3.12.12. Exempt Organization Returns

(1) TAS and the Operating Functions have reached agreements outlining the procedures and responsibilities for processing Taxpayer Advocate Service (TAS) casework when either the statutory or delegated authority to complete a case transaction rests with that Operating Function. These agreements are known as Service Level Agreements (SLA).

(2) In preparation for a case being referred to an Operating Function, the TAS employee is responsible for:

1. Preparing Form 12412, Operations Assistance Request.

2. Securing all necessary supporting documentation.

3. Identifying cases that require expedite processing. No case will automatically receive expedite processing; requests for expedite processing will be made on a case-by-case basis.

4. Forwarding Form 12412 and documentation to the Operating Function Unit Liaison.

(3) The Operating Function is responsible for:

1. Assigning a liaison in each office or Campus where a Taxpayer Advocate is located.

2. Acknowledging receipt of the case within one workday for cases requiring expedite processing or within three workdays for all other cases.

3. Providing TAS with the name and telephone number of the group manager or employee assigned the case.

4. Determining a reasonable timeframe for case resolution.

5. Upon closing the OAR, the functional employee assigned the OAR will complete Section VI of Form 12412, Operations Assistance Request and return it to the TAS employee assigned the case. The Form 12412 must be returned within three workdays from the date that all actions have been completed and transactions input.

(4) For further information, refer to the SLAs online at http://tas.web.irs.gov/default.aspx under the heading "Policy/Procedures/Guidance."

(5) BMF Identification Theft is increasing. If a tax examiner in Submission Processing (SP) Error resolution System (ERS) finds a case with attachments or correspondence indicating the taxpayer is a victim of ID Theft, provide the whole case to your senior/lead. Your senior/lead will expedite the case to the P&A staff for referral to one of the SP BMF ID Theft liaisons. The taxpayer must clearly state that they are a victim of "ID Theft".

(6) BMF Identification Theft is increasing. If a tax examiner in Submission Processing (SP) Error resolution System (ERS) finds a case with attachments or correspondence indicating the taxpayer is a victim of ID Theft:

1. SSPND “360” to route the return to Planning & Analysis (P&A).

2. Attach Form 4227 (or other appropriate routing slip) with the notation “ID THEFT”.

3. Provide the entire case to your senior/lead.

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

(2) Topics for BMF Consistency have been identified and developed as a coordinated effort between Cincinnati, Ogden, and Paper Processing Branch BMF Code and Edit/ERS.

(3) BMF consistency subsections are identified by a ♦ (diamond) before and after the title.

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

(1) Program guidance doesn’t always apply to the work in all offices in all areas of the

(2) Guidance that deviates from the IRM or that establishes new practices (even if temporary) must be:

1. Approved by a first-line executive with program responsibility (of documented designee);

2. Communicated to employees in writing, and

3. Reviewed annually if the deviation is effective longer than one year.

(3) When you prepare a request:

1. Summarize the circumstances that require deviation.

2. Identify the applicable IRM section.

3. Describe the reason for the deviation (explain what caused the situation to occur and what is being done to correct it).

4. Specify the time frame the deviation is effective (no longer than one year).

(4) Guidance which deviates from the IRM may require disclosure on IRS.gov to adhere to FOIA laws. For information on the E-FOIA criteria and requirements, see IRM 1.11.1.3.1, Transparency of Instructions to Staff.

(1) A Field secured return is a return obtained from the filer by EO Field personnel.

(2) Identify as a secured return if the return or attachment is noted with wording similar to "Delinquent Secured Return" or "Secured by TE/GE".

(3) Route the secured return to the Area Office via Form 4227 notated "Unprocessable Secured Return" if the organization's name and EIN are missing.

(4) Correspond for missing schedule(s) or missing signature as required.

(5) Enter CCC "R", "D" and/or "V" if applicable if the Area Office indicated that penalties and/or interest must not be assessed.

(1) A substitute for return is prepared by EO compliance functions if the filer does not provide a return. The return can be identified as a substitute for return by wording similar to "SFR", "Substitute for Return" or "6020(b)" anywhere on the document. The agent will edit "TC 599 CC 096" at the bottom margin of the return. At the top of the return, the agent will write "Substitute for Return Secured by TE/GE".

(2) Do not correspond for missing information on returns marked Substitute for Return, SFR, or 6020(b).

(3) Enter CCC "R" and/or "V" if applicable if the Area Office indicated that penalties and/or interest must not be assessed.

