Source: http://www.irs.gov/irm/part3/irm_03-011-154r-cont02.html
Timestamp: 2014-09-16 09:27:50
Document Index: 613931076

Matched Legal Cases: ['art 1', 'art 1', 'art 1', 'art 1', 'art 1', 'art 2', 'art 2', 'art 2', 'art 2', 'art 2', 'art 4', 'art 4', 'art 4', 'art 4', 'art 5', 'arte 1', 'arte 1']

Internal Revenue Manual - 3.11.154 Unemployment Tax Returns (Cont. 2)
Section 154. Unemployment Tax Returns (Cont. 2)
3.11.154 Unemployment Tax Returns (Cont. 2)
3.11.154.7
Form 940- Revision 2005 and Prior
3.11.154.8
Form 940-EZ - General Guidelines for Converting and Editing Returns
3.11.154.9
Form 940PR - General Guidelines for Editing Returns (OSPC Only) (Revision 2006 and subsequent)
Exhibit 3.11.154-1
Form 940 (Revision 2013) and Schedule A (Revision 2013)
Exhibit 3.11.154-2
Form 940PR (Revision 2013) and Schedule A Exhibit 3.11.154-3
Form 940 Conversion Table- Current Year to Years 2002 Through 2005
Exhibit 3.11.154-4
Correspondence Action Table
Exhibit 3.11.154-5
Exhibit 3.11.154-6
Entity State Code and ZIP Codes
Exhibit 3.11.154-7
U.S. Possessions, Abbreviations and ZIP Codes
Exhibit 3.11.154-8
Exhibit 3.11.154-9
Providence, State and Territory Abbreviations
Exhibit 3.11.154-10
Action Code Chart
Exhibit 3.11.154-11
Potential Frivolous Return Criteria
Exhibit 3.11.154-12
Tax Years (TY) and Credit Reduction Rates (TY 2004-2013)
Exhibit 3.11.154-13
Taxable State Wage Bases
Exhibit 3.11.154-14
"Track and Confirm"
3.11.154.7 Form 940- Revision 2005 and Prior
3.11.154.7.2 (01-01-2014)Form 940 - Part I - Computation of Taxable Wages (Revision 2005 and Prior)
Form 940 - Part I should be completed by all filers. If Part I does not contain sufficient information to determine Line 5, Total taxable wages, correspond. Exception:
It is not necessary to correspond to obtain Part I information from the taxpayer when they indicate "not liable"
, zero, dash, all blank entries or "final return"
and the return has been signed. We should consider taxpayer intent.
3.11.154.7.2.1 (01-01-2014)Form 940 - Part I, Line 1 (Revision 2005 and Prior)
Form 940 - Part I, Line 1 - Total Payments for Services of Employees
On some Form 940 returns, the taxpayer may enter the same amount to Line(s) 1 and 3. (Line 1 entries cannot be the same as
Line 3 entries).
If Part I, Line 1 and Line 3 have the same line entries, edit an asterisk (*) on line 3 to allow the return to fall out to
If the taxpayer does not respond, disallow the entry on Line 3. Bring the amount from Line 1 to Line 5, making a balance due
3.11.154.7.2.2 (01-01-2014)Form 940- Part I, Line 2, Exempt Payments (Revision 2005 and Prior) Form 940 - Part 1, Line 2, Exempt Payments: IF
There is an entry on Part 1, Line 2,
Accept the taxpayer's figure on Line 2.
No explanation is provided by the taxpayer on Line 2, No action is necessary. Do not correspond with the taxpayer for an explanation.
Line 2, 3, and 4 are identical,
Consider them as misplaced entries and correspond for the correct line entries.
3.11.154.7.2.3 (01-01-2014)Form 940 - Part I, Line 3, Excess Payment (Revision 2005 and Prior) Form 940 - Part 1, Line 3, Excess Payment: IF
The taxpayer enters the same amount on Line 1 and Line 3,
Edit an asterisk (*) on line 3 to allow the return to fallout to ERS.
The taxpayer does not respond,
Disallow the entry on Line 3. Bring the amount from Line 1 to Line 5, making the return taxable.
3.11.154.7.2.4 (01-01-2014)Form 940 - Part I, Line 4, Total Exempt Payments (Revision 2005 and Prior)
Form 940 - Part 1, Line 4, Total Exempt Payments:
The taxpayer has an entry on Line 4, Total Exempt Payments.
There is no entry in Part I, Lines 2 and Line 3,
No action is necessary. Accept taxpayer's entry on Line 4. Do not correspond. Line 4 is greater than Part I, Line 1,
Correspond for the correct amounts (total exempt payments cannot exceed total payments).
Asterisk (*) to the left of the taxpayer's entry on Line 4, and Line 5.
Edit amount on Line 1 to Line 5 making the return taxable.
3.11.154.7.2.5 (01-01-2014)Form 940 - Part I, Line 5, Total Taxable Wages (Revision 2005 and Prior)
Form 940 - Part 1, Line 5, Total Taxable Wages:
If there is an entry on Line 1 (Total Payments) and Lines 2 through 5 show a significant entry such as a "0"
(zero), dash"-"
or the word "None"
written on the line,
Edit the amount from Line 1 to Line 5 or compute and enter Line 1 less Line 4.
