3.12.251. Corporation Income Tax Returns

(1) The purpose of Error Resolution is to resolve validity errors, field errors, consistency errors, and math errors in returns and other documents for posting on the Master File. Records fall out in Error Resolution System (ERS) due to the Generalized Mainline Framework (GMF). The entries from transcription are transferred to ERS fields. The GMF programming causes a record to fall out to ERS if it fails to meet certain criteria, including:

• Invalid characters in a field (e.g., numeric instead of alpha).

• Invalid length of field (e.g., Employer Identification Number (EIN) with 8 digits instead of 9).

• Invalid codes in field (valid Action Codes, Audit Codes, etc., are programmed at GMF).

• Consistency errors - Any valid field used in any computation where the result is inconsistent with (or contradictory to) any other valid field.

• Math errors - computer does math computation and it differs from the taxpayer’s amount.

• Invalid tax periods and eligibility for certain credits.

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

• IRC 6201(a)

• IRC 6213(b)

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

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

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

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

(1) Program Goals: Correct any errors that are identified using the Error Resolution System (ERS).

(2) Program Reports: System control reports are on the Control-D WebAccess (CTDWA) and a general listing of the reports are found in IRM 3.12.38, BMF General Instructions.

(3) Program Effectiveness: The program goals are measured by using the following tools:

• Embedded Quality Submission Processing (EQSP)

• Balanced Measures

• Managerial reviews

(4) Annual Review: Federal Managers Financial Integrity Act (FMFIA)

(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 3.12.251-28, Terms/Definitions/Acronyms.

(1) The following table lists related sources:

(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 a 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 subsequent 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 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 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 following your local procedures.

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

(1) The National Taxpayer Advocate reached agreements with the Commissioners of the Wage and Investment (W&I) Division, Small Business/Self Employed (SB/SE) Division, Tax Exempt Government Entities (TE/GE), Criminal Investigation (CI), Appeals and Large Business and International (LB&I), that outline the procedures and responsibilities for processing (TAS) casework when either the statutory or delegated authority to complete case transactions rests outside of TAS. These agreements are known as Service Level Agreements (SLAs).

(2) The SLAs are found at https://irsgov.sharepoint.com/sites/TAS/SitePages/SLA.aspx.

(1) BMF ID Theft is increasing. If a case is found with attachments or correspondence showing the taxpayer is a victim of "ID Theft":

1. SSPND with Action Code 360 to route the return to Planning & Analysis (P&A).

2. Attach Form 4227, Intra-SC Reject or Routing Slip, (or other proper routing slip) with the notation "ID THEFT".

3. Give the entire case to the manager/lead.

(2) The manager/lead will expedite the case to the P&A staff for referral to one of the 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) Records are placed into the Error Inventory or the Workable Suspense Inventory for correction.

(2) Once a record is accessed and displayed on the screen, the error must be resolved by:

1. Fully correcting the record.

2. Placing the record in suspense until more information is received, or

3. Rejecting the record from pipeline processing.

(3) Correct coding and transcription errors and misplaced entries, or in the case of a taxpayer error, notify the taxpayer of the error on the return.

(1) This IRM is your main source of information for correcting the record on the screen and the related return. You will also find procedures in the following IRMs:

• IRM 3.11.16, Corporate Income Tax Returns, which includes instructions for coding and editing of Form 1120, Form 1120-C, 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.

• IRM 3.12.38, BMF General Instructions. This IRM has instructions for correcting records on the screen, document control, inventories, and management reports.

(2) If there is any discrepancy between the instructions in other IRMs, always follow the instruction in IRM 3.12.251.

(1) New exhibits have been added to the IRM. Job Aids can be found at BMF ERS Job Aid 2519-012, Section 07 https://program.ds.irsnet.gov/sites/WILESPInstCrnr/ERS/ERS%20-%20BMF/BMF%20ERS%20Job%20Aid/2519-012.pdf.

(2) If there is any discrepancy between the IRM and the information in the Job Aid, always follow the instruction in IRM 3.12.251.

(1) The purpose of this initiative is to achieve consistency in the Business Master File (BMF) Error Resolution System (ERS) 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 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) Some Submission Processing Campuses have developed "Desk Procedures." These "Local Desk Procedures" can be used:

1. To supplement existing Headquarters procedures.

2. To expand Submission Processing Campus Error Resolution procedures by incorporating material from other IRMs, Automatic Data Processing (ADP) handbooks, etc.

3. For local routing procedures.

4. Are not limited to the uses listed above.

(2) A "signed approval" must be on file from the responsible manager on all Submission Processing Campus "Desk Procedures."

