Postal (ZIP) Code.

  6. U.S. and Australian addresses must include Numeric Postal Codes.

    Reminder:

    The Australian Postal Codes must be entered after the street address in the street address field.

  7. Whenever there is a period in the first position of the state code field (foreign address), no Zip Code can appear in the zip code field, or the field will be invalid.

  8. Zip Codes for U.S. possessions are considered U.S. Zip Codes and must appear in the Zip Code field.

    Figure 3.22.261-4

    State Territory Postal Codes
    New South Wales and A.C.T. 2000–2999
    Victoria 3000–3999
    Queensland 4000–4999
    South Australia 5000–5799
    Western Australia 6000–6799
    Tasmania 7000–7499
    Northern Territory 0800–0899

Computer Condition Codes (CCC) – Form 8288

  1. Up to ten (10) Computer Condition Codes (CCC) may be entered.

  2. An entry may or may not be present in the CCC field.

  3. Only the following characters are valid: D, O, R, U, W, X, 3, 4, or 7.

  4. See IRM 3.22.261.20.14, Field 01R - Computer Condition Code, for descriptions.

Amounts

  1. These are 12-position fields for which entries may or may not be present, depending on the requirements of the particular field.

  2. Valid characters are numeric (0-9) or blank.

  3. Entries are entered in dollars and cents.

Processing Form 8288 - Error Register

  1. The following subsections are used in correcting the Form 8288 error register.

General Information

  1. Form 8288 is a one-page tax return used to show tax withheld from certain transactions and said amounts paid to the IRS.

  2. Form 8288 is also considered a transmittal form for Form 8288-A.

  3. There are no:

    • Audit Codes

    • Edit Sheet

    • Attached schedules or forms

      Exception:

      Form 8288-A and at times a Withholding Certificate.

    • Extension Form.

  4. There are only two sections which make up the record for the Form 8288 error register, which is processed in the SCRS and Rejects areas.

    Note:

    There is no electronic filing for this form.

  5. Prior to tax period 200512 (Date of Transfer 12/13/2005), Form 8288 was processed to the NMF.

  6. The valid DLN will begin with "98140 in PSPC, 60140 in OSPC, 17641 in CSPC - NMF, and 09641 in KCSPC - NMF."

    • The File Location Code must be "60 or 98" regardless of the address.

      Note:

      Do not renumber to "66 or 78" if a U.S. possession or to "28 or 29" if the address is in the U.S.

    • The Tax Class is "1" ,

    • The Doc Code is "40."

    • The Blocking Series is "000–999."

  7. The MFT is "17."

  8. The Program Code is "11330."

  9. The tax period can show months 01-12.

  10. All money amounts are in dollars and cents.

Section 01 - Form 8288

  1. Section 1 alpha field designators, maximum field lengths, titles and return locations are as follows for Form 8288:

    Field Reference Field Length Field Title Field Location on Form 8288 Return
    01A 11 Remittance Amount Top right side corner of Form 8288
    01B 6 Tax Period Right of Form Title
    01C 40 Name Line 1, Row 1
    01D 4 Name Control Line 1, Row 1
    01E 9 Taxpayer Identifying Number Line 1, Row 1
    01F 1 TIN TYPE Line 1, Row 1
    01G 1 Part Number Left outside margin of Part Number box
    01H 35 In Care of Name Line Line 1, Row 2
    01I 35 Foreign Address Line 1, Row 2
    01J 35 Address Line 1, Row 2
    01K 22 City Line 1, Row 3
    01L 2 State Line 1, Row 3
    01M 12 Zip Code Line 1, Row 3
    01N 10 Taxpayer Telephone Number End of Line 1, Row 3
    01O 8 Correspondence Received Date Right outside margin at end of Line 1, Row 2
    01P 8 IRS Received Date In the middle of Line 2
    01Q RESERVED RESERVED RESERVED
    01R 1 Computer Condition Code Left outside margin of Line 2, last row
    01S 6 Taxpayer Notice Code Upper left corner margin
    01T 1 Entity Underprint  
    01U 9 Preparer PTIN Bottom right corner
    01V 9 Preparer EIN Bottom right corner
    01W 10 Preparer Phone Number Bottom right corner

Field 01A - Remittance Amount

  1. This is an 11-position field, which may or may not be present.

  2. The valid characters are numeric 0-9, or blank.

  3. It is entered in the top right corner of Form 8288 and will have a “green rocker” below the amount.

  4. It is entered in dollars and cents, and must be positive.

  5. The field shows the amount of remittance paid with Form 8288.

  6. This field cannot be corrected with an Action code 6. If there is an error, SCRS will reject the return and Rejects will re-input the return indicating the correct amount of remittance on the Form 3893, Re-Entry Document Control, (in the "credit box" ).

  7. This field is invalid when there is no amount of total tax in Field 02G or when Field 02G underprints zero. Entering the tax into Field 02G or correcting the record (such as entering the correct amount into Field 02F) to eliminate the zero 02G underprint will clear the invalid condition in Field 01A.

Field 01B - Tax Period

  1. This is a six-position field which must be present.

  2. Valid Characters are numeric (0-9).

  3. It is found in the upper, right corner of the return, to the right of the return title.

    Note:

    The source of the tax period is the YYYYMM of the "Date of Transfer" (DOT), located on line 3 of either Part I or II.

  4. It is entered in YYYYMM format.

  5. The earliest valid tax period for Form 8288 is 200512.

    Caution:

    When processing Form 8288 deposits the "Date of Transfer" is used to determine the tax period, as well as distinguish a NMF Form 8288 from a BMF 8288. Review Form 8288 for a possible withholding certificate. When a withholding certificate is attached, edit the Withholding Certificate notice date to Line 3 of Form 8288. This edited Date of Transfer will be the new date used for the tax period, as well as the new Date of Transfer. DO NOT DETACH ANY ATTACHMENTS FROM FORM 8288.

  6. The tax period is determined from the Date of Transfer (DOT), (Line 3, Parts I and II of Form 8288). The month and year of the DOT will be the month and year of the tax period.

    Note:

    If the DOT is 07/07/2021, then the tax period will be 202107. The IRS received date can be the same month and year as the tax period, but not prior to it.

  7. ERS will reject the return if the tax period is earlier than 200512. These returns should be transshipped to the KCSPC Accounting Branch NMF for processing. See IRM 3.22.261.11, Pre-Master File Processing of Form 8288.

    Note:

    Although 200512 is a valid tax period, the DOT must be 12-13-2005 or later. If the DOT is prior to 12-13-2005, the computer will not accept the return. ERS will reject the return and notate the Form 4227, "Date of Transfer is prior to 12-13-2005."

  8. Form 8288 is due to the IRS 20 days after the date of transfer (DOT), or 20 days from the withholding certificate date (if applicable).

  9. Form 8288 is an ad-hoc return. This means that each return is filed to reflect a particular transaction and not as a general summary of a year’s income, etc. Because of this there is no filing requirement (on INOLE) and is never considered (or coded) as a final return.

  10. If the tax period is later than the current date, compare the tax period to the DOT to be sure it is correct. If it is correct, ERS will reject the return (Action Code 3) and Rejects will hold it until the first day after the month of the tax period, when it will be worked.

  11. Because each Form 8288 reflects only one specific transaction, it is possible that more than one return could be filed by the same taxpayer for the same tax period. This is not a concern for ERS or Rejects, as it will be handled by other areas.

Field 01C - Name, Line 1

  1. This is a 40-position field which must be present.

  2. Valid characters are alpha (a-z), and numeric (0-9).

  3. It is located on Line 1 in Parts I and II.

  4. Code and Edit will have underlined the Name Control.

  5. This name can be that of a person, corporation, trust, estate, partnership, Escrow Company, Title company, etc.

  6. If the name is missing or illegible, research IDRS using Command Codes INOLE and ENMOD.

  7. If the name and TIN are both illegible, reject the return with Action Code "3" and send to Entity.

  8. Use Action Code "6" to correct any errors.

Field 01D - Name Control, Line 1

  1. This is a four-position field which must be present.

  2. Valid characters are alpha (a-z), and numeric (0-9).

    Note:

    Delete any character from the name control that is not alpha or numeric, such as a hyphen (-) or slash (/).

  3. It is derived from the name on Line 1, Part I or II.

  4. Field 01D is a fixed field (there is no field breaker). If it is necessary to enter or correct this field and the name control has less than 4 alpha or numeric characters, then it will be necessary to enter the number of unused spaces in a circle immediately after the entry.

    Figure 3.22.261-5

    This is an Image: 39747001.gif

    Please click here for the text description of the image.

  5. If underprinted with a different Name Control (not "XXXX" ):

    1. First be certain that the TIN TYPE indicator (Field 01F) field is entered correctly. If the Taxpayer Identification Number (TIN) is a Social Security Number (SSN), IRS Number (IRSN) or an ITIN then the TIN TYPE indicator must be "0" , otherwise it must be "blank."

    2. Verify that the name control was transcribed correctly.

    3. If transcribed incorrectly, enter the correct name control and enter the Entity Underprint Code (EUC) "1" into Field 01T, if the correct name control differs from the underprint.

      Note:

      Use Action Code "6" .

    4. If transcribed correctly, research using IDRS Command Codes NAMEI and/or NAMES for an SSN/ITIN, or NAMEB and/or NAMEE for an EIN.

      Note:

      If unable to locate the correct name, reject record using "Action Code 3." ERS will send the case to Entity.

  6. If the name control underprints with "XXXX," then:

    1. Be sure that the TIN (Field 01E) and TIN TYPE Indicator (Field 01F) are both entered correctly on the register.

      Example:

      If the TIN is an EIN but 01F has a "0" , the computer will treat the TIN as an SSN and will underprint the name control or cause an unpostable condition.

    2. If correctly transcribed, first research using IDRS Command Codes NAMEI and/or NAMES for an SSN/ITIN, and NAMEB and/or NAMEE for an EIN.

      Note:

      If the EIN is written in orange ink (assigned by Entity) and entered correctly on the register and the TIN TYPE indicator is "blank," then just enter a "1" into Field 01T.

    3. If a good TIN is found, enter it into Field 01E, issue IDRS Letter 3875C (Missing or Incorrect EIN on Return) and be sure that Field 01F is correct. Then enter a "1" into Field 01T (EUC).

