3.11.16. Corporate Income Tax Returns

(1) Document Perfection perfects returns and other documents for input to the Master File (MF) through the Integrated Submission and Remittance Processing System (ISRP) or the Service Center Recognition Image Processing System (SCRIPS). In addition, Document Perfection sends any other documents or attachments not related to the processing of the returns to the function responsible for handling them.

(2) Code and Edit does not mathematically verify or check the validity of the returns and other documents being processed unless otherwise specified in the applicable subsection. The computer and/or Error Correction (Resolution) will perform these functions if the returns and other documents are coded and edited as prescribed in the applicable subsections of this section.

(1) Authority for these procedures is found in the following sections of the Internal Revenue Code and their corresponding Treasury regulations:

• IRC 6201(a) - Assessment Authority

• IRC 6213(b) - Exceptions to restrictions on assessment

(1) The Campus Director monitors operational performance for their campus.

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

(3) The Team Manager/Lead monitors performance monitoring and ensuring employees have the tools to perform their duties.

(4) The Team Employees are responsible to follow the instructions in this IRM and maintain updated IRM procedures.

(1) Program Reports: The Batch/Block Tracking System (BBTS) stores a vast amount of data which can be used in performance monitoring and production projections.

(2) Program Effectiveness: The program goals are measured using the following methods:

• Embedded Quality Submission Processing (EQSP)

• Balanced Measures

• Managerial reviews

(1) Quality Review conducts a statistical valid sample size review of completed work to ensure IRM guidelines are followed.

(1) For Terms, Definitions and Acronyms, see Exhibit 3.11.16-22, Terms/Definitions/Acronyms.

(1) The following is a list of related resources:

• Servicewide Electronic Research Program (SERP)

• Submission Processing Design Center (SPDC)

• Integrated Data Retrieval System (IDRS)

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

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

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

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

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

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

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

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

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

(1) The purpose of this initiative is to achieve consistency in the Business Master File (BMF) Code and Edit processing IRMs.

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

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

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

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

(1) The Taxpayer Advocate Service (TAS) is an independent organization within the Internal Revenue Service (IRS), led by the National Taxpayer Advocate. Its job is to protect taxpayers’ rights by striving to ensure that every taxpayer is treated fairly and knows and understands their rights under the Taxpayer Bill of Rights (TBOR). TAS offers free help to taxpayers, including when taxpayers face financial difficulties due to an IRS problem, when they are unable to resolve tax problems, they haven’t been able to resolve on their own, or when they need assistance to address an IRS system, process, or procedure that is not functioning as it should. TAS has at least one taxpayer advocate office located in every state, the District of Columbia, and Puerto Rico.

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

(3) Refer taxpayers to TAS when the contact meets TAS criteria (see IRM 13.1.7), or when Form 911, Request for Taxpayer Advocate Service Assistance (and Application for Taxpayer Assistance Order), is attached and steps cannot be taken to resolve the taxpayer's issue the same day. 

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

• The issue can be resolved within 24 hours.

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

(5) When making a TAS referral, use Form 911, and forward to TAS in accordance with local procedures.

(6) See IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria, for more information.

(1) Edit marks are edited on the tax return for transcription to the Automatic Data Processing (ADP) System through Integrated Submission and Remittance Processing (ISRP). Enter edit marks in brown, red, orange, purple, or green pencil or pen.

(2) Only edit items on the return that are for transcription except where specific instructions require editing of a non-transcribed item. Leave lines blank if the entry would be a zero amount unless otherwise instructed.

(3) Do not obliterate, alter, or erase the original entry on a return when deleting or correcting an entry. Always exercise care to ensure that the original entry remains legible. Perfected entries provide a legible "edit trail" for anyone who may work with the return later.

(4) Do not re-edit edit marks entered by other areas, such as Collections, Entity or Accounts Management, except to place the marks in the correct area or perfect for legibility.

(5) Photocopied Returns - Re-edit or underline any valid, black edit marks. See IRM 3.11.16.3.4.3, Correspondence Imaging Inventory (CII) Returns, and IRM 3.11.16.3.8 Re-Entry Document Procedures.

(6) For a description of specific edit marks, see the table below:

(1) Businesses use frivolous arguments for expressing dissatisfaction with the substance, form or administration of the tax laws by trying to illegally avoid or reduce tax liabilities. See IRM 25.25.10, Frivolous Return Program, shown in Exhibit 3.11.16-15, Frivolous Return Program for Examination Review.

