4.81.12 Compliance Review of Form 8038-CP

Manual Transmittal

September 26, 2018

Purpose

(1) This transmits revised IRM 4.81.12, Tax Exempt Bonds (TEB) Examination Program and Procedures, Compliance Review of Form 8038-CP.

Material Changes

(1) Added Program Scope and Objectives in IRM 4.81.12.1 which includes subsections for background, authority, responsibilities, program reports, and acronyms to meet the new internal control requirements.

(2) Updated the IRM to meet the requirements of Public Law 111-274 (H.R. 946), the Plain Writing Act. For additional information on the Plain Writing Act and using plain language, see http://www.plainlanguage.gov.

(3) Deleted IRM 4.81.12.1, Form 8038-CP GECU Processing. This section is no longer applicable.

(4) Changed IRM 4.81.12.1.1, General Duties, Guidelines and Procedures, to IRM 4.81.12.2, General Duties and Guidelines.

(5) Changed IRM 4.81.12.1.1.1 TCO Duties, to IRM 4.81.12.2.1, TCO or TE Duties.

(6) Changed IRM 4.81.12.1.1.2 Lead TCO Duties, to IRM 4.81.12.2.2, Lead TCO/TE Duties.

(7) Added IRM 4.81.12.2.2.1 to provide information for the Lead TCO/TE when there is a missing Interest Payment Date.

(8) Deleted IRM 4.81.12.1.1.3, TEB Coordinator Duties, since it is no longer applicable to the compliance review.

(9) Changed IRM 4.81.12.1.1.4, Project Manager Duties, to IRM 4.81.12.2.3, Manager Duties.

(10) Added IRM 4.81.12.2.3.1 RCCMS Case File to provide guidance to the managers on transferring cases to ITG/TEB.

(11) Changed IRM 4.81.12.1.2, Direct Pay Bonds (DPB) Processing, to IRM 4.81.12.3, Direct Pay Bonds (DPB) Processing.

(12) Deleted 4.81.12.1.3, DPB Time Log Sheet, because it is not applicable to the new processing procedures.

(13) Changed 4.81.12.1.4, Edit Marks, to IRM 4.81.12.3.1, Edit Marks.

(14) Changed IRM 4.81.12.1.5, Multiple Returns, to IRM 4.81.12.3.2, Acknowledgment Returns, to provide guidance on processing acknowledgment returns received.

(15) Changed IRM 4.81.12.1.6, Amended Return Box is Checked, to IRM 4.81.12.3.3, Amended/Corrected Return.

(16) Changed IRM 4.81.12.1.7, Reprocessed Return, to IRM 4.81.12.3.4, Reprocessed Returns.

(17) Added IRM 4.81.12.3.5, Indicators of More In-Depth Review Required.

(18) Deleted IRM 4.81.12.1.8, IRS Received Date Stamp, GECU is no longer editing the received date per the new processing procedures. Code and Edit will review per IRM 3.11.26.3.10, Received Date.

(19) Changed IRM 4.81.12.1.9, Compliance Review, Code and Edit, and Approval Process to IRM 4.81.12.3.6, Compliance Review and Approval Process.

(20) Deleted 4.81.12.1.9.1 Part I, Information on Entity That is To Receive Payment of Credit and Communications. The information was incorporated into IRM 4.81.12.3.1, Edit Marks, and IRM 4.81.12.3.6.1 Part 1, Line 1.

(21) Deleted IRM 4.81.12.1.9.1.1 Lines 1, 2, 3, and 4, Perfecting the Entity (Payee) replaced with IRM 4.81.12.3.6.1, Part 1, line 1, IRM 4.81.12.3.6.2, Part 1, Line 2, and IRM 4.81.12.3.6.4, Part II, Line 7.

(22) Deleted 4.81.12.1.9.2 Part II, Reporting Authority, no longer applicable.

(23) Deleted IRM 4.81.12.1.9 replaced with IRM 4.81.12.3.6, Compliance Review and Approval Process.

(24) Deleted IRM 4.81.12.1.9.2.1 Lines 7, 8, 9, 11, 15, and 16, Issuer Name and Address. Replaced with IRM 4.81.12.3.6.4, Part II, Line 7 and IRM 4.81.12.3.6.5, Part II, Line 8.

(25) Added IRM 4.81.12.3.6.4, Part II, Line 7 to replace IRM 4.81.12.1.9.2.1, Lines 7, 8, 9, 11, 15, and 16, Issuer Name and Address.

(26) Added IRM 4.81.12.3.6.5 Part II, Line 8 to replace IRM 4.81.12.1.9.2.1 Lines 7, 8, 9, 11, 15, and 16, Issuer Name and Address.

(27) Changed IRM 4.81.12.1.9.2.2, Line 10, Report Number and Duplicate Return Check, to IRM 4.81.12.3.6.6, Line 10, Report Number and Duplicate Return Check.

(28) Deleted IRM 4.81.12.1.9.2.3, Line 12, Issue Date, no longer being edited in GECU. Code and Edit will do the editing per IRM 3.11.26.3.20 (9), Form 8038-CP.

(29) Deleted IRM 4.81.12.1.9.2.4, Line 13, Name of Issue, no longer being edited in GECU. Code and Edit will do the editing per IRM 3.11.26.3.20 (22), Part II, Line 13, Name of Issue.

(30) Deleted IRM 4.81.12.1.9.2.5 Line 14, CUSIP Number, no longer being edited in GECU. Code and Edit will do the editing per IRM 3.11.26.3.20 (23), Part II, Line 14, CUSIP Number.

(31) Deleted IRM 4.81.12.1.9.2.6, Line 17a, Type of Issue, no longer being edited in GECU. Code and Edit will do the editing per IRM 3.11.26.3.20 (24), Part II, Line 17a, Type of Issue.

(32) Deleted IRM 4.81.12.1.9.2.7, Line 17b, Issue Price, no longer being edited in GECU. Code and Edit will do the editing per IRM 3.11.26.3.20 (25), Part II, Line 17b, Issue Price.

(33) Deleted IRM 4.81.12.1.9.2.8, Line 17c, Fixed or Variable Rate, IRM 4.81.12.4.9.2.8.1, Fixed or Variable Rate (Returns with a Revision Date of April 2009, and IRM 4.81.12.4.9.2.8.2, Fixed or Variable Rate (Returns with a Revision Date after 01-2010), no longer being edited in GECU. Code and Edit will do the editing per IRM 3.11.26.3.20 (26), Part II, Line 17c, Variable/Fixed Rate Check Box.

(34) Deleted IRM 4.81.12.1.9.3, Part III, Payment of Credit, no longer applicable.

(35) Changed IRM 4.81.12.1.9.3.1, Line 18, Interest Payment Date (IPD) to IRM 4.81.12.3.6.7.

(36) Changed IRM 4.81.12.1.9.3.2, Statute of Limitation (SOL) for Form 8038-CP to IRM 4.81.12.3.6.6, Form 8038-CP Statute of Limitation (SOL).

(37) Deleted IRM 4.81.12.1.9.3.3, Lines 19a - 20f, no longer applicable due to the new processing procedures. Refer to IRM 3.11.26.3.20 for more information.

(38) Deleted IRM 4.81.12.1.9.3.3.1 Line 19a, Interest Payment, no longer applicable due to the new processing procedures. Refer to IRM 3.11.26.3.20 (28), Part III, line 19a, Interest Payable to Bondholders.