      Exception:

      if less than 3 digits of the EIN are incorrect, or if the EIN is transposed, different or missing.

    4. Do not send Letter 3875C when:

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

      • INOLES indicates the account has been merged to (MT) or merged from (MF). If the MT TIN does not match the entity on the return, SSPND with Action Code 320 to Entity.

    5. If a good TIN is not found, SCRS will reject the return and send it to Entity for assignment of an EIN.

  7. For complete information on individual name controls, refer to Document 7071 (Name Control Job Aid for Individual Master File (IMF) Taxpayers).

  8. For complete information on business entities (corporation, trust, estate, etc.), refer to Document 7071A (BMF Name Control Job Aid).

Field 01E - Taxpayer Identifying Number (TIN), Line 1

  1. This is a 9–position field which must be present.

  2. The nine-character Taxpayer Identifying Number is found on the right side of Line 1, Parts I and II.

  3. The valid characters are numeric (0-9).

  4. The TIN can be any of the following: See IRM 3.22.261.18.3, Taxpayer Identifying Numbers (TIN).

    • EINs (entered in NN-NNNNNNN format), or

    • SSNs (entered in NNN-NN-NNNN format), or

    • ITINs (the middle digits of an ITIN number range from 70-88, 90-92, and 94-99).

    • IRSNs (entered in 9NN-04-NNNN* if OSPC format). See IRM 3.22.261.18.3, Taxpayer Identifying Numbers (TIN).

      Note:

      For an IRSN, valid TIN in 4th and 5th positions need to include "01," "03," "11," "16," "40."

    Note:

    Canadian Social Insurance Numbers are also nine digits but are in an NNN-NNN-NNN format, and are not valid for use on a U.S. tax return.

  5. If the TIN on the return is other than nine digits, missing, invalid or undetermined, check any attachments to the return for a valid TIN. If none is found, research IDRS using Command Codes NAMEI, NAMES, NAMEB, and NAMEE.

    Note:

    If the assigned IRSN number was assigned by another campus other than Ogden, delete the IRSN number, and have a new IRSN number assigned by Ogden (9NN-04-NNNN).

  6. If a valid TIN is found, cross out the invalid TIN on the return, issue IDRS Letter 3875C and enter the correct TIN next to it and into Field 01E on the register. Do not send Letter 3875C when:

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

    • INOLES indicates the account has been merged to (MT) or merged from (MF). If the MT TIN does not match the entity on the return, SSPND with Action Code 320 to Entity.

    Note:

    When you correct the TIN on the register, you must also check the TIN TYPE indicator, Field 01F to make sure it is correct. If not correct, then the return will unpost. See IRM 3.22.261.20.5.1, Field 01F - Taxpayer Identifying Number Type (TIN TYPE).

  7. If there are more than one TIN on the return, enter or perfect the first TIN present and cross out the other TIN(s).

    Note:

    If an SSN/ITIN and EIN are present, use the SSN and the individual's entity name; however, if the name is that of a business or other BMF entity, use the EIN. Cross out the unused TIN. In either case, you must be certain that the TIN TYPE indicator Field 01F is correct.

  8. If the name is that of a BMF entity (corporation, estate, etc.), forward the return to the Entity function on Form 4227 for assignment of an EIN and enter Action Code "3" on the register.

  9. If it is later than the due date of the return, and the Entity function has assigned a new EIN, enter the Entity assignment date into Field 01O.

Field 01F - Taxpayer Identifying Number Type (TIN TYPE)
  1. This is a one-position field which must be present if the Filer's TIN is an SSN or an ITIN. Otherwise, leave this field blank.

  2. Valid characters are "0" (zero) and "blank."

  3. If the TIN entered in Field 01E is either an SSN, IRSN, or an ITIN (NNN-NN-NNNN format), enter a "0" (zero) in Field 01F. Otherwise, leave blank.

  4. If the TIN entered in Field 01E is an EIN (NN-NNNNNNN format), no TIN Type is required.

  5. The purpose of the TIN TYPE indicator is to tell the computer what kind of TIN is in Field 01E. If an SSN, IRSN, or ITIN is in Field 01E then the computer will keep the integrity of the TIN format and assign it the IDRS definer access code "V" or "W" to force it to post to the BMF.

    1. Since the SSN, IRSN, and ITIN have the same criteria, it is not necessary to have a separate code for each, but Entity must establish the SSN/ITIN on the BMF entity with TC 000.

    2. If the TIN TYPE indicator code and the TIN in Field 01E are not in agreement, it can cause the name control to underprint, the return to unpost, or be invalid.

      Example:

      If Field 01F is "0" but Field 01E has an EIN, the computer will think Field 01E is an SSN and treat the name control as an individual rather than a business entity and format the EIN in the format of an SSN number, thus making the return unpost.

Field 01G - PART NUMBER

  1. This is one-position field which must be present.

  2. The valid characters for this field are "1" and "2" .

    • 1 = The Part of Form 8288 completed by the transferee, when the 10 or 15 percent FIRPTA tax is based on the amount realized of the sale of the United States Real Property Interest (USRPI). A USRPI is generally the parcel of real estate in the United States that is being bought, sold or transferred. See

      Example:

      Part I of Form 8288.

    • 2 = The Part of Form 8288 completed by the transferee, when the FIRPTA tax due is at 10 or 15 percent of the USRPI, or 21 percent (35 percent with a date of transfer before January 1, 2018) of the recognized capital gain dividend from the sale of the USRPI, or the taxpayer has cited IRC 1.1445–5(c)(1)(iii) or IRC 1445(e), or has made an IRC 897(i) Election.

      Example:

      Part II of Form 8288.

      Note:

      Taxpayers must only complete Part I or Part II of Form 8288. If both parts are completed, Code and Edit will "X" the incorrect Part, based on entries on the attached Form 8288-A. If neither Part is crossed-out, see figure to determine which part should be used.

  3. The Part Number is entered by Code and Edit in the top left margin of the bold Part I block, when Part I has been completed, or in the center left margin of the bold Part II block.

  4. Form 8288 is divided into two (2) parts:

    Note:

    The taxpayer must complete only one Part of Form 8288.

    • Part I consists of most of the top half of Form 8288, Lines 1 - 6.

    • Part II consists of most of the bottom half of Form 8288, Lines 1 - 6.

  5. If the taxpayer completes Part I, Field 01G will have a "1" .

  6. If the taxpayer completes Part II, Field 01G will have a "2" .

  7. If both Part I and II are completed by the taxpayer, enter"1" in Field 01G if an entry appears in Field 02F. Otherwise, enter a "2" in Field 01G.

Field 01H - In-Care of Name Line, (Line 1 Row 2)

  1. Description - Field 01H is located in the Entity Section of the return.

  2. Valid Condition - Field 01H has 35 positions and the valid characters are alpha, numeric, ampersand, dash, slash or percent (%).

    Note:

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

  3. Invalid Condition - Field 01H is invalid if any of the following conditions are present:

    • The first position is blank.

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

    • There are two consecutive blanks between significant characters.

  4. Correction Procedures: Correct coding and transcription errors.

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

    2. Enter the in-care-of name beginning with an alpha or numeric in Field 01H.

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

    2. Enter the in-care-of name beginning with an alpha or numeric in Field 01H.

    Two consecutive blanks are present between significant characters, Delete any unnecessary blanks in Field 01H.

  5. Use Action Code "6" to correct any errors.

Field 01I - Foreign Address, Line 1 Row 2

  1. This is a 35-position field that may or may not be present. The valid characters are alpha (a-z) and numeric (0-9).

  2. This field must be used for foreign addresses. If the entire address does not fit, continue entering the address in the "Street Address" field. Abbreviate where possible to contain address to the two lines.

    Figure 3.22.261-6

    This is an Image: 39747002.gif

    Please click here for the text description of the image.

  3. Although a foreign address will usually require this field, overly long U.S. addresses can also be entered, beginning in Field 01I and continued into Field 01J.

  4. If the entire address fits into Field 01J, then Field 01I must be blank.

  5. Do not enter a U.S. address into Field 01I, and leave Field 01J blank. Field 01J must have an entry or it will be invalid.

    Note:

    There are no fast rules on how to divide an overly long address, if the information is present and neither field exceeds the allotted 35 spaces after it is corrected.

Field 01J - Street Address, Line 1 Row 2

  1. This is a 35-position field which must be present.

  2. The valid characters are alpha (a-z) and numeric (0-9).

  3. This field must be used for the address. If the entire address requires 35 or less spaces, then the entire address will fit into this field. Otherwise, abbreviate where possible.

  4. See IRM 3.22.261.18.4, Street Address, for more instructions.

Field 01K - City, Line 1 Row 3
  1. This is a 22-position field which must be present.

  2. The valid characters are alpha (a-z) and numeric (0-9).

    Note:

    This field will also show the code of a foreign country (other than a U.S. possession).

  3. If the name of the city contains a hyphen (-), enter a "blank" in place of the hyphen.

  4. If the City is missing, look on all available attachments (Form 8288-A).

  5. If the City is missing, but there is a Zip Code present, research the Zip Code directory to determine the name of the city.

  6. A Major City Code (MCC) can be used in this field.

    Note:

    There are no Major City Codes for foreign cities, with the only exception being San Juan, PR (XJ).

  7. Enter a (foreign) province abbreviation at the end of the city field. A two (2) letter Canadian Province Code is always required. See Figure 3.22.261-2.

  8. When working with a Foreign Address, the code of the foreign country or the country code must appear in this field. See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries.

    Note:

    There is no separate field for a foreign country code in this program.

  9. See IRM 3.22.261.18.5, City, for more instructions.

Field 01L - State, Line 1 Row 3
  1. This is a two-position field which must be present for all U.S. and U.S. possession addresses.

  2. The valid characters are alpha (a-z), and must be only the list of allowed state codes. See Document 7475. A period (.) is required with foreign (non U.S. possession) addresses.

    Note:

    Since there is no state code for a foreign country (other than five U.S. possessions), a period is entered into the first position of Field 01L to take the place of a State Code. To ensure that the period is transcribed into the first position, the period is followed by a "1" in a circle, which indicates a blank space. If the period is in the second position, the field will be invalid.

  3. See IRM 3.22.261.18.6, State.

Field 01M - Zip Code, Line 1 Row 3
  1. This is a 12-position field which must be present for all U.S. addresses. The valid characters are alpha (a-z) and numeric (0-9). A minimum of 5 digits must be entered, but the field will accept up to 12 digits.