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

(3) Do not consider the following returns as frivolous, unless there is other evidence of a frivolous argument:

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

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

(1) For tax returns completed in other than United States (U.S.) currency, process as filed. However, if corresponding for missing/incomplete item(s), include in the letter to resubmit in U.S. currency.

(1) Remove returns marked as "Protective Claims," "Protective Claim for Refund," or similar statement from the batch and route to Accounts Management (AM). Notate "Protective Claim" in the remarks box of Form 4227, Intra-SC Reject or Routing Slip.

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

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

(3) For returns with refund claims of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, do the following:

(4) Because of the repetitive nature of the Code and Edit (C&E) function, C&E Tax Examining Technicians often recognize income tax return data which is outside of the norm for data found on similar returns for each income tax return type. If C&E finds return characteristics not meeting Audit Code or Exam referral criteria it deems suspicious, CI is available to review the referral.

(5) If a suspicious return is found, do the following:

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

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

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

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

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

5. Continue processing the return.

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

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

(1) BMF ID Theft is increasing. If a case is found with attachments or correspondence showing the taxpayer is a victim of "ID Theft", give the entire case to the manager/lead.

(2) The manager/lead will expedite the case to the Planning and Analysis (P&A) staff for referral to one of the Submission Processing (SP) BMF ID Theft liaisons. The taxpayer must show that they are a victim of "ID Theft"; do not send cases that are subject to Criminal Investigation (CI), Examination (Exam), or Fraud review.

(1) The instructions in this subsection only apply to tax periods 201712 through 202012.

(2) Section 965, as amended by the Tax Cuts and Jobs Act (TCJA) of 2017, requires certain taxpayers to pay a transition tax on the untaxed foreign earnings of certain specified foreign corporations as if those earnings had been repatriated to the United States.

(3) Identify a corporate Section 965 return when any of the following are present and the corporation’s Tax Period is 201712 through 202012:

• Form 965, Inclusion of Deferred Foreign Income Upon Transition to Participation Exemption System, is attached.

• Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net Tax 965 Tax Liability and Electing REIT Report of 965 Amounts, is attached.

• IRC 965 Transition Tax Statement (or similar statement) is attached for TY2017.

• A significant entry is present on any of the following forms and/or lines.

  Note: A significant entry is defined as any amount other than zero.

Form	Lines
Form 1120	Schedule C, Line 15 Schedule J, Line 12 Schedule J, Line 22 Page 1, Line 32
Form 1120-C	Schedule C, Line 15 Page 2, Line 29 Page 2, Line 30i
Form 1120-L	Page 1, Line 27 Page 1, Line 28i
Form 1120-PC	Page 1, Line 14 Page 1, Line 15d
Form 1120-REIT	Page 2, Line 24 Page 2, Line 25h
Form 1120-RIC	Page 1, Line 28 Page 1, Line 29i

(4) When a return has been identified as a Section 965 return, edit as follows:

1. Completely edit the return.

2. Edit CCC "J," see IRM 3.11.16.9.1.10, CCC "J" - Section 965.

3. Edit Action Code "460," see IRM 3.11.16.3.1, Action Codes.

4. Do not issue correspondence on the return. ERS will correspond for any missing information.

(1) Under the Inflation Reduction Act (IRA) of 2022 and CHIPS and Science Act of 2022, the taxpayer can elect to:

• Take certain credits as an “Elective or Deemed Payment.”

• Transfer certain credits to another taxpayer.

• Claim the credit as a General Business Credit.

(2) For tax periods 202201 to 202212, identify an "Elective or Deemed Payment Election" when the taxpayer writes "IRA22DPE" on Form 3800 or on an attachment or on any of the following lines (2022 and prior revisions):

(3) When a return is identified with an "Elective or Deemed Payment Election", do the following:

1. Completely edit the return.

2. Edit RPC "J."

3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

   Note: P&A will provide the pre-printed half-sheets for C&E to use.

4. Give the return to the lead.

5. The lead will have the returns rebatched with "DPE" in the batch ID.

(4) Identify a "Credit Transfer" when the taxpayer writes "IRA22TRE" at the top of the return or on an attachment. When found, do the following:

1. Completely edit the return.

2. Edit RPC "K."

3. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet to the return.

   Note: P&A will provide the pre-printed half-sheets for C&E to use.