(3) All existing local information and procedural issuances must be reviewed periodically by a manager (at least 2 times a year or with each IRM revision) to:

1. Ensure conformance with Headquarters procedures,

2. Make necessary updates to the Desk Procedures, and

3. Secure necessary approvals.

(4) An Excel worksheet has been developed and may be used for verifying tax with Form 1120. This job aid is available for your use and can be found at http://serp.enterprise.irs.gov/databases/portals/sp/bmf/ers/job-aids/form-1120-calculations.xls. Another Excel worksheet has been developed for figuring the blended rate for fiscal filers (201801 through 201811) and can be found at http://serp.enterprise.irs.gov/databases/portals/sp/bmf/ers/job-aids/blended-rate.xlsm. This does not override the "Rule of Two." If the corrected tax is different than the computer’s generated tax, two tax examiners must figure the tax to ensure a quality product.

(5) Immediately notify the Headquarters tax analyst of any processing problems that cause a "work stoppage."

(1) Use Command Codes (CC) to correct and research the Error Inventory and the Workable Suspense Inventory.

1. Command Codes tell the system what function to perform.

2. The Employee Security file shows the employee’s working Command Codes.

3. Command Codes must be entered in a valid format, otherwise an error message displays.

4. Correct the data and transmit.

5. For more information, see IRM 3.12.38, BMF General Instructions and the job aid at http://serp.enterprise.irs.gov/job-aids/command-code/command-code.html.

(2) Valid Command Codes are:

(1) The ERS Action Code (AC) shows that specific information is missing or that the record is to be suspended from processing.

(2) Only one Action Code can be assigned at a time to a record. Assign Action Codes in the following priority:

1. AC 310

2. AC 320

3. AC 4XX

4. AC 6XX

5. AC 3XX

6. AC 2XX

(3) Action Code "001" will be computer-generated when the Block Out of Balance (BOB) Resolution Function has added a missing document by only inputting the TIN and the Name Control for the missing document.

(4) Code and Edit assigns Action Codes to numbered returns if the document is unprocessable. This code is edited in the lower left margin of the return.

(5) A Correspondence Action Sheet is used for initiating correspondence. This form is attached by Document Perfection. When routing within the campus (in-house research), attach an explanation about the missing information to the return.

(6) The Action Code assigned by Code and Edit (C&E) will be transcribed into the record of the Form 1120. A valid Action Code other than 001 will place the record in the Suspense Inventory, either Workable or Unworkable.

(7) If the Action Code assigned by Code and Edit is invalid or incomplete, the record will be assigned to the Error Inventory for correction or deletion of the code.

(8) For more information and applicable Action Codes, see IRM 3.12.38.3.4, BMF General Instructions, http://serp.enterprise.irs.gov/databases/irm.dr/current/3.dr/3.12.dr/3.12.38.dr/3.12.38.3.4.htm and the exhibit in IRM 3.12.38-1, Action Codes, http://serp.enterprise.irs.gov/databases/irm.dr/current/3.dr/3.12.dr/3.12.38.dr/3.12.38.htm.

(1) Use Action Codes and Command Codes to:

1. Enter an Action Code on a record.

2. Delete or correct an invalid code.

3. Overlay the present Action Code with another to either resuspend or reject from ERS.

(2) Command Codes:

(3) When the Action Code does not describe the required action, attach a note of explanation to the return Form 4227, Intra-SC Reject or Routing Slip.

(4) If an IDRS letter is necessary then, attach a Correspondence Action Sheet to issue the correspondence.

(1) Certain generated Error Codes displays with a Clear Code. A Clear Code must clear the generation of an Error Code and allow the return to continue processing.

(1) Records for the documents in the Error Resolution Systems (ERS) are controlled by Status Codes. The status is updated when the record is placed in a specific inventory.

(2) Below is a list of the status codes and a brief explanation:

1. Status 100, error awaiting correction. Records are in the Error Inventory.

2. Status 2XX, record awaiting information. Records are in the Unworkable Suspense Inventory.

3. Status 3XX, suspense period expired-no response. Records are in the Workable Suspense Inventory.

4. Status 4XX, record with information, awaiting correction. Records are in the Workable Suspense Inventory.

5. Status Code 900, Record is on the Unselected Inventory.

(3) The final two positions of the Status Code consist of the first two positions of the Action Code. This puts similar work together on the Workable Suspense Inventory. For example, "321" Suspense period expired, no response to taxpayer correspondence.

(4) Records for which the Suspense Period has expired before being activated are automatically moved from Status 2XX to Status 3XX.