(39) Deleted IRM 4.81.12.1.9.3.3.2, Lines 19b and 19c, Applicable Credit Rate/Interest Payable to Bondholders at the Applicable Credit Rate, due to the new procedures. Refer to IRM 3.11.26.3.20 (29).

(40) Deleted IRM 4.81.12.1.9.3.4, Lines 20a - 20f, Credit Payment to be Received as of the IPD, due to the new procedures. Refer to IRM 3.11.26.3.20 (31), Part III, Lines 20a through 20f, Amount of Credit Payment to be Received.

(41) Added IRM 4.81.12.3.6.8, Part III, Lines 20a, 20b and 20e to provide the new procedures for the compliance review of the Form 8038-CP.

(42) Added IRM 4.81.12.3.6.9, Part III Lines 20a thru 20f to provide the new procedures for the compliance review of the Form 8038-CP.

(43) Deleted IRM 4.81.12.1.9.3.5, Lines 21a and 21b, Adjustment due to the new procedures, refer to IRM 3.11.26.3.20 (32), Part III, Line 21a, Net Increase to Previous Payments or Line 21b, Net Decrease to Previous Payments.

(44) Deleted IRM 4.81.12.1.9.3.6, Line 22, Credit Payment to be Received due to the new procedures, refer to IRM 3.11.26.3.20 (33), Line 22, Amount of Credit Payment to be Received.

(45) Added IRM 4.81.12.3.6.9.1, Part III, Line 22 to provide the new procedures for the compliance review of the Form 8038-CP.

(46) Changed IRM 4.81.12.1.9.3.7, Line 23, Final Interest Payment, to IRM 4.81.12.3.6.10, Part III, Line 23, and changed the information as what to focus on during the compliance review.

(47) Deleted IRM 4.81.12.1.9.3.8, Line 24, Entity Identified, no longer applicable to GECU because of the new procedures. Refer to IRM 3.11.26.3.20 (35), Part III, Line 24 Check Box.

(48) Deleted IRM 4.81.12.1.9.3.9, Lines 25a, 25c, Direct Deposit Designation, no longer applicable to GECU.

(49) Deleted IRM 4.81.12.1.9.3.10, Signature and Consent, no longer applicable to GECU refer to IRM 3.11.26.3.20 (36), Signature.

(50) Deleted IRM 4.81.12.1.9.3.11, Paid Preparer SSN or PTIN, no longer applicable to GECU refer to IRM 3.11.26.3.20 (27), Paid Preparer Social Security Number (SSN) or Preparer’s Tax Identification Number (PTIN).

(51) Deleted IRM 4.81.12.1.9.3.12, Paid Preparer EIN, no longer applicable to GECU. Refer to IRM 3.11.26.3.20 (28), Paid Firm’s EIN.

(52) Deleted IRM 4.81.12.1.9.3.13, Paid Preparer’s Phone Number, no longer applicable to GECU. Refer to IRM 3.11.26.3.20 (39), Paid Preparer Phone Number.

(53) Deleted IRM 4.81.12.1.9.4, Left Hand Margin, no longer applicable to GECU.

(54) Deleted IRM 4.81.12.1.9.5, Return Due Date (RDD), no longer applicable to GECU.

(55) Deleted IRM 4.81.12.9.10, Post Approval Procedures, no longer applicable to GECU.

(56) Deleted IRM 4.81.12.1.10.1, Scanning, since the information has been added to the applicable sections throughout the IRM.

(57) Deleted IRM 4.81.12.1.10.2, Review TCO Procedures. Review will be conducted by the Lead TCO/TE or manager(s). See IRM 4.81.12.2.2 and IRM 4.81.12.2.3.

(58) Deleted IRM 4.81.12.4.10.3, Non-Review TCO Procedures. Review will be conducted by the Lead TCO/TE or manager(s). See IRM 4.81.12.2.2 and IRM 4.81.12.2.3.

(59) Added IRM 4.81.12.3.7, Batches Ready to Process, provides guidance on preparing the batches for process.

(60) Added IRM 4.81.12.3.8, Disallowed, provides guidance on how to handle returns that have been disallowed by the campus.

(61) Updated the Signature section and additional references throughout the manual to indicate that Tax Exempt Bonds is now Indian Tribal Governments/Tax Exempt Bonds.

(62) Added Direct Pay Bond Compliance Review Coordinator to IRM 4.81.12.1.5.

(63) Updated IRM 4.81.12 to change Direct Pay Bond Coordinator to Direct Pay Bond Compliance Review Coordinator (DPBCRC) throughout the IRM.

(64) Revised the wording in IRM 4.81.12.3.5 and identified OUO items.

(65) Added IRM 4.81.12.3.6.1, Remedial Action Under Section 6 of Rev. Proc. 2018-26.

(66) Identified OUO issues in IRM 4.81.12.3.6.2 and IRM 4.81.12.3.6.9.1.

(67) Added 4.81.12.3.6.7, Part II, Line 12, Issue Date, to provide instructions for processing of Forms 8038-CP with an issue date of January 1, 2018 or later per the Tax Cuts and Jobs Act of 2017.

Effect on Other Documents

This supersedes IRM 4.81.12, dated October 19, 2015.

Audience

Tax Exempt and Government Entities
Government Entities Compliance Services
Indian Tribal Governments/Tax Exempt Bonds

Effective Date

(09-26-2018)

Justin L. Abold-LaBreche
Acting Director, Government Entities/Shared Services
Tax Exempt and Government Entities

Program Scope and Objectives

  1. Purpose: This IRM section provides procedures for the Government Entities Compliance Unit (GECU)’s review of the refundable credit payments claimed on Form 8038-CP.

  2. Audience: These procedures apply to employees responsible for completing the compliance review of the Form 8038-CP.

    • Tax Compliance Officers (TCO)

    • Tax Examiner (TE)

    • Lead TCO/TE

    • Managers

  3. Policy Owner: Director, Indian Tribal Governments/Tax Exempt Bonds

  4. Program Owner: Director, Indian Tribal Governments/Tax Exempt Bonds

  5. Authority: Direct Pay Bonds (DPBs) are obligations that meet applicable requirements for credits allowed under IRC 6431.

    Note:

    The credit on DPBs is treated as an overpayment of tax and under IRC 6431(b) is to be paid (contemporaneously with each interest payment date (IPD) under such bonds) to the Issuer of such bonds (or to any person who makes interest payments on behalf of the Issuer).

Background

  1. Certain qualified issuers of state and local government obligations use Form 8038-CP, Return for Credit Payments to Issuers of Qualified Bonds, to claim:

    • The direct credit payments allowed under the Build America Bonds (BABs) provisions of the American Recovery and Reinvestment Act of 2009 (ARRA).

    • Specified tax credit bonds provisions of the Hiring Incentives to Restore Employment Act (HIRE) of 2010.

  2. This law is codified as IRC 6431. The refundable credits are:

    1. Payable to the issuer of qualified obligations, or at the issuer’s option, to the designated person who pays interest on behalf of the issuer.

    2. Based on a percentage (from 35 to 100 percent) of the interest payable under the obligation.

    3. Designed to lower the issuer’s cost of borrowing as a replacement of the federal subsidy provided to bondholders by traditional tax-exempt bonds under IRC 103.