There is an entry on Part II, Line 7,
Determine the wages by dividing this amount by .008 and edit the result to line 5.
Line 1 and Line 5 have no entries,
Correspond to obtain the total taxable wages.
Line 5 is blank or zero because Line 3 equals Line 1,
3.11.154.7.2.6 (01-01-2014)Form 940 - Part I, Line 6, Credit Reduction (Revision 2005 and Prior) See IRM 3.11.154.6.9, Schedule A (Form 940), (Revision 2011 and subsequent)- Multi-State Employer and Credit Reduction Information.
3.11.154.7.2.7 (01-01-2014)Form 940- Part I, Line 7, Total Credit Reduction (Revision 2005 )
See IRM 3.11.154.6.9, Schedule A (Form 940), (Revision 2011 and subsequent)- Multi-State Employer and Credit Reduction Information.
3.11.154.7.3 (01-01-2014)Form 940 - Part II (Revision 2005 and Prior)
This section contains instructions for Form 940, Part II.
3.11.154.7.3.1 (01-01-2014)Form 940- Part II, Line 3(a), Name of State (Revision 2005 and Prior) ISRP will transcribe the valid state codes shown in Part II, Line 3, Column (a).
If the state name is written out in its entirety, or shown in a format other than as a valid state code, edit the correct
two character state code. If more than one state code is present on the return or attachments, attach a Schedule A and mark the applicable state code
Valid state codes, for purposes of unemployment tax, include all fifty states, the District of Columbia, Puerto Rico and the
U.S. Virgin Islands. See Exhibit 3.11.154-5 for valid state codes and abbreviations.
coded returns (Amended) are not edited.
When processing a non - taxable return from a single state filer subject to credit reduction state, edit a "ZZ"
State Code to Part II, Line 3(a).
If the State Code is missing or illegible, edit the State used in the entity section of the return to Part II, Line 3(a).
Edit a State Code only once, even if the taxpayer has entered it more than once.
Do not edit any data listed for foreign countries including: American Samoa
Only Puerto Rico and U.S. Virgin Islands will be edited to Part II, Line 3(a) or Schedule A.
3.11.154.7.3.2 (01-01-2014)Form 940- Part II, Line 3 Column (b), State Reporting Numbers (Revision 2005 and Prior)
Form 940 - Part II, Line 3, column (b), State Reporting Number(s) will no longer be edited. No action is necessary.
3.11.154.7.3.3 (01-01-2014)Form 940- Part II, Line 3b, Total Tentative Credit (Revision 2005 and Prior)
Line 3(b), Total Tentative Credit, will no longer be transcribed. No action will be necessary. Note:
Any reduction in credit because of late payments made to the State will be determined by the FUTA State Certification Program
after initial processing of the Form 940 return.
3.11.154.7.3.4 (01-01-2014)Form 940 - Part II, Line 7 Total FUTA Tax (Revision 2005 and Prior) Form 940 - Part II, Line 7, Total FUTA Tax
If this line is blank or illegible, perfect it from the return or attachments if possible.
Do not compute the Gross FUTA tax, Line 1 of Part II or the Maximum Credit, Line 2 of Part II, in order to perfect Line 7.
If Lines 1, 2 and 6 of Part II have been completed by the taxpayer or perfected from information on this return, perfect Line
7, by subtracting Line 6 from the amount on Line 1, Part II.
If the entry is a negative number, asterisk (*) to the left of the entry. 3.11.154.7.3.5 (01-01-2014)Form 940 Part II, Line 8, Total FUTA Federal Tax Deposit (Revision 2005 and Prior)
Form 940 - Part II, Line 8, Total FUTA FTD
If you cannot perfect this line from the return or attachments, leave it blank.
If the entry is a negative number, asterisk (*) to the left of the entry. 3.11.154.7.3.6 (01-01-2014)Form 940, Part II, Line 9, Balance Due/Line 10, Overpayment (Revision 2005 and Prior)
Form 940 - Part II, Line 9, Balance Due / Line 10, Overpayment
If these lines are blank or illegible, perfect from the return or attachments if possible.
Perfect the Balance Due/Overpayment by subtracting Line 8 from Line 7. IF
The Balance Due amount on Line 9 contains Failure to Deposit (FTD), Failure to File (FTF), or Failure to Pay (FTP) penalty
and/or interest,
1. Edit an asterisk (*) to the left of the Line 9 amount. 2. Subtract the FTD, FTF, FTP penalty and interest from the Balance Due amount.3. Edit the Balance Due amount to the left of the asterisk (*). 4. Edit a Received Date, if necessary. The Overpayment Amount on Line 10 is reduced by FTD, FTF, FTP penalty and/or interest,
1. Edit an asterisk (*) to the left of the Line 10 amount. 2. Add the FTD, FTF, FTP penalty and interest to the Overpayment amount.3. Edit the Overpayment amount to the left of the asterisk (*). 4. Edit a Received Date, if necessary.
If the taxpayer has entered the same amount in Part II, Lines 7, 8 and 9, and the amount equals the total of the ROFTL in
Part III or the ROFTL is blank, Asterisk (*) to the left of the entry on Line 8.
Do not edit if the computation on Line 9 or 10 is less than ≡ ≡ ≡ ≡ ≡ .
