Source: http://www.irs.gov/irm/part3/irm_03-011-016r.html
Timestamp: 2013-05-18 13:41:21
Document Index: 326745974

Matched Legal Cases: ['art 1', 'art 1', 'art 1', 'art 1', '§3705', 'art\n321', '§6020', '§6020', '§6020', '§6020']

Internal Revenue Manual - 3.11.16 Corporate Income Tax Returns
3.11.16 Corporate Income Tax Returns
3.11.16.1
3.11.16.2
Unprocessable Documents - Error Resolution System
3.11.16.3
♦ Refund Returns - 45-Day Jeopardy / Million Dollar Refunds ♦
3.11.16.4
Examination of Tax Data
3.11.16.5
(1) This transmits revised IRM 3.11.16, Returns and Documents Analysis - Corporate Income Tax Returns.
(1) Minor editorial changes have been made throughout this IRM. (2) All cross-reference IRMs have been updated and verified.
(3) Line numbers have been updated to reflect current year forms throughout this IRM.
(4) IRM 3.11.16.1.8, Criminal Investigation "Funny Box"
- Added additional "Funny Box"
criteria. (IPU 12U0044 issued 01-03-2012) (5) IRM 3.11.16.2.8.1(6), Form 3893 - Re-Entry Document Control - Added a caution on what needs to be edited when a Form 1120 that was converted from a Form 1120S is being reprocessed.
(6) IRM 3.11.16.2.9(3), Amended Returns - Added CCC "S"
to CCC's that can be used with CCC "G"
. (7) IRM 3.11.16.2.10(4), IRC Section 847 Deduction - Revised instruction to photocopy pages 1 and 2 of the return. (IPU 12U0044 issued 01-03-2012) and added instruction to
edit an Action Trail such as "Fwd to Accounting"
on the return (IPU 12U0495 issued 02-27-2012).
(8) IRM 3.11.16.3 - Refund Returns - 45-Day Jeopardy / Million Dollar Refunds - Revised the manual refund amount from $1,000,000 to $10,000,000.
(9) IRM 3.11.16.4.2(1), Conversion of Form 1120S to Form 1120 - Added a caution with a cross reference to IRM 3.11.16.2.8.1, Form 3893 - Re-Entry Document Control when a Form 1120 converted from a Form 1120S needs to be reprocessed. (10) IRM 3.11.16.5.1(3), ♦ Entity Perfection - Employer Identification Number (EIN) ♦ -Revised per consistency template, added instruction to research IDRS if name and EIN are changed on a pre-addessed label.
(11) IRM 3.11.16.5.4 (2) - Entity Perfection - Domestic Address - Added instruction that no editing is required when the address contains no street address or PO Box information. (12) IRM 3.11.16.6.3(2), Short Period – Editing Proof of Entitlement - Removed instruction to notate and input a TC 971-1502.
(13) IRM 3.11.16.6.3.1(3)2), Short Period Returns - Regulation 1.1502-76 - Removed instruction to notate and input a TC 971-1502.
(14) IRM 3.11.16.7(2) table, Received Date - Added a note for the "USPS.com Track & Confirm"
record that may be attached to the return. (IPU 12U0044 issued 01-03-2012)
(15) IRM 3.11.16.7 (6) 1), Received Date - Added the criteria to look for the "USPS.com Track & Confirm"
record if the postmark is missing and the envelope is certified. (IPU 12U0145 issued 01-17-2012)
(16) IRM 3.11.16.8.1.10, CCC "N"
– Joint Committee Case - Added reference to Form 1120-L, Form 1120-PC, Form 1120-FSC and Form 1120-SF in (1) and added bullet in (2) for Form 1120-PC
Line 14 (IPU 12U0044 issued 01-03-2012).
(17) IRM 3.11.16.8.1.15, CCC "S"
- Form 8883 Asset Allocation Statement - Added instruction to edit CCC "S"
when a Form 8883 is attached. (18) IRM 3.11.16.8.1.16, CCC "T"
- Form 8886, Reportable Transaction Disclosure Statement - Added instruction to edit CCC "T"
when a Form 8886 is attached.
(19) IRM 3.11.16.8.1.24
, CCC "2"
- Disregard the IPU 12U0044 that stated that there will be no editing of the CCC "2"
. CCC "2"
will be edited when Form 8938 is attached. Added Form 1120-L and Form 1120-PC to the list forms CCC "2"
is not valid for. (20) IRM 3.11.16.8.2(4), ABLM Code and Schedule M-3 Checkbox - Added Form 1120–C to the list of computer generated ABLM codes. (IPU 12U0044 issued 01-03-2012)
(21) IRM 3.11.16.9 (2), Additional Return Perfection and through out the IRM - Revised the location where these elements will be edited to match the ISRP IRM. They will now be
edited in the left margin near Line 12 instead of near Line 9. (IPU 12U0337 issued 02-03-2012 and IPU 12U0495 issued 02-27-2012)
(22) IRM 3.11.16.9.1(6), Audit Codes - Added a caution with a cross reference to IRM 3.11.16.2.8.1, Form 3893 - Re-Entry Document Control when a Form 1120 converted from a Form 1120S needs to be reprocessed. (23) IRM 3.11.16.9.1(9) - Audit Codes - Added the that the form M-3 must have an entry of greater than $1 to edit the audit code of 8.
(24) IRM 3.11.16.9.2, Missing Schedule Code (MSC) - Added MSCs "31"
for Form 3468, "34"
for Form 4626, "70"
for Form 5884-A, "75"
for Form 5884-B, "76"
for Form 8941. Removed MSC's "44"
and "45"
. (25) IRM 3.11.16.10(2), Return Processing - Form 1120 - Added the word series after Form 1120. (IPU 12U0044 issued 01-03-2012) (26) IRM 3.11.16.10.1, Sequence - Form 1120 - Added the Schedule D to the list of forms to be placed in sequence order. (27) IRM 3.11.16.10.4.1, Line 1 Gross Receipts or Sales - Revised instruction for the removal of the Merchant Card Lines. (28) IRM 3.11.16.10.4.10(1), Total Income - Corrected line number to say (sum of Lines 3 through 10) instead of (sum of Lines 1c through 10. (IPU 12U0044 issued 01-03-2012)
(29) IRM 3.11.16.10.6.5, FIRPTA, Form 1042-S, and Form 8288-A Credits - Added in instruction that if the taxpayer's name is not listed in Box 13 of the Form 1042-S, then "X"
the amount. (IPU 12U0556 issued 03-02-2012)
(30) IRM 3.11.16.10.13(3), Schedule J, Line 5c - General Business Credits - Added If, And, Then chart for editing Line 5c. (31) IRM 3.11.16.10.13.1 (2) table, Investment Credit - Form 3468 - Revised the Then table to edit MSC "31"
instead of corresponding for Form 3468. (32) IRM 3.11.16.10.13.3 (2) table, Credits for Affected Midwestern Disaster Area Employers - Form 5884-A - Revised the Then table to edit MSC "70"
instead of corresponding for Form 5884-A.
(33) IRM 3.11.16.10.13.4 (2) table, New Hire Retention Credit - Form 5884-B - Revised the Then table to edit MSC "75"
instead of corresponding for Form 5884-B. (34) IRM 3.11.16.10.13.4 (3), New Hire Retention Credit - Form 5884-B - Added table to edit a Form 5884-B when attached to a 2012 tax year.
(35) IRM 3.11.16.10.13.7, Low Income Housing Credit - Form 8576 - Revised instruction to correspond if missing instead of editing MSC 44.
(36) IRM 3.11.16.10.13.36 (2) table, Credit for Small Employer Health Insurance Premiums - Form 8941 - Revised the Then table to edit MSC "76"
instead of corresponding for Form 8941.
(37) IRM 3.11.16.10.13.36 (2) table, Credit for Small Employer Health Insurance Premiums - Form 8941 - Added a note to convert the prior year revisions. (IPU 12U0337 issued 02-03-2012)
(38) IRM 3.11.10.16.2, Schedule J, Line 9b - Recapture of Low-Income Housing Credit (Form 8611) - Revised instruction to correspond if missing instead of editing MSC 45.
(39) IRM 3.11.16.10.21, Schedule K, Line 7c - Number of Form 5472 - Added instruction to edit Line 7c for the number of Forms 5472 attached.
(40) IRM 3.11.16.10.25.8(1), Schedule N, Line 7b – Number of Forms 8873 - Clarified note.
(41) IRM 3.11.16.11(3), Form 8873 - Extraterritorial Income Exclusion - Added instruction that if no boxes are checked on Part 1, Lines 1-3 then no "971"
needs to be input. (42) IRM 3.11.16.11.1, Part 1, Line 1 - IRC Section 942(a)(3) Election - Added note to leave an action trail of "971-361"
in the lower left margin of the return.