(1) If the return is unsigned, it will be returned to the filer. DO NOT correspond for missing signatures on returns printed from the CIS system, returns with "This is a live return from SMIP" across the top or MEF returns that have "e-File GRAPHIC print DO NOT PROCESS" across the top of the return. A signature can consist of either an original signature (including a printed signature, rubber stamped, mechanical device or signed by a software program.

(2) Filing of original tax returns via fax will only be allowed as part of a return perfection process (e.g., securing missing schedule or missing signature) initiated by the IRS where contact with the taxpayer has been made and documented. These faxed signatures will be accepted as well as those received from any internal source.

(3) 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 or wording such as "e-file GRAPHIC print - DO NOT PROCESS" printed at the top of the return. Do not correspond for missing signatures on these documents if they are being reprocessed and they were originally accepted through the E-File system.

(4) When corresponding for a missing signature only use the 0143-C letter. If you are corresponding for other missing information also, use the 2694-C, 2695-C, 2696-C, 2697-C or 2698-C as appropriate.

(1) A frivolous argument is used for the purpose of expressing dissatisfaction with the substance, form or administration of the tax laws by attempting to illegally avoid or reduce tax liabilities. Recognized frivolous arguments made by businesses include, but are not limited to, the examples in IRM 25.25.10, Frivolous Return Program (FRP).

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

(1) For the Incomplete Returns Program, the reasonable cause must state why the information cannot be furnished and/or why it wasn't furnished when the return was initially filed.. Refer to Figure 3.12.12-1:

1. When the filer furnishes reasonable cause for late filing, but does not provide reasonable cause for an incomplete return, the reasonable cause for late filing will not apply to the Incomplete Returns Program. The return will be treated as if the reasonable cause was not furnished.

2. If reasonable cause is furnished for late filing but not for the missing items, send a second letter.

3. Ensure CCC "R" and "V" are not present if reasonable cause will not be allowed.

(1) If an organization attempts to file a return electronically and is unable to do so, the electronic return originator (ERO) will receive notification from the Service that the return was not accepted for processing. The ERO is required to inform the filer of the reject within 24 hours, provide the filer with an explanation of why the return was not accepted through the electronic system, and inform them they must file a paper return. A paper return received after the return due date will be considered timely filed if the filer indicates on the return or an attachment that an unsuccessful attempt was made to timely file electronically and the paper return is received within 10 days of the notice of rejection.

(2) The received date will be the return due date if (2) above applies.

(1) SSPND 351 or enter Action Code "3" as applicable to reject the return.

(2) Rejects will contact the EO ERS/Reject Program Analyst by e-mail or OCS and send a screen print of the page of the return when possible. The issue will be responded to within 48 hours of contact.

(1) Check all Fields of the section and verify that Fields are entered as coded.

1. If no correction is needed, or once the section is correct, drop to the bottom of the screen and transmit.

2. If the section needs to be deleted, enter Command Code DLSEC with the section number.

(1) All Fields present for the section must be examined and the necessary correction(s) made to all the Fields.

(2) If the section needs to be deleted, use Command Code DLSEC to delete the section.

(3) If no corrections are needed, drop to the bottom of the screen and transmit.

(1) Error Code 001 will generate when any of the following conditions are present:

• Computer Condition Code "G" is Not Present – The processing date is equal to or more than 2 years and 10 months after the Return Due Date or Received Date (whichever is later) and CCC "W" is not present.

• Computer Condition Code "G" is Present – The processing date is equal to or more than 2 years and 10 months after the Return Due Date and CCC "W" is not present

• On any return, the process date is less than two years after the Return Due Date and CCC "W" is present.

(1) Correct all misplaced entries, coding and transcription errors.

(2) Do not send the following returns to Statute Control for clearance. Instead, enter "W" in Field 01CCC and on the return and continue processing:

• any return secured by Compliance (i.e., 6020(b))

• any return with a TC 59X

• any return that is a Substitute for Return prepared by Examination ("SFR" in the margin) with document 13133 ( Expedite Processing Cycle) attached.

(3) Compare the displayed Fields with the return and attachments. If incorrect, overlay the screen with the correct information.

(1) When Statute Control returns the cleared document, enter CCC "W" in Field 01CCC and continue processing.

(2) Statue Control request the record to be voided to them, RJECT 640.

(1) Error Code 002 will generate when the Name Control mismatched against the National Account Profile (NAP) or the Entity Index File (EIF).