3.11.154.7.4 (01-01-2014)Form 940 - Part III - Record of Federal Unemployment Tax Liability (ROFTL) (Revision 2005 and Prior)
Form 940 - Part III - Liability for Quarter - Only the quarterly liability amounts are transcribed and require editing. The "Total for year"
amount in Part III is not transcribed. IF
Edit from attachments.
Only the fourth quarter is blank,
Part II, Line 7 is larger than the sum of the first three quarters Edit the difference between Part II, Line 7 and the sum of the three quarters to the fourth quarter. (This will prevent erroneous
deposit penalties from being charged.)
The taxpayer may have entered wages instead of tax in Part III,
Part I, Line 5 is the same amount as the Total for Year, Part III, and Part II, Line 7 is more than ≡ ≡ ≡ Multiply the wage amount shown for each quarter by .008 and edit the correct entries to Part III. See Figure 3.11.154-12.
The taxpayer entered a negative figure in any quarter of the liability fields in Part III,
Enter a SIC "1"
to the right of the line that separates the entity information from the ABCD Questions. Figure 3.11.154-12
3.11.154.7.5 (01-01-2014)Form 940 - Schedule Indicator Code - SIC (Revision 2005 and Prior) The Schedule Indicator Code (SIC) is used to notify the computer that the Quarterly Federal Tax Liability for Unemployment
Tax (ROFTL), Part III is incomplete or unnecessary. When the SIC "1"
is edited the computer will determine if a Federal Tax Deposit penalty should be assessed based on a quarterly average
of the total liability for the year. The SIC code will be edited in the right margin, next to the line that separates the
entity information from the ABCD Questions. Edit SIC Code "1"
when: ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ There is a negative amount in the ROFTL.
The ROFTL is blank.
There is a total in the ROFTL, but there are no Quarterly Liability Amounts present.
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ 3.11.154.7.6 (01-01-2014)Form 940 - Federal Tax Deposit Credits (Revision 2005 and Prior) If the return shows excess credit (remittance or FTD) and the taxpayer requests that credit be transferred to another type
of tax, edit CCC "X"
and prepare Form 3465. (Part II, Line 8)
Photocopy related materials, attach to Form 3465 and route to BMF Accounts Management.
3.11.154.8 (01-01-2014)Form 940-EZ - General Guidelines for Converting and Editing Returns
Form 940-EZ was filed between Tax Years 2005 and 2009. If filed now, they are converted to a current year Form 940. This section provides instructions for processing Form 940-EZ in the Code and Edit function. For Editing, see IRM 3.11.154.2.1
For Third Party Designee Returns, see IRM 3.11.154.2.16
For Signature, see IRM 3.11.154.2.18
For Tax Period, see IRM 3.11.154.2.19
For Received Date, see IRM 3.11.154.3.3
For Indian Tribal Returns,
IRM 3.11.154.3.5
For Statute Returns, see IRM 32.11.154.3.6
For Entity Perfection, see IRM 3.11.154.5
For Conversion Procedures, see IRM 3.11.154.8.1
3.11.154.8.1 (01-01-2014)Form 940-EZ Conversion to Form 940 (Current Revision)
All Form 940-EZ returns are converted to a current year Form 940 for processing. If correspondence is needed to resolve unprocessable
conditions, first convert the return to a Form 940. If credit reduction applies to a state on a filed Form 940-EZ, transfer the information to a current Form 940 revision and/or
Schedule A. See IRM 3.11.154.6.9 for Credit Reduction procedures.
The following table enumerates the Form 940-EZ line conversion to Form 940, current form.
Form 940-EZ Line Number Form 940 (Rev 2013, 2012, or 2010 and prior) Line Number Transcription Line
Name of State Where Contributions are Paid
Payments of More than $7,000
Total FUTA Tax Deposited
First Quarter Liability
First Box in Part II
Second Quarter Liability
Second Box in Part II
Third Quarter Liability
Third Box in Part II
Fourth Quarter Liability
Fourth Box in Part II
3.11.154.8.2 (01-01-2014)Form 940-EZ, Question B(1)- Valid State Code Valid - State Code - Question B(1) Question B(1) of the Form 940-EZ is converted to Line 1a on the Form 940 (current revision)
See IRM 3.11.154.5.7, Entity State Codes, for processing procedures.
See Exhibit 3.11.154-5 for a list of valid state codes. 3.11.154.8.3 (01-01-2014)Form 940-EZ, State Reporting Number/ Multiple Identification Code (MID) State Reporting Number/ Multiple Identification Code (MID) - Question B(2) - No action is necessary. We will no longer transcribe the State Reporting Number, and there is no need for a Multiple Indicator
Code (MID).
3.11.154.8.4 (01-01-2014)Form 940-EZ, Part I - Taxable Wages and FUTA Tax Form 940-EZ, Part I should be completed by all filers. If Part I does not contain sufficient information to determine Total Taxable Wages, correspond. It is not necessary to correspond to obtain Part I information from the taxpayer when they indicate "not liable"
3.11.154.8.4.1 (01-01-2014)Form 940-EZ, Part I, Line 1 Form 940-EZ - Part I, Line 1 - Total Payments
Line 1 of the Form 940-EZ is converted to Line 3 of the Form 940. See IRM 3.11.154.6.3.1, Part 2, Line 3 Total Payments to Employees, for processing procedures.