(43) IRM 3.11.16.11.2, Part 1, Line 2 - Extraterritorial Income Exclusion - Added note to leave an action trail of "971-362"
(44) IRM 3.11.16.11.3, Part 1, Line 3 - Domestication Election - Added note to leave an action trail of "971-363"
(45) IRM 3.11.16.14, Schedule D - Capital Gains and Losses - Added subsection on how to edit the Schedule D. (46) IRM 3.11.16.15 (6), Form 1125-A -Cost of Goods Sold (Formerly Form 1120, Schedule A)- Added new paragraph stating that 2011 and subsequent Forms 1125-A should be dummied if missing (IPU 12U1413 issued 07-27-2012).
(47) IRM 3.11.16.15(7) 2), Form 1125-A -Cost of Goods Sold (Formerly Form 1120, Schedule A) - Removed instruction to line through or "X"
Schedule A on 2010 and prior revisions per SERP Feedback Control number 201201476. (IPU 12U0556 issued 03-02-2012)
(48) IRM 3.11.16.16(4), Form 4136 -Credit for Federal Tax Paid on Fuels - Reworded for clarity. (49) IRM 3.11.16.18, Form 8941 - Credit for Small Employer Health Insurance Premiums - Added a note to convert the prior year revisions. (IPU 12U0337 issued 02-03-2012)
(50) IRM 3.11.16.19 (2), Form 5884-B - New Hire Retention Credit - Added table to edit a Form 5884-B when attached to a 2012 tax year.
(51) IRM 3.11.16.20, Form 3800 - General Business Credit - Added instruction to convert a prior revision of the Form 3800 to a current revision. (IPU 12U0145 issued 01-17-2012)
(52) IRM 3.11.16.21.3(12), Form 851 - Affiliations Scheduled - Updated the time to check IDRS from 2 cycles to 1 cycle. (53) IRM 3.11.16.24(4), Return Processing Form 1120-A - Added instruction to line out the Schedule K on the dummied page 3 Schedule J. (IPU 12U0044 issued 01-03-2012)
(54) IRM 3.11.16.25.2, Sequence - Form 1120-C - Removed the Form 1125-A from sequence. This form is not transcribed for the Form 1120-C. (IPU 12U0044 issued 01-03-2012)
(55) IRM 3.11.16.25.7, Computer Condition Codes - Added CCC "A"
to the list of valid computer condition codes for the Form 1120-C. (56) IRM 3.11.16.25.12.3, Missing Schedule Codes (MSC) - Added MSC "31"
for Form 3468, MSC "75"
for Form 5884-B, and MSC "76"
for Form 8941. (57) IRM 3.11.16.25.15(1), Tax and Payments - Lines 27 through 33 - Corrected line numbers. (IPU 12U0044 issued 01-03-2012)
(58) IRM 3.11.16.25.17(1) and (2) - Schedule G - Allocation of Patronage and Nonpatronage Income and Deductions - Correct instruction to say Lines 3 and 4 instead of 3 through 4. (59) IRM 3.11.16.25.23, Schedule K, Line 8c - Number of Form 5472 - Added instruction to edit Line 8c for the number of Form 5472 attached.
(60) IRM 3.11.16.25.27, Form 1125-A - Cost of Goods Sold - Removed instruction for the Form 1125-A. Form 1125-A is not transcribed for the Form 1120-C. (IPU 12U0044 issued 01-03-2012)
(61) IRM 3.11.16.25.30, Form 8941, Credit for Small Employer Health Insurance Premiums - Added a note to convert the prior year revisions. (IPU 12U0337 issued 02-03-2012)
(62) IRM 3.11.16.25.31, Form 5884-B - New Hire Retention Credit - Added table to edit a Form 5884-B when attached to a 2012 tax year.
(63) IRM 3.11.16.26.1, Sequence Form 1120-F - Removed the Form 1125-A from sequence. This form is not transcribed for the Form 1120-F. (IPU 12U0044 issued 01-03-2012)
(64) IRM 3.11.16.26.8, Page 1, Line M- Number of Form 5472 - Added instruction to edit Line 8c for the number of Form 5472 attached.
(65) IRM 3.11.16.26.9, Computer Condition Codes - Added CCC "Z"
to the list of valid Computer Condition Codes for the Form 1120-F. (IPU 12U0044 issued 01-03-2012)
(66) IRM 3.11.16.26.9, Computer Condition Codes - Added CCC "S"
to the list of valid Computer Condition Codes for the Form 1120-F. (67) IRM 3.11.16.26.12.3, Missing Schedule Code (MSC) - Revised edited and added new MSC for the Form 1120-F.
(68) IRM 3.11.16.26.13 (11), Lines 1 through 9 Computation of Tax Due or Overpayment - Added an If And Then chart to address when a Form 1042-S is used to substantiate items on Line 5i and the taxpayer is not
listed as the recipient on the Form 1042-S. (IPU 12U0495 issued 02-27-2012) (69) IRM 3.11.16.26.13 (13) , Lines 1 through 9 Computation of Tax Due or Overpayment - Added the Caution "If FIRPTA credit is reported on a line other than Line 5i, move the FIRPTA amount to Line 5i and continue
processing following the instructions below. "
(IPU 12U0556 issued 03-02-2012)
(70) IRM 3.11.16.26.19, Schedule W - Overpayment Resulting Form Tax Deducted and Withheld Under Chapter 3 - Added new subsection for the editing of the new Schedule W including a new figure to show how to edit Line 1 of the Schedule
W. (71) IRM 3.11.16.26.22, Form 8941, Credit for Small Employer Health Insurance Premiums - Added a note to convert the prior year revisions. (IPU 12U0337 issued 02-03-2012)
(72) IRM 3.11.16.26.23, Form 5884-B - New Hire Retention Credit - Added table to edit a Form 5884-B when attached to a 2012 tax year.
(73) IRM 3.11.16.27.7, Computer Condition Codes - Added missing CCC's to the list of valid Computer Condition Codes for the Form 1120-FSC. (74) IRM 3.11.16.27.18 (6), Tax Data Perfection, Page 1 - Tax and Payments - Added an If And Then chart to address when a Form 1042-S is used to substantiate items on Line 2g and the taxpayer is not
listed as the recipient on the Form 1042-S. (IPU 12U0556 issued 03-02-2012)
(75) IRM 3.11.16.28.6, Computer Condition Codes - Added CCC "P"
to the list of valid Computer Condition Codes for the Form 1120-H.
(76) IRM 3.11.16.28.15, Form 8941, Credit for Small Employer Health Insurance Premiums - Added a note to convert the prior year revisions. (IPU 12U0337 issued 02-03-2012)
(77) IRM 3.11.16.29.6, Computer Condition Codes - Added CCC "S"
to the list of valid Computer Condition Codes for the Form 1120-L.
(78) IRM 3.11.16.29.10.3, Missing Schedule Code (MSC) - Added several MSCs that are valid.
(79) IRM 3.11.16.29.18 (3), Schedule M, Questions 6, 8, and 8c - Added instruction to edit Line 8c for the number of Form 5472 attached.
(80) IRM 3.11.16.29.22, Form 8941, Credit for Small Employer Health Insurance Premiums - Added a note to convert the prior year revisions. (IPU 12U0337 issued 02-03-2012)
(81) IRM 3.11.16.29.23, Form 5884-B - New Hire Retention Credit - Added table to edit a Form 5884-B when attached to a 2012 tax year.
(82) IRM 3.11.16.30.8, Computer Condition Codes - Added missing CCC's to the list of valid Computer Condition Codes for the Form 1120-ND.
(83) IRM 3.11.16.31.7, Computer Condition Codes - Added CCC "S"
to the list of valid Computer Condition Codes for the Form 1120-PC.
(84) IRM 3.11.16.31.11.3, Missing Schedule Code (MSC) - Added MSC "76"
for Form 8941. (85) IRM 3.11.16.31.22, Schedule I, Line 6c - Number of Form 5472 - Added instruction to edit Line 6c for the number of Form 5472 attached.
(86) IRM 3.11.16.31.29, Form 8941, Credit for Small Employer Health Insurance Premiums - Added a note to convert the prior year revisions. (IPU 12U0337 issued 02-03-2012)
(87) IRM 3.11.16.31.30, Form 5884-B - New Hire Retention Credit - Added table to edit a Form 5884-B when attached to a 2012 tax year.
(88) IRM 3.11.16.32.7, Computer Condition Codes - Added missing CCC's to the list of valid Computer Condition Codes for the Form 1120-REIT.
(89) IRM 3.11.16.32.18 (2) and (4) - Schedule J, Lines 2b through 2g - Taxes - Added a note to leave any statements of reasonable cause for failure to meet the asset and/or gross income tests attached
to the return and no action is needed with them. (IPU 12U0242 issued 01-25-2012)
(90) IRM 3.11.16.32.25, Schedule K, Line 5c Form 5472 - Number of Form 5472 - Added instruction to edit Line 5c for the number of Form 5472 attached.