    4. These qualified obligations are collectively known as direct pay bonds:

    • Build America bonds

    • Recovery zone economic development bonds

    • Specified tax credit bonds

  3. Due to the potential for fraud, TEGE, in cooperation with the Wage and Investment (W&I) operating division, established a compliance review of all Form 8038-CP returns during their initial processing. This review is done in two parts:

    1. ITG/TEB reviews the qualifications of the direct pay bonds transaction.

    2. Ogden Submission Processing Center (OSPC) processes the refund return (Form 8038-CP).

Authority

  1. The table below outlines the authorities for direct pay bonds.

    Type of Bond Statute/Authority
    DPBs American Recovery and Reinvestment Act of 2009 (ARRA) introduced Build America Bonds (BABs) and included a special type of BABs eligible for an increased credit amount called recovery zone economic development bonds (RZEDBs).
    • New clean renewable energy bonds (NCREBs)

    • Qualified energy conservations bonds (QECBs)

    • Qualified Zone academy bonds issued under the 2009 and 2010 volume caps (QZABs)

    • Qualified school construction bonds (QSCBs).

    Hiring Incentives to Restore Employment Act (HIRE) of 2010 extended the refundable tax credit option to four types of previously authorized qualified tax credit bonds, defined as specified tax credit bonds in IRC 6431(f).
    DPBs and tax credit bonds The Tax Cuts and Jobs Act of 2017 repealed the authority to issue tax credit bonds, including specified tax credit bonds, after December 31, 2017.

Responsibilities

  1. The Director, Indian Tribal Governments/Tax Exempt Bonds is responsible for the administration, procedures and policies contained in this IRM.

  2. Management officials are responsible for:

    1. Providing internal controls relating to the compliance review of the Form 8038-CP.

    2. Ensuring the instructions are communicated to and carried out by the employees completing the compliance review.

  3. Lead TCO/TE updates the IRM for changes in how the compliance reviews are completed.

  4. Employees complete the compliance review.

Program Reports

  1. GECU Compliance Lead TCO/TE compiles data on the following:

    • Returns received.

    • Interactive returns received.

    • Returns sent to the campus for processing.

Acronyms and Terms

  1. Acronyms and terms used throughout IRM 4.81.12:

    Acronym Definition
    ADP Automated Data Processing
    AM Accounts Management
    BABs Build America Bonds
    BBTS Batch/Block Tracking System
    Cc Carbon Copy
    CCC Computer Condition Code
    CUSIP Committee on Uniform Security Identification Procedures
    DPB Direct Pay Bonds
    DPBCRC Direct Pay Bonds Compliance Review Coordinator
    DSS Debt Service Schedule
    EIN Employer Identification Number
    EO Exempt Organizations
    ERS Errors Resolution System
    GECU Government Entities Compliance Unit
    HIRE Hiring Incentives to Restore Employment Act
    HQ Headquarters
    IDRS Integrated Submission and Remittance Processing
    IPD Interest Payment Date
    ITG Indian Tribal Governments
    Lead TCO/TE Provides technical guidance on procedures and policies.
    NCREBs New Clean Renewable Energy Bonds
    OJI On the job instructor
    OSPC Ogden Submission Processing Center
    QECBs Qualified Energy Conservation Bonds
    QSCBs Qualified School Construction Bonds
    QZABs Qualified Zone Academy Bonds
    RCCMS Reporting Compliance Case Management System
    RPT Report
    RZEDBs Recovery Zone Economic Development Bonds
    SOL Statute of Limitations
    TCO Tax Compliance Officer
    TE Tax Examiner
    TEB Tax Exempt Bonds
    TEGE Tax Exempt Government Entities
    TLS Tax Law Specialist
    TP Taxpayer
    W & I Wage and Investment

General Duties and Guidelines

  1. Form 8038-CP compliance review responsibilities depend on the employee’s position.

    1. Tax Examiner (TE)

    2. Tax Compliance Officer (TCO)

    3. Lead TCO/TE

    4. Manager

    5. ITG/TEB Direct Pay Bonds Compliance Review Coordinator’s (DPBCRC) duties are defined in IRM 4.82.3.

TCO or TE Duties

  1. The TCO or TE working the bonds completes the following tasks:

    1. Check the Batch/Block Tracking System (BBTS) for any incoming batches.

    2. Retrieve the batches.

    3. Logs the batches in function 300 through BBTS. Refer to local procedures for checking in batches.

  2. Date stamp all returns received that day with the GECU date stamp.

  3. Review the Form 8038-CP returns:

    1. Input the Form 8038-CP data into the Direct Pay Bonds (DPB) database.

    2. Establish the Form 8038 CP returns in the Reporting Compliance Case Management System (RCCMS) by scanning returns and saving them in the office documents in RCCMS for cases referred to ITG/TEB.

    Note:

    Don’t mix reprocessed returns with other returns. Separate reprocessed returns in a separate gusset or add to a gusset containing other reprocessed returns.

  4. Print the Form 3210, Document Transmittal, and include a listing of all the returns in the gusset folder of the Form 3210 from the DPB database. The listing must include:

    1. The payee’s employer identification number (EIN)

    2. Tax period

    3. Report number

      Note:

      If you’re manually preparing the Form 3210, staple the list of returns to the copies designated as recipient, acknowledgment and originator. Place the recipient and acknowledgment copies of the Form 3210 in the gusset folder. Place the originator’s copy or recipients copy of the Form 3210 from the DPB database in the designated binder located at the main bond desk.

  5. Verify that the information on the Form 3210 matches the returns in the batch by comparing the Form 3210 to each return in the batch. Initial next to the "Releasing Officials" name.

  6. Save the Form 3210 and listing to the shared drive in the corresponding batch. Title the listing as "Form 3210 to Code and Edit."

  7. Print the routing slip (located in the Form 8038-CP images folder titled "Form 8038 Paper to Put on the Truck)." Attach one print on the top of the truck and another on the side of the truck. Place a batch of work in each of the slots on the truck and take the truck to the loading dock before 10:00 a.m. daily.

  8. Release the batch on BBTS:

    1. Open the BBTS program.

    2. Select Production Web Site under the heading Batch/Block Tracking System.

    3. Log onto BBTS.

    4. Select Navigate from the tool bar.

    5. Select Batch Release.

    6. Select 300 from the Function drop down list.

    7. Enter program code 13210 and the batch number that is being released.

  9. When Code and Edit returns the acknowledgment copy, the Lead TCO/TE will:

    1. Scan and save the Form 3210 and listing, if attached, to the batch folder on the shared drive.

    2. Title the document as "Signed Form 3210" .

    3. Place a large "X" across front of the document and place the document in the "designated classified waste" trash can.

Lead TCO/TE Duties

  1. Coordinate with ITG/TEB Technical and W&I to:

    1. Update the IRM for changes in how the compliance reviews are completed.

    2. Provide on the job instructor (OJI) help and non-evaluative feedback to the TCOs.

  2. Conduct random review of batches before being released to the campus for processing.

  3. Prepare a DPB Rotation monthly calendar designating the daily TCO or TE.

    1. Complete the DPB monthly calendar by the second week of the month. If necessary, changes can be made the following week.

    2. E-mail the final monthly calendar to the GECU managers.

    3. Each group manager e-mails a copy to their group.

    4. Lead TCO/TE: Saves a copy of the rotation schedule to the shared drive.

Missing Interest Payment Date (IPD)
  1. The TCO or TE makes two attempts to call the taxpayer for the missing interest payment date (IPD).

  2. The Lead TCO/TE corresponds with the taxpayer for the missing IPD after the TCO/TE makes two unsuccessful attempts. Attach a copy of the correspondence to the Form 8038-CP.

  3. Suspend the return for 45 days (30 days for response time and 15 days for mailing).

    1. If you receive a response with the missing IPD, edit the Form 8038-CP. Submit the edited Form 8038-CP with the attached letter to the TCO or TE to input, review, and incorporate into a batch of less than 25 returns.