3.11.154.8.4.2 (01-01-2014)Form 940-EZ, Line 2, Exempt Payments Form 940-EZ - Line 2, Exempt Payments
Line 2 of the Form 940-EZ is converted to Line 4 of the Form 940. See IRM 3.11.154.6.3.2, Part 2, Line 4 Exempt Payments for processing procedures.
3.11.154.8.4.3 (01-01-2014)Form 940-EZ, Line 3, Excess Payment Form 940-EZ - Line 3, Excess payment
Line 3 of the Form 940-EZ is converted to Line 5 of the Form 940. See IRM 3.11.154.6.3.3, Part 2, Line 5 Excess Payments for processing procedures.
3.11.154.8.4.4 (01-01-2014)Form 940-EZ, Line 4, Total Exempt Payments Form 940-EZ - line 4, Total Exempt Payments
Line 4 of the Form 940-EZ is converted to Line 6 of the Form 940. See IRM 3.11.154.6.3.4, Part 2, Line 6, Subtotal of Exempt and Excess Payments for processing procedures. 3.11.154.8.4.5 (01-01-2014)Form 940-EZ, Line 5, Total Taxable Wages Form 940-EZ - Line 5, Total Taxable Wages
Line 5 of the Form 940-EZ is converted to Line 7 of the Form 940. See IRM 3.11.154.6.3.5, Part 2, Line 7 Total Taxable Wages for processing procedures. 3.11.154.8.4.6 (01-01-2014)Form 940-EZ, Line 6, FUTA Tax Form 940-EZ - Line 6, FUTA Tax
Line 6 of the Form 940-EZ is converted to Line 12 of the Form 940. See IRM 3.11.154.6.5.1, Part 4, Line 12 Total FUTA Tax After Adjustments for processing procedures.
3.11.154.8.4.7 (01-01-2014)Form 940-EZ, Line 7, Total FUTA Tax Deposits Form 940-EZ - Line 7, Total FUTA Tax Deposits
Line 7 of the Form 940-EZ is converted to Line 13 of the Form 940. See IRM 3.11.154.6.5.2, Part 4, Line 13 FUTA Tax Deposits for processing procedures. 3.11.154.8.4.8 (01-01-2014)Form 940-EZ, Line 8, Balance Due Form 940-EZ - Line 8, Balance Due
Line 8 of the Form 940-EZ is converted to Line 14 of the Form 940. See IRM 3.11.154.6.5.3, Part 4, Line 14 Balance Due. 3.11.154.8.4.9 (01-01-2014)Form 940-EZ, Line 9, Overpayment
Form 940-EZ - Line 9 Overpayment
Line 9 of the Form 940-EZ is converted to Line 15 of the Form 940. See IRM 3.11.154.6.5.4, Part 4, Line 15 Overpayment for processing procedures.
3.11.154.8.5 (01-01-2014)Form 940-EZ, Part II - Record of Quarterly Federal Unemployment Tax Liability (ROFTL) Form 940-EZ Part II - Liability for Quarter
Part II, First, Second, Third and Fourth Quarter Liability boxes will be converted to Line 16a, 16b, 16c, and 16d. See IRM 3.11.154.6.6, Part 5, Record of Quarterly Federal Unemployment Tax Liability (ROFTL). 3.11.154.8.6 (01-01-2014)Form 940-EZ - Schedule Indicator Code (SIC) See IRM 3.11.154.6.6.1 for processing procedures. 3.11.154.8.7 (01-01-2014)Form 940-EZ, FTD Credits If the return shows excess credit (remittance or FTD) and the taxpayer requests that credit be transferred to another type
of tax, or to another tax year, edit CCC "X"
to freeze the credit until the transfer is made.
Prepare Form 3465 to Accounts Management.
3.11.154.9 (01-01-2014)Form 940PR - General Guidelines for Editing Returns (OSPC Only) (Revision 2006 and subsequent)
Procedures for editing Form 940PR in the Code and Edit function. See Publication 850 (EN/SP)
"English-Spanish Glossary of Tax Words and Phrases used in Publications by the IRS"
which may be used as a resource tool for processing Form 940PR returns.
The taxpayer completes Parte I, Parte II, Parte III, and Parte IV, Examine the return and attachments.
Delete the incorrect used Parte.
Wages were paid in Puerto Rico only,
Unemployment payments were made timely,
Only Parte I and Parte II should be completed by the taxpayer. It is not necessary for the taxpayer to complete Parte III
or Parte IV.
The taxpayer completed both Parte II and Parte III,
Examine the return and attachments.
If only Puerto Rico is shown in both Parte II and Parte III, delete Parte III.
If Puerto Rico and any other possession or state is shown in Parte III, delete Parte II. . The taxpayer completes Parte I, Parte III, and Parte IV,
Take no action. The taxpayer is indicating that their unemployment tax payments were not made timely or that wages were paid
in other states, the District of Columbia or the Virgin Islands.