(91) IRM 3.11.16.32.31, Form 8941, Credit for Small Employer Health Insurance Premiums - Added a note to convert the prior year revisions. (IPU 12U0337 issued 02-03-2012)
(92) IRM 3.11.16.32.32, Form 5884-B - New Hire Retention Credit - Added table to edit a Form 5884-B when attached to a 2012 tax year.
(93) IRM 3.11.16.33.7, Computer Condition Codes - Added missing CCC's to the list of valid Computer Condition Codes for the Form 1120-RIC.
(94) IRM 3.11.16.33.10.3, Missing Schedule Code (MSC) - Added MSC "45"
for Form 8611. (95) IRM 3.11.16.33.13, Page 1 Deductions Items, Lines 9 through 25 - Revised line numbers adding in 25a and 25b for new 2012 Form 1120-RIC. (96) IRM 3.11.16.33.17, Schedule J - Lines 2b through 2e - Revised line numbers adding in Line 2c and renumbering Line 2d and 2e. (97) IRM 3.11.16.33.23 (4) - Schedule J, Line 6 - Recapture Taxes (Form 4255, Form 8611 and Recapture of Indian Employment Credit) - Added a (4) for the Schedule J, Line 6, Other Taxes box. Also added a note to leave any statements of reasonable cause
for failure to meet the asset and/or gross income tests attached to the return and no action is needed with them. (IPU 12U0242
issued 01-25-2012)
(98) IRM 3.11.16.33.25, Schedule K, Line 5(b)(2) Number of Form 5472 - Added instruction to edit Line 5c for the number of Form 5472 attached.
(99) IRM 3.11.16.33.31, Form 8941, Credit for Small Employer Health Insurance Premiums - Added a note to convert the prior year revisions. (IPU 12U0337 issued 02-03-2012)
(100) IRM 3.11.16.33.32, Form 5884-B - New Hire Retention Credit - Added table to edit a Form 5884-B when attached to a 2012 tax year.
(101) IRM 3.11.16.34.7, Computer Condition Codes - Added missing CCC's to the list of valid Computer Condition Codes for the Form 1120-SF.
(102) IRM 3.11.16.36, Form 4876-A - Election To Be Treated as an Interest Charge DISC/Scope (CSPC Only) - Added instruction to use the toll-free phone number of 1-888-829-7434 when using the 599C letter to correspond to the taxpayer.
(103) IRM 3.11.16.37, Form 1120-IC-DISC — Interest Charge Domestic International Sales - Corporation Return (CSPC Only) - Added instruction to use the toll-free phone number of 1-888-829-7434 when using the 599C or 118C letter to correspond
to the taxpayer. (IPU 12U0556 Issued 03-02-2012)
(104) IRM 3.11.16.37.1(3), Due Date - Removed the title of the letter 599C. (IPU 12U0044 issued 01-03-2012)
(105) IRM 3.11.16.37.1, Due Date - Revised instruction for processing a late filed Form 1120 IC-DISC. (106) IRM 3.11.16.37.3 (2), Ineligible Filers - Removed the words "and assign for classification by an international Examiner"
. (IPU 12U0145 issued 01-17-2012)
(107) IRM 3.11.16.37.4(10), Document Perfection - Added the instruction: Also, follow the failure to supply information instructions in Civil Penalty - IRC Section 6686,
IRM 3.11.16.37.7. (IPU 12U0044 issued 01-03-2012)
(108) Exhibit 3.11.16-3, Form 1120 - Prior Year Conversion Chart - Added note that if the only lines on the Schedule J that will be converted are Lines 1-3, 5a-d, 6 and 8 then no conversion
is needed. (IPU 12U0337 issued 02-03-2012)
(109) Exhibit 3.11.16-3, Form 1120 - Prior Year Conversion Chart - Added instruction to convert the 2011 Form 1120 and revised instruction to remove reference to lining out Schedule A. (110) Exhibit 3.11.16-15, Form 8941- Prior Year Conversion Chart - Added new Exhibit to convert the prior year Form 8941. (111) Exhibit 3.11.16-17, Missing Schedule Codes - Updated and revised the chart with correct MSC and the return used with them.
(112) Exhibit 3.11.16-19, Routing Guide for Attachments - Updated routing instructions for Form 433-B, Form 433-D and Form 9465. (113) Exhibit 3.11.16-19 - Routing Guide for Attachments - Form 8938 instructions were updated to say "No editing is required."
(IPU 12U0242 issued 01-25-2012)
(114) Exhibit 3.11.16-19 - Routing Guide for Attachments - Removed the instructions for the Forms 8271 and updated the instructions for the Form 8886. Added the instructions for
the CP 504.
(115) Exhibit 3.11.16-22 - Added exhibit of the "USPS.com Tack and Confirm"
record. (IPU 12U0044 issued 01-03-2012)
IRM 3.11.16 dated October 11, 2011 (effective January 1, 2012) is superseded. The following IRM Procedural Updates (IPUs),
issued from January 3, 2012 through July 27, 2012, have been incorporated into this IRM: – 12U0044, 12U0145, 12U0242, 12U0337,
12U0495, 12U0556, 12U1431.
This IRM is intended for use by Wage and Investment (W&I) personnel in the Submission Processing Campuses.
3.11.16.1 (01-01-2010)General Information
The purpose of this section is to provide instructions for general required processing actions on corporate tax returns in
order to eliminate repetition of the same instructions in different sub-sections.
In case of a conflict of instruction between this general sub-section and the subsequent specific sub-section, the specific
For additional general information, see IRM 3.0.273, Administrative Reference Guide.
3.11.16.1.1 (01-01-2011)IRS Employee Contacts - RRA Section 3705(a)
The Restructuring and Reform Act of 1998, Section §3705(a), provides identification requirements for all IRS employees working
face to face and written contact. In addition a telephone number is required on all taxpayer correspondence. This will provide
taxpayers with enough information to identify an IRS employee who has previously assisted with tax-related matters.
All IRS employees who communicate, by telephone, correspondence, or face to face, with taxpayers, or their personal representatives,
Telephone Contact – Their title (e.g., Mr., Mrs., Ms., Miss), their last name, and ID card number (badge).
Face to Face – This information should be their title (e.g., Mr., Mrs., Ms., Miss), provided as appropriate during the conversation,
their last name and badge identification (ID Card) number.
Secretaries, receptionists, or other people who answer the telephone in functional offices need to identify themselves should
provide their badge identification (ID card) number only if they are answering telephones which are routinely used to provide
tax or account information.
their badge identification (ID card) number on the first contact.
3.11.16.1.2 (01-01-2010)♦ BMF Consistency ♦
Processing Branch, BMF Code and Edit (C&E) /Error Resolution System (ERS).
Text in normal print is the common processes for BMF tax returns. The text in BOLD print is form specific and applies to this IRM only.
3.11.16.1.3 (01-01-2010)♦ Taxpayer Advocate Service (TAS) ♦
TAS criteria (see Taxpayer Advocate Service (TAS) Case Criteria, IRM 13.1.7), or has Form 911 attached, and you can't resolve
to be transferred to TAS. Refer to Same Day Resolution by Operations, IRM 13.1.7.4 . When referring cases to TAS, use Form
3.11.16.1.3.1 (01-01-2013)♦ TAS Service Level Agreements (SLAs) ♦
Small Business and Self-Employed (SB/SE) Division, Tax Exempt and Government Entities (TE/GE), Criminal Investigation (CI),
Appeals, and Large Business and International (LB&I) that outline the procedures and responsibilities for the processing of
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).
3.11.16.1.4 (01-01-2009)♦ Edit Marks ♦
Edit marks are edited on the tax return for transcription to the Automatic Data Processing (ADP) System through Integrated
Submission and Remittance Processing (ISRP). The editing can be entered in brown, red, orange, purple, or green pencil/pen.
The only items edited on the tax return are those to be transcribed except where specific instructions require editing of
a non-transcribed item. Lines are left blank if the entry would be a zero amount unless otherwise instructed.
The original entry on a tax return is never obliterated, altered, or erased when deleting or correcting an entry. Always exercise
is used to delete tax data or to indicate that an item is not to be transcribed.A slash "/"
"/ /$"
If the taxpayer circles an entry, edit the entry. Underline
Indicates an entry is to be transcribed (e.g., name control, tax period, etc.).
clearly indicates a negative amount with brackets "( )"
Edit marks entered by other areas (such as Collections or Accounts Management) are not to be re-edited except to place the
3.11.16.1.5 (04-05-2010)♦ Frivolous Arguments ♦
include, but are not limited to, the examples in IRM 4.10.12, Frivolous Return Program, shown in Potential Frivolous Arguments for Examination Review, Exhibit # 3.11.16-16 #.