  4. If you don’t receive a response within 45 days, complete the following steps:

    1. Research the Debt Service Schedule (DSS) for the next payment date and edit line 18 with the next date.

    2. Reduce the credit by entering ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    3. Recompute the credit payment amount based on the type of bond reported on Form 8038-CP lines 20a-20f.

    4. Edit the CCC O on the Form 8038-CP (edit should be in the middle between lines 18 and 19a).

    5. Issue Letter 5836, Form 8038-CP No Consideration. Attach a copy of the letter to the Form 8038-CP.

    6. Input the return information into the DPB database, ask the TCO or TE which batch contains less than 25 returns so this return can be incorporated, update the database with the batch number, and give the return to the TCO or TE to place in that batch.

Manager Duties

  1. Work directly with ITG/TEB Technical and the Lead TCO/TE to:

    1. Monitor the project.

    2. Provide information to senior management.

    3. Meet the project’s milestones and goals.

      Note:

      When you find barriers to meeting the goals, inform senior management and coordinate needed adjustments.

  2. Conduct random review of batches before being released to the campus for processing.

  3. Inform senior management about current project achievements and issues.

  4. Monitor and evaluate TCO or TE inventory.

RCCMS Case File
  1. During the compliance review, the TCO or TE may need to establish a case for the Form 8038-CP in RCCMS.

  2. TCO or TE e-mails the manager and copies the Lead TCO/TE indicating which case(s) were established in RCCMS and should be transferred to ITG/TEB Technical. The TCO or TE must include information in RCCMS indicating the basis for transferring the Form 8038-CP to ITG/TEB Technical.

  3. Manager transfers the case to the ITG/TEB DPBCRC for review by transferring the case to ITG/TEB Technical. To transfer the case(s) in RCCMS, use:

    • Primary Business: 400 - Nationwide

    • Secondary Business: 20011 - GE Compliance Services

    • Employee Group: 7271 - ITG/TEB Tech 2

    • Status Code: 10 - Assigned for Evaluation - No TP Contact

Direct Pay Bonds (DPB) Processing

  1. Receipt & Control batches Form 8038-CP returns and enters them into BBTS before delivering them to the GECU.

  2. The designated bond TCO or TE: will check the batch into BBTS at the beginning of their shift.

  3. TCO or TE: Monitors BBTS for any new batches.

    Note:

    Complete returns in the batch within 48 to 72 hours from the time received in Function 300 on BBTS. If you’re unable to work the entire batch within 72 hours, consult the Lead TCO for further instructions.

    1. Select "Multi Query" under Batch Reports on the BBTS home page.

    2. Select "Ogden" from the drop-down box if asked to select a service center, insert "13210" in the box next to Program Code enter or scroll down to submit query at the bottom of the page. An inventory screen appears showing all the batches in Function 300.

  4. To determine whether the batch was received, click on the batch number and a batch query report. Under "Function History" , it will show when the batch was received in function 300.

  5. When the batch is received, the 48-hour time frame begins the morning after the batch was released from function 180.

  6. After GECU completes the compliance review, they send the returns to the following "pipeline" functions for expedited processing:

    1. Code and Edit

    2. Numbering

    3. Transcription (ISRP)

    4. Validation

      BBTS assigns a program number of 13210 to Form 8038-CP returns and tracks each batch of returns through the pipeline using the following function codes:
      • 180 — Batching

      • 300 — GECU

      • 210 — Code and Edit

      • 190 — Numbering

      • 230 — Transcription

      • 610 — Validation

Edit Marks

  1. Add edit marks to the return (such as IPD, RPT Number, and EIN) for transcribing into the Automated Data Processing (ADP) system through the Integrated Submission and Remittance Processing (ISRP) system.

    Note:

    It’s essential to properly edit Form 8038-CP to ensure the returns flow smoothly through the submission processing pipeline.

  2. GECU employees use green pencil/pen to make edit marks.

    Note:

    A green gel pen is more legible on scanned copies.

  3. Never destroy, alter or erase the original entry on a return when deleting or correcting an entry. Make sure the original entry remains legible. Perfected entries create a legible "audit trail."

  4. See IRM 3.11.26.3.1, Edit Marks, for a description of specific edit marks.

  5. GECU must edit these lines:

    • Part I, Line 1 Payee name

    • Part I, Line 2 Payee EIN

    • Part II, Line 7 Issuer’s Name

    • Part II, Line 8 Issuer’s EIN

    • Part II, Line 10 Report Number

    • Part III, Line 18 IPD and formatting

    • Top left margin of the Form 8038-CP (in other words, SOL, True Duplicate)

      Note:

      Code and Edit does most of the editing on the Form 8038-CP and ERS/Rejects corresponds for missing information required to process the return except for any missing Interest Payment Date (IPD). For certain math errors or missing information, ERS/Rejects will either correct the math error or issue correspondence requesting missing or incomplete information from the filer. If the filer doesn't provide the requested information, ERS/Rejects processes the claim as a "No Consideration" return.

      Note:

      GECU’s role is now limited to: 1) ensuring the return has enough information to generate a unique report number; 2) Corresponding or calling the issuer for missing IPD, entity information on lines 1, 2,3, 7 and 8 to generate a unique report number to affix to the return and completing a compliance review of the return to minimize the risk of paying refunds on non-qualifying claims. GECU may coordinate with ERS/Rejects for something that they can’t do, but that is separate from the initial return processing.

Acknowledgment Returns

  1. If more than one return is attached, check the Committee on Uniform Security Identification Procedures (CUSIP) number, issue price, credit amount, IPD and issue date to make sure the return attached is not a duplicate.

    If... Then...
    There are two Form 8038-CP’s stapled together and the second form shows it’s an acknowledgment copy. Mark an "X" through the attached return showing acknowledgment copy and continue the compliance review.
    Everything on the return (CUSIP, issue price, credit amount, IPD, issue date and dollar amounts on Lines 19a through 22) are the same and the other return is in the batch.
    1. Mark an "X" through the document.

    2. Attach it to the original Form 8038-CP in the batch.

    Everything on the return (CUSIP, issue price, credit amount, IPD, issue date and dollar amounts on lines 19a through 22) is the same and the other return is not in the batch.
    1. Edit the previous return report number on the Form 8038-CP.

    2. In the comment section of the DPB database, comment the "assigned report number 8XX to the return possible duplicate."

    3. Pull the form from the batch and give it to the Lead TCO/TE.

      Note:

      Don’t put the batch number in the database.

    Everything matches except for the CUSIP number. Separate the two returns and process as separate returns. If they are stapled together, remove the staple and process as separate returns.
    There are two returns, not stapled together and they appear to be the same return. Check the return to make sure it isn’t a duplicate.
    1. Determined to be a duplicate;

      1. "X" through the document.

      2. Attach it to the original Form 8038-CP in the batch.

    2. Determined that it is not a duplicate:

      1. Continue with the compliance review.

    Note:

    The CUSIP number may be identical except for two digits

    .

Amended/Corrected Return

  1. If the amended return check box in the upper right corner of Form 8038-CP, Part 1 is marked or the taxpayer wrote "amended/corrected" on the face of the return, send the return to Account Management EO Accounts via Form 3210, Document Transmittal and Form 12634, OIRSC Campus Document Transmittal to Mail Stop 6710.

    Note:

    Do Not input the return into the database or edit anything on the return.