4. Give the return to the lead.

5. The lead will have the returns rebatched with "TRE" in the batch ID.

(5) Treat taxpayers who claim the credit on Form 3800 with no other indication of claiming the "Elective or Deemed Payment Election" or "Credit Transfer" as normal. See IRM 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.

(1) Action Codes are used to show whether correspondence, research, or some other action is needed. The Action Code sets the suspense period for the return and places the return in the workable or unworkable suspense inventory.

(2) When necessary, assign a three-digit Action Code. 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

• Form 1120-RIC

(3) Edit the Action Code in the bottom left margin of the tax return.

(4) Assign Action Codes in the following priority:

1. Action Code "310" (Statute Control).

2. Action Code "320" (Entity Control).

3. Action Code "4XX"

4. Action Code "6XX"

5. Action Code "3XX"

6. Action Code "2XX" (Correspondence).

(5) Use the following table if more than one Action Code is needed:

(6) See Figure 3.11.16-1.

(7) Edit the following Action Codes when a return can’t be perfected:

(8) Continue perfecting the return after editing the Action Codes.

(9) Valid Action Codes are listed below:

(10) For more information and applicable Action Codes, see IRM 3.12.38.3.4, Error Resolution System (ERS) Action Codes, and the exhibit in IRM 3.12.38-1, Action Codes.

(1) A tax return is an "Ogden Submission Processing Center (OSPC) only" return if at least one of the following conditions exists:

1. The tax return has a foreign address.

2. The tax return is a Form 1120-C.

3. The tax return is a Form 1120-F.

4. The tax return is a Form 1120-FSC.

5. The tax return is a Form 1120-L.

6. The tax return is a Form 1120-ND.

7. The tax return is a Form 1120-PC.

8. The tax return is a Form 1120-SF.

9. 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, Statement of Withholding on Certain Dispositions by Foreign Persons.

   Note: Form 8288-A credit must be verified by the OSPC Foreign Team.

(1) If the tax return is an Ogden Submission Processing Center (OSPC) "only" return, discontinue perfection of the return. Prepare Letter 86C, Referring Taxpayer Inquiry/Forms to Another Office, to inform the taxpayer the return has been sent to Ogden Submission Processing Campus.

(2) If the tax return is other than an OSPC "only" return, perfect the return if possible:

1. Examine schedules and other attachments for the necessary information and edit the return as needed for processing.

2. If perfection is not possible, perfect to the extent possible and proceed as set forth in (3) below.

(3) Action to secure perfection:

1. Where indicated, prepare Form 4227, Intra-SC Reject or Routing Slip, showing the reason for rejecting the document and that the document must be resubmitted for processing when it has been perfected.

2. Attach the Form 4227, to the face of document in such a position that the Employer Identification Number (EIN) is visible for transcription.

3. If the tax return has not been numbered, withdraw it from processing and send it to the proper activity.

4. For numbered Form 1120-FSC, Form 1120-ND, and Form 1120-SF, edit Computer Condition Code (CCC) "U" and attach Form 4227.

5. 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 right Action Code in the bottom left margin of the return and leave it in the block.

(1) There are two types of correspondence that C&E may encounter:

• Correspondence received from taxpayers, and

• Correspondence Issued to taxpayers.

(1) Listed below are letters provided by Headquarters for Submission Processing Center use in corresponding for items listed in this IRM. Tax examiners or their supervisors (or delegates) will have access to and be familiar with the Submission Processing Center Correspondex Handbook for selection of right letters.

1. Letter 118C, Corporate Return Incomplete for Processing: Form 1120, Form 1120 Series, Form 1120-S.

2. Letter 319C, Return Covers Other Than 12-month Accounting Period.

3. Letter 3064C, IDRS Special Letter.

(1) Compliance notates:

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

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

(1) Any tax return with a received date that is two years and nine months or more after the Return Due Date is a potential statute control return.

(2) Route statute returns to the Statute Control Unit daily or more often if needed.

(3) If any of the conditions listed below are present, do not route to Statute Control Unit for clearance. Instead, edit CCC "W" and continue processing.

• Compliance IRC 6020(b) returns

• Secured by Examination/Collections, including TEGE or TEGE Employee Plan (EP) Exam

• Returns with Transaction Code (TC) TC 59X or "ICS" notated on the face of the return

• Returns showing "substitute returns prepared by Examination (SFR)" in top margin of the return

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

• Return is a 2019 or prior year original. Due to the COVID-19 pandemic and subsequent Submission Processing (SP) and Accounts Management (AM) site closures, SP and AM developed procedures to bypass AM statute clearance and be processed. In addition, any 2019 or prior year returns previously cleared by AM statute will not be returned by SP to AM to be cleared again if the 90-calendar day statute stamp has expired.