3.11.154.9.1 (01-01-2014)Form 940PR - Procedures for Coding and Editing Returns (Revision 2005 and Prior)
For Code and Editing Form 940PR, follow instructions below: For Editing, see IRM 3.11.154.2.1
For Indian Tribal Returns, see IRM 3.11.154.3.5
For Statute Returns, See IRM 3.11.154.3.6
For Entity Perfection, see IRM 3.11.154.5.1
3.11.154.9.2 (01-01-2014)Form 940PR - Page 1 Editing the "A"
Indicator Questions (Revision 2005 and Prior) Take no action. We will no longer edit the ABC Indicator Code.
3.11.154.9.2.1 (01-01-2014)Form 940PR - "A"
Indicator Questions - IRC 6020(b) (Revision 2005 and Prior)
If return has IRC 6020 (b) notated on the return, do not edit the ABC Indicator. No action is necessary. Do not correspond with the taxpayer.
3.11.154.9.3 (01-01-2014)Form 940PR - Credit Reduction States (Revision 2005 and Prior)
For some Tax Year(s) 2005 and prior, the taxpayer may be required to use Form 940 to report the FUTA wages paid in a Credit
Reduction state. Form 940PR cannot be used if credit reduction applies. Convert to Form 940. If conversion is not possible, correspond with the taxpayer.
3.11.154.9.4 (01-01-2014)Form 940PR - Parte I - Computation of Taxable Wages (Revision 2005 and Prior)
Form 940PR, Parte I, should be completed by all filers. If Parte I does not contain sufficient information to determine Line 5, Total Taxable Wages, correspond.
3.11.154.9.4.1 (01-01-2014)Form 940PR - Parte I, Line 1 (Revision 2005 and Prior)
Parte I, Line 1 - Total Compensation Paid to Employees: On some Form 940PR returns, the taxpayer may enter the same amount on Line(s) 1 and 3. (Line 1 entry cannot be the same as
Line 3 entry).
If Parte I, Line 1 and Line 3 have the same line entries, then correspond with the taxpayer using Letter 142C (or local letter,
as the campus permits) for the correct Line 3 entry.
If the taxpayer does not respond, then disallow the entry on Line 3. Bring the amount of the Line 1 entry to Line 5 making
a Balance Due Return (TAXABLE).
3.11.154.9.4.2 (01-01-2014)Form 940PR - Parte I, Line 2, Exempt Payments (Revision 2005 and Prior)
Parte 1, Line 2, Exempt Payments No action is necessary.
3.11.154.9.4.3 (01-01-2014)Form 940PR - Parte I, Line 3, Excess Payment (Revision 2005 and Prior)
Parte 1, Line 3, Excess Payment. Taxpayer shows an amount based on other than federal wage limit, correspond to determine correct federal wage amount.
If Line 3 is an even multiple of $7,000 (i.e., 14,000, 21,000, etc.) the taxpayer may be exempting the first $7,000 and paying
taxes based on wages over $7,000 rather than paying taxes on the first $7,000. Note:
If it appears that the taxpayer has "flipped"
these amounts, correct Lines 3, 4 and 5, if applicable.
If Line 3 equals Line 1, correspond using Letter 142C (or local letter, as the campus permits) to the taxpayer. 3.11.154.9.4.4 (01-01-2014)Form 940PR - Parte I, Line 4, Total Exempt Payments (Revision 2005 and Prior)
Parte I, Line 4 - Total Exempt Payments:
If there is no entry in Parte I, Line 2 and Line 3, accept the taxpayer's entry on Line 4. Do not correspond.
If Line 4 is greater than Parte I, Line 1, correspond. (Total exempt payments cannot exceed total payments.)
If no reply, asterisk (*) to the left of the entries on Lines 4 and 5 and edit the amount from Line 1 to Line 5 (making the
return Taxable).
3.11.154.9.4.5 (01-01-2014)Form 940PR - Parte I, Line 5, Total Taxable Wages (Revision 2005 and Prior)
Line 5, Total Taxable Wages: If there is an entry on Line 1 (Total Payments) and Lines 2 through Line 5 shows a significant entry such as a "0"
(zero), blank, dash "-"
, or the word "NONE"
written on the line, edit the amount on Line 1 to Line 5 or compute and enter Line 1 less Line 4.
If Parte I, Line 1 and 5 have no entries, correspond to obtain the total taxable wages, except:
Line 1, Parte II has an entry,
Determine the wages by dividing this amount by .008 (for tax years 2010 and prior, or .006 for tax year 2013 and 2012. (For
tax year 2011, see Form 940, Rev 2011)
The state in Parte III, Line 3, Column (a) has a taxable state wage base of $7,000 and there are no exempt payments,
Edit the amount from Parte II, Line 3, Column (c) - Taxable payroll to Line 5.
If Line 5 is "blank"
because Line 3 equals Line 1, correspond with taxpayer using 142C Letter.
3.11.154.9.4.6 (01-01-2014)Form 940PR - Corporate Officers' Wages (Revision 2005 and Prior) No action necessary. We will no longer correspond for Corporate Officers' Wages.
3.11.154.9.5 (01-01-2014)Form 940PR - Parte II - ABC Indicator (Revision 2005 and Prior) No action is necessary. We will no longer edit the ABC Indicator.