(1) A statute control document is a document that is filed for a barred period. A barred period is a taxable period on which statutory limitations are placed for allowing refunds, credits, or for assessing added taxes.

(2) Any Form 1120 that the current processing date is equal to or more than two years after the return due date or received date, whichever is later, is a statute control document. It appears on the screen with Error Code 001 unless Computer Condition Code "W" is present on the record. The Computer Condition Code "W" shows the record has been cleared by Statute Unit.

(3) All "G" coded returns become statute returns if the processing date is equal to more than two years and ten months after the 15th day of the third month after the tax period ending.

(4) In general, a claim for refund must be filed or added tax assessments must be made not later than three years from the date the original return was filed or two years from the date the tax was paid, whichever is later.

(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 ERS/Rejects function, ERS/Rejects 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 ERS 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, and there is no sign Code and Edit made a copy and sent to CI Referral, then, do the following:

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

CI Referral Routing

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) 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, and Exhibit 3.12.251-27, Potential Frivolous Arguments for Examination Review, for a list of recognized frivolous arguments made by businesses.

(2) Review the return to decide whether it appears to be a frivolous return.Frivolous Return Criteria

(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) A charge-out (Form 8161, ERS Return Charge-Out, or Form 4251, Return Charge Out, computer generates for all new suspense items.

(2) When a record appears on the Workable Suspense inventory with the Action Code as first priority:

1. Tax examiners will add the information received to the record or follow the IRM instructions and clear the Action Code by entering the letter "C" in the Clear Code Field (CL) and transmitting.

2. Once the Action Code is cleared, any Validity, Section, or Math/Consistency errors will be displayed for correction.

3. Records may have been unprocessable and again require suspension for more information. A charge-out will not be generated for resuspended items. Attach Form 4227, Intra-SC Reject or Routing Slip, notating the corrective action and route as necessary.

(3) Some Action Codes may not be resuspended. If this occurs the charge-out should be notated in the correct block by entering the correct Action Code and date.

(1) Work non - perfectable conditions as follows:

(2) A charge-out generates for all Rejected Records. The charge-out remains in the SC files for future reference. ERS automatically controls adjustments to SCCF.

(1) The Error Resolution System identifies errors according to type and priority. The record heading shows the type of error.

• Priority I - Action Code/Unpostable Code Error

• Priority II - Terminus Error / Integrated Submission and Remittance Processing (ISRP) system Problem

• Priority III - Field Error

• Priority IV - Math/Consistency Error

(2) If programming has not furnished a section needed to correct an error, then:

1. Enter Command Code (CC) GTSEC.

2. Report to National Office for correction of the display.

(1) This code is used when a math error is present involving the tax liability or tax due/overpayment. Each math error display requires a correction to a field or the assignment of a TPNC.

1. TPNCs are entered on the terminal screen following the literal "NC" (Notice Code).

2. The TPNC 90 must be entered on the front of the return in the upper left corner (or use Form 12648, Error Correction 90 TPNC).

   Reminder: The transmission of a TPNC cannot be accompanied by any other correction.

(2) A TPNC is entered only after determining that no corrections to the record can be made. Before assignment of a TPNC:

1. All corrections must be entered and transmitted for each error condition.

2. A working trail showing the changes made must be entered on the return at the point of error and on the Total Tax line.

Note: An error may ripple through a return so that figures/entries based on the original calculations/entries could appear to be additional errors/Error Codes. If an Error Code is the direct result of a ripple, reassign any previously sent TPNC.

(3) Each math error will have certain TPNCs that are valid to clear the math error. If an invalid code is assigned, the error will be re-displayed.

(4) A return can have a total of three TPNCs. If more than three codes are to be assigned, use TPNC 90 instead and list the needed TPNCs for Notice Review to type and send to the taxpayer.

(5) TPNC 90 is a blank fill-in notice with 10 lines available for whatever statement is needed and is used when no other TPNC fully explains the error situation or when more than three notice codes are necessary. TPNC 90 can be used in conjunction with other notice codes. The TPNCs will be noted on the 90 notice as “Other notices sent”. When a TPNC 90 is needed, See TPNC 90 Literals - Copy and Paste Job Aid on SERP at http://serp.enterprise.irs.gov/databases/portals/sp/bmf/notice-review/job-aids/tpnc-90-literals.txt.

(6) When sending a TPNC 90, do the following:

1. Write on the returns “TPNC 90 - ###” (or similar language) or use Form 12648, Error Correction 90 TPNC.

   Note: TPNC 90 Math Error Code Job Aid, shows literals with two digits and TPNC 90 Literals - Copy and Paste Job Aid, shows literals with three digits.