  2. Field 01M will accept all zip codes. This field must be blank when a foreign address is present.

  3. If the Zip Code is missing research the attachments and/or the Zip Code directory.

    Note:

    The Zip Code in Field 01M must agree with the state code in Field 01L.

  4. See IRM 3.22.261.18.7, ZIP Code.

Field 01N - Transferee Telephone Number, Line 1 Row 3

  1. This is a 10-position field which may or may not be present.

  2. The valid characters are, "Numeric 0-9" , and "blank."

  3. The telephone number is found on line 1, row 3, after the City line.

  4. Only the telephone number of a U.S. address or U.S. possession is entered. Do not enter a foreign telephone number, especially if the address is foreign.

  5. If the number is not legible, or if there is any doubt about a digit in the number, leave Field 01N blank.

Field 01O - Correspondence Received Date (CRD)

  1. This is an eight-position field that may or may not be present.

  2. The valid characters are numeric (0-9).

  3. The format of the CRD is YYYYMMDD.

  4. The CRD is entered in the right margin of the street address line on Form 8288.

  5. The CRD must be later than the due date of the return.

  6. This field must not be present if Computer Condition Code 3 is present in Field 01R.

  7. If the reply was not date stamped, use the postmark date from the envelope that the reply came in.

  8. The field can also contain the date that Entity assigned a TIN to the return (the Entity Assignment Date), subject to the same restrictions noted above. This date is usually entered in orange text, next to the TIN that was assigned.

Field 01P - Received Date

  1. This is an eight-position field which must be present.

  2. The valid characters are Numeric (0-9).

  3. The format of the received date is YYYYMMDD.

  4. The received date is stamped onto the center area of the return.

  5. If the IRS received date was not stamped, enter it in the right-hand area of Line 2, Part II and into Field 01P.

  6. If there is more than one received date on the return, use the earliest date and circle out the other dates.

    Caution:

    Field 01P will error if the IRS received date is earlier than the tax period.

    1. If the Form 8288 was sent to a different campus or IRS office, even though it is supposed to be sent to Ogden, use the received date of the other IRS office.

    2. If the received date on the return is stamped by another IRS office in a different country, this date is still acceptable and is entered into Field 01P.

    3. If the received date is earlier than the tax period, review the return to make sure the correct tax period (YYYYMM) was used from line 3, "Date of Transfer." If the tax period is not correct, then enter AC "6" to the left of Section 01, and enter the correct tax period (YYYYMM) in Field 01B, this should eliminate the register error.

      Exception:

      If the tax period is correct, then change the received date to one day after the date of transfer.

  7. See IRM 3.22.261.17, ♦Received Date♦, for more information.

Field 01Q - CAF Indicator

  1. The Centralized Authorization File (CAF) indicator is no longer required to be edited. Therefore, Field 01Q will always be blank.

Field 01R - Computer Condition Code

  1. This is a 10-position field which may or may not have an entry.

  2. The valid codes are: D, O, R, U, W, X, 3, 4, and 7. CCC U is also used by Code and Edit but it is not valid on the error register.

  3. The CCC is edited in the left outside margin of Form 8288, Line 2 of Part I or Part II.

  4. CCC "D" : When reasonable cause exists for waiver of the failure to pay penalty.

  5. CCC "O" : Indicates that a pre-settlement manual refund was paid.

  6. CCC "R" : Indicates that a delinquent return with reasonable cause was filed and does not assess a Failure to File Penalty.

  7. CCC "U" : Is used to reject the unprocessable return or to issue a manual refund over $1 million dollars.

  8. CCC "W" : indicates that the return has been cleared by Statutes. See IRM 3.22.261.8, Statute Of Limitations.

  9. CCC "X" : Indicates that excess remittance with return or overpayment be applied to another account.

    Note:

    This code is used when it has been determined that an excess remittance should be applied to a different tax class or module (period). The CCC "X" will freeze the tax module from refund or offsetting any monies by generating a TC 570.

  10. CCC "3" : Indicates that there was no reply to correspondence sent to a taxpayer by either Code and Edit or Rejects.

    Note:

    There can be no entry in Field 01O (CRD) when CCC "3" is present in Field 01R.

  11. CCC "4" : Indicates that the return was prepared by the IRS under IRC 6020(b).

  12. CCC "7" : Indicates that the reasonable cause explanation offered by the taxpayer for filing or paying late was denied by the IRS.

    Caution:

    When using CCC "7," do not use CCC "D" or "R."

  13. Leave "blank" if no CCC is required.

Field 01S - Taxpayer Notice Code

  1. This is a four-position field which may or may not be present.

  2. Valid characters are, "01," "02," and "90."

  3. The Taxpayer Notice Code is entered with Action Code "1" to the left of Section 01 on the error register and in the upper left corner of Form 8288.

  4. The purpose of Field 01S is that this is the area where the TPNC will appear after the return has posted. Never enter a TPNC into this field.

  5. Never correct this field if it is invalid. It is not necessary. If the field is invalid because the incorrect TPNC appears in it (this will be on a loop register), ignore it and just re-enter the correct TPNC(s) to the left of Section 01 with Action Code "1" .

  6. There are three valid TPNCs:

    • TPNC 01 – "You made an error in computing the amount of FIRPTA tax under Section 1445."
      TPNC 01 is used for a math error in computing the amount of tax due on line 6, Part I, and line 6, Part II (Field 02G).

    • TPNC 02 – "No Copy of Withholding Certificate attached to support the reported 10 percent reduced withholding amount."
      TPNC 02 also applies to line 6, Part I, and line 6, Part II but only when the taxpayer has computed tax at less than 10 percent (or zero) and the required withholding certificate (needed to authorize this lower tax rate) is not attached to Form 8288.

      Caution:

      In the case of an IRC 1446(f)(1) return, the transferee can pay a lesser amount without an approved Withholding Certificate (W/H Cert). These returns include the statement "Section 1446(f)(1) withholding" (or something similar) at the top of Form 8288 and 8288-A.

    • TPNC 90 – Open Paragraph.
      TPNC 90 is an open paragraph for any error that is not covered by a TPNC.
      TPNC 90 will also be used for post February 16, 2016 dispositions where withholding is less than the required 15 percent and no withholding certificate attached. Use open paragraph to say, "No Copy of Withholding Certificate attached to support the reported 15 percent reduced withholding amount." There is currently no specific TPNC for this amount.
      TPNC 90 will also be used for IRC 1446(f)(1) returns where line 5c or line 5d was not checked. Use open paragraph to say, "You made an error in computing the amount of withholding tax under Section 1446(f)(1)."

Field 01T - Entity Underprint Code

  1. This is a one-position field which may or may not be used by the tax examiner. It is not found on the return itself, but only on the error register.

  2. The valid characters are 1 or blank.

  3. Enter "1" in Field 01-T if the name control underprints. Make sure the correct name control is not the same as the underprint.

  4. If the correct name control is the same as the underprinted name control, leave Field 01T blank.

  5. Entity Underprint Codes "2" and "3" do not apply to this program because the tax period does not underprint.

♦Signature♦

  1. A signature (withholding agent/transferee, partner, fiduciary, or corporate officer) and jurat is required for all returns except the following:

    • Returns prepared under IRC 6020(b). These returns must be signed by a Revenue Officer or Compliance Services representatives.

      Note:

      Accept electronic or typed Revenue Officer (RO) signatures as valid on the return.

    • Returns prepared by Examination, for example Substitute for Return. "SFR" or "SUBSTITUTE RETURN" .

    • Dummy returns prepared by IRS.

    • Returns filed under Section 501(d) (Religious or Apostolic Organization).

    • Correspondence is attached showing that the taxpayer is responding to an IRS letter.

    • Correspondence Imaging System ("CIS" ) returns that have a Form 13596 (Reprocessing Returns) or Form 3893 (Re-Entry Document Control) attached.

  2. If a signature is missing, correspond when:

    • The return is not signed on the line designated for the taxpayer's signature or

    • The jurat is not present on the line designated for the taxpayer's signature (non-standard return).

    Note:

    Do not correspond for a signature on "CIS" returns that have a Form 13596 or Form 3893 attached.

    If... Then...
    Delinquent balance due or numbered returns,
    1. Correspond using the 3104C Letter.

    2. Enter Action Code "3" .

    Timely Filed unnumbered zero-balance returns,
    1. Enter Action Code"3" and correspond with Letter 3104C.

    2. Circle all received dates on the return.

    3. Pull the return from the batch and forward for correspondence.

    Note:

    Use IDRS Letter 3104C.

    Only the Entity information is present and there are no attachments containing tax data, Correspond for signature using Letter 3104C.

    Note:

    Use IDRS Letter 3104C.

  3. If only the Entity information is present and there are no attachments containing tax data then correspond for a signature using Letter 3104C.

    Note:

    Use IDRS Letter 3104C for "Secured" or delinquent returns.

  4. If the jurat is altered or stricken (crossed-out), it may be a frivolous return. See IRM 25.25.10, Frivolous Return Program, shown in Exhibit 3.22.261-5, Potential Frivolous Arguments for Examination Review.

  5. Accept a "signature declaration" (a signature with jurat obtained through IRS correspondence) if attached to the return.

    1. If the "signature declaration" is altered or stricken (crossed-out), it may be a frivolous return.

    2. If the taxpayer responds with a self-prepared "signature declaration" it must contain the same language as the jurat on the tax return: i.e., "UNDER PENALTIES OF PERJURY, I DECLARE THAT I HAVE EXAMINED THIS RETURN, INCLUDING ACCOMPANYING SCHEDULES AND STATEMENTS, AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, IT IS TRUE, CORRECT AND COMPLETE."

  6. Tax examiners are not handwriting experts. IRC 301.6064-1 allows IRS to presume that the signature on a return, statement or other document is the true signature of the person who actually signed the document.

    Note:

    Do not accept a “✓” or “X” on the signature line as a valid taxpayer signature.

  7. If the only item missing on a return is the signature, use Form 3104C or other approved Correspondence Action Sheet to correspond and enter Action Code "3" .

  8. Correspond one time for the signature. If no response, enter CCC "3" .

Field 01U - Paid Preparer's PTIN
  1. Field 01U is a nine-position field that may be present.