3.11.154.9.5.1 (01-01-2014)Form 940PR - Parte II, Line 3, Balance Due/Line 4, Overpayment (Revision 2005 and Prior)
Form 940PR - Parte II, Line 3, Balance Due/Line 4, Overpayment:
Perfect the Balance Due/Overpayment by subtracting Line 4 from Line 1 of Part II, Form 940PR. IF
The Balance Due amount on Line 3 contains Failure to Deposit (FTD), Failure to File (FTF), or Failure to pay (FTP) penalty
Edit an asterisk (*) to the left of the Line 3 amount.
Subtract the FTD, FTF, FTP penalty and interest from the Balance Due amount.
Edit the Balance Due amount to the left of the asterisk (*). Edit a Received Date, if necessary.
. The Overpayment amount on Line 4 is reduced by FTD, FTF, FTP penalty and/or interest,
Edit an asterisk (*) to the left of the Line 4 amount. Add the FTD, FTF, FTP penalty and interest to the Overpayment amount.
Edit the Overpayment amount to the left of the asterisk (*).
Edit a Received Date, if necessary.
3.11.154.9.6 (01-01-2014)Form 940PR - Parte III - Tax Owed (due) or Refund (Revision 2005 and Prior)
The taxpayer will complete Part III and Parte IV, if applicable.
3.11.154.9.6.1 (01-01-2014)Form 940PR - Parte III, Line 3(a), State Codes (Revision 2005 and Prior)
All returns must have at least one State Code.
The only exception is a "G"
coded return (amended return).
as used here, pursuant to IRC 3306(j)(1), includes the fifty U.S. States plus the District of Columbia, Puerto Rico, and
the U.S. Virgin Islands, participating by the Federal Unemployment Tax Act.
The State Code can only be edited in two locations: On the Form 940PR, Parte III, Line 3, Column (a), or
On the Schedule A.
If there are one or two state codes, ISRP will capture the 2 character state code in Parte III, Line 3, Column (a) of the
If there are three or more state Codes, enter the states on Schedule A A non-taxable return will be given a " ZZ"
State Code when the state is subject to credit reduction. If a State Code(s) cannot be determined from Parte III or attachments to the return, use the Entity State Code of the taxpayer's
mailing address. If the State Code cannot be determined, correspond.
Edit a State Code only once, even if the taxpayer has entered it more than once on the return.
OSPC Only - The only countries that should be listed on Form 940PR, or should be edited will be Puerto Rico and the U.S. Virgin Islands.
You may sometimes see the following countries listed in Parte III. They should not be listed on Form 940PR and should not
be edited because they do not participate in our unemployment system. Asterisk (*) to the left of any data listed for foreign
countries, including the following: American Samoa
Remember only Puerto Rico or the U.S. Virgin Islands can qualify for Credit Reduction.
3.11.154.9.6.2 (01-01-2014)Form 940PR - Parte III, Line 3, Column b, State Reporting Numbers (Revision 2005 and Prior)
We will no longer transcribe the State Reporting Number. No action is necessary.
3.11.154.9.6.3 (01-01-2014)Form 940PR - Parte III, Line 3b, Total Tentative Credit (Revision 2005 and Prior)
Form 940PR - Parte III, Line 3b, Total Tentative Credit. Take no action. We will no longer edit Parte III, Line 3b, Total Tentative Credit.
3.11.154.9.6.4 (01-01-2014)Form 940PR - Parte III, Line 7, Total FUTA Tax (Revision 2005 and Prior)
Form 940PR - Parte III, Line 7, Total FUTA Tax
Line 7 is blank or illegible,
1. Perfect it from the return or attachments if possible. 2. Do not compute the Gross FUTA Tax, Line 1 of Parte III, or the Maximum Credit, Line 2 of Parte III, in order to perfect
Lines 1 through 3 of Parte III have been completed by the taxpayer or perfected from information on the return, Perfect Line 7 by subtracting Line 3 from the amount on Line 1, Parte III.
3.11.154.9.6.5 (01-01-2014)Form 940PR - Parte III, Line 8, Total FUTA Tax Deposits (Revision 2005 and Prior)
If Form 940PR - Parte III, Line 8, Total FUTA Tax Deposits is blank, perfect it from the following areas on the return:
Enter the amount from Parte II, Line 4, if you can determine it is a misplaced entry.
The taxpayer may have the FTD amount erroneously entered in the amount line of Question A or on an attachment.
If you can determine the correct FTD amount from this area, enter it on Line 8, Parte III.
3.11.154.9.6.6 (01-01-2014)Form 940PR - Parte III, Line 9, Balance Due/Line 10, Overpayment (Revision 2005 and Prior)
Form 940PR - Parte III, Line 9, Balance Due/Line 10, Overpayment
If Line 9 or Line 10 are blank or illegible, perfect from the return or attachments if possible.
1. Edit an asterisk (*) to the left of the Line 9 amount.2. Subtract the FTD, FTF, FTP penalty and interest from the Balance Due amount.3. Edit the Balance Due to the left of the asterisk (*). 4. Edit a received date, if necessary.
The Overpayment amount on Line 10 is reduced by FTD, FTF, FTP penalty and/or interest,
1. Edit an asterisk (*) to the left of the Line 10 amount.2. Add the FTD, FTF, FTP penalty and interest to the Overpayment amount.3. Edit the Overpayment amount to the left of the asterisk (*). 4. Edit a Received Date, if necessary.