2. Notate TPNC 90 (or similar language) and the date on Form 1332, Block and Selection Record, or Form 2275, Records Request, Charge and Recharge.

3. Place the return in the TPNC 90 designated area (basket/tub).

(7) If there is not an applicable TPNC 90 Math Error Code, then the ERS tax examiner will do the following:

1. Attach the applicable TPNC 90 slip of paper to the front of the return, after completing applicable fields or use Form 12648, Error Correction 90 TPNC, with the TPNC or narrative to be sent.

2. Notate TPNC 90 (or similar language) and the date on Form 1332, Block and Selection Record, or Form 2275, Records Request, Charge and Recharge.

3. Place the return in the TPNC 90 designated area (basket/tub).

(8) Make sure that the return needing a TPNC 90 leaves Error Resolution System (ERS) with the correct TPNC 90 language for the applicable form. For questions, please contact your Lead and/or Manager.

(9) Once a code is transmitted to the record, it may be changed in the following manner:

1. For records which have not been cleared from the terminal (errors remain after transmitting the TPNC), create an error with a higher priority.

   Note: This will cause all "C" clear codes and any notice code already assigned a lower priority error to be deleted from the record. TPNCs will be deleted from the header display. Beginning with the high Priority IV error created, all later errors will be displayed for resolution, even though they may have been displayed previously.

2. For records which have cleared the terminal, the "C" or TPNC on this error and all later Error Codes are displayed for resolution whether they were displayed previously. TPNCs previously assigned for this error and later Error Codes will be deleted from the screen.

3. Records which have been worked may be reworked using Command Code GTRECW. See IRM 3.12.38, BMF General Instructions, for further details.

4. All TPNCs are erased when a record is suspended with Command Code SSPND.

5. Unfinished records from the previous day will have none of the TPNCs that were assigned to the records that were not worked.

(10) See Exhibit 3.12.251-1, Form 1120 Taxpayer Notice Codes, for a list of the TPNCs that are valid for Form 1120.

(1) Unprocessable returns occur when perfection of a return is not possible or it is necessary to correspond, perform in-house research or refer the document to another area of the campus. The record will be suspended and the required action taken. Suspend the unprocessable record by entering Command Code SSPND followed by the correct Action Code.

(2) In cases where the Action Code cannot describe the required action, attach a note of explanation to the return (use Form 4227, Intra-SC Reject or Routing Slip).

(3) If an IDRS letter is necessary, attach a Correspondence Action Sheet to issue the correspondence and SSPND with Action Code "211."

(1) OLE is the system designed to allow for validation of the EIN and EIN/name control online using IDRS input Command Codes. It is designed to allow for entity research on a national basis.

(2) Command Code INOLE is used with the National Accounts Profile (NAP) to research the entity module. This information includes name lines, name control, address, employment codes, filing requirements, etc.

(3) Definer Code "S" should be used when you need more information that cannot be found using Command Code NAMEB or NAMEE to verify that the EIN the taxpayer has furnished is on the Master File. The display for a BMF EIN account will show the following:

• Primary name and all the name lines on the BMF

• Mailing address

• Primary name control

• Prior name control

• Sole proprietor SSN

• Fiscal month

• Prior fiscal month

• Establishment date

• Employment date

• Exempt Organization (EO) data, if present

• Filing requirements

• Parent Corporation EIN

• Subsidiary Corporation.

(4) Validation of IDRS Command Codes - IDRS Command Codes that create transactions posting on the Master File will have the EIN and EIN/name control confirmed using the Taxpayer Identification File (TIF) and the National Accounts Profile (NAP). The Command Codes will not return the "Request Completed" response until the EIN and EIN/name control have been validated by the NAP as being on the Master File. The transaction will then try to post. The following IDRS Command Codes are affected by OLE validation:

• FRM49 - Taxpayer Delinquent Return Notices and Investigations;

• ENREQ - Entity Changes.

(5) If the EIN matches the EIN and name control, normal processing will continue.

(1) Correspondence records with Action Code 21X will be automatically suspended for a predetermined number of days or until the taxpayer replies, whichever is earlier.

(2) An ERS tax examiner initiating correspondence may either:

1. Use the IDRS Correspondence Command Code LETER, or

2. Initiate correspondence by using a Correspondence Action Sheet (CAS), as is currently done for the IDRS operator or typist to use in issuing the actual correspondence. Attach the CAS to the left of Page 1 of the return, keeping the entity area visible.