Review the tax return to determine whether it appears to be a frivolous return.
The tax return meets any of the conditions identified as a frivolous return. See Potential Frivolous Arguments for Examination
Review, Exhibit # 3.11.16-16 #,
If the return shows Action Code "331"
, and has a Form 4227 attached with the remarks, "Refer to Exam FRP for audit after processing"
Examination has selected the return as frivolous (e.g., indicated by an Action Code "331"
, and a Form 4227 with the remarks, "Refer to Exam FRP for audit after processing"
, but sends the return for processing),
Continue processing the return using procedures in IRM 3.11.16. However, do not circle or void the Action Code indicating a frivolous return.
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ "
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ 3.11.16.1.6 (01-01-2010)♦ Foreign Currency ♦
For tax returns completed in other than United State (U.S.) currency, process as filed. However, if corresponding for missing/incomplete
item(s), include in the letter to resubmit in U.S. currency.
3.11.16.1.7 (01-21-2011)♦ Protective Claims ♦
Do not remove any Form 1120-F with the "Protective return"
box (upper right-hand corner) checked from the batch. These returns are not considered "Protective Claims"
If the return is amended, do not remove from the batch. Edit Computer Condition Code "G"
3.11.16.1.8 (01-01-2013)♦ Criminal Investigation (CI) "Funny Box"
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ "
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ 3.11.16.1.9 (01-01-2013)♦ Examination(Exam) Funny Box ♦
3.11.16.2 (01-01-2012)Unprocessable Documents - Error Resolution System
The Document Perfection tax examiner will have the first opportunity to identify a return having a problem which requires
correspondence, research, or other action in order to make the return processable. Depending on the type of return, either
an Action Code or Computer Condition Code (CCC) "U"
is edited to identify these unprocessable returns.
On Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC the tax
examiner will determine the kind of action required and assign an Action Code to the return which will force it to Error Resolution
System (ERS) (on-line correction system). The code will indicate whether correspondence, research, or some other action is
needed. Action Codes apply only to Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT, and
Form 1120-FSC, Form 1120-ND, and Form 1120-SF are processed through a manual correction system. Use Computer Condition Code
3.11.16.2.1 (01-01-2012)♦ Action Codes ♦
When necessary, a three-digit Action Code will be assigned by the tax examiner. Action Codes are valid on Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT, and
Form 1120-RIC. Any other returns are processed through a manual correction system. Use Computer Condition Code "U"
on these returns when actions such as correspondence is needed.
Edit the Action Code in the bottom left margin of the tax return.
Action Code "310"
(Statute Control).
Action Code "320"
(Entity Control).
Action Code "4XX"
Action Code "6XX"
Action Code "3XX"
Action Code "2XX"
(Correspondence). Exception:
Use Action Code "211"
, "215"
, "225"
, or "226"
before Action Code "341"
to ensure the return is complete before a manual refund is issued.
Attach Form 4227 when more than one Action Code is needed. Edit the Action Code with the shortest suspense period on the return
and edit the second Action Code on Form 4227. See Figure 3.11.16-1.
Figure 3.11.16-1
Example of editing using the Form 4227 for multiple Action Codes
(First Correspondence) or "215"
Return is illegible, incomplete, or contradictory and therefore cannot be processed.
The taxpayer notates on the tax return or attachment that they are reporting tax for more than one tax period or for more
(Missing Signature Correspondence)
(Missing Signature International Correspondence)
(Early Filed – Suspense)
The return is an early-filed (future) return.
(Renumbered non-remittance) or"611"
(Renumbered with-remittance)
A return is mis-blocked (e.g., Form 1065 found in a 1120 batch of work). "640"
To delete the assigned Document Locator Number (DLN) on the return (e.g., Re-entry Returns).
Valid Action Codes are listed below: Action Code Chart
321(MeF only)
Entity Control - Form 1120 with Form 851 attached
Frivolous Review 3
345(MeF only)
Form 1120-F Total Tax Math Error
346(MeF only)
Form 1120-F Balance Due Math Error
Master File Transcript Request (MFTRA)
Name Research 3
Renumber - Non-Remittance
Renumber - Remittance
3.11.16.2.2 (01-01-2011)Unprocessable Conditions and Rejection of Tax Returns
A tax return is an "OSPC only"
return if at least one of the following conditions exists:
The tax return has a foreign address.
The tax return is a Form 1120-C.
The tax return is a Form 1120-F.
The tax return is a Form 1120-FSC.
There is a refund credit claimed because of U.S. income tax paid or withheld at source because of the Foreign Investors in
Real Property Tax Act whether or not Form 8288-A is attached. Note:
Form 8288-A credit must be verified by the OSPC Foreign Team.
3.11.16.2.3 (01-01-2012)Treatment of All Unprocessable Tax Returns
Cincinnati Submission Processing Campus (CSPC) If the tax return is an Ogden Submission Processing Campus (OSPC) "only"
return, discontinue perfection of the return. Prepare Letter 86C to inform the taxpayer the return has been sent to Ogden
If the tax return is other than an OSPC "only"
return, perfect the return if possible:
Examine schedules and other attachments for the necessary information and edit the return as needed for processing. If perfection is not possible, perfect to the extent possible and proceed as set forth in (3) below.
Action to secure perfection:
Where indicated, prepare Form 4227, Intra-SC Reject or Routing Slip, indicating the reason for rejecting the document and
that the document should be resubmitted for processing when it has been perfected. Attach the Form 4227 to the face of document in such a position that the Employer Identification Number (EIN) is visible for
If the tax return has not been numbered, withdraw it from processing and forward it to the proper activity.
For numbered Form 1120-FSC, Form 1120-ND, and Form 1120-SF, edit Computer Condition Code (CCC) "U"
For numbered Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC,
edit the appropriate Action Code in the bottom left margin of the return and leave it in the block.
3.11.16.2.4 (01-01-2012)♦ Correspondence ♦
Issue correspondence to resolve any conditions causing the return to be unworkable or unprocessable. Note:
Do not correspond on returns prepared by Collections, Section 6020(b) or by Examination, "Substitute for Return"
(SFR). Correspond for back up forms and schedules
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ .
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Examine the return so that all of the conditions can be included in the same correspondence.
Correspondence is needed A response is required,
Complete an approved Correspondence Action Sheet indicating the letter number (86C, 118C, etc.), Master File Tax (MFT), and
(International Correspondence) on Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT, or Form 1120-RIC.
If the return is consolidated, input a TC "590"
with Closing Code "14"
for each subsidiary corporation listed on the Form 851 to satisfy the filing requirement.
and input TC "599"
with Closing Code "17"
for Form 1120-FSC, Form 1120-ND, and Form 1120-SF.
If the return is a consolidated, input TC "590"
Correspondence is needed A response is not required,
Photocopy the first page of the tax return and attach a Correspondence Action Sheet below the Entity area on the front of
the photocopy. Be sure the name and address show clearly above the Correspondence Action Sheet.
Edit an Action Trail (e.g., "118C Sent"
where it was deemed necessary for processing. The tax examiner should go to their lead or manager for copies of these letters
3.11.16.2.4.1 (01-01-2010)♦ Correspondence Imaging System (CIS) Returns ♦
returns If...
is edited on the return), do not route the return to Accounts Management. Continue processing.
return does not have a Form 13596 attached The return is not complete (e.g., missing signature, schedules, or forms),
3.11.16.2.4.2 (01-01-2012)♦ Use of Fax for Taxpayer Submissions ♦
Before disclosing tax information, you must be sure you are speaking to the taxpayer or authorized representative. See the
Taxpayer Authentication guidelines in IRM 21.1.3.2.3, Required Taxpayer Authentication and IRM 21.1.3.2.4, Additional Taxpayer Authentication. Also, before leaving any messages on a taxpayer's answering machine, review IRM 11.3.2.6.1, Leaving Information on Answering Machines/Voice Mail. Fax procedures contained in IRM 11.3.1.11, Facsimile Transmission of Tax Information must be reviewed prior to faxing confidential information to the taxpayer. 3.11.16.2.5 (01-01-2009)C/SC Letters
Listed below are letters and a form which are provided by the Headquarters for Submission Processing Center use in corresponding
for items listed in this IRM. It is expected that tax examiners or their supervisors (or delegates) will have access to and
be familiar with the Submission Processing Center Correspondex Handbook for selection of appropriate letters.
Letter 86(C/SC/SP) - Letter referring taxpayer inquiry/forms to another office.
Letter 118(C) - Letter requesting missing schedules or documents.
Letter 143(C) - Letter advising taxpayer that we have received tax form and need additional information in order to complete
action on it. (Also use this letter for missing signature only.)
Letter 319(C/SC) - Letter advising taxpayer that IRS cannot process return because it shows an improper tax period or a period
of more than 12 months or a period less than 12 months without an explanation. Letter 105(C) - Letter disallowing Federal Telephone Excise Tax Credit, explaining appeal rights and procedures.