If the taxpayer has entered the same amounts in Lines 7, 8, and 9, the amount is equal to total amount of the ROFTL, delete
the entry on Line 8. Do not edit if the computation on Line 9 or 10 is less than ≡ ≡ .
3.11.154.9.7 (01-01-2014)Form 940PR, Parte IV - Record of Quarterly Federal Unemployment Tax Liability (Rev 2005 and prior) Form 940PR -Liability for the Quarter:
Parte II and Parte III are completed and the remittance or ROFTL does not agree,
The taxpayer's intent cannot be determined, Correspond with the taxpayer.
The taxpayer indicates a larger amount on Line 7, Parte III,
Edit an amount to the fourth quarter that would allow the total of all quarters to equal total FUTA tax.
Edit a Received Date, if necessary to keep a penalty from being charged. The taxpayer entered wages instead of tax in Parte IV,
Compare Parte I, Line 5 with the Total for Year, Parte IV. If the amounts agree, and Parte II, Line 1 or Parte III, Line 7 is more than ≡ ≡ ≡ ≡ , multiply the wage amount shown for
each quarter by .008 for tax years 2010 or prior, or .006 for 2013 and 2012. Edit the correct entries. (For tax year 2011,
see Form 940, Rev 2011.) See Figure 3.11.154-13.
The taxpayer has entered a negative figure in any quarter of the ROFTL fields,
Enter SIC "1"
to the right margin next to the line that separates the entity information from the ABC Questions. Figure 3.11.154-13
Form 940PR - Total for Year - This item is not edited or transcribed.
3.11.154.9.8 (01-01-2014)Form 940PR - Schedule Indicator Code - SIC (Rev 2005 and prior) The Schedule Indicator Code (SIC) is used to notify the computer that the Quarterly Federal Tax Liability for Unemployment
Tax (ROFTL), Parte IV is incomplete or unnecessary. When the SIC "1"
is edited, the computer will determine if a Federal Tax Deposit penalty should be assessed based on a quarterly average
of the total liability for the year. The SIC code is edited in the right margin next to the line that separates the entity
information from the ABC Questions. Edit SIC Code "1"
when: Line 1, Parte II, is $500 or less. Line 7, Parte III, is $500 or less.
The ROFTL Total is $500 or less.
There is a negative amount in the ROFTL.
Line 7, Parte III is more than $500 and the Total in the ROFTL is more than $500, and there is a difference of more than ≡
≡ ≡ ≡ between the two amounts.
3.11.154.9.9 (01-01-2014)Form 940PR - Federal Tax Deposit Credits (Rev 2005 and prior) Form 940PR - Federal Tax Deposit Credit:
A return is subject to FTD requirements and reflects an overpayment or refund,
The taxpayer requests that credit be transferred to another type of tax
.2. Prepare Form 3465 to Accounts Management.
Exhibit 3.11.154-1 Form 940 (Revision 2013) and Schedule A (Revision 2013)
Exhibit 3.11.154-2 Form 940PR (Revision 2013) and Schedule A This image is too large to be displayed in the current screen. Please click the link to view the image.
Exhibit 3.11.154-3 Form 940 Conversion Table- Current Year to Years 2002 Through 2005
Form 940, Revision 2012
Prior Year Form 940 Revision Line Name
Line Number Year 2005 Line Number
Year 2004 Line Number
Year 2002–2003 Line Number
If Credit Reduction applies, enter the total from Schedule A
FUTA tax deposited for the year
FUTA Tax Liability- 1st Quarter
FUTA Tax Liability- 2nd Quarter
FUTA Tax Liability- 3rd Quarter
FUTA Tax Liability- 4th Quarter
Exhibit 3.11.154-4 Correspondence Action Table
Correspondence is required when the following conditions exists
Action required on "No Reply"
, "Undeliverable"
, and Insufficient Response
940, 940PR
Signature missing on an Unnumbered overpaid or zero/even return
Edit AC 225 (AC 226 for International)
on all returns with this condition. Also, edit CCC "X"
on overpaid returns.
Signature missing on an Unnumbered balance due or Numbered return
on overpaid returns. Edit an asterisk (*) in the left most position in the "Sign your name here"
box 940, 940PR
Return indicating tax liability for more than one type of tax a) Unnumbered overpaid or zero/even returns b) Unnumbered balance due and numbered returns
a. Correspond. Complete Form 12522 for Letter 142C. (or local letter as permitted by campus.) b. Correspond. Complete Form 12522 for Letter 142C, (or local letter as permitted by campus.) (For a or b) Edit AC 211.
Taxpayer enters non-calendar year Tax Period a) Unnumbered overpaid or zero/even returns b) Unnumbered balance due and numbered returns.
Correspond. Complete Form 12522 for Letter 142C, (or local letter as permitted by campus.) Edit AC 211.
Information provided not complete or not sufficient to determine Total Taxable Wages. a) Unnumbered overpaid or zero/even returns b) Unnumbered balance due and numbered returns
Allow return to generate to ERS.
If possible, determine Total Taxable Wages from information provided on the return or attachments. If unable to determine
the Total Taxable Wages, allow return to generate to ERS.