Reprocessed Returns

  1. Do not input returns received for reprocessing with Form 13596, Reprocessing Returns, into the database. Input the current batch number in the database so a Form 3210 can be printed. Compare the information shown on the Form 13596 and the Form 8038-CP with the information in the database.

    If... Then...
    The report number on Line 10 of the return was changed, Check the database to determine if the report number changed on the return matches the report number in the database.

    Note:

    Check for a comment in the comments section indicating the return duped out and the report number was changed.

    The processing date is more than 20 days after the received date or the return due date, whichever is later.

    Note:

    Processing date in this instruction means the date GECU inputs the return into the DPB database.

    No action necessary.
    The processing date is less than 20 days after the received date or the return due date, whichever is later.

    Note:

    Processing date in this instruction means the date GECU inputs the returns into the DPB database.

    Ensure the CCC "O" has been edited on the return. If not, edit the return with the CCC "O" in green ink.
    The report number matches the report number in the database. No action necessary.

    Note:

    Don’t input the return into the database again. Input the batch number for a Form 3210 to be printed.

    The report number doesn’t match the report number in the database and there’s no comment in the comment section indicating the return duped out. Follow the processing procedures, performing all the checks to determine if the report number is correct or if it needs to be corrected.
    Corrections need to be made to the reprocessed return. Contact the Lead TCO/TE for further instructions.
    None of the above apply. Contact the Lead TCO/TE for further instructions.

Indicators of more in depth review required

  1. TCO or TE: Pull any Form 8038-CP identified with indicators that a more in-depth review is required and give it to the Lead TCO/TE.

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

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

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

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

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

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

    6. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    7. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    8. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

  3. GECU won’t contact the authorized person for any reason.

  4. The original return won’t be edited or submitted to submission processing.

  5. Lead TCO/TE: Contact DPBCRC to review any return that indicates a more in-depth review is required. If it’s determined the return requires a more-in-depth review, the Lead TCO/TE prepares the return to be sent to the ITG/TEB DPBCRC.

    1. Prepare Form 3210, Document Transmittal.

    2. Attach the original return with all attachments and envelope (if available) to the Form 3210.

    3. Mail the Form 3210 and original return to the ITG/TEB DPBCRC.

  6. Based on the totality of the available information, determine if a more in-depth review is required.

Compliance Review and Approval Process

  1. TCO or TE opens the DPB database. On the main menu, select the "8038-CP Form" tab.

    Caution:

    Don’t deviate from the compliance review in processing the return unless otherwise instructed by the Program Manager, ITG/TEB Technical, group manager or Lead TCO/TE.

  2. Research and input the return using the DPB Database.

    Note:

    If the data on the return isn’t sufficient to produce a unique report number, contact the issuer for the missing information. If unable to contact the issuer after two attempts give the Form 8038-CP to the Lead TCO/TE to correspond for the missing information. In the comments section, note the date you made each attempt and who you contacted or attempted to contact.

Remedial Action Under Section 6 of Rev. Proc. 2018-26
  1. All Forms 8038-CP annotated with “Remedial Action under Section 6 of Rev. Proc. 2018-26” will be reviewed by the DPBCRC in ITG/TEB Technical.

    IF... THEN...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    1. Comment in the database that the case was established in RCCMS.

    2. Establish the return in RCCMS.

    3. Scan and save the return in the Office Documents folder in the RCCMS case.

    4. Send an e-mail to the manager and CC the Lead TCO/TE with the information (EIN, PID, and so forth) to transfer the case to ITG/TEB Technical.

    5. Continue with the review process.

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    1. Edit the CCC "O" on the form.

    2. Establish the return in RCCMS.

    3. Scan and save the return in the Office Documents folder in the RCCMS case.

    4. Send an e-mail to manager and CC the Lead TCO/TE with the information (Send an e-mail to the manager and CC the Lead TCO/TE with the information (EIN, PID, and so forth) to transfer the case to DPBCRC.

    5. Continue with the review process.

Part I, Line 1
  1. GECU perfects the Payee information.

    If the payee information... Then...
    Matches the name in the DPB database. No edit is necessary.
    Doesn’t match the name in the DPB database. Research IDRS to find the correct name using command codes INOLES, NAMEE, ENMOD.
    Doesn’t match the name in the DPB database and IDRS was researched, and the correct name was found and matches the name in the DPB database. Edit Line 1 to match the name shown on IDRS.
    Doesn’t match the name in the DPB database. IDRS was researched and the correct name was found that matches the name on the Form 8038-CP. Update the DPB database to show the correct name found on IDRS.
    Doesn’t match the name in the DPB database and IDRS was researched, and the correct name was not found. Discuss with the Lead TCO/TE.
    Is missing.
    1. Call the issuer to get the missing EIN.

    2. Follow the procedures above.

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    1. Edit the CCC "O" on the form.

    2. Comment in the database that the case was established in RCCMS and indicate if the return was "O" coded.

    3. Establish the return in RCCMS.

    4. Scan and save the return in the Office Documents folder in the RCCMS case.

    5. Send an e-mail to manager and Cc the Lead TCO/TE with the information (EIN, IPD, etc.) to transfer the case to DPBCRC.

    6. Continue with the review process.

Part I, Line 2
  1. To process the Form 8038-CP, there must be an EIN present on Line 2.

    If the EIN on Line 2... And... Then...
    Appears to be a valid EIN (9 digits) and it’s not a Trustee. There’s an approved transaction shown on the database. No action is necessary.
    Appears to be a valid EIN (9 digits) and it’s not a Trustee. There’s no approved transaction on the database.
    1. Research the DPB database by the CUSIP, Name, etc.

    2. If unable to find the information, research the DPB database research IDRS to verify the EIN is correct. If the EIN is correct, continue with the review process.

    Appears to be a valid EIN (9 digits) and it’s not a Trustee and there is no approved transaction shown on the database. You researched DPB database and IDRS and are unable to find a good EIN. Call the taxpayer to get a good EIN. Edit the Form 8038-CP with the valid EIN and continue the review process.

    Note:

    Add comments to the database.

    Appears to be a valid EIN (9 digits) and it’s not a Trustee. There’s no approved transaction on the database.
    1. Research the DPB database by the CUSIP, Name, etc.

    2. If unable to find the information, research the DPB database and research IDRS to verify the EIN is correct. If the EIN is correct, continue with the review process.

    Appears to be a valid EIN (9 digits) and it’s not a Trustee and there is no approved transaction shown on the database. You’ve researched the DPB database and IDRS and are unable to find a good EIN. Call the taxpayer to get a good EIN. Edit the Form 8038-CP with the valid EIN and continue the review process.

    Note:

    Add comments to the database.

    Appears to be a good EIN (9 digits) and it’s not a Trustee, there is no approved transaction shown on the database, and the DPB database and IDRS has been researched and unable to find a good EIN. You’re unable to communicate with the taxpayer. Continue the review process.
    Doesn’t appear to be a good EIN (less than 9 digits) or is blank.   Research IDRS using the command code NAMEE to find a good EIN.
    Doesn’t appear to be a good EIN (less than 9 digits) or is blank. A good EIN is found on NAMEE and there is an approved transaction on the database.
    1. Edit Line 2 to show the correct EIN.

    2. Continue with the review process

    Doesn’t appear to be a good EIN (less than 9 digits) or is blank. A good EIN is found on NAMEE and there is no approved transaction on the database. Research the DPB database by the CUSIP, Name, etc.
    1. Edit Line 2 to show the correct EIN.