(3) Most correspondence is either a computer-generated notice, a computer-generated letter or a pre-printed letter. All correspondence reflects a response period within 30 days and the potential consequences for not replying.

(4) Review the document before issuing correspondence to ensure all needed information is requested the first time. Check CC BMFOLI to ensure the return is not a duplicate document before corresponding. If a return is posted to the tax module, use CC BRTVU or BMFOLR to see if the raw return is a duplicate. If it is, SSPND with Action Code "640" to have it deleted. If it does not match the posted return, enter CCC "G" and continue processing the document as an amended return.

(5) All correspondence to taxpayers requesting information should show that a response is required. Specify the length of time the taxpayer has to respond and include a statement on the action the IRS will take if the response is not received timely. Include the statement "When you reply, please send your telephone number and the most convenient time for us to call so we may contact you if we need additional information." Give for a purge date at least 10 days after the date given in the letter to the taxpayer.

(6) Whenever possible, pattern letters should be used to correspond with taxpayers. If a CNOTE or QUICKNOTE is used, be sure that it clearly communicates the message in simple language and has the above required information.

(7) Before initiating manual correspondence on an account dealing with anything other than a recently filed return, check the Centralized Authorization File (CAF) to ensure that the information will be mailed to the taxpayer's representative if one is on record.

(8) Specific turnaround times for working taxpayer correspondence as outlined in IRM 3.30.123, Work Planning and Control-Processing Timeliness: Cycles, Criteria, and Critical Dates, must be followed. Monitored reports must be kept ensuring that these guidelines are met.

(9) When taxpayer errors are discovered in processing which have caused or will cause processing delays and no other notification is to be sent to the taxpayer, tell the taxpayer of the reasons for the delay.

(1) Taxpayers may send tax return information via fax as part of return perfection even when submitting a signature. In circumstances where contact with the taxpayer was made and documented, faxed signatures are acceptable.

(2) Contact the taxpayer by telephone or correspondence. Follow local procedures to decide which method of contact to use.

(3) Indicate the fax paragraph on the approved Correspondence Action Sheet to inform the taxpayer of the fax options.

(4) Use the following resources to make sure you are speaking with the taxpayer or authorized representative before disclosing any tax information:

• IRM 21.1.3.2.3, Required Taxpayer Authentication

• IRM 21.1.3.2.4 Additional Taxpayer Authentication

(5) Before leaving any messages on a taxpayer's answering machine, review:

• IRM 10.5.1.6.7.2, Answering Machine or Voicemail

• IRM 10.8.1, Information Technology (IT) Security, Policy and Guidance

(1) An error record must be rejected when:

1. It is International related and has a foreign address or claims Possessions Tax Credit or claims Credit for Income Tax Withheld (or paid) at source (Form 1042-S credit) (except Ogden Submission Processing Center (OSPC) only).

2. It covers multiple tax periods or reports multiple types of tax.

3. It is misblocked.

4. It requires correspondence with the taxpayer for missing or clarifying information.

5. Subsidiary returns are detached from parent returns.

6. It is a potential Statute Case not cleared by Statute Control Group.

7. It is an unprocessable return "Secured by Audit/Examination." Do not correspond. Treat as a "No Reply" and follow No Reply instructions.

8. The return is stamped "Pro Forma" or other designation that shows income calculation for a state that requires such tax filing requirements.

9. The return is a supporting document for Form 1139, Corporation Application for Tentative Refund.

10. The return is a supporting document for Form 6166, Certification Program Letterhead.

(2) When a record is rejected, it is necessary to suspend with Action Code "640" and prepare one or more of the following:

1. Form 4227, Intra-SC Reject or Routing Slip. Note the reason for rejecting the document.

2. Correspondence Action Sheet used to correspond with the taxpayer.

3. Form 6882, IDRS/Master File Information Request.

(1) Document Perfection and ERS must identify refunds and initiate requests for manual refunds.

(2) Action Code "341" should be input by Code and Edit to show that a manual refund is needed. If these conditions are not identified in Code and Edit, ERS must follow the criteria below:

(3) TAS Manual Refunds - any return hand walked by a W&I SP (SP) liaison for TAS must be processed by a lead tax examiner or designated tax examiner using the following procedures in the order listed:

1. CCC "O" must be edited on the return and entered in Field 01CCC.

2. Delete CCC "Y" from Field 01CCC.

3. Continue processing the return according to Error Code procedures.

(4) Correspondence: If needed for missing or incomplete information, follow procedures below:

1. Complete the correct correspondence request form and request all information that is missing or incomplete.

2. Inform the W&I liaison of all information that is being requested.

3. Suspend (SSPND) with