Taxpayer’s amount for payments of more than $7,000.00 is the same amount as total payments for services to employees. a) Unnumbered overpaid or zero/even returns b) Unnumbered balance due and numbered returns
Edit asterisk (*) to disallow the entry on line 5.Allow return to generate to ERS.
Taxpayer has not given taxable wage breakdown for credit reduction states. a) Unnumbered overpaid or zero/even returnsb) Unnumbered balance due and numbered returns
Allow return to generate to ERS
Early Filed Return (Do not return to taxpayer) a) Non-final, and it cannot be determined the reason for filing a future year b) Final and complete (Not a correspondence condition.) c) Final and incomplete
If final and complete, Edit AC 480 and CCC "F"
. Otherwise, complete Form 12522 for letter 142C, (or local letter as permitted by campus) and edit AC 211.
When correspondence is received, Rejects will suspend the return until the upcoming January.
Taxpayer’s intent cannot be determined. (Not covered by previous conditions). a) Unnumbered overpaid or zero/even returns b) Unnumbered balance due and numbered returns
Correspond Complete Form 12522 for Letter 142C, (or local letter as permitted by campus.) Edit AC 211.
Exhibit 3.11.154-5 State Abbreviations
Used for Zero Liability Tax in Credit Reduction State(s) only
Exhibit 3.11.154-6 Entity State Code and ZIP Codes
Exhibit 3.11.154-7 U.S. Possessions, Abbreviations and ZIP Codes
Exhibit 3.11.154-8 Foreign Country Codes
See Canadian province abbreviations in Exhibt 3.11.154–9
China, People's Republic of (Including Inner Mongolia, Tibet and Manchuria
Congo, Democratic Republic of (Kinshasa) (formerly Zaire)
Dem. Rep. of Congo (Kinshasa) CG
Georgia Island and South Sandwich Island SX
Indonesia (Including Bali, Belitung, Flores, Java, Moluccas and Sumatra)
Use when only "Korea"
St. Kitts and Nevis (Includes St. Christopher) SC
Exhibit 3.11.154-9 Providence, State and Territory Abbreviations
Canada Province/Territory Abbreviation
Country Code Alberta
Bolozano Bolzen
The Netherlands Province Abbreviation
Exhibit 3.11.154-10 Action Code Chart
EPMF (Employee Master Plan File) Correspondence 60
Examination (Fuel Tax Credit
QRDT ( Questionable Refund Detection Team) Review 3
Other CID (Criminal Investigation Division)
Missing Document- 1st Suspense
Missing Document- 2nd Suspense
Missing Document- 3rd Suspense
Missing Document- Short Term
Magnetic Tape Return- Check for Attachments
Magnetic Tape Return- Inconsistent Data
Data Control Delete -TEP (Team Exam Program) 0
NAP (National Account Profile) Linkage Problem 2
CE = Code and EditEC = Error Correction S = Suspense CorrectionGEN = Computer Generated Exhibit 3.11.154-11 Potential Frivolous Return Criteria
Potential Frivolous Return for Examination Review Alleged Churches/First Amendment
faith attempt to comply with the law. Files a return that attempts to send some type of message or protest to the IRS, but fails to include sufficient identifying
delegated authority. They may have no certificate of assessment attached, do not comply in form or content with a Stat or
from sources within the United States is taxable.
An individual files a return reporting false amounts of income (generally "Other" or "Miscellaneous" income) and all of them
claim a false amount of income tax withholding approximately equal to the amount of falsely reported income. Although the
returns report income, they do not calculate any tax due. Some of the returns have Form 1099-OID (Original Issue Discount)
attached and some have Forms 1096. Other false financial instruments may be filed in the place of or in addition to the Forms
1099-OID such as Form 2439, promissory notes, bonds sight drafts etc.
IRC 861 Business Employment Tax (BMF 861)
Argument targets employers and advises them that wages are exempt from withholding. Based on 26 CFR Section 1.861, promoters
of this scheme advise employers to stop withholding and paying payroll taxes on their employee’s wages. In addition, some
employers file amended payroll tax returns and request refunds of previously paid payroll taxes.
tax-paying public into a "new world order"
within the meaning of section 7701 (a)(14) of the Internal Revenue Code.
Argues that the government has created an entity separate and distinct from the taxpayer -a "straw man"
Taxes are Voluntary/Law Does Not Require
Submits a return with zero money amounts on all or most of the line items on the form ( e.g., IRC 861, Forms 2439, OID and
other BMF filings that claim no income and requests refunds). See Revenue Ruling 2004-34. A statement is attached claiming
there is no section of the Internal Revenue Code that established an income tax liability. The statement may also contain
arguments regarding the definition of income. There are several variations on this type of filling such as those bearing the
words "nunc pro tunc"
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ "
≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Other
All others. This category includes non-filer accounts resulting from initial compliance check such as cross-reference TINs.
(CDP) should be reviewed by Collections for possible referral to Appeals. Refer to IRM 4.10.12.1.3.3, Collection Appeal
Rights Procedures, for additional information.
Exhibit 3.11.154-12 Tax Years (TY) and Credit Reduction Rates (TY 2004-2013)
NEW YORK (NY) .006
Exhibit 3.11.154-13 Taxable State Wage Bases
Exhibit 3.11.154-14 "Track and Confirm"