Form 6800 - Request for Missing Information or Papers to Complete Your Tax Return or Form 8038-CP.
3.11.16.2.6 (06-27-2011)♦ Compliance Secured/Prepared Returns ♦
does not provide them.
Prepared tax returns are notated with "6020(b)"
(Integrated Collections System) or are notated "Process as original"
3.11.16.2.6.1 (01-01-2010)♦ IRC Section §6020(b) – Prepared by Collections ♦ When the taxpayer fails to file a required return, IRC, Section §6020(b) is the authority for the IRS to prepare the return.
These tax returns are identified by the notation: "PREPARED AND SIGNED UNDER AUTHORITY OF SECTION §6020(b) OF THE INTERNAL
, which is located in the center bottom of Page 1.
Returns must have a received date. If missing, follow the normal procedures for editing the received date. See Received Date,
IRM 3.11.16.7.
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "
≡ Do not correspond with the taxpayer for unprocessable conditions. If the return is unprocessable, edit CCC "3"
3.11.16.2.6.2 (03-04-2011)♦ Collection Secured ♦
if the received date is more than 2 years and 9 months after the return Due Date. Do not send to Statute Control function.
If there is an indication a penalty or penalties should be suppressed, edit the appropriate Computer Condition Code(s). Please
refer to IRM 3.11.16.8.1 for additional information.
3.11.16.2.6.3 (01-01-2010)♦ Examination Prepared Returns ♦
These tax returns are identified by the notation "SFR"
The return must have a received date. If no received date is present, follow the normal procedures for editing the received
date. Do not correspond with the taxpayer for unprocessable conditions. If the return is unprocessable, edit CCC "3"
If Form 13133 is attached, edit the Computer Condition Codes checked on the form.
3.11.16.2.6.4 (03-04-2011)♦ Examination Secured ♦
These tax returns are identified by the notation "Process as Original"
Edit the Computer Condition Codes checked on Form 13133.
If Form 13133 (or something similar) indicates a penalty or penalties should be suppressed, edit the appropriate Computer
Condition Code(s). Please refer to IRM 3.11.16.8.1 for additional information.
3.11.16.2.7 (01-01-2012)♦ Statute Returns ♦
Any tax return with a received date that is 2 years and 9 months or more after the Return Due Date is a potential statute
Do not route the return to Statue Control Unit for clearance, edit CCC "W"
Compliance (IRC Section §6020(b)) returns.
Tax returns with "TC 59X"
Tax returns that are substitute returns prepared by Examination ("SFR"
notated in top margin).
Tax returns that are secured by Examination ("Process as Original"
Tax returns with a stamp indicating a previous clearance by the Statute Control Unit within the last ninety days.
Edit Action Code "310"
on Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC.
and attach Form 4227. Check the "Statute Control"
Attach Form 4227 and check the box for "Statute Control"
if the tax return has been cleared by the Statute Control Unit. Statutes will stamp or indicate clearance on the front
3.11.16.2.8 (01-01-2010)♦ Re-Entry Document Procedures ♦
A tax return posted to the wrong account or module or attempting to post must be reprocessed to post to the proper account
Each re-entry tax return must have a Form 3893, Re-Entry Document Control, or Form 13596, Reprocessing Returns, attached.
Form 3893 is used to reinput returns that have not posted to an account or module.
Form 13596 is used to reprocess returns to the correct account or module that had previously posted to the wrong account or module. Always leave the Form 3893 or Form 13596 on the front of the return. It must remain as a permanent part of the document.
Examine Form 3893 or Form 13596 to determine the action needed to make the return processable. Caution:
or reprocessing the return. See Statute Returns, IRM 3.11.16.2.7.
3.11.16.2.8.1 (01-01-2013)♦ Form 3893 – Re-Entry Document Control ♦
Form 3893, Re-Entry Document Control is used to reinput a return that has not posted to an account or module.
If you receive a Form 1120 converted from Form 1120S, ensure that the following items are present: EIN, name control, NAICS,
received date, audit code 4, tax period (prior year returns), and CCC 3 (as applicable for No Replies). If not, then edit
the needed items. If the return was edited according to current processing instructions, ensure that the information from Form 3893 is edited
Edit the same correction in red/green (per local procedure) to the appropriate area. Taxpayer error,
Received date is not present,
Edit a received date to the middle of the return. See Received Date, IRM 3.11.16.7.
When additional information is still needed to make the return processable, prepare an approved Correspondence Action Sheet
or Form 4227 for the appropriate action (e.g., correspondence, research, etc.). When perfection is not possible, edit Action Code "640"
(or CCC "U"
) and attach Form 4227 noting "PERFECTION NOT POSSIBLE"
and leave in batch.
3.11.16.2.8.2 (01-01-2010)♦ Form 13596 – Reprocessing Returns ♦
Do not send Letter 1382C if a request for reasonable cause is attached. If the return was not edited according to current processing instructions, circle any Action Codes, Computer Condition Codes,
Taxpayer Identification Number (TIN) correction,
Edit the correct TIN on tax return.
Tax period correction,
Edit the correct tax period ended on the tax return.
Edit appropriate Computer Condition Code.
(Failure to File) box is checked.
(Failure to Pay) box is checked.
or Form 4227 for the appropriate action (e.g., correspondence, research, etc.).
3.11.16.2.9 (01-01-2013)♦ Amended Returns ♦
The "Amended"
Words such as "Supplemental"
Words such as "Copy"
Detach any unrelated documents and route them to the appropriate function using Form 4227. Edit an Action Trail on the return.
Pull any amended return that has "CBR"
notated and route to AM.
TC "59X"
was edited on the return by Compliance Services,
Form 3893 or Form 13596 is attached, Do not edit CCC "G"
.See Form 3893 - Re-Entry Document Control, IRM 3.11.16.2.8.1, orForm 13596 - Reprocessing Returns, IRM 3.11.16.2.8.2.
.No other codes may be used with CCC "G"
except CCC "S"
and/or Error Resolution System (ERS) Action Codes.
Name control (unless check digits are present)
3.11.16.2.10 (01-01-2013)IRC Section 847 Deduction
IRC Section 847(2) requires certain insurance companies to make special estimated tax payments in the amount equal to the
tax benefit derived from the additional deduction permitted under IRC Section 847.
On Form 1120 the special estimated tax payments may be identified by a notation in the margin near Schedule J, Part II, Line
13 (Page 1, Line 32b for 2010 and prior revisions), stating "Form 8816"
and a corresponding entry for the amount of the payment.
Special estimated tax payments are also reported on a Consolidated 1120, Form 1120-L, and Form 1120-PC. The payment is found
Line Number Form 1120 (Consolidated)
Schedule J, Part II, Line 13 (Page 1, Line 32b for 2010 and prior revisions) (Identified by "Form 8816"
notated in the margin and a corresponding entry for the amount of the payment.)
Form 1120-L Lines 29b and/or 29d
Form 1120-PC Lines 14b and/or 14d (for 1999 and prior, Lines 16b and/or 16d)
If special estimated tax payments are claimed, edit Action Code "342"
on the return. Also, enter CCC "8"
and edit an action trail such as "Copies Fwd to Accounting"
on the return. Photocopy pages 1 and 2 of the return showing the payment and Form 8816, if attached. For a Consolidated
Form 1120, also photocopy the subsidiary return or attachment on which the payment is claimed.
Forward the photocopies to Accounting, or the function designated by the Submission Processing Center and continue processing
Attachment of Form 8816, Special Loss Discount Account and Special Estimated Tax Payments for Insurance Companies, is an indication
of IRC Section 847 deduction.
3.11.16.2.11 (01-01-2010)Prompt Assessment (Form 4810) / Prompt Determination
A "Prompt Assessment"
, IRC Section 6501 is requested, either in the form of a letter or on Form 4810. A "Prompt Determination"
is requested under IRC Section 505(b) of the U.S. Bankruptcy Code.
A Prompt Assessment or Prompt Determination request is not attached to a tax return,
Forward the Prompt Assessment/Prompt Determination request to Examination. A Prompt Assessment or Prompt Determination request is attached to a tax return
A TC "150"
has not posted for that return,
Process the return and forward the Prompt Assessment/Prompt Determination request to Examination with a copy of the tax return.
has posted for that return,
Route the return and the Prompt Assessment/Prompt Determination request to Examination.
If the return is numbered, edit Action Code "370"
3.11.16.2.12 (01-01-2012)Form 8913 - Credit for Federal Telephone Excise Tax Paid Only Tax Return
For corporation returns claiming ONLY a refund of the Federal Telephone Excise Tax Credit (Form 8913) and no other income or deduction entries are present on the
corporate return, edit the following:
Entity area. See IRM 3.11.16.5.