    2. Continue with the review process.

    Doesn’t appear to be a valid EIN (less than 9 digits) or is blank. A valid EIN couldn’t be found. Call the taxpayer. If unable to reach the taxpayer, discuss with the Lead TCO/TE.
    Appears to be a good EIN (9 digits) and it’s a Trustee. There is an approved transaction shown on the database for the Issuer’s EIN. No action is necessary.
    Appears to be a good EIN (9 digits) and it’s a Trustee. There is no approved transaction shown on the database for the Issuers EIN.
    1. Check both EINs on Line 2 and Line 8 of the 8038-CP to the EINs input into the database. If either EIN was input incorrectly, change the EIN and continue with the review process.

    2. Edit Line 2 to show the correct EIN.

    3. Continue with the review process.

Part II, Line 7
  1. Line 7 must show the issuers name or the "Same" for a valid entry.

    If line 7... And the Entity name on line 1 is... Then...
    Has an entity name   No action is necessary.
    Is blank. Not a trustee and the box on line 24 isn’t checked. Edit "Same" on Line 7.
    Is blank. Is a trustee and box on line 24 isn’t checked. Call the taxpayer to get the missing information for Lines 7 and 8.
    Is blank. Not a trustee and the box on line 24 isn’t checked. Call the taxpayer to get the missing information for Lines 7 and 8.
    Shows "Same" . Not a Trustee. No action is necessary.
    Is blank or "Same" . A Trustee. Research IDRS using the EIN on Line 8. If no EIN shown on Line 8, call the taxpayer to get the missing information for Lines 7 and 8.
Part II, Line 8, EIN
  1. To process the Form 8038-CP, there must be an EIN on Line 8 only if a Trustee is present on Line 1.

    If the EIN on Line 8... And... Then...
    Is blank. Line 7 shows "Same" and the payee on line 1 is the same as the issuer and there’s an approved transaction shown on the database for the issuer. No action is necessary.
    Appears to be a valid EIN (9 digits). A trustee is shown on Line 1 and there’s an approved transaction shown on the database for the issuer. No action is necessary.
    Doesn’t appear to be a valid EIN (less than 9 digits or missing). A trustee is shown on Line 1 and there’s no approved transaction shown on the database for the issuer.
    1. Research the DPB database by using the CUSIP, Name, etc.

    2. Research IDRS using the command code NAMEE to find a valid EIN.

    Doesn’t appear to be a valid EIN (less than 9 digits or missing). A valid EIN is found on NAMEE and there is an approved transaction on the database. Edit Line 8 to show the valid EIN.
    Doesn’t appear to be a valid EIN (less than 9 digits or missing). A valid EIN is found on NAMEE and there’s no approved transaction on the database.
    1. Check both EINs on Line 2 and Line 8 of the 8038-CP to the EINs input into the database. If either EIN was input incorrectly, change the EIN and continue with the review process.

    2. Edit Line 2 to show the correct EIN.

    3. Continue with the review process.

    4. Edit Line 8 to show the valid EIN.

    Doesn’t appear to be a valid EIN (less than 9 digits or missing). A valid EIN couldn’t be found. Call the taxpayer. If unable to reach the taxpayer, discuss with the Lead TCO/TE.
Line 10, Report Number and Duplicate Return Check
  1. Determine whether another return has been processed by checking Lines 2, 8, 18 and 22 on the Form 8038-CP.

  2. Each return should reflect credit for a separate DPB transaction, or a portion of that transaction. Examples include:

    1. Trustee banks are often designated to receive DPB’s credit payments on behalf of the issuer. As the designated payee, the bank EIN issued to process returns for many different customers paying interest on the same interest payment date.

    2. An issuer of DPB’s may have two or more obligations that pay interest on the same date. Additionally, one DPB issue may have fixed-rate and variable-rate bonds, or regular BABs (35 percent credit rate) and Recovery Zone Economic Development Bonds (RZEDBs) at a 45 percent credit rate included in the same issue.

  3. These circumstances require the issuer to file separate returns using the same payee EIN and same interest payment date. To distinguish bond returns using the same EIN and period, a report number is assigned to each return.

    1. Using the DPB Database, enter the payee’s EIN, issuer's EIN and tax period (i.e. the year and month of the IDP is used to determine the tax period). After you’ve entered the issuer's EIN into the database, the database will search all records for returns using the payee’s EIN for the tax period entered.

    2. The maximum value of the report numbers for these returns plus one is entered in the report number field automatically (i.e., If 800, 801, and 802 have already been assigned to other returns, the database will enter 803 (802, the maximum value in the list + 1) in the report number field).

    3. If there are no other returns for the payee EIN and tax period, the number entered for the report number will be 800. The database has been programmed to proceed to the 200 and 400 series of report numbers as needed.

    4. The report number field is only generated through this automated process to ensure that the payee’s EIN, tax period, and report number are unique for each return and for the record in the database.

    5. The Payee’s EIN, CP period, report number, or issuer’s EIN can’t be changed.

    Note:

    Don’t place the report number in the shaded boxes.

  4. The report number range for Form 8038-CP is:

    1. 800-899, first series used for report numbers.

    2. 200-299, used when number of returns received for the same EIN and period have exceeded the 800 series.

    3. 400-499, used when the number of returns received for the same EIN and period have exceeded the 800 and 200 series.

  5. Give duplicate returns to the Lead TCO/TE.

  6. If a report number is entered on the Form 8038-CP by the taxpayer, then circle the report number and edit the report number assigned by the DPB database.

    If the Dupe Check Tab in the DPB database identifies a return(s) for the same DIN with one or more of the following fields highlighted:... And... Then...
    Payee EIN, report number, Issue Date, CUSIP, and Issue Price. The payee (Line 1) and issuer (Line 7) are the same or the payee (Line 1) is the same as the original filed return and Part II is the same (Line 7). Compare the Form 8038-CP to the previous return shown on the DPB database.
    Payee EIN, report number, Issue Date, CUSIP and was compared to the previous return shown on the DPB database. Everything is the same.
    1. Edit the previous returns report number on the Form 8038-CP.

    2. In the comment section of the DPB database, place the comment “assigned report number 8XX to the return.”

    3. Place a Post-it note on the return indicating the return is a duplicate.

    4. Pull return and give it to the Lead TCO/TE. Note:Do not place the batch number in the database.

    Payee EIN, report number, Issue Date, CUSIP and was compared to the previous return shown on the DPB database. Everything is the same except for the credit amount. Check the DSS to see if the dollar amounts shown on the return match the DSS.
    Payee EIN, report number, Issue Date, CUSIP, compared to the previous return shown on the DPB database, and the checked the DSS to see if the dollar amounts shown on the return match the DSS. The dollar amounts don’t match the amounts shown for the IPD but matches the dollar amounts for a different IPD.
    1. Edit the report number of the previous return on the Form 8038-CP.

    2. In the comment’s section of the DPB database, place the comment “assigned report number 8XX to the return.

    3. Place a post-it on the return indicating the return is a duplicate.

    4. Pull return and give it to the Lead TCO/TE.

    Payee EIN, report number, Issue Date, CUSIP, and Issue Price. The payee (Line 1) is different from the original filed return and Part II is the same (Line 7).
    1. Edit the CCC "O" on the form.

    2. Annotate in the database the case was established in RCCMS and indicate if the return was O coded.

    3. Edit the report number.

    4. Establish the return on RCCMS.

    5. Scan and save the return in the office documents in the RCCMS case.

    6. E-mail the manager and cc the Lead TCO/TE when sending the information (EIN, IPD, etc.) to transfer the case to DPBCRC.