(1) Before taking any additional research steps to resolve Error Code 002, drop the cursor to the bottom of the screen and transmit. This will ensure that any prior changes to the Name Control have posted to the NAP. If Error Code 002 reappears, continue with the remainder of the correction procedures.

(2) When corrections are made to Field 01NC or Field 01EIN, the computer will validate the entries with the NAP and reset the OLE indicators as appropriate upon transmitting the ERS screen.

(3) Correct all misplaced entries, coding and transcription errors.

(4) Compare the displayed Fields with the return and attachments. If incorrect, overlay the screen with the correct information.

(5) If Field 01NC and the Name Control on the return or attachments are the same but differ from the underprint in Field 01NC, research INOLES to determine the correct Name.

(6) If a new EIN is located, verify the Name Control using CC INOLES.

(7) If the Name on the return or attachment does not agree with the Name on INOLES or there is an indication of a name change, research ENMOD for a new name.

(8) If the Name change has not been made, research ENMOD for a pending TC 013.

(1) Error Code 003 will generate when any of the following conditions is present:

• The Check Digit is present but is not valid for the EIN.

• The letters, "E", "G", or "M" are present in Field 01NC.

• The first two positions of the Field are not blank and the last positions is not alphabetic.

(1) Correct all misplaced entries, coding and transcription errors.

(2) Compare the displayed Fields with the return and attachments. If incorrect, overlay the screen with the correct information.

(3) Compare the EIN from NAMEB/NAMEE to the EIN on the return.

(4) If IDRS is not available, SSPND 351.

(1) Error Code 003 will generate when any of the following conditions is present:

• The Check Digit is present but is not valid for the EIN.

• The letters, "E", "G", or "M" are present in Field 01NC.

• The first two positions of the Field are not blank and the last positions is not alphabetic.

(1) Correct all misplaced entries, coding and transcription errors.

(2) Compare the displayed Fields with the return and attachments. If incorrect, overlay the screen with the correct information.

(3) Compare the EIN from NAMEB/NAMEE to the EIN on the return.

(4) If IDRS is not available, SSPND 351.

(1) Error Code 004 will generate when any of the following conditions is present:

• The EIN was not present at the master file (NAP).

• The Entity Index File (EIF) and the NAP were not accessed or were not operational, causing a blank underprint in Field 01NC.

(1) Before taking any additional research steps to resolve Error Code 004, drop to the bottom of screen and transmit. This will ensure that any prior changes to the Name Control/EIN have posted to the NAP. If Error Code 004 reappears, continue with the remainder of the correction procedures.

(2) When corrections are made to Field 01NC or Field 01EIN, the computer will validate the entries with the NAP and reset the OLE indicators as appropriate upon transmitting the ERS screen.

(3) Correct all misplaced entries, coding and transcription errors.

(4) Compare the displayed Fields with the return and attachments. If incorrect, overlay the screen with the correct information.

(5) If Field 01NC and the Name Control on the return or attachments are the same but differ from the underprint in Field 01NC, research INOLES to determine the correct Name.

(6) If a new EIN is located, verify the Name Control using CC INOLES.

(7) If the Name on the return or attachment does not agree with the Name on INOLES or there is an indication of a name change, research ENMOD for a new name.

(8) If the Name change has not been made, research ENMOD for a pending TC 013.

(1) Error Code 004 will generate when any of the following conditions is present:

• The EIN was not present at the master file (NAP).

• The Entity Index File (EIF) and the NAP were not accessed or were not operational, causing a blank underprint in Field 01NC.

(1) Before taking any additional research steps to resolve Error Code 004, drop to the bottom of screen and transmit. This will ensure that any prior changes to the Name Control/EIN have posted to the NAP. If Error Code 004 reappears, continue with the remainder of the correction procedures.

(2) When corrections are made to Field 01NC or Field 01EIN, the computer will validate the entries with the NAP and reset the OLE indicators as appropriate upon transmitting the ERS screen.

(3) Correct all misplaced entries, coding and transcription errors.

(4) Compare the displayed Fields with the return and attachments. If incorrect, overlay the screen with the correct information.

(5) If Field 01NC and the Name Control on the return or attachments are the same but differ from the underprint in Field 01NC, research INOLES to determine the correct Name.

(6) If a new EIN is located, verify the Name Control using CC INOLES.

(7) If the Name on the return or attachment does not agree with the Name on INOLES or there is an indication of a name change, research ENMOD for a name.

(8) If the Name change has not been made, research ENMOD for a pending TC 013.