Tax period. See IRM 3.11.16.6.
Action code "420"
. (CCC "U"
for Forms 1120-FSC/ND/SF.)
Received date. See IRM 3.11.16.7.
Initial return code (Form 1120, Form 1120-REIT, and Form 1120-RIC). See IRM 3.11.16.8.3.
Signature. See IRM 3.11.16.4.4.
Form 8050 (Form 1120, place in sequence order if entries are present).
Form 8913 (place in sequence if Line 15, Column (d) or (e) contain a significant entry).
3.11.16.3 (01-01-2013)♦ Refund Returns - 45-Day Jeopardy / Million Dollar Refunds ♦
A refund tax return is batched in a non-refund batch,
Follow the instructions below when the processing date is more than 20 days after the received date or the return due date OR the refund is $10,000,000 or more.
The processing date is more than 20 days after the received date or the return due date (whichever is later) and the refund amount is $25,000 or more,Note"Refund"
in this instruction means only the amount requested to be refunded to the taxpayer, not overpayments transferred to other
for Form 1120, 1120-C, 1120-F, 1120-H, 1120-L, 1120-PC, 1120-REIT, and 1120-RIC.
for Form 1120-FSC, Form 1120-ND, and Form 1120-SF. Attach Form 4227 and check the "Accounting"
The refund is $10,000,000 or more, Note: "Refund"
periods. Do not leave the return in the block.
for numbered and unnumbered Forms 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT,
and 1120-RIC.
for numbered and unnumbered Form 1120-FSC, Form 1120-ND, and Form 1120-SF. Attach Form 4227 and check the "Accounting"
The W&I Submission Processing TAS Liaison walks a return through Code and Edit,
In addition to normal editing, edit the following:
, to freeze the refund.
, to send the return to ERS.
3.11.16.4 (01-01-2012)Examination of Tax Data
This subsection addresses general tax data editing procedures.
3.11.16.4.1 (01-01-2010)Non-Standard or Prior Year Format
All prior year returns must be reformatted to current year format. See prior year conversion exhibits and the Job Aids for
specific year coding.
If the return is on other than current form format (may be either a prior year or non-standard form) and the transcription
lines cannot be numbered to agree with the current year return:
Edit all available transcribed tax data items to the tax data portion of a blank current year form.
across the tax data entries of the prior year (or non-standard) form.
Staple the forms together, attaching the dummied form (current format) on top so that ISRP can enter the Entity data from
the prior year (or non-standard) form.
3.11.16.4.2 (01-01-2013)Conversion of Form 1120S to Form 1120
If a taxpayer filed Form 1120S and the Entity Control Unpostable Unit has determined the Taxpayer does not have a valid Small
Business Election on file (Form 2553), Rejects will convert Form 1120S to a Form 1120. No action is required for Document
see IRM 3.11.16.2.8.1, Form 3893 - Re-Entry Documents Control for additional information. 3.11.16.4.3 (01-01-2009)Significant Entries
. A significant entry is defined as any amount other than zero. Note:
3.11.16.4.4 (01-01-2013)♦ Signature ♦
Returns prepared under IRC Section 6020(b). These returns must be signed by a Compliance Function representative. See IRC
Section 6020(b) Prepared by Collections, IRM 3.11.16.2.6.1. Returns prepared by Examination, for example "SFR"
. See Examination Prepared Returns - SFR or Substitute for Return, IRM 3.11.16.2.6.3.
Returns filed under IRC Section 501(d) (Religious or Apostolic Organization).
Correspondence containing a signature and jurat is attached showing that the taxpayer is responding to an IRS letter. (See
paragraph (5) below.)
Re-entry returns originally filed electronically ("E-File"
). These returns may be identified by the presence of Mod E-file printouts or TRPRT prints in lieu of an actual return.
Form 1120-X, with a signature on the line designated for the taxpayer's signature is attached to Form 1120. Form 1120-X must
be for the same tax period as Form 1120.
tax returns that have Form 13596 attached. For processing instructions, see Correspondence Imaging System (CIS) Returns,
IRM 3.11.16.2.4.1.
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 (a non-standard tax return),
Edit:• Action Code "225"
(Correspondence for Signature only) or "226"
(International Correspondence for Signature only) for Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form
1120-PC, Form 1120-REIT and Form 1120-RIC.• CCC "U"
for all other 1120 series. Attach Form 4227 notating "Signature missing"
If the jurat is altered or stricken (crossed out), see Frivolous Arguments, IRM 3.11.16.1.5.
(a signature with jurat obtained through IRS correspondence) if attached to the tax return.
If the "signature declaration"
is altered or stricken (crossed out), see Frivolous Arguments in IRM 3.11.16.1.5 .
If the taxpayer responds with a self prepared "signature declaration"
, it must contain the same language as the jurat on the tax return: e.g., "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."
that the signature on the tax return, statement or other document is the true signature of the person who actually signed
3.11.16.4.5 (01-01-2011)Incomplete Return
When the return serves only as a transmittal for statements, schedules, and other attachments, or is otherwise incomplete,
analyze the supporting documents and edit the missing entries on the form itself.
Examine attachments and edit the information to appropriate transcription lines of both the income and deduction sections.
This does not apply to Consolidated – Mixed Component returns.
See instructions for Minimum Edit, IRM 3.11.16.4.6.
Edit the income section if Line 11 is the only entry in the income section.
Edit the deduction section if Line 27 is the only entry in the deduction section.
Edit the income and/or deduction section if blank and there is an indication the income and/or deduction items are included
on an attachment (e.g., a notation such as "See attached"
When a doubt exists concerning placement of an income or deduction item because of terminology used by taxpayer, edit income
items as "other income"
deduction items as "other deductions"
Secured Delinquent Returns are returns secured by compliance personnel. If information is missing from one of these returns,
correspond using an approved Correspondence Action Sheet.
3.11.16.4.6 (01-01-2013)Minimum Edit
If Form 1120 does not require Balance Sheet inspection (see Schedule L, Balance Sheet, IRM 3.11.16.10.24 instructions), perform the least time-consuming edit on the income section and the deductions section through Total Deductions.
If only totals are shown in Total Income and/or Total Deductions, edit Total Income to the Other Income line and/or edit Total
Deductions to the Other Deductions line.
If there is an entry on Form 1120, Page 1, Line 29b, enter Form 1120, Page 1, Line 4 (Dividends), from Schedule C, Page 2,
Line 19. Subtract the Line 4 (Dividends) amount from Line 11 (Total Income) to determine the difference. Enter the difference
on Line 10 (Other Income).
Form 1120, analyze and edit to appropriate lines any entry on the attachments for Income and Deductions items.
(Form 1120 Only) Form 1120 filed by a large corporation (defined as a corporation with $10 million or more of assets in Box
D), where "see attached"
is notated in the Income Section and the Deduction Section, should be brought to the attention of your supervisor. Taxpayer
correspondence should be initiated on these returns. Suggested language for the correspondence is as follows:"Complete every applicable entry space on Form 1120. Do not write "see attached"
instead of completing the entry spaces. If you need more space on the forms or schedules, attach separate sheets, using
the same size and format as the printed forms. Be sure to put the corporation's name and EIN on each sheet."
3.11.16.4.7 (01-01-2012)Editing Dollars and Cents
Document Perfection is not required to edit a vertical line, 00, dash, or decimal point to indicate dollars and cents.
The taxpayer has entered money amounts showing dollars and cents separated by a decimal point,
The taxpayer has entered dollars only where dollars only should be entered, The taxpayer has entered dollars only where dollars and cents should be entered,
3.11.16.4.8 (01-01-2009)Negative Entries
Edit negative entries as follows: If...
Brackets are pre-printed on the form,
The taxpayer indicates a negative amount with brackets or a minus (–) sign,
Editing a negative amount to a transcription line (e.g., computing a line entry, entering a missing entry, etc.),
Bracket the negative amount.
3.11.16.5 (01-01-2009)♦ Entity Perfection - General ♦
Check Digits (on preprinted label) - See Figure 3.11.16-2
Preaddressed – An IRS preprinted label (with Check Digits)
Non-preaddressed – Handwritten or typed (no Check Digits)
Some forms have IRS labels printed under the National Change of Address (NCOA) program. These returns can be identified by
either a solid black line or by pound signs above and to the left of the entity area. These returns do not contain Check Digits
and are not considered to be pre-addressed. Figure 3.11.16-2
Example of Check Digits on Form 1120.
3.11.16.5.1 (01-01-2013)♦ Entity Perfection – Employer Identification Number (EIN) ♦
The EIN is located in the upper right area of the form ("Employer Identification Number"
box) or the top left corner of the preprinted label.
Preaddressed Returns (IRS label containing Check Digits):
The taxpayer changed the EIN
Also changed the first name line,
Research IDRS to determine if the first name line and EIN are valid.