(4) If a return has any of the following computer paragraphs (CPs) or letters attached, do not route to Statute Control Unit for clearance. Edit CCC "W" if the return needs processing. See Exhibit 3.11.16-17, Routing Guide for Attachments, for more information.

• CP 259, Master File Generated 1st TDI Notice

• CP 959, Master File Generated 1st TDI Notice (Spanish version)

• CP 518, Final Notice - Return Delinquency

• Letter 112-C, Payment/Overpayment/Credit Applied; No Record of Return Filed

• Letter 282-C, Return Not Received: Copy Requested/Received

• Letter 2255-C, Delinquent Return (Forms 720, 1041, 1065, 1120)

• Letter 2284-C, Delinquent Return (Form 940, 941, 942, 943)

(5) If a return has a Form 12412, Operations Assistance Request (OAR), from TAS and is a potential statute Control return but is not stamped "Cleared by Statute", give it to the lead. The lead contacts the TAS employee listed on the OAR for rejection of the return and sends it back to TAS for clearance by the Statute Control Unit.

(6) Statute returns are unprocessable until cleared by Statute Control.

(7) Edit CCC "W" if the Statute Control Unit stamps or shows clearance on the front of the return.

(8) Follow the chart below to determine if CCC "W" is needed.

(1) A tax return posted to the wrong account or module or attempting to post must be reprocessed to post to the proper account or module.

(2) Some re-entry returns may have originally been filed electronically (E-File). These returns may be identified by the presence of Mod E-File printouts in lieu of an actual return. Do not correspond for missing signatures on these documents.

(3) 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.

(4) Always leave the Form 3893 or Form 13596 on the front of the return. It must remain as a permanent part of the document.

(5) Examine Form 3893 or Form 13596 to determine the action needed to make the return processable.

(1) A return is considered Amended based on the following:

• The "Amended" box is checked

• On MeF returns the "Superseded Return" or the "Amended Return" box is checked. The "Superseded Return" and the "Amended Return" boxes will only be on MeF returns that have been printed. They will be located on Line E.

• Words such as "Supplemental," "Corrected," "Additional," "Superseded" are present

• Any indication from the taxpayer that a previous return was filed

  Note: Words such as "Copy" or "Duplicate" are not sufficient indicators and must be accompanied by a statement from the taxpayer that a previous return was filed.

(2) Examine the return for attachments:

• Do not separate any related attachments submitted to explain the reason for the Amended return. Accounts Management may use the information.

• Detach any unrelated documents and route them to the correct function using Form 4227, Intra-SC Reject or Routing Slip. Edit an Action Trail on the return.

(3) Follow the instructions in the chart below when there is a sign of an amended return:

(4) The following data must be edited on all amended returns:

1. Name control, see IRM 3.11.16.6.3, Entity Perfection - Name Control

2. EIN, see IRM 3.11.16.6.2, Entity Perfection - Employer Identification Number (EIN)

3. Tax period, see IRM 3.11.16.7, Tax Period

4. CCC "G," see Exception above

5. Received date, see IRM 3.11.16.8, Received Date

6. Signature, see IRM 3.11.16.11.7, Signature

(1) The instructions in this subsection only apply to tax periods 201812 and prior. For tax periods 201901 and later, no action is needed.

(2) If Special Estimated Tax Payments (SETP) is claimed for tax periods 201812 and prior, follow the instructions in the paragraphs below.

(3) The SETP payment (or application of prior SETP payment) was reported on the following lines:

(4) If SETP are claimed, edit Action Code "342" and enter CCC "6" on the return. Give the return to the lead.

(5) C&E Lead or another assigned individual will do the following:

1. Edit an action trail such as "Faxed to LB&I Exam 01-01-2018" (01-01-2018 would be the date faxed).

2. Fax pages 1, 2, and 3 of the Form 1120, Form 1120-PC, and/or Form 1120-L and all Form 8816 to LB&I Exam at ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ with your contact information (name, phone number and e-mail address). For a consolidated Form 1120, also fax the subsidiary return or attachment on which the SETP are identified. If the fax does not work, contact LB&I Exam directly at ≡ ≡ ≡ ≡ ≡ ≡ ≡ or e-mail ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

3. Set the return aside in a location designated for Section 847 returns with a copy of fax acknowledgement or other record of correspondence with LB&I Exam. Check the bin daily to ensure returns have been properly communicated to LB&I Exam.