    7. Continue the review process.

    Payee EIN, report number, Issue Date, CUSIP, and Issue Price. the credit amount is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . Research IDRS command code TXMODA or BMFOLT for a TC 766 dollar amount and CCC "3" .

    Note:

    TC 766 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and CCC "3" is an indicator the return was processed as a "No Consideration" , see IRM 4.81.12.3.8.

    Payee EIN, report number, Issue Date, CUSIP, and Issue Price. IDRS shows a TC 766 ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and CCC "3" . Assign the report number generated on the DPB database and continue the review.
    If the Dupe Check Tab in the DPB database doesn’t identify any other return with the same payee, EIN and tax period.   Edit the report number on the Form 8038-CP assigned by the DPB database.
Part II, Line 12, Issue Date
  1. Pursuant to the Tax Cuts and Jobs Act of 2017, DPBs may not be issued after December 31, 2017, thus:

    1. Any Form 8038-CP with an issue date of January 1, 2018 or later will be referred to the DPBCRC.

      1. Edit the CCC "O" on the form.

      2. Establish the return on RCCMS.

      3. Annotate in the database that the case was established in RCCMS and indicate if the return was "O" coded.

      4. Scan and save the return in the Office Documents folder in the RCCMS case file.

      5. Send an e-mail to the manager and CC the Lead TCO/TE with the information ( for example, EIN, IPD) to transfer the case to the DPBCRC.

      6. Place Form 8038-CP in batch and send to the campus for processing.

      Note:

      GECU won’t contact the authorized person for any reason.

Form 8038-CP Statute of Limitations (SOL)
  1. A claim for credit or refund of the refundable credit for Qualified bonds must be filed by the later of:

    1. Three (3) years from the time the Form 8038-CP was filed.

    2. Two (2) years from the time the issuer made the bond interest payment.

    Note:

    GECU can only verify whether the Qualified bond was filed within three (3) years from the time the Form 8038-CP was filed. GECU can’t verify whether the issuer is filing within two (2) years of the bond interest payment date.

    If the IPD is Then
    More than three (3) years from the postmark date stamp.

    Example:

    IPD is 10-28-2012 and the post mark date is 11-01-2015, it is outside the statutory limitations.

    .
    Temporary procedures:
    1. Edit the CCC "O" on the form.

    2. Annotate in the database the case was "O" coded.

    3. Continue with the review process.

    4. Edit in the upper left-hand corner "Statute of Limitation" on the 8038-CP in green ink.

    5. Scan and send the image to the Lead TCO/TE via e-mail.

    Note:

    Don’t remove any envelope(s) attached to the return.

    The IPD is less than three (3) years from the postmark date stamp.

    Example:

    IPD is 10-28-2012 and the postmark date is 10-25-2015, it is inside the statutory limitations.

    Continue processing.

    Note:

    Don’t remove any envelope(s) attached to the return.

  2. Lead TCO/TE: Save the scanned image to the secured share drive folder SOL returns for Monitoring.

    1. Input the return information on the "Monitored Form 8038-CP SOL Returns" spreadsheet.

    2. Check IDRS to see if a TC 150 has posted.

    3. E-mail a copy of the Form 8038-CP to the SOL unit once the TC 150 has posted.

Part III, Line 18
  1. Payments on bonds can be made at different frequencies: monthly, quarterly, semi-annually, and annually. Check the IPD against the payment frequency shown on the Approved Transaction tab in the DPB database.

    Payment Frequency IPD Date Next Payment
    Monthly - paid every month 12 payments

    Note:

    Variable rate bonds can only be filed quarterly, semiannually, and annually. Refer to Notice 2009-16 Section 3 (c).

    • January

    • February

    • March

    • April

    • May

    • June

    • July

    • August

    • September

    • October

    • November

    • December

    • February

    • March

    • April

    • May

    • June

    • July

    • August

    • September

    • October

    • November

    • December

    • January

    Quarterly - (every three months or four time during the year)
    • January

    • February

    • March

    • April

    • May

    • June

    • July

    • August

    • September

    • October

    • November

    • December

    • April

    • May

    • June

    • July

    • August

    • September

    • October

    • November

    • December

    • January

    • February

    • March

    Semi-Annually - paid twice a year
    • January

    • February

    • March

    • April

    • May

    • June

    • July

    • August

    • September

    • October

    • November

    • December

    • July

    • August

    • September

    • October

    • November

    • December

    • January

    • February

    • March

    • April

    • May

    • June

    Annually - Once a year January January the next year
    If... Then...
    The IPD is missing. Call the taxpayer to get the IPD.
    1. While the taxpayer is still on the phone compare the 8038-CP with the DSS for the IPD given.

    2. Comment on the database the call and the results.

    Note:

    If after two attempts to contact the taxpayer, there is no response. Give the Form 8038-CP to the Lead TCO/TE to correspond with the taxpayer. Notate in the database the attempts to make contact.

    The IPD agrees with the date suggested by the Initial Payment Date and frequency (Example: See payment frequency table above). No action is necessary. Continue processing.
    The IPD doesn’t agree with the date suggested by the Initial Payment date and frequency (Example: See payment frequency table above). Research the DSS to find the correct Interest date. The DPB database and IDRS may need be researched to ensure no other return was filed for that IPD.
    The IPD doesn’t agree with the date suggested by the Initial Payment date and frequency (Example: see payment frequency table above) the IPD on the Form 8038-CP matches the DSS. No action is necessary. Continue processing.
    The IPD doesn’t agree with the date suggested by the Initial Payment date and frequency (example: see payment frequency table above) the IPD doesn’t match the DSS. If only the date is wrong, edit to correct the date on the return. If the Month and/or Year is wrong follow the steps below:
    1. Establish the return on RCCMS.

    2. Comment in the database the case was established in RCCMS.

    3. Scan and save the return in the office documents in the RCCMS case.

    4. E-mail the manager and cc the Lead TCO/TE the information (EIN, IPD, etc.) to transfer the case to ITG/TEB Technical.

    5. Continue with the review process.

    Line 18 is in MM-DD-YYYY format. No edit is necessary.
    Line 18 isn’t in MM-DD-YYYY format. Edit the date to correct the format.
Part III, Lines 20a, 20b and 20e
  1. Review the issue date.

    If the taxpayer is filing a... And... Then...
    BABs or RZEDBs (no approval on the database), The issue date is before Feb. 17, 2009, or after Dec. 31, 2010, and this is a new filing for a BABs or RZEDBs (no approval on the database).
    1. Edit the CCC "O" on the form.

    2. Establish the return on RCCMS

    3. Annotate in the database the case was established in RCCMS and indicate if the return was "O" coded.

    4. Scan and save the return in the Office Documents folder in the RCCMS case file.

    5. Send an e-mail to the manager and cc the Lead TCO/TE with the information (EIN, IPD, etc.) to transfer the case to DPBCRC.

    6. Continue with the review process.

    QZABs The issue date is after Dec. 31, 2010 and is a new filing (no approval on the database).
    1. Edit the CCC "O" on the form.

    2. Establish the return on RCCMS.

    3. Annotate in the database that the case was established in RCCMS and indicate if the return was "O" coded.

    4. Scan and save the return in the Office Documents folder in the RCCMS case file.

    5. Send an e-mail to the manager and cc the Lead TCO/TE with the information (EIN, IPD, etc.) to transfer the case to DPBCRC.