If the first name line and EIN are valid:
Circle the Check Digits if present.
If the first name line and/or EIN are not valid, route to Entity Control following local procedures.
There is any major change to the first name line
The EIN is not changed,
Route to Entity Control following local procedures for assignment of new EIN.
There is an EIN change by the taxpayer
No change to the first name line,
The return has been given a new EIN by Entity Control
"TC 011"
or "IDRS EIN"
is notated(Entity has already taken the necessary action),
Circle the Check Digits and old EIN (if present).
Non-Preaddressed Returns (IRS label containing altered check digits or no check digits present (the entity is handwritten or typed)):
The EIN is missing
The EIN is either a PTIN or Individual Taxpayer Identification Number (ITIN), orMultiple EINs are present
Unnumbered, Remove return from batch.
Edit Action Code "320"
on Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC. All
other returns edit CCC "U"
3.11.16.5.2 (01-01-2012)♦ Entity Perfection – Name Control ♦
Valid characters are alpha, numeric, ampersand (&), hyphen (-), and blank. However, blanks are only valid in the last three
positions. Disregard the word "THE"
See Job Aid Document 7071A, Name Control Job Aid – For Use Outside the Entity Area, to determine the Name Control.
If Box E(3)* "Name Change"
, Form 1120 is checked, route the return to Entity Control following local procedures. *(For Form 1120-C - Box D(3), Form 1120-F - Box "Name or address change"
, Form 1120-FSC - Box F(2), 1120-H - Box (2), Form 1120-L - Box E(2), Form 1120-ND - Box D(2), Form 1120-PC - Box E(2),
Form 1120-REIT - Box F(2), Form 1120-RIC - Box E(2), Form 1120-SF - Box (2))
Preaddressed return (IRS label containing Check Digits):
Check digits are present
No changes have been made to the IRS label by the taxpayer,
There is a change to the first name and the EIN is not changed, Note:If the EIN was changed, see Entity Perfection – Employer Identification Number (EIN), IRM 3.11.16.5.1. Unnumbered
Route to Entity Control following local procedures.
A change to other than the first Name (e.g., revision of a trade name or a Doing Business As (DBA) name),
Notate "TC 016"
in the upper left margin of the return. Input TC "016"
There are any questionable entity changes,
Non-preaddressed return (IRS label containing altered check digits or no check digits present (the entity is handwritten or typed):
The entity is an IRS label
The check digit is not present or has been altered,
The entity is not an IRS label,
Underline the Name Control. See Figure 3.11.16-3 .
Edit Action Code "352"
(Name Research) on Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form
1120-RIC. All other returns, edit CCC "U"
. Attach Form 4227 and indicate "Name Research"
in the "Other (explain)"
A return indicates the taxpayer has filed bankruptcy (e.g., shows "RECEIVER"
, "TRUSTEE"
, or "DEBTOR IN POSSESSION"
in the entity area, or on an attachment),
Route to Entity Control following local procedures. Figure 3.11.16-3
Example of underlining the name control on a non-IRS label.
3.11.16.5.3 (01-01-2010)♦ Entity Perfection – "In-Care-Of"
Ensure the "in-care-of"
name is located in the proper location.
name is located on the street address line preceding the street address,
in the first position. See Figure 3.11.16-4.
name is different from the street address of the corporation,
name if included on an attachment.
Circle the corporation street address and input TC "014"
Always circle the in-care-of symbol (% or c/o) if it is present with an address. Do not use the ampersand (&) and the percent
sign (%) when editing address information. Figure 3.11.16-4
Example of editing an "in-care-of"
name that was located on an attachment.
name can be determine by any of the following:
A check mark in the "Name change"
name is changed (e.g., the taxpayer crossed out the original "in-care-of"
name and added the new name or has entered a new "in-care-of"
name in brackets)
Correct the address. See Entity Perfection – Domestic Addresses, IRM 3.11.16.5.4.
3.11.16.5.4 (01-01-2013)♦ Entity Perfection – Domestic Addresses ♦
The procedures for perfection of addresses for preaddressed returns and non-preaddressed returns indicating an address change
For processing year 2012 a new Form 8822-B, Change of Address - Business, will become available.
There is an indication on an attachment that the address has been changed,
Edit the new address in the Entity Section of the return.See Figure 3.11.16-5.
Form 8822 (Address Change Requested) or Form 8822-B (Change of Address - Business) is attached
Information is the same,
Information is different,
Detach Form 8822/Form 8822-B and route to Entity Control following local procedures.
Both a P.O. Box and street address are shown,See Figure 3.11.16-6 .
Input TC "014"
.See Figure 3.11.16-7.
See Document 7475, State and Address Abbreviations, Major City codes (MCCs), ZIP Codes and Countries to determine the ZIP
Edit the 3 digits followed by "01" of the first zip code listed for the applicable state (e.g., "99501" for Alaska).
The "Change of Address"
Edit the "%"
(percent sign) or "c/o"
to the left of the "in-care-of"
name (in the first position) followed by the appropriate name.
See Document 7475, State and Address Abbreviations, Major City Codes, ZIP Codes, and Countries. The address contains information other than a street address or P.O. Box,
) if it is present with an address. Do not use the ampersand (&) and the percent symbol (%) when editing address information. Figure 3.11.16-5
Example of an address on an attached note being edited to a preaddressed label.
Figure 3.11.16-6
Example of how to edit when both a street address and a PO Box is on a non-preaddressed Form 1120.
Figure 3.11.16-7
Example of how to edit when both a street address and a PO Box is on a preaddressed label.
The U.S. Postal Service established new address requirements for APO/DPO/FPO addresses. If the old address appears, convert
to the new state code abbreviation based on the ZIP Code (e.g., APO New York, New York 091XX would be converted to APO AE
091XX). APO/DPO/FPO addresses are considered domestic addresses. Refer to Conversion Chart below:
3.11.16.5.5 (01-01-2010)♦ Entity Perfection – Foreign Address (OSPC) ♦ A foreign (international) address is any address that is not in the 50 states or the District of Columbia.
Returns with APO, DPO, and FPO addresses are considered domestic addresses. See Entity Perfection – Domestic Addresses, IRM 3.11.16.5.4.
Route returns with a foreign address to the Ogden Submission Processing Center (OSPC) for processing. Prepare Letter 86C to
inform the taxpayer the return has been sent to Ogden.
Returns with addresses in the following U.S. Possessions/Territories are considered to be a foreign for processing purposes
but are edited in the same way as domestic addresses. A two-character alpha code must be edited for the possession name.
A ZIP code must be present for U.S. Possessions/Territories. Edit the appropriate ZIP Code if one is not provided. See U.S. Possessions ZIP
Codes, Exhibit 3.11.16-21.
is edited for Germany). For official foreign country codes, see Document 7475 State and Address Abbreviations, Major City Codes, ZIP Codes, and Countries. A unique country code will be edited for returns filed with an address in Canada. See Country Code – Canada, IRM 3.11.16.5.5.1.
If the foreign address is from Australia, Brazil, Canada, Cuba, Italy, Mexico, or The Netherlands, check if the address contains
a province, state, or territory.
A province, state, or territory is present,
Edit the appropriate abbreviation. See Province, State and Territory Abbreviations, Exhibit 3.11.16-18.
A province, state, or territory name is not present, A ZIP Code or state are not required on a foreign address. Foreign addresses use a postal code that is entered before the
city or foreign country and is part of the address.
3.11.16.5.5.1 (01-01-2010)♦ Country Code – Canada ♦
unique country code based on the province. If...
The foreign address contains a Canadian province/territory name, abbreviation, or postal code beginning letter shown in the
The foreign address does not contain a Canadian province/territory name shown on the table below,
The rest of the foreign address is edited using procedures in Entity Perfection – Foreign Address (OSPC), IRM 3.11.16.5.5.
3.11.16.6 (01-01-2013)Tax Period
This section addresses the editing of the period for which the tax return is being filed.
3.11.16.6.1 (01-01-2013)Tax Period - General
Edit the tax period to the right of the form title in YYMM format.
The return is for the current processing calendar year (e.g., 201212), Do not edit the tax period.
Edit the tax period.
The taxpayer has notated a tax period other than the preprinted year on the return,
Edit the tax period based on the taxpayers indication, per paragraph (3).
The tax period is missing, incomplete, or illegible,
If found, edit the tax period to the right of the form title in YYMM format. If unable to determine the tax period after researching, process the return for the year currently being processed.
A tax period should end on the last day of a month. (Ignore a minor discrepancy such as October 30 instead of October 31.)
The exceptions are a 52/53 week filer, and final and/or short period returns. The table below identifies examples of tax periods.
Oct. 3, 2012 (Final short period return)
Oct. 25, 2012 (Final short period return)
1212 (No editing required)
of a month. In the edit format, use the numeric designation of the month, the last day of which is closest to the actual ending
The tax period ending date is not more than 3 days after the beginning of the month,
Edit the previous month.(e.g., October 3, use the numeric designation for September, YY09.)