  2. Valid conditions are:

    • Entry is blank

    • "P" for the first character followed by eight numeric characters

  3. Invalid condition is one of the following:

    • Field 01U is other than a "P" followed by eight digits

    • Contains all zeroes

    • Contains all nines

    • Contains all numeric

  4. Correct Field 01U as follows:

    If... Then...
    Only a valid PTIN is present Enter the PTIN in Field 01U, and use AC "6" .
    Only a valid SSN is present Delete the SSN in Field 01U, and use AC "6" .
    A valid PTIN is present and a SSN is also present Enter the PTIN in Field 01U. Use AC "6" .
    A valid PTIN cannot be located Delete the entry in Field 01U, and use AC "6" .
Field 01V - Paid Preparer EIN
  1. Field 01V is an nine-position field that may be present.

  2. Valid conditions are:

    • Entry is blank

    • All numeric

  3. Invalid condition is one of the following:

    • Field 01V is other than nine numeric digits

    • Contains all zeroes

    • Contains all nines

  4. Correct Field 01V as follows:

    If... Then...
    Only a valid EIN is present Enter the EIN in Field 01V. and use AC "6" .
    A valid PTIN is present and an EIN is also present Enter the PTIN in Field 01U, and delete the entry in Field 01V. Use AC "6" .
    Both an EIN and SSN are present Delete the SSN in Field 01U, and make sure the EIN in Field 01V is correct. Use AC "6" .
    A valid EIN cannot be located Delete the entry in Field 01V, and use AC "6" .
Field 01W - Paid Preparer Phone Number
  1. The Paid Preparer's Phone Number is located below the Paid Preparer's EIN at the bottom right corner of Form 8288. This line was not available prior to 201101.

  2. Field 01W is a 10-digit field that may be present.

  3. Valid characters are alpha or numeric or a combination of alpha and numeric characters, not to exceed 10 characters or blank.

  4. Consider Field 01W invalid when the Preparer Phone Number is other than 10 alpha/numerics.

  5. Delete the entry if the phone number is invalid, illegible or cannot be located.

Section 02 - Form 8288

  1. The chart below lists Section 2 alpha field designators, maximum field lengths, titles and their location on the return:

    Field Reference Field Length Field Title Field Location on Form 8288 Return
    02A 35 Property Description Line 2
    02B 8 Date of Transfer Line 3
    02C 3 Number of Form 8288-A filed Line 4
    02D 12 Amount Realized or Amount Subject to W/H at 15 percent Part I, Line 5a or Part II Line 5a
    02E 12 Amount Realized or Amount Subject to W/H at 10 percent Part I, Line 5b or Part II Line 5b
    02F 12 Amount Subject to W/H at 21 percent or 35 percent with a date of transfer before January 1, 2018. Part II, Line 5c
    02G 12 Total Tax Part I - Line 6, or Part II - Line 6
    02G   Total Tax -- Underprint Part I - Line 6, or Part II - Line 6
    02H 1 Bypass Indicator Outside right margin of Part I - Line 2, or Part II - Line 6
    02I 1 Reduced W/H Indicator Part I - Line 5c, or Part II - Line 5d
    02J 1 Large Trust Election Part II - Line 5e
    02K 12 Tax Verified Field  

Field 02A - Property Description (USRPI) - Line 2

  1. This is a 35-position field which must be present.

  2. The valid characters are Alpha (a-z) and Numeric (0-9).

  3. This field is located on line 2, in either Part I or Part II.

  4. The entry in the field will frequently be in the form of an address (street, city, state, ZIP Code); however, it could be descriptions of other types of property, such as in the case of Section 1446(f) withholding on dispositions of non-publicly traded partnership interests. Enter the most important information present on line 2.

    Example:

    2300 ROSEBUD ST. LIBERTY PA 19114

    If Then
    The property description is not present in Field 02A look at the attached Form 8288, Line 2 Form 8288-A, Box 5, or the W/H certificate (if attached) for the property description, and enter it in Field 02A.
    The property description is not present on Form 8288, Form 8288-A, or attached W/H certificate. Correspond (IDRS Letter 3104C) with the transferee for the information.
    In the case of USRPI, no street address is present for the property description, but a technical description is present (e.g., Lot 52 of parcel 2534 in Mahogany County) Enter the technical description in Field 02A.
    In the case of USRPI, the only thing present for the property description is the name of the county where the property is located, Enter the county information of the property location in Field 02A.
    In the case of Section 1446(f) withholding on dispositions of non-publicly traded partnership interests, no information on the partnership name or EIN, and percentage of ownership transferred is present in Field 02A, Look at the attached Form 8288, Line 2 Form 8288-A, Box 5, for the description, and enter it in Field 02A. If not present, correspond (IDRS Letter 3104C) with the transferee for the information.
    No response to the correspondence or telephone call is received, and no property description is available Enter "MISSING" in Field 02A.

  5. See IRM 3.22.261.18.4, Street Address, for more instructions on entering the address.

Field 02B - Date of Transfer (DOT), Line 3

  1. This is an eight-position field which must be present.

  2. Valid characters are, Numeric 0-9.

  3. The format of the field is YYYYMMDD.

  4. The purpose of the Date of Transfer is:

    1. It is used to establish the Return Due Date (RDD) (which is 20 days after the USRPI or interest in partnership sales transaction).

    2. It is used to establish the Tax Period (Field 01B).

      Example:

      If the DOT is January 6, 2021, the tax period will be 202101.

    3. It is the recorded date for when the actual sale of the U. S. Real Property Interest or partnership interest took place.

  5. The earliest Date of Transfer that is valid in Field 02B is 12/13/2005.

    If... Then...
    DOT is prior to 12/13/2005, SCRS will reject the return so it can be renumbered and forwarded to KCSPC to be processed as a NMF return.
    If... Then...
    the DOT is missing from Form 8288, line 3, Look in block 1 on the attached Form 8288-A for the DOT. If not present, look for the DOT on an attached document, such as on a withholding certificate letter. See IRM 3.22.261.21.2(6) for instructions.
    the DOT is missing from Field 02B, Correspond with the taxpayer using IDRS Letter 3104C and suspend case to enter AC "3" .
    no response is received from the taxpayer, Enter the "Default DOT" on the Form 8288 and Form 8288-As.

    Note:

    The Default DOT is the first day of the month prior to the IRS received date on Form 8288.

    Example:

    The IRS received date is 09-19-2021, edit 08-01-2021 as the default DOT.

    If... Then...
    the DOT is a future date and is less than one month in the future, SCRS will reject the return to be held in Rejects until it can be processed.
    the DOT is a future date and is one month or more in the future, Correspond with the taxpayer using IDRS Letter 3104C for clarification of the correct DOT and suspend case to enter AC "3" .

  6. When a withholding certificate (approved or rejected) is attached, consider the date on the withholding certificate letter the new DOT. If the taxpayer attaches a withholding certificate to Form 8288, verify the DOT in Field 02B. Line through the incorrect DOT and edit the new corrected DOT above the incorrect DOT and on the Form 8288 (Line 3) and Form 8288-A (Box 1). Copy the corrected Form 8288-A and forward the copy to Code and Edit on Form 4227 to update the Form 8288-A database.

    Exception:

    Letters 3315 and 3318 are not considered Withholding Certificates. The date on these letters are NOT considered the “NEW Date of Transfer”.

    Reminder:

    Do not forget to edit/assign the reduced withholding (Field 02I) and bypass indicator (Field 02H) "1" when one of the seven"Approved" certificates are attached to Form 8288.

    Caution:

    Per Notice 2018-29, with respect to any forms that were required to be filed, or amounts that were due, under section 1446(f) on or before May 31, 2018, no penalties or interest will be asserted if these forms are filed with, and such amounts are paid over to the IRS on or before May 31, 2018. Edit a CCC “R” if the return was filed and amounts paid on or before May 31, 2018.

  7. When a withholding certificate is attached (approved or rejected) and the date of the withholding certificate is in a subsequent year from the original DOT, edit the original DOT on the top right side of the Form 8288-A with the literals “Original DOT...” preceding the date. Copy the corrected Form 8288-A and forward the copy to Code and Edit on Form 4227 to update the Form 8288-A database with the same information. In the “Other (explain)” field of Form 4227, write “Please enter ‘Original DOT...’ in the FIRPTA database”. This will help prevent problems processing the Seller’s individual return.

    Example:

    Forms 8288 and 8288-A have an original DOT of December 1, 2021. Attached to the forms is a withholding certificate letter dated February 1, 2022. Edit “Original DOT 12-01-2021” on the top right side of Forms 8288-A, and in the “Other (explain)” field of Form 4227, write, “Please enter ‘Original DOT 12-01-2021’ in the FIRPTA database”.

  8. The following table contains a list of withholding certificate letters.

    Withholding Certificate Letter Numbers
    • Letter 3307 (SC/CG) Withholding Certificate - Approved Exempt - Early Refund

    • Letter 3308 (SC/CG) Withholding Certificate - Approved Reduced

    • Letter 3309 (SC/CG) Withholding Certificate - Approved Exempt

    • Letter 3310 (SC/CG) Withholding Certificate - Approved Reduced

    • Letter 3311 (SC/CG) Withholding Certificate - Approved Reduced

    • Letter 3312 (SC/CG) Withholding Certificate - Approved Installment Plan

      Caution:

      Whenever Letter 3312 is attached the new DOT to edit will consist of the same Month and Day as on the Letter, but with the current year (e.g., March 29, 2021 edit 03/29/2021). Do not enter a reduced withholding or bypass indicator in Fields 02H and 02I.

      Example:

      Please assume the applicable withholding rate is 10 percent. Installment W/H Certificate is issued March 2, 2020, of which 10 percent ($2,275.00 x 10 percent = $227.50) FIRPTA tax is to be paid on the initial USRPI installment transfer. Subsequent installment transfer may take place on 03/02/2021 ($3,310.00 x 10 percent = $331.00), which means the tax period is 202103 and not 202003. The RDD would be 03/22/2021. If it is timely filed, no penalties or interest will be charged.

    • Letter 3313 (SC/CG) - Disapproved Reject

    • Letter 3314 (SC/CG) - Disapproved Reject

    • Letter 3315 (SC/CG) - Filed Late Rejected

      Caution:

      Letter 3315 is not considered a Withholding Certificate. When attached, the date on this letter is NOT considered the new DOT. Do not edit the DOT and do not edit a reduced withholding or bypass indicator.