4. LB&I Exam will respond within 72 hours by e-mailing a Form 3809, Miscellaneous Adjustment Voucher, to the person who provided the fax. Print the e-mailed Form 3809 on green paper and attach to the back of the return. If LB&I responds back stating the return is not a true Section 847 case, print that e-mail on green paper and attach to the back of the return.

5. Place the return back in the processing pipeline.

(1) A "Prompt Assessment," Section 6501 is requested, either in the form of a letter or on Form 4810, Request for prompt Assessment Under Internal Revenue Code 6501(d). A "Prompt Determination," is requested under 11 U.S.A. 505(b) of the U.S. Bankruptcy Code.

(1) All prior year returns must be reformatted to current year format. See prior year conversion exhibits and the Job Aids for specific year coding.

(2) 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:

1. Edit all available transcribed tax data items to the tax data portion of a blank current year form.

2. Place a large "X" across the tax data entries of the prior year (or non-standard) form.

3. Staple the forms together, attaching the dummied form (current format) on top so that Data can enter the entity data from the prior year (or non-standard) form.

(1) If a taxpayer filed Form 1120-S 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 1120-S to a Form 1120. No action is required for Document Perfection. Do not detach Form 1120-S.

(1) Reference is made throughout this IRM to "significant entries." A significant entry is defined as any amount other than zero.

(1) 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.

(2) Examine attachments and edit the information to correct transcription lines of both the income and deduction sections. This does not apply to Consolidated - Mixed Component returns.

1. Edit the income section if Line 11 is the only entry in the income section.

2. Edit the deduction section if Line 27 is the only entry in the deduction section.

3. Edit the income and/or deduction section if blank and there is a sign on the income and/or deduction items are included on an attachment (e.g., a notation such as "See attached," "See Schedule F," "Statement attached" ).

(3) 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.

(1) If Form 1120 does not require Balance Sheet inspection (see IRM 3.11.16.11.36, Schedule L, Balance Sheet, instructions), perform the least time-consuming edit on the income section and the deductions section through Total Deductions.

1. 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.

2. 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 23a (Line 19 for 2017 and prior). Subtract the Line 4 (Dividends) amount from Line 11 (Total Income) to determine the difference. Enter the difference on Line 10 (Other Income).

Exception: On a "Final" Form 1120, analyze and edit to right lines any entry on the attachments for Income and Deductions items.

(2) Initiate correspondence using Letter 118C, Corporate Return Incomplete for Processing: Form 1120, Form 1120 Series, Form 1120-S if Form 1120, (Form 1120 Only), is filed by a large corporation (defined as a corporation with $10 million or more of assets in Box D), and "see attached" is notated in the Income Section and the Deduction Section.

(1) Document Perfection is not required to edit a vertical line, 00, dash, or decimal point to indicate dollars and cents.

(1) Edit negative entries as follows:

(1) If any of the Form 1120 series forms indicates bankruptcy (e.g., shows RECEIVER, TRUSTEE, or DEBTOR IN POSSESSION) in the entity area or on an attachment, route to Entity Control. Follow local procedures using Form 13934, Entity Document/C&E Merge Transmittal.

(2) Completely edit the return except the name control prior to routing to Entity Control.

(1) The EIN is a nine-digit number (xx-xxxxxxx) assigned to identify the taxpayer.

(2) The EIN is located in the upper right area of the form ("Employer Identification Number" box).

(3) Determine the EIN as follows:

If...	And...	Then...
The EIN is missing,	The correct EIN can be determined from the attachments and/or schedules,	Edit the EIN to the proper location.
The EIN is either a PTIN or Individual Taxpayer Identification Number (ITIN), or Multiple EINs are present,	Unnumbered,	Remove return from batch. Route to Entity Control following local procedures using Form 13934, Entity Document/C&E Merge Transmittal, for EIN assignment.
The EIN is either a PTIN or Individual Taxpayer Identification Number (ITIN), or Multiple EINs are present,	Numbered,	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 Form 1120-RIC All other returns edit CCC "U." Leave return in batch.
The EIN has any of the following conditions and can’t be determined from attachments and/or schedules: Illegible; Missing; Other than 9 digits; All zeros; or, All nines	Unnumbered,	Circle all illegible EINs, zeros, or nines. Research IDRS. If found, edit to the proper location. If not found, route to Entity Control following local procedures using Form 13934, Entity Document/C&E Merge Transmittal.
The EIN has any of the following conditions and can’t be determined from attachments and/or schedules: Illegible; Missing; Other than 9 digits; All zeros; or, All nines	Numbered,	Circle all illegible EINs, zeros, or nines. 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 Form 1120-RIC All other returns edit CCC "U." Leave return in batch.
"PENDING," "APPLIED FOR," etc., is shown in the EIN area,	Unnumbered,	Research IDRS. If found, edit to the proper location. If not found, route to Entity Control following local procedures using Form 13934, Entity Document/C&E Merge Transmittal.
"PENDING," "APPLIED FOR," etc., is shown in the EIN area,	Numbered,	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 Form 1120-RIC All other returns edit CCC "U." Leave return in batch.

(1) The Name Control consists of four characters or less.

1. Valid characters are alpha, numeric, ampersand (&), hyphen (-), and blank. However, blanks are only valid in the last three positions.

2. Disregard the word "THE" in the Name Control only when followed by more than one word.

(2) See Job Aid Document 7071A, Name Control Job Aid - For Use Outside the Entity Area, to determine the Name Control.

(3) If Box E(3) "Name Change," Form 1120 is checked, route the return to Entity Control following local procedures using Form 13934, Entity Document/C&E Merge Transmittal.

• Form 1120-C - Box D(3)

• Form 1120-F - Box "Name or address change"

• Form 1120-FSC - Box F(2)

• Form 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)

(4) Edit the Name Control as follows:

If...	And...	Then...
Able to determine the Name Control,		Underline the Name Control. See Figure 3.11.16-2.
Unable to determine the Name Control,	Unnumbered,	Research IDRS. If found, edit to the proper location. If not found, route to Entity Control following local procedures using Form 13934, Entity Document/C&E Merge Transmittal.
Unable to determine the Name Control,	Numbered,	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 Form 1120-RIC All other returns, edit CCC "U." Attach Form 4227 and indicate "Name Research" in the "Other (explain)" area. Leave return in batch.

(1) An "in-care-of" name can be identified by the words "in care of" or the symbols "c/o" or "%" (percent).

(2) Ensure the "in-care-of" name is in the proper location.

(3) Determine a change in the in-care-of name by any of the following:

• A check mark in the "Name change" box, or

• A check mark in the "Address change" box, or

• Taxpayer edits or added to the "in-care-of" name (e.g., original "in-care-of" name crossed out, new name added).

If...	Then...
An "in-care-of" name is changed but there is no sign of an address change,	Edit the "in-care-of" name as shown above. Continue editing the return.
An "in-care-of" name is present and the "Address change" box is checked (or there is a sign of an address change),	Edit the "in-care-of" name as shown above. Correct the address, see IRM 3.11.16.6.5, Entity Perfection - Domestic Addresses. Continue editing the return.

(1) Perfect the address when the mailing address (Street or P.O. Box) is not easily identified.

(2) A business may have two addresses. One is the mailing address and the other is the location address or physical location of the business.

(3) Perfect the address as follows:

(4) 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:

(1) A foreign (international) address is any address that is not in the 50 states or the District of Columbia.

(2) Consider returns with APO, DPO, and FPO addresses as considered domestic addresses, see IRM 3.11.16.6.5, Entity Perfection - Domestic Addresses.

(3) Route returns with a foreign address to the Ogden Submission Processing Center (OSPC) for processing. Prepare Letter 86C, Referring Taxpayer Inquiry/Forms to Another Office, to inform the taxpayer IRS sent the return to Ogden.

(4) Consider returns with addresses in the following U.S. Possessions/Territories as foreign for processing purposes. Edit the same way as domestic addresses.

1. Edit a two-character alpha code for the possession name.

U.S. Possession / Territory	Abbreviation
American Samoa	AS
Federated States of Micronesia	FM
Guam	GU
Marshall Islands	MH
Northern Mariana Islands	MP
Palau	PW
Puerto Rico	PR
U.S. Virgin Islands (U.S.)	VI

2. A ZIP code must be present for U.S. Possessions/Territories. Edit the right ZIP Code if one is not provided, see Exhibit 3.11.16-19, U.S. Possessions ZIP Codes.