The tax ending date is not more than 6 days before the end of the month, Edit the month shown on the return,(e.g., October 25, use the numeric designation for October, YY10.)
If the tax period is for more than 12 months or 53 weeks, correspond.
short period return ends on the date the taxpayer went out of business. This may be any day of the month. Use the numeric
designation of the calendar month in which it ends. If the taxpayer has not indicated in which month the business ended, edit
the tax period to be one month prior to the received date.
return if the tax periods month and year is equal to or later than the received dates month and year (future return),
edit the tax period to be one month prior to the received date. See Figure 3.11.16-8.
return, see Short Period Returns – With Prepaid Credits, IRM 3.11.16.6.8. *(Form 1120, Page 3, Schedule J, Line 12, 13 or 16 (2010 and prior revision Form 1120, Page 1, Line 32a, 32b, or 32e) or
applicable line on other Form 1120 series.) Figure 3.11.16-8
Example of how to edit an early filed (future) Final return.
return, if the received date is after the short period due date but on or before the regular full tax period due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ , edit CCCs "R"
Also edit CCC "D"
if the return is a Balance Due.
The separate short period return of a subsidiary which became affiliated with a "consolidated"
group may end on the day preceding such affiliation. As a practical matter, do not question the ending date on any change-of-accounting
Check all tax periods for the Statute of Limitation (2 years and 9 months from the normal due date of the return). Refer to
Statute Returns, IRM 3.11.16.2.7. 3.11.16.6.2 (01-01-2012)Early Filed Returns – Full Year and Short Period
The received date and the tax period Ending (TPE) are the same month (e.g., the received date and the TPE are both April),
orThe received date is prior to the TPE by four months or less (e.g., the received date is April but the TPE is May, June, or
for Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC. (Early
Filed - Suspense).
and attach Form 4227. "Edit Early Filed - Suspense"
in the "Other Activity"
The received date is prior to the TPE by more than four months (e.g., the received date is April but the TPE is August or
later), Edit Action Code "211"
(International Correspondence) for Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT,
and Form 1120-RIC.
for Form 1120-FSC, , Form 1120-ND, and Form 1120-SF.
Attach an approved Correspondence Action Sheet to request confirmation of the TPE.
Action Codes are only applicable to Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT,
and Form 1120-RIC. Use CCC "U"
for other returns in the 1120 series.
3.11.16.6.3 (01-01-2013)Short Period – Editing Proof of Entitlement
A Short Period Return is one which covers a period of less than 12 months or 52–53 weeks.
If the Short Period Return is marked "Final"
, see Tax Period - General, IRM 3.11.16.6.1.
If the Short Period Return is marked "initial"
, etc. or meets any of the identifying conditions for "Initial Return Code"
see Initial Return Code, IRM 3.11.16.8.3. Process all other Short Period Returns as a "Change of Accounting Period"
. In such cases, proof of entitlement to the change is required. Exception:
Proof of entitlement is not required for Form 1120-H. For editing Form 1120-H short period returns, see tax period, IRM 3.11.16.28.4(2).
Use the table below to identify and edit proof of entitlement.
Acceptable Proof of Entitlement
A statement the corporation is changing the tax period under:
Headquarters "Grant Letter"
Revenue Procedure 2006–45 or 2006–46.
is also applicable for Form 1120-F, Form 1120-FSC, and Form 1120-SF. For Form 1120-F see, Audit Codes, IRM 3.11.16.26.12.2,For Form 1120-FSC see, Audit Codes, IRM 3.11.16.27.16.1, andFor Form 1120-SF see, Audit Codes, IRM 3.11.16.34.8.1. A statement the corporation is:
Coming out of consolidation; or
(Parent) is no longer a consolidated group; or
Changing the tax period to "get in step with"
Parent (may note "affiliation with a consolidated group"
Filing under "Section 338 Election"
or attached Form 8023 and tax period begins after the acquisition date. Do all of the following: Edit CCC "R"
if filed before the specially privileged (full tax year of parent return) due date; and
See Figure 3.11.16-9.
Notation referring to:
Section 898(c)(1)(A); or
Election Change in Taxable Year under Section 898(c)(2); or
"Section 1398 election"
(Bankruptcy Petition has been filed), or
Reference to Revenue Procedure 2006–45 or 2006–46; or
"Second Short Year after Section 1398 Election"
. Do not correspond.
. Also input TC "590"
with Closing Code "20"
to prevent future transcript generation.
Notation on Form 1128 or Form 5471 indicates: "Filed under Rev. Proc. 2006–45"
or "Filed under Rev. Proc. 2006–46"
Notation on Form 1120 or 1120-F indicates: "Section 444 Election Terminated"
if the tax return is for a Personal Service Corporation (e.g., Form 1120, Page 1, Box A, Item 3 is marked or Schedule J, Page 3, Line 2 box is marked; or Form 1120-F, Page 2, Question O is marked or Schedule J, Page 4, Line 2 box is marked).
Figure 3.11.16-9
Example of editing a short period return with proof of entitlement attached on a statement. 3.11.16.6.3.1 (01-01-2011)Short Period Returns – Regulation 1.1502–76
Regulation 1502 applies to returns filed by a corporation which becomes a member of a consolidated group during the tax year.
These returns may be identified by a statement referencing "Changing the tax period to get in step with parent"
or "Affiliation with a Consolidated Group"
The short period return has the same due date as the consolidated return of the parent. This is sometimes referenced on the
return as a "specially privileged"
due date. It is important to recognize these returns and follow the procedures outlined in this section in order to suppress the penalties
for late filing and late payment of tax that would otherwise be assessed.
When processing a IRC Section 1502 return it is necessary to do all of the following:
Edit Computer Condition Codes "R"
if filed before the specially privileged (full tax year of parent return) due date.
Edit Computer Condition Code "Y"
3.11.16.6.4 (01-01-2009)Short Period Returns – Missing Proof of Entitlement
If proof of entitlement is missing or the taxpayer states on the return or an attachment that the corporation has filed an
application but has not received a response, research IDRS using Command Code BMFOLE for approval or disapproval information
BMFOLE shows a Transaction Code 053, 054, or 055,(This is an indication that the Form 1128 or Form 8716 has been approved.)
BMFOLE shows a Transaction Code 058 or 059,(This is an indication that the Form 1128 or Form 8716 has not been approved.)
The return is unprocessable. See Short Period Returns – Editing a Disapproved Application (Form 1128), IRM 3.11.16.6.5. BMFOLE does not show a Transaction Code 053, 054, 055, 058, or 059,
Correspond using Letter 319.
3.11.16.6.5 (01-01-2009)Short Period Returns – Editing a Disapproved Application (Form 1128)
If Form 1128 is disapproved, the return is considered unprocessable:
(International Correspondence) or CCC "U"
In the correspondence, instruct the taxpayer to file a return for the next regular full period due. Request a disposition
of any remittance paid with the return or other credits which have posted to the short period module.
3.11.16.6.6 (01-01-2013)Short Period Returns – Editing Form 1128 With No Indication of Approval or Disapproval
When a Form 1128 with no indication of approval or disapproval is attached and no proof of entitlement is present, research
BMFOLE shows a Transaction Code 053 or 054,(This is an indication that Form 1128 has been approved.)
BMFOLE shows a Transaction Code 059,(This is an indication that Form 1128 has not been approved.)
The return is unprocessable. See Short Period Returns – Editing a Disapproved Application (Form 1128), IRM 3.11.16.6.5. BMFOLE does not show Transaction Code 053, 054, or 059,
A Form 1128 with neither approval or disapproval, discontinue processing Form 1120. Route Form 1120 and Form 1128 to Entity as directed in the paragraphs below.
for Form 1120, Form 1120-C, Form 1120-F, Form 1120-H, Form 1120-L, Form 1120-PC, Form 1120-REIT, and Form 1120-RIC. Edit
for all other returns. Attach Form 4227 and check the box for Entity Control box. Edit the Form 1120 received date on
Form 1128. (Do not detach Form 1128.) Leave the return in the batch and continue processing. See Figure 3.11.16-10.
If Form 1128 is attached to an unnumbered return, edit the Form 1120 received date on Form 1128, attach Form 4227 and route the return to Entity Control. (Do not detach
Form 1128.)
Figure 3.11.16-10
Example of editing for a short period return when the Form 1128 is attached with no indication of approval or disapproval.
3.11.16.6.7 (01-01-2009)Short Period Returns – Editing Returning Correspondence
If the taxpayer provides acceptable proof, follow instructions in Short Period – Editing Proof of Entitlement, IRM 3.11.16.6.3.
If the taxpayer fails to reply, or does not provide tax period approval, enter CCC "Y"