    6. Continue the review process.

Part III, Lines 20a thru 20f
  1. If there is no dollar amount shown on Lines 20a through 20f, no action is necessary.

  2. There should only be one entry on Lines 20a through 20f.

Part III, Line 22
  1. See procedures below.

    Note:

    If there is no Approved Transaction Record, recheck the issuer’s EIN to ensure the correct issuer is being researched.

    If Line 22 is... And... Then...
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . There is an approved transaction record on the DPB database and the amount on Line 22:
    1. ≡ ≡ ≡ ≡ ≡ ≡

    2. ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

    Note:

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

    No action is necessary. Continue the review.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    1. Compare the Form 8038-CP to the DSS.

    2. DSS matches the Form 8038-CP.

    3. No action is necessary.

    4. Continue processing.

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . The DSS doesn’t match the Form 8038-CP.
    1. Establish the return in RCCMS.

    2. Annotate in the database the case was established in RCCMS.

    3. Scan and save the return in the Office Documents folder for the return in RCCMS case file.

    4. E-mail the manager and cc the Lead TCO/TE the information (EIN, IPD, etc.) to transfer the case to DPBCRC.

    5. Continue processing.

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ There’s no approved transaction and it is not a BABs, RZEDBs or QZABs.
    1. Refer to IRM 4.81.12.3.6.11.1 to determine if it is a valid filing.

    2. If it is determined that it is a valid filing and EIN is valid after following the guidelines established in IRM 4.81.12.3.6.2 through IRM 4.81.12.3.6.5:

      1. Establish the return in RCCMS.

      2. Annotate in the database to indicate the case was established in RCCMS and indicate if the return was "O" coded.

      3. E-mail the manager and cc the Lead TCO/TE the information (EIN, IPD, etc.) to transfer the case to DPBCRC.

      4. Scan and save the return in the Office Documents folder for the return in RCCMS.

      5. Continue processing the return.

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ There’s no approved transaction and it is a BABs, RZEDBs or QZABs.
    1. Refer to IRM 4.81.12.3.6.10 to determine if it is a valid filing.

    2. If it is determined that it is a valid filing and the EIN is valid after following the guide lines established in IRM 4.81.12.3.6.3 through IRM 4.81.12.3.6.5.

      1. Edit the CCC "O" on the form in green ink.

      2. Establish the return in RCCMS.

      3. Annotate in the database the case was established in RCCMS and indicate if the return was "O" coded.

      4. E-mail the manager and cc the Lead TCO/TE the information (EIN, IPD, etc.) to transfer the case to DPBCRC.

      5. Scan and save the return in the Office Documents folder for the return in RCCMS.

      6. Continue processing the return.

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ There’s an approved transaction record on the DPB database. Compare the Form 8038-CP to the DSS. If the DSS matches the Form 8038-CP no action is necessary. Continue processing the return.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    • There’s no approved transaction record on the DPB database, and/or

    • The DSS doesn't match the Form 8038-CP.

    1. Refer to IRM 4.81.12.3.6.10 to determine if it is a valid filing.

    2. If it is determined that it is a valid filing and EIN is valid after following the guidelines established in IRM 4.81.12.3.6.3 and IRM 4.81.12.3.6.5:

      1. Edit the CCC "O" on the form in green ink

      2. Establish the return in RCCMS.

      3. Annotate in the database the case was established in RCCMS and indicate if the return was "O" coded.

      4. E-mail the manager and cc the Lead TCO/TE the information (EIN, IPD, etc.) to transfer the case to DPBCRC.

      5. Scan and save the return in the Office documents for the return in RCCMS.

      6. Continue processing the return.

    ≡ ≡ ≡ ≡ ≡ ≡ ≡
    • There’s an approved transaction record on the DPB database, and

    • The DSS matches the 8038-CP.

    Continue with the compliance review.
    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡
    • There’s no approved transaction record on the DPB database, and/or

    • The DSS doesn't match the Form 8038-CP.

    1. Refer to IRM 4.81.12.3.6.11 to determine if it is a valid filing.

    2. If it is determined that it is a valid filing and EIN is valid after following the guidelines established in IRM 4.81.12.3.6.3 through IRM 4.81.12.3.6.5:

      1. Edit the CCC "O" on the form in green ink.

      2. Establish the return in RCCMS.

      3. Annotate in the database to indicate the case was established in RCCMS and indicate if the return was "O" coded.

      4. E-mail the manager and cc the Lead TCO/TE the information (EIN, IPD, etc.) to transfer the case to DPBCRC.

      5. Scan and save the return in the Office documents for the return in RCCMS.

      6. Continue processing the return.

    Blank ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Using the amount shown on Lines 20a through 20f follow the same procedures above as if the amount was on Line 22.
    Blank ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , or ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Using the amount shown on Lines 20a through 20f follow the same procedures above as if the amount was on Line 22.
Part III, Line 23
  1. Line 23 indicates if the Form 8038-CP is a final return.

    If... And... Then...
    The "No" box on Line 23 is checked. No prior final return has been filed. No action is necessary. Continue with the review.
    The "No" box on Line 23 is checked. A prior final return has been filed.
    1. Edit the CCC "O" on the form.

    2. Establish the return in RCCMS.

    3. Annotate in the database the case was established in RCCMS and indicate if the return was "O" coded.

    4. Scan and save the return in the office documents for the return in RCCMS.

    5. E-mail the manager and cc the Lead TCOs the information (EIN, IPD, etc.) to transfer the case to DPBCRC.

    6. Continue processing of the return.

    The " Yes" box on Line 23 is checked. No prior final return has been filed.
    1. Establish the return in RCCMS.

    2. Annotate in the database to indicate the case was established in RCCMS.

    3. Scan and save a copy of the return in the office documents for the return in RCCMS.

    4. E-mail the manager and cc the Lead TCO/TE the information(EIN, IPD, etc.) to transfer the case to DPBCRC.

    5. Continue processing the return.

    The" Yes" box on Line 23 is checked. A prior final return has been filed.
    1. Edit the CCC "O" on the form in green ink.

    2. Establish the return in RCCMS.

    3. Add Comment in the database to indicate the case was established in RCCMS and indicate if the return was "O" coded.

    4. Scan and save the return in the office documents for the return in RCCMS.

    5. E-mail the manager and cc the Lead TCO/TE the information (EIN, IPD, etc.) to transfer the case to DPBCRC.

    6. Continue processing the return.

    Line 23 is blank.  
    1. Establish the return in RCCMS.

    2. Annotate in the database to indicate the case was established in RCCMS.

    3. Scan and save a copy of the return in the office documents for the return in RCCMS.

    4. E-mail the manager and cc the Lead TCO/TE the information (EIN, IPD, etc.) to transfer the case to DPBCRC.

    5. Continue processing the return.

Batches Ready to Process

  1. The TCO or TE prepares the Form 3210 and listing and places it on the gusset, refer to IRM 4.81.12.2.1.

  2. Place the routing slip on the top and side of the cart showing the cart going to Code and Edit. Refer to IRM 4.81.12.2.1.

  3. Release the batch on BBTS. Refer to IRM 4.81.12.2.1.

  4. Batch(s) will need to be taken to the loading dock.

Disallowed Returns

  1. When there is an error on a Form 8038-CP due to missing or incomplete information, ERS/Rejects will issue a Letter 4617-C, Information Request, to the filer requesting the correct information. If the taxpayer doesn’t respond within 45 days, ERS/Rejects processes the Form 8038-CP as a "No Consideration," reduces the credit amount and edits CCC "3" .

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