(5) All other foreign addresses are edited the same as a domestic address with the following exceptions:

1. Ensure the foreign country is the last entry in the address.

2. Circle the foreign country and edit the country code preceded by a "/" and followed by "/$" (e.g., "/GM/$" is edited for Germany). For official foreign country codes, see Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes, and Countries.

3. Edit a unique country code for returns filed with an address in Canada, see IRM 3.11.16.6.6.1 Country Code - Canada.

Note: Coding and Editing BMF Tax Returns, Foreign Addresses Job Aid (Number 2324-002) provides examples for editing foreign addresses.

4. If the foreign address is from Australia, Brazil, Cuba, Italy, Mexico, or The Netherlands, check if the address has a province, state, or territory.

   Note: There may be other countries with provinces, states, and territories not listed above, see Coding and Editing BMF Tax Returns, Foreign Addresses Job Aid (Number 2324-002) for more information.

If...	Then...
A province, state, or territory is present,	Circle the province, state, or territory name. Edit the right abbreviation, see Exhibit 3.11.16-16, Province, State and Territory Abbreviations.
A province, state, or territory is shown in abbreviated format,	Continue editing the return.
A province, state, or territory name is not present,	Continue editing the return.

(6) A ZIP Code or state is 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.

(1) All returns must have a tax period.

(2) Edit the tax period to the right of the form title in YYMM format.

(3) A tax period must 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. Correspond using Letter 319C, Return Covers Other Than 12-Month Accounting Period, if the exceptions do not apply. The table below shows examples of tax periods.

(4) Tax periods reported under the 52-53 week rule may end not more than six days before, and not more than three days after, the end 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 date.

(5) If the tax period is for more than 12 months or 53 weeks, correspond.

(6) A "Final" 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 shown in which month the business ended, edit the tax period to be one month before the received date.

(7) Edit the Tax Period Beginning on a "Final" return in MMDDYY format, see IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

(8) On a "Final" 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 before the received date, see Figure 3.11.16-4.

(9) On a "Final" 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" and "F."

(10) 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 period return.

(11) Check all tax periods for the Statute of Limitation (two years and nine months from the normal due date of the return), see IRM 3.11.16.3.7, Statute Returns.

(1) The Tax Period Beginning has been added to Form 1120, Form 1120-F, Form 1120-FSC, Form 1120-H, Form 1120-L, Form 1120-ND, Form 1120-PC, Form 1120-REIT, Form 1120-RIC and Form 1120-SF.

(2) Edit the Tax Period Beginning to the left of the Form 1120 title area in Month Month Day Day Year Year (MMDDYY) format on an Initial, Final, or Short Period return as follows: See Figure 3.11.16-5 below.

(1) Never send an early filed return back to the taxpayer.

(2) If the month of the tax period is the same or after the month of the received date, determine how early the return has been filed:

(1) 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 IRM 3.11.16.7.1, Tax Period - Ending.

• If the Short Period Return is marked "initial," "first return," "new corporation," etc., or meets any of the identifying conditions for "Initial Return Code," see IRM 3.11.16.9.4, Initial Return Code.

• Process all other Short Period Returns as a "Change of Accounting Period." In such cases, proof of entitlement to the change is required.

(2) Use the table below to find and edit proof of entitlement.

3.11.16.7.4.1 (04-01-2020)

Short Period Returns - 26 CFR 1.1502-76

(1) 26 CFR 1.1502-76 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 notation referencing "Section 1.1502-76," "Changing the tax period to get in step with parent," "Affiliation with a Consolidated Group," or a similar statement on the return or attachment.

Note: It is important to recognize these returns and follow the procedures outlined in this subsection to ensure the correct penalty and interest are charged, if applicable.

(2) The short period return under 26 CFR 1.1502-76 is not due until the normal full 12-month due date of the short period return or the due date of the consolidated parent return, whichever is earlier.

(3) Always edit CCC "Y" on these returns.

(4) The computer will calculate the due date of the return according to the tax period of the short period return. Since the actual due date of the return under 26 SFR 1.502-76 may be later than the short period return due date, do the following:

If ...	And ...	Then ...
The received date is later than the short period return due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡	Before the consolidated return due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ Or, The normal full 12-month due date of the short period return ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ whichever is earlier, Note: If the consolidated return due date is unknown, use the normal full 12-month due date of the short period return.	Edit CCC "R."