    • Letter 3316 (SC/CG) - Disapproved Reject

    • Letter 3318 (SC/CG) - Filed Late Rejected

      Caution:

      Letter 3318 is not considered a Withholding Certificate. When attached, the date on this letter is NOT considered the new DOT. Do not edit the DOT and do not edit a reduced withholding or bypass indicator.

Field 02C - Number of Form 8288-A filed, Line 4

  1. This is a three-position field which must be present.

  2. Valid characters are, Numeric 0-9.

  3. Use the following format for these entries: 001, 002, 010, 011, 999.

    Note:

    Leading zeros are required and the valid range is 001 to 999. This field can never be blank.

  4. If Field 02C is blank, count the number of attached Forms 8288-A. You can tell this by seeing how many people are listed as the transferor (foreign seller) in the "Name of Person subject to withholding block."

    Note:

    The taxpayer must attach a set (2 copies) of each Form 8288-A (Copy A and B) to the Form 8288; however, each such pair of Form 8288-A counts only as 1 Form 8288-A.

    Reminder:

    Correspond with the taxpayer using IDRS Letter 3104C, when the number of Form 8288-As shown on line 4 (Field 02C) of Form 8288, are not attached to the Form 8288, or the amount from box 2, Form 8288-A do not add up to the amount shown in Field 02G, OR the amount from box 3 or 4, Form 8288-A do not add up to the amount shown in Field 02G.

  5. If for any reason this is not possible, correspond for the correct number using IDRS Letter 3104C. However, if there is no reply to the correspondence, then enter "001" in Field 02C.

    Reminder:

    Once the taxpayer has responded with the copies of Form(s) 8288-A, coordinate with the Code and Edit FIRPTA unit so they can record or update the International Web Applications with the Form 8288-A information and mail out Copy B of Form 8288-A to the foreign transferor.

  6. If the number of Forms 8288-A is 1,000 or more, enter "999" in Field 02C.

Field 02F - Amount Subject to Withholding at 21 percent, Part II - Line 5c

  1. This is a 12-position field which may or may not be present if Part II is completed. However, if Part II is used by the taxpayer, either Line 5c (Field 02F), line 5a (Field 02D) or line 5b (Field 02E) must have an entry.

    Caution:

    When Field 01G is a "2" then a 21 percent tax rate (or 35 percent with a date of transfer before January 1, 2018) is used to calculate Field 02G.

  2. Valid characters are Numeric 0-9, and is entered in DOLLARS and CENTS. There is no tolerance for this field, so it will come out to ERS.

  3. If Field 02F is blank, look at the attached Forms 8288-A and total the amounts shown in box 4 of Form 8288-A. Enter this total in Field 02F, of Part II.

    Note:

    If Fields 02F and 02G are both zero, and the Form 8288-As reflect zero in box 2 or 3, then the return is not required to be filed. Use Action Code "6" and enter $1.00 in Field 02F (leave Field 02H and 02F blank).

  4. If you are unable to determine the "Amount Subject to Withholding at 21 percent" on the attached Forms 8288-A, then correspond for the information using IDRS Letter 3104C.

  5. If no response is received, divide the amount in Field 02G by 21 percent (or 35 percent if the DOT is before January 1, 2018), and enter the result in Field 02F (delete entry in Fields 02H and 02I). Use AC "1" and send TPNC 01.

    Example:

    Field 02G = $25,200.00 divide by .21 = $120,000.00. Enter 12000000, in Field 02F, Part II.

  6. Field 02F is invalid if the entry in Field 01G is "1" . Field 02F is valid only if 01G is a "2" .

    1. If Part II is used, change 01G from "1" to "2" .

    2. If Part I is used, delete the entry in 02F and enter it in either Field 02E or Field 02D depending on the date of disposition and amount realized (see IRM 3.22.261.1.1.1(8), Form 8288 Background, for specific information), and make 01G "1" .

Field 02E - Amount Subject to Withholding at 10 percent, Line 5b, Part I and Part II

  1. This is a 12-position field which must be present if Line 5a in Part I or Lines 5a or 5c in Part II have no entries.

    Caution:

    When Field 01G is a "1" , a 10 percent tax rate is used to calculate Field 02G for Line 5b. However, if Line 5a contains an entry, a 15 percent tax rate should be used to calculate Field 02G.

  2. Valid characters are Numeric 0-9, and is entered in DOLLARS and CENTS. There is no tolerance for this field, so it will come out to ERS.

  3. This field must be significant (positive) if Part I is used.

  4. If Field 02E is blank, look at the attached Forms 8288-A and total the amounts shown in the Amount Realized box, which is box 3 on Form 8288-A. Enter this total in Field 02E.

    Note:

    If Fields 02E and 02G are both zero, and the Form 8288-As reflect zero in box 2 or 3, then the return is not required to be filed. Use Action Code "6" and enter $1.00 in Field 02E (leave Field 02H and 02I blank).

  5. If you are unable to determine the "Amount Realized" on the attached Forms 8288-A, then correspond for the information using IDRS Letter 3104C.

  6. If no response is received, and the amount withheld is for a disposition prior to February 17, 2016, or the sale of a personal residence where the amount realized is $1 million or less, divide the amount in Field 02G by 10 percent. Enter the result in Field 02E (delete entry in Fields 02H and 02I). Use Action Code "1" and send TPNC 01 Otherwise, divide the amount in Field 02G by 15 percent, and enter the result in Field 02E (delete entry in Fields 02H and 02I). Use Action Code "1" and send TPNC 01.

    Example:

    Field 02G = $32,200.00 Divide by .10 = $322,000.00. Enter 32200000 in Field 02E.

    Example:

    Field 02G = $75,000.00 Divide by .15 = $500,000.00. Enter 50000000 in Field 02D.

Field 02D - Amount Subject to Withholding at 15 percent, Line 5a, Part I and Part II

  1. This is a 12-position field which must be present if Line 5b in Part I or Lines 5b or 5c Part II have no entries.

  2. Valid characters are Numeric 0-9, and is entered in DOLLARS and CENTS. There is no tolerance built into the program for this field, so it will come out to ERS.

  3. If Field 02D is blank, look at the attached Forms 8288-A and total the amounts shown in Amount Realized box, (box 3 of the Form 8288-A). Enter this total in Field 02D, of Part II. See "Note" in IRM 3.22.261.21.5 (4), Field 02E - Amount Subject to Withholding at 10 percent, Line 5b, Part I and Part II, for more instructions.

  4. If you are unable to determine the "Amount Subject to Withholding at 15 percent" on the attached Forms 8288-A, then correspond for the information using IDRS Letter 3104C.

  5. If no response is received, and the amount withheld is for a disposition after February 16, 2016, and it’s not for the sale of a personal residence where the amount realized is $1 million or more, divide the amount in Field 02G by 15 percent. Enter the result in Field 02D (delete entry in Fields 02H and 02I). Use AC "1" and send TPNC 01. Otherwise, divide the amount in Field 02G by 10 percent, and enter the result in Field 02E (delete entry in Fields 02H and 02I). Use Action Code "1" and send TPNC 01.

    Example:

    Field 02G = $75,000.00 Divide by .15 = $500,000.00. Enter 50000000 in Field 02D.

    Example:

    Field 02G = $32,200.00 Divide by .10 = $322,000.00. Enter 32200000 in Field 02E.

Field 02G - Total Tax, Line 6 - Part I or Line 6 - Part II

  1. This is a 12-position field that must be present. This Field is found on line 6, in Part I, or Line 6, in Part II.

    Caution:

    If the tax in Field 02G is "Zero" , because of a withholding certificate, then the taxpayer has no filing requirement with the IRS. Enter Action Code "0" to accept Zero tax. There is no tolerance built into the program for this field, so it will come out to ERS.

  2. The valid characters are numeric 0-9, and must be in dollars and cents.

  3. This field contains the amount of FIRPTA or Section 1446(f) tax due (the amount of money required to be withheld at source from the transaction sale of the USRPI or dispositions of non-publicly traded partnership interests).

    Note:

    If the taxpayers calculated tax is more than 10 percent, 15 percent, or 21 percent of the amount realized (and that is the amount the taxpayer paid to the IRS), but more than the underprint amount, accept the taxpayers figure using Action Code "0" .

  4. Field 02G cannot be less than zero ("0" ).

    IF THEN
    Field 02G is a negative entry, Review Form 8288 for the correct amount to enter into Field 02D, 02E, or 02F so the computer can re-calculate the tax. Use Action Code "6" to correct the entry in Field 02G.
    an entry appears in Field 02D, Part I Multiply the amount in Field 02D, Part I by 15 percent for dispositions after February 16, 2016. See IRM 3.22.261.1.1(8), Background, and using AC 6 enter the correct tax amount into Field 02K.
    an entry appears in Field 02E, Part I Multiply the amount in Field 02E, Part I by 10 percent for dispositions prior to February 17, 2016 and certain post-February 16, 2016 dispositions. See IRM 3.22.261.1.1(8), Background, and using AC "6" enter the correct tax amount into Field 02K.
    Form 8288 reflects a negative entry, and you are unable to correct it by looking at the Form 8288-A, Correspond with the taxpayer for the information via IDRS Letter 3104C. Enter AC "3" .
    No response is received, and an amount was paid with the return, Enter the amount of the remittance into Field 02K and change 02G to "0" . On Loop, use AC "1" and TPNC 01.

  5. Field 02G will underprint when it is less than 10 percent for dispositions prior to February 17, 2016 and certain post-February 16, 2016 dispositions, or underprint when it is less than 15 percent for dispositions after February 16, 2016, or less than 21 percent (Field 02F Part II), and both Fields 02H and 02I are not "blank," or do not contain a "1" .

    Note:

    There is no tolerance for this field, so it will come out to ERS.

    "When Field 01G is a 1..." Error Situation occurs when... Correction of Error
    For dispositions prior to February 17, 2016 and certain post-February 16, 2016 dispositions, Field 02G is calculated by multiplying the significant entry in Field 02E Part I by 10 percent.

    Note:

    The error is set by placing a "2" in Field 02H and leaving Field 02I "blank. "

    Field 02G will underprint when the tax is not equal to 10 percent of the entry in Field 02G Part I, and Field 02H and 02I are blank, or a "1" is not present in Fields 02H and 02I.
    1. If no approved withholding certificate is attached, enter the underprint tax in Field 02K, and close with AC "6" .

    2. Send TPNC 02 using AC "1" on the Loop register.

    Note:

    If an approved withholding certificate is attached, enter a "1" , in Fields 02G and 02I.

    For dispositions after February 16, 2016, Field 02G is calculated by multiplying the significant entry in Field 02D Part I by 15 percent.

    Note:

    The error is set by placing a "2" in Field 02H and leaving Field 02I "blank. "

    Field 02G will underprint when the tax is not equal to 15 percent of the entry in Field 02D Part I, and Field 02H and 02I are blank, or a 1 is not present in Fields 02H and 02I.
    1. If no approved withholding certificate is attached, enter the underprint tax in Field 02K, and close with AC "6" .

    2. Send TPNC 90 using AC "1" on the Loop register. Please see IRM 3.22.261.20.15(6), Field 01S - Taxpayer Notice Code, for more information on using TPNC 90

    Note:

    If an approved withholding certificate is attached, enter a "1" , in Fields 02H and 02I.

    "When Field 01G is a 2..." Error Situation occurs when... Correction of Error
    Field 02G is calculated by multiplying the significant entry in Field 02F Part II by 21 percent.

    Note:

    The error is set by placing a "2" in Field 02H and leaving Field 02I "blank."

    Field 02G is calculated by multiplying the significant entry in Field 02F Part II by 21 percent.

    Note:

    The error is set by placing a "2" in Field 02H and leaving Field 02I "blank."

    1. If no approved withholding certificate is attached, enter the underprint tax in Field 02K, and close with an AC "6" .

    2. Send TPNC 02 using AC "1" on the Loop Register.

    Field 02G is calculated by multiplying the significant entry in Field 02F Part II by 21 percent.

    Note:

    The error is set by placing a "2" in Field 02H and leaving Field 02I "blank."

    Field 02G will underprint when the tax is not 21 percent of the entry in Field 02F Part II, and a "1" is not present in Field 02J. Field 02H is not valid here.
    1. If an approved withholding certificate is attached, enter a "1" , in Fields 02H and 02I.

    2. Enter the underprint tax in Field 02K, and enter AC "1" and TPNC 01.

    For dispositions prior to February 17, 2016 and certain post-February 16, 2016 dispositions, Field 02G is calculated by multiplying the significant entry in Field 02E Part II by 10 percent.

    Note:

    The error is set by placing a "2" in Field 02H and leaving Field 02I "blank."

    Field 02G will underprint when the tax is not equal to 10 percent of the entry in Field 02E Part II, and Field 02H and 02I are blank, or a "1" is not present in Fields 02H and 02I.
    1. If no approved withholding certificate is attached, enter the underprint tax in Field 02K, and close with an AC "6" .

    2. Send TPNC 02 with AC "1" on the Loop Register.

    Note:

    If an approved withholding certificate is attached, enter a "1" , in Fields 02H and 02I.

    For dispositions after February 16, 2016, Field 02G is calculated by multiplying the significant entry in Field 02F Part II by 15 percent.

    Note:

    The error is set by placing a "2" in Field 02H and leaving Field 02I "blank."

    Field 02G will underprint when the tax is not equal to 15 percent of the entry in Field 02F Part II, and Field 02H and 02I are blank, or a 1 is not present in Fields 02H and 02I.
    1. If no approved withholding certificate is attached, enter the underprint tax in Field 02K, and close with an AC "6" .

    2. Send TPNC 90 with AC "1" on the Loop Register. Please see IRM 3.22.261.20.15 (6), Field 01S - Taxpayer Notice Code, for more information on using TPNC 90.

    Note:

    If an approved withholding certificate is attached, enter a "1" , in Fields 02H and 02I.

Field 02G) - Total Tax Underprint

  1. This is a 12-position money field, showing the computer calculation of the FIRPTA or Section 1446(f) tax, when different from the taxpayer’s figure.

    Note:

    This field cannot be less than ".00."

  2. Field 02G is in dollars and cents.

  3. Field 02G will underprint:

    1. The computer multiplies the amount in Field 02D, 02E, or 02F to determine the tax in Field 02G.

    2. If the underprint is greater than 10 percent for dispositions prior to February 17, 2016 and certain post-February 16, 2016 dispositions of Field 02E, 15 percent for dispositions after February 16, 2016 of Field 02D in Part I or Part II, or 21 percent of Field 02F in Part II, then assign TPNC 01. See Figure 3.22.261-7.

  4. Accept the taxpayers (AC "0" ) figure if the difference in tax and the computer underprint is NOT greater than ≡ ≡ ≡ ≡.

Field 02H - Bypass Indicator (BPI)

  1. This is a one-position field which may or may not be present.

  2. The valid characters are 1, 2 and Blank.

  3. The Bypass Indicator is edited in the outside right margin of Part I, Line 6 or Part II, Line 6. See IRM 3.22.261.21.10 (3), Field 02I - Reduced Withholding Amount Indicator (RWI), Line 5c - Part I, or Line 5d - Part II.

  4. Definition:

    • "1" - tax is less than 10 percent, 15 percent, or 21 percent and is substantiated with an approved withholding certificate. No Math Error.

    • "2" - tax is less than 10 percent, 15 percent, or 21 percent and is unsubstantiated with no copy of an approved withholding certificate attached to the return. Set Math Status Code 3.

    • "blank" - tax is at 10 percent, 15 percent, or 21 percent and no error is present.

    If Then
    Tax is at 10 percent, 15 percent, or 21 percent Leave BPI "blank."
    Tax is less than 10 percent, 15 percent, or 21 percent and an approved reduced withholding certificate is attached Enter a BPI "1" with an AC "6" .
    In the case of an IRC 1446(f)(1), tax is less than 10 percent and the taxpayer places a check on line 5c or line 5d to claim the reduced withholding

    Note:

    IRC 1446(f)(1) allows the transferee to pay a lesser amount without an approved Withholding Certificate (W/H Cert). These returns include the statement "Section 1446(f)(1) withholding" (or something similar) at the top of Form 8288 and 8288-A. However, the transferee must place a check on lines 5c or 5d to claim the reduced withholding.

    Enter a BPI "1" with an AC "6" .
    Tax is less than 10 percent, 15 percent, or 21 percent and no approved reduced withholding certificate is attached Enter BPI "2" with an AC "6."

Field 02I - Reduced Withholding Amount Indicator (RWI), Line 5c - Part I, or Line 5d - Part II

  1. This is a one-position field which may or may not be present.

  2. Valid characters are 1 and blank.

  3. Description:

    • "1" = The checkbox on Line 5c, Part I is checked and there is a Withholding Certificate attached to the Form 8288 (i.e., W/H Cert. SC/CG Letter 3307 to Letter 3312, and Letter 3497) or an entry on line 5d Part II.

    • "Blank" = The checkbox is not checked, or NO Withholding Certificate is attached or required, or no entry on line 5d Part II.

    Reminder:

    Enter the reduced withholding and bypass indicator "1" when one of the seven "Approved" certificates are attached to Form 8288:

    Withholding Certificate Letter Numbers
    • Letter 3307 (SC/CG) Withholding Certificate - Approved Exempt

    • Letter 3308 (SC/CG) Withholding Certificate - Approved Reduced

    • Letter 3309 (SC/CG) Withholding Certificate - Approved Exempt

    • Letter 3310 (SC/CG) Withholding Certificate - Approved Reduced

    • Letter 3311 (SC/CG) Withholding Certificate - Approved Reduced

    • Letter 3312 (SC/CG) Withholding Certificate - Approved Installment Plan

    • Letter 3313 (SC/CG) Withholding Certificate - Disapproved Reject

    • Letter 3314 (SC/CG) Withholding Certificate - Disapproved Reject

    • Letter 3315 (SC/CG) Withholding Certificate - Filed Late Rejected

    • Letter 3316 (SC/CG) Withholding Certificate - Disapproved Reject

    • Letter 3318 (SC/CG) Withholding Certificate - Filed Late Rejected

    Otherwise, do not enter anything. The tax is assessed at the full 10 percent, 15 percent, or 21 percent amount for the Disapproved, Late or Installment letters.

  4. If Field 02D or 02E is significant, and the amount in Field 02G is less than 10 or 15 percent of Field 02D or 02E Part I or II, or 21 percent of Field 02F Part II, then review Form 8288 to look for a copy of a withholding certificate. If one is attached, then enter a "1" in Field 02H and 02I with an AC "6" . Otherwise, leave "blank."

    Reminder:

    If a withholding certificate is attached, then the date of the withholding certificate Letter must be the Date of Transfer in Field 02B, and the tax period in Field 01B must have the same YYYYMM as the DOT.

  5. Leave Fields 02H and 02I "blank" when a withholding certificate is not attached, and Field 02G, (Part I or Part II) is 10 or 15 percent of the amount realized in Field 02E or 02D (Part I or II).

  6. Leave Fields 02H and 02I "blank" when a withholding certificate is not attached, and Field 02G, (Part I or Part II) is 21 percent of the amount subject to withholding in Field 02F Part II with an AC "6" .

Field 02J - Large Trust Election, Part II - Line 5e

  1. This is a one-position field which may or may not be present.

  2. The valid characters are:

    • "1" = checkbox is marked, calculate tax at 21 percent.

    • "blank" = Not Applicable.

  3. The field is located only in Part II on line 5e.

  4. Enter a "1" in Field 02J when the large trust election checkbox is marked. Enter AC "6" .

    Note:

    This Field will affect the math calculation when Field 02G is not 21 percent of Field 02F Part II and no withholding certificate is attached.

    Figure 3.22.261-7

    This is an Image: 39747007.gif

    Please click here for the text description of the image.

Field 02K - Total Tax Verified Field

  1. This is a 12-position field which may or may not be present.

  2. Field 02K is used to override the taxpayers computed tax calculation when different than the computer calculation (underprint).

Form 8288 - Part I and Part II Roadmap of Field Designators

Exhibit3.22.261-1Form 8288 - Part I Transcription LinesThis is an Image: 39747005.gif

Please click here for the text description of the image.

Computer Condition Codes

Exhibit3-22-261-2Form 8288 - Computer Condition CodesCCC
Codes Explanation
D When reasonable cause exists for waiver of the failure to pay penalty.
O When there is an indication that a manual refund will be issued.
R To indicate a delinquent return with reasonable cause. Do not assess a failure to file penalty.
U Unprocessable transaction or document.
W Indicates that the return has been cleared by Statutes.
X Credit freeze.
3 No Reply to Correspondence:
To bypass validation of the correspondence received date when the taxpayer does not reply to IRS-generated correspondence.
4 Indicates IRS prepared returns under IRS 6020(b).
7 When denying the reasonable cause explanation for filing and paying late.

Caution:

When using "CCC 7" do not use "CCC D or CCC R"

♦Province, State, and Territory Abbreviations♦

Exhibit3.22.261-3Province, State and Territory Abbreviations
Australia State Abbreviation
Australian Capital Territory ACT
New South Wales NSW
Northern Territory NT
Queensland QLD
South Australia SA
Tasmania TAS
Victoria VIC
Western Australia WA
Brazil State Abbreviation
Acre AC
Alagoas AL
Amapa AP
Amazonas AM
Bahia BA
Ceara CE
Distrito Federal DF
Esperito Santo ES
Goias GO
Maranhao MA
Mato Grosso MT
Mato Grosso do Sul MS
Minas Gerais MG
Parana PR
Paraiba PB
Para PA
Pernambuco PE
Piaui PI
Rio Grande do Norte RN
Rio Grande do Sul RS
Rio de Janeiro RJ
Rondonia RO
Roraima RR
Santa Catarina SC
Sergipe SE
Sao Paulo SP
Tocantins TO
Canada Province/Territory Abbreviation
Alberta AB
British Columbia BC
Manitoba MB
New Brunswick NB
Newfoundland and Labrador NL
Northwest Territories NT
Nova Scotia NS
Nunavut NU
Ontario ON
Prince Edward Island PE
Quebec QC
Saskatchewan SK
Yukon YT
Cuba Provincias Abbreviation
Camaguey CG
Ciego de Avila CA
Cienfuegos CF
Ciudad di La Habana CH
Gramma (Bayamo) GR
Guantanamo GT
Holguin HO
La Habana HA
Matazas MT
Municipio Especial Isla de la Juventud IJ
Pinar del Rio PR
Sancti Spiritus SS
Santiago de Cuba SC
(Victoria de) Las Tunas LT
Villa Clara VC
Italy Provincia Abbreviation
Agrigento AG
Alessandria AL
Ancona AN
Aosta/Aoste AO
Arezzo AR
Ascoli Piceno AP
Asti AT
Bari BA
Belluna BL
Beneveto BN
Bergamo BG
Biella BI
Bologna BO
Bolzano BZ
Brescia BS
Brindisi BR
Cagliari CA
Caltanisetta CL
Campobasso CB
Caserta CE
Catania CT
Catanzaro CZ
Chieti CH
Como CO
Cosenza CS
Cremona CZ
Crotone KR
Cuneo CN
Enna EN
Ferrara FE
Firenze FI
Foggia FG
Forli FO
Frosinone FR
Genova GE
Gorizia GO
Grosseto GR
Imperia IM
Isernia IS
L'Aquila AQ
La Spezia SP
Latina LT
Lecce LE
Livorno LI
Lodi LO
Lucca LU
Macerata MC
Mantova MN
Massa-Carrara MS
Matera MT
Messina ME
Milano MI
Modena MO
Napoli NA
Novara NO
Nuoro NU
Oristano OR
Padova PD
Palermo PA
Parma PR
Pavia PV
Perugia PG
Pesaro-Urbino PS
Pescara PE
Piacenza PC
Pisa PI
Pistoia PT
Pordenone PN
Potenza PZ
Prato PO
Ragusa RG
Pavenna RA
Peggio de Calabria RC
Reggio nell'Emilia RE
Rieti RI
Rimini RN
Roma RM
Rovigo RO
Salerno SA
Sassari SS
Savona SV
Siena SI
Siracusa SR
Sondrio SO
Taranto TA
Teramo TE
Terni TR
Torino TO
Trapani TO
Trento TN
Treviso TV
Trieste TS
Udine UD
Varese VA
Venezia VE
Verbania VB
Vercelli VC
Verona VR
Vibo Valentia VV
Vincenza VI
Viterbo VT
Mexico State Abbreviation
Aguascalientes AGS
Baja California Norte BCN
Baja California Sur BCS
Campeche CAM
Chiapas CHIS
Chihuahua CHIH
Coahuila COAH
Colima COL
Distrito Federal DF
Durango DGO
Guanajuato GTO
Guerrero GRO
Hidalgo HGO
Jalisco JAL
Mexico MEX
Michoacan MICH
Morelos MOR
Nayarit NAY
Nuevo Leon NL
Oaxaca OAX
Puebla PUE
Queretaro QRO
Quintana ROO QROO
San Luis Potosi SLP
Sinaloa SIN
Sonora SON
Tabasco TAB
Tamaulipas TAMPS
Tlaxcala TLAX
Veracruz VER
Yucatan YUC
Zacatecas ZAC
The Netherlands Province Abbreviation
Drenthe DR
Flevoland FLD
Friesland FR
Gelderland GLD
Groningen GN
Lemburg LB
North Brabant NB
North Holland NH
Overijssel OV
South Holland ZH
Utrecht UT
Zeeland SLD

Sample Withholding Certificate and Blank Form 8288-B

Exhibit3.22.261-4Sample Withholding Certificate and Blank Form 8288-BThis is an Image: 39747080.gif

Please click here for the text description of the image.

This is an Image: 39747804.gif

Please click here for the text description of the image.

♦Potential Frivolous Arguments for Examination Review♦

Exhibit3.22.261-5Potential Frivolous Arguments for Examination Review

Potential Frivolous Arguments

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

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

  3. Files a return with several types of rambling dialogue or confusing arguments that no one could reasonably view as a good faith effort to follow the law.

  4. Files a return that tries to send some type of message or protest to the IRS, but does not include sufficient identifying information for the IRS to either determine the identity of the taxpayer or correspondent or return address.

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

Note:

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

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

Note:

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

♦U.S. Possessions ZIP Codes♦

Exhibit3.22.261-6U.S. Possessions ZIP Codes

American Samoa (AS)

City ZIP Code City ZIP Code
Faga'itua 96799 Olosega Manua' 96799
Leone 96799 Pago Pago 96799
 

Federated States of Micronesia (FM)

City ZIP Code City ZIP Code
Chuuk 96942 Pohnpei 96941
Kosrae 96944 Yap 96943
 

Guam (GU)

City ZIP Code City ZIP Code
Agana 96910 Tamuning 96931
Inarajan 96917 Umatac 96915
Merizo 96916 Yona 96915
 

Marshall Islands (MH)

City ZIP Code City ZIP Code
Ebeye 96970 Majuro 96960
 

Northern Mariana Islands (MP)

City ZIP Code City ZIP Code
Capitol Hill 96950 Saipan 96950
Rota 96951 Tinian 96952
 

Palau (PW)

City ZIP Code City ZIP Code
Koror 96940 Palau 96940
 

Puerto Rico (PR)

City ZIP Code City ZIP Code
Adjuntas 00601 Las Marias 00670
Aguada 00602 Las Piedras 00771
Aguadilla 00603 Levittown 00950
Aguas Buenas 00703 Loiza 00772
Aguirre 00704 Loiza Street Station 00936
Aibonito 00705 Luquillo 00773
Anasco 00610 Manati 00674
Angeles 00611 Maricao 00606
Arecibo 00612 Maunabo 00707
Arroyo 00714 Mayaguez 00680
Bajadero 00616 Mercedita 00715
Barceloneta 00617 Minillas 00940
Barranquitas 00794 Moca 00676
Bo Obrero 00935 Morovis 00687
Bayamon 00956 Naguabo 00718
Boqueron 00622 Naranjito 00719
Cabo Rojo 00623 Orocovis 00720
Caguas 00725 Palmer 00721
Camuy 00627 Patillas 00723
Canovanas 00729 Penuelas 00624
Caparra Heights 00920 - 00922 Ponce 00731
Carolina 00979 - 00987 Puerta de Tierra 00906
Catano 00962 Puerta Real 00740
Cayey 00736 Punta Santiago 00741
Ceiba 00735 Quebradillas 00678
Ciales 00638 Ramey 00603
Coamo 00769 Rincon 00677
Comerio 00782 Rio Blanco 00744
Corozal 00783 Rio Grande 00745
Coto Laurel 00780 Rio Piedras 00925, 00927, 00928
Culebra 00775 Rosario 00636
Dorado 00646 Sabana Grande 00637
Ensenada 00647 Sabana Hoyos 00688
Fajardo 00738 Sabana Seca 00952
Fernandez Juncos 00936 Saint Just 00978
Florida 00650 Salinas 00751
Fort Buchanan 00934 San Antonio 00690
Garrochales 00652 San German 00683
Guanica 00653 San Juan 00936
Guayama 00784 San Lorenzo 00754
Guayanilla 00656 San Sebastian 00685
Guaynabo 00965 - 00971 Santa Isabel 00757
Gurabo 00778 Santurce 00936
Hatillo 00659 Toa Alta 00953
Hato Rey Station 00936 Toa Boa 00949
Humacao 00791 Trujillo Alto 00976
Isabela 00662 Utuado 00641
Jayuya 00664 Vega Alta 00692
Juana Diaz 00795 Vega Baja (box 1-9049) 00694
Juncos 00777 Vieques 00765
Lajas 00667 Villalba 00766
La Plata 00786 Yabucoa 00767
Lares 00669 Yauco 00698
 

Virgin Islands - U.S. (VI - Entity Section) (VQ - Other than Entity Section)

City ZIP Code City ZIP Code
Charlotte Amalie 00802 Saint Croix 00820
Christiansted 00820 Saint John 00830
Cruz Bay 00830 Saint Thomas 00805
Downtown 00840 Sunny Isle 00850
Frederiksted 00840 Veterans Annex 00820
Kingshill 00850    

Glossary and Acronyms

Glossary and Acronyms

Glossary

Glossary Definition
Action Codes Numeric codes edited in the bottom center margin of a return to reject documents and identify the reason the document has been rejected.
Action Trail A notation in the lower left side margin on page 1 of a return which indicates or explains an action taken.
Amended Return A return that changes information submitted on a previously filed return.
Audit Code An alpha character edited in the right bottom margin of a return to identify a specific condition for the Examination Operation.
Batch A group of blocks of documents. A batch cannot contain more than 20 blocks.
Block A group of up to 100 documents with consecutive DLNs containing the same block number (digits 9 through 11 of the DLN). (A block cannot contain more than 100 documents since the documents are numbered from 00 to 99.)
Business Master File (BMF) A magnetic tape file containing information about taxpayers filing business returns and related documents.
Calendar Year A tax year that begins January 1 and ends on December 31.
Centralized Authorization File (CAF) Computerized system of records which houses authorization information from Powers of Attorney (POAs), Tax Information Authorizations (TIAs) and state tax returns. The CAF system contains two types of records:
  1. Taxpayer records

  2. Representative records

Check Digits Two alpha characters used to identify the tax account.
Coding Placing symbols that have specific meanings on returns. These codes direct the computer to perform certain programmed functions.
Computer Condition Code (CCC) A single alpha or numeric character edited on a return which either identifies a special condition or directs the computer to take a specific programmed action. CCCs are posted to the Master File.
Correspondence Action Sheets (CAS) Forms used to request information from the taxpayer. Some are mailed to the taxpayer with the return; others generate a letter.
Current Year Return For processing in 2022, a Current Year Return is a return filed for tax year 2021.
Data All information reported or coded on forms, schedules, and attachments.
Delinquent Return A return filed after the due date without an approved extension.
Document Written information, (e.g., forms, schedules and attachments).
Document Locator Number A fourteen-digit number assigned to every return and document input through the Automatic Data Processing (ADP) system.
Dummying The act of transferring information provided by the taxpayer onto a required transcribed form/schedule.
Editing Preparing returns and attachments for data entry or other transcription processes by correcting entries and entering edit marks.
Employer Identification Number A nine-digit number that identifies the account of a business taxpayer on the Business Master File.
Entry Any type of mark entered by, or edited for, the taxpayer.
Error Resolution System (ERS) A system for the examination and correction of returns rejected due to taxpayer and processing errors.
Fiscal Year A tax year which ends on a date other than December 31.
Form An IRS document identified by a number, e.g., Form 1040.
Frivolous Filer/Non-Filer Filers and non-filers who use certain types of tax avoidance arguments which are not supported by law.
Hardship An indication of severe consequences for a taxpayer caused by the normal application of IRS regulations and procedures. Although a determination of hardship is highly subjective, the work leader must be consulted if a particular situation may be considered for referral to the Taxpayer Advocate Service (TAS).
Individual Master File (IMF) A magnetic tape file containing information about taxpayers filing individual income tax returns and related documents.
Individual Taxpayer Identification Number (ITIN) A unique nine-digit number assigned by the IRS to individuals who must file a U.S. tax return or are listed as a spouse or a dependent and who do not have and cannot obtain a valid Social Security Number. Taxpayers obtain an ITIN by filing a Form W-7.
Integrated Data Retrieval System (IDRS) A system that enables employees in the area/territory offices and the campuses to have visual access to certain computer-based information in taxpayer accounts.
Integrated Submission and Remittance Processing System (ISRP) A computerized system which will convert paper tax and information documents and remittances received by IRS into perfected electronic records of taxpayer data.
International Return A return on which income is excluded or not reported because of revenues from, payments to, or residence in a foreign country.
Julian Date A calendar date expressed as the number of days since the beginning of the year. For example, February 1 is Julian Date 032.
Jurat The perjury statement required in the signature area of a tax return, form, or schedule.
Master File A magnetic tape record which contains taxpayer accounts.
Misblocked Return A Form 1040, Form 1040A or Form 1040EZ, found in the wrong type of block or batch. For example, a Form 1040A found in a batch of Forms 1040.
Misfiled Return A Form 1040, Form 1040A or Form 1040EZ, filed when a BMF form should have been filed instead.
Name Control The first four characters of the taxpayer's surname. Also used for dependents, qualifying children, child care providers, etc.
Non-Resident Alien (NRA) An alien individual (not a U.S. citizen), who does not meet either the green card test or the substantial presence test for the calendar year.
Numeric Character A number or numeral between 0 and 9, inclusive.
Perfecting Making returns acceptable for data entry through editing procedures.
Pipeline The areas in the IRS Submission Processing Campus that process a return from the time it is received until the data from the return is entered to an account in the IRS' main computer. These areas include Receipt and Control, Code and Edit, Data Conversion, Error Resolution, Rejects, and Unpostables.
Power of Attorney (POA) A form authorizing a representative to perform certain acts on the taxpayer's behalf.
Paid Preparer Tax Identification Number (PTIN) Paid preparer tax identification number.
Primary Taxpayer The taxpayer who is listed first on the name line caption of a joint return, regardless of whether that taxpayer is male or female.
Primary Taxpayer Identification Number The TIN associated with the taxpayer who is listed first on the name line of the caption.
Prior Year Return A return for a tax period prior to the current tax year.
Processable Return A return which meets all the requirements for ISRP input.
Received Date Date a return was received by the IRS. If the date is unknown and a Received Date is required, there is a prescribed formula for determining the date to edit as the Received Date. (Required on Amended, Fiscal Year, Short Year, Prior Year, and Delinquent Returns.)
Re-Input Document A document that did not post to the Master File when originally entered and is now being entered again with a Form 3893, Re-Entry Document Control.
Return A legal document used by the taxpayer to report income, deductions, and tax liability.
Return Due Date The date in which the return is due to the IRS.
Return Processing Code (RPC) A single character edited on a return to direct the computer to take specific actions in processing the return. This code does not post to the Master File.
Schedule An IRS document identified by alpha characters or numbers (e.g., Schedule B, Schedule 8812).
Secondary Taxpayer The taxpayer who is listed second on the name line caption of a joint return, regardless of whether that taxpayer is male or female.
Secondary Identification Number The TIN associated with the taxpayer whose name appears second on a joint return.
Significant Entry Any positive or negative number or dollar amount other than zero.
Social Security Number A nine-digit number identifying the account of an individual on the Individual Master File.
Statute Return A return filed for a Tax Period more than three years prior to the current Tax Period.
Suffix Information added at the end of a word, phrase, or series of numbers. For instance, a title may be edited as a suffix to a name as in James Canary, Exec.
Tax Examiner (TE) Stamp A rubber stamp containing a unique identifying number of the Code & Edit tax examiner working the return.
Tax Period The time covered by a particular return represented by the year and month in which the period ends. For example, 2112 stands for the tax year ending December 31, 2021.
Taxpayer Advocate Service An independent organization within the IRS whose employees help taxpayers who are experiencing economic harm, who are seeking help in resolving tax problems that have not been resolved through normal channels, or who believe than an IRS system or procedure is not working as it should.
Taxpayer Identification Number (TIN) A nine-digit number which identifies the account of an individual or business taxpayer. The TIN may be a Social Security Number (SSN), an Individual Taxpayer Identification Number (ITIN), Adoption Taxpayer Identification Number (ATIN) or an Employer Identification Number (EIN).
Third Party Designee Person given permission by the taxpayer to discuss their current year return processing issues with the IRS.
Transaction Code (TC) A three-digit numeric code defining the precise nature of an action posted to the Master File.
Transcription The process of transferring information from documents to a computer-readable form. Also called data conversion, input, and entry.
Unpostables Data which cannot be entered successfully to an account at the Martinsburg Computing Center (MCC) and is returned to the Campus for corrective action.
Unprocessable Document A document which cannot be perfected for the ADP system, usually because of incomplete information.
 

Acronyms

Acronym Definition
ADM Administrator
AKA Also Known As
AP Approved Paragraph
APO Army Post Office
ASED Assessment Statute Expiration Date
AUSPC Austin Submission Processing Campus
AWS Alternative Work Schedule
BMF Business Master File
BOB Block Out of Balance
CAF Centralized Authorization File
CAS Correspondence Action Sheet
CCC Computer Condition Code
CLS Common Law Spouse
COMM Commissioner
CONS Conservator
CP Computer Paragraph
CPA Certified Public Accountant
CSPC Cincinnati Submission Processing Campus
CY Calendar Year
DECD Deceased
DLN Document Locator Number
DOD
  • Date of Death

  • Department of Defense

DPO Diplomatic Post Office
EGA Ethics in Government Act
EIN Employer Identification Number
ELF Electronic Filing
ERS Error Resolution System
EXEC Executor
FEC Foreign Employer Compensation
FICA Federal Insurance Contribution Act
FMV Fair Market Value
FPO Fleet Post Office
FSPC Fresno Submission Processing Campus
FRP Frivolous Return Program
FTD Federal Tax Deposit
FTF Failure to File
FTP Failure to Pay
FY Fiscal Year
GDN Guardian
IDRS Integrated Data Retrieval System
IDT Identity Theft
IMF Individual Master File
IRC Internal Revenue Code
IRM Internal Revenue Manual
IRP Information Returns Processing
IRS Internal Revenue Service
IRSN Internal Revenue Service Number
ISRP Integrated Submission and Remittance Processing System
ITIN Individual Taxpayer Identification Number
IVO Integrity and Verification Operation
KCSPC Kansas City Submission Processing Campus
LAFCP Living Abroad Foreign Care Provider
LEM Law Enforcement Manual
MCC Martinsburg Computing Center
MeF Modernized e-File
MFT Master File Transaction
NCOA National Change of Address
NO National Office
NR No Record
NRA Non-Resident Alien
OSPC Ogden Submission Processing Campus
PAO Process As Original
PCD Program Completion Date
PDS Private Delivery Service
PER REP Personal Representative
POA Power of Attorney
POD Post of Duty
PPR
  • Personal Property Rental

  • Payment Plan Request

P-TIN Primary Taxpayer Identification Number
Prep. TIN (PTIN) Paid Preparer Tax Identification Number
PY Prior Year
RICS Return Integrity and Compliance Services
RPC Returns Processing Code
RTN Routing Transit Number
SERP Servicewide Electronic Research Program
SPC
  • Special Processing Code

  • Submission Processing Center

SFR Substitute for Return
SSN Social Security Number
TAS Taxpayer Advocate Service
TC Transaction Code
TE Tax Examiner
TIN Taxpayer Identification Number
TP Taxpayer
TR Trustee
TY Tax Year
USPS United States Postal Service