Reminder: Edit the Tax Period Beginning in MMDDYY format on Short Period Returns per IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

(1) 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 and proceed as follows:

(1) If Form 1128 is disapproved, the return is considered unprocessable:

1. Edit Action Code "211" or "215" (International Correspondence) or CCC "U" and correspond.

2. 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.

(1) When a Form 1128 with no indication of approval or disapproval is attached and no proof of entitlement is present, research IDRS using Command Code BMFOLE for approval or disapproval and proceed as follows:

(2) 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.

1. If Form 1128 is attached to a numbered return, enter Action Code "320" 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 CCC "U" for all other returns. Attach Form 4227, Intra-SC Reject or Routing Slip, 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 3.11.16-8.

2. 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.)

3. Entity will process the Form 1128 and route the return back to C&E with a Form 4227 attached. The Form 4227 will indicate if the Form 1128 is approved, denied or if the Form 1128 was returned to the taxpayer and the words "Process Return" or "Let Unpost."

(1) If the taxpayer provides acceptable proof, follow instructions in IRM 3.11.16.7.4, Short Period - Editing Proof of Entitlement.

(2) If the taxpayer fails to reply, or does not provide tax period approval, enter CCC "3."

(1) Route to Accounting for possible adjustment action any return meeting both conditions below.

1. A prepaid credit is claimed.

Form Type	Line Numbers
Form 1120	Page 3, Schedule J, Line 13, 14 or 17 (Line 12, 13, or 16 for 2017-2011)
Form 1120-C	Line 30a, 30b, or 30e (Line 29a, 29b, or 29e for 2017 and prior)
Form 1120-F	Line 5a, 5b, or 5e
Form 1120-FSC	Line 2a, 2b, or 2e
Form 1120-H	Line 23a, 23b, 23c (Lines 23a, 23b, 23d for 2022 and prior).
Form 1120-L	Line 27a, 27b, or 27e (Line 28a, 28b, 28c or 28f for 2022 and prior).
Form 1120-ND	Line 14a, 14b, or 14e
Form 1120-PC	Line 15a, 15b, or 15e (Line 15a, 15b, 15c or 15g for 2022 - 2018). (Line 14a, 14b, 14c, or 14g for 2017 and prior)
Form 1120-REIT	Line 25a, 25b, 25e (Line 24a, 24b, or 24e for 2017 and prior)
Form 1120-RIC	Line 28a, 28b, or 28e (Line 29a, 29b, 29e for 2022 through 2018). (Line 28a, 28b, or 28e for 2017 and prior)
Form 1120-SF	Line 16a, 16b, or 16e

2. The return is a short period (an initial return, a final return or one with a change of accounting period).

(2) Take the following action when routing these returns to Accounting, see Figure 3.11.16-9.

1. Enter Action Code "342" 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. Edit CCC "U" on all other returns. Attach Form 4227, Intra-SC Reject or Routing Slip check the "Accounting" box and notate "Short period return with ES Credits."

2. Continue normal processing.

3. If the return shows a refund, see IRM 3.11.16.4, Refund Returns (45-Day Jeopardy and High Dollar Refunds).

Reminder: Edit the Tax Period Beginning in MMDDYY format on Short Period Returns per IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

(1) Computer Condition Codes (CCC) identify special conditions or computation for the computer. Computer Condition Codes post to the Master File.

(2) Computer Condition Codes are edited in the center of Lines 1 and 2 of the tax return.

3.11.16.9.1.31 (01-01-2015)

CCC "5" - Bank Holding Company Tax Act

(1) Edit CCC "5" when there is a statement electing to make installment payments for a portion of the total tax attributable to the Bank Holding Company Tax Act, see Figure 3.11.16-10.

3.11.16.9.1.33 (01-01-2021)

CCC "8" - Waiver of Estimated Tax Penalty

(1) Edit CCC "8" when any of the following is present:

• Form 2220 is attached and Part II, Box 6 or Box 7 is checked, see Figure 3.11.16-11.

• Form 2220 is attached and any column on Form 2220, Schedule A, page 4, Line 38 has entries.

(1) Return Processing Code (RPC) is an alpha or numeric character used to alert the computer to a special condition or computation.

(2) RPCs are edited on Page 1, in the right margin next to Line 1c of Form 1120.

(3) More than one RPC can be edited and in any order.

(4) Refer to the table below for an explanation of when to edit each RPC.

(1) ABLM is not an acronym. The letters are a carryover from when Form 1120 was generic. The ABLM Code identifies a specific type of tax return. The ABLM letters are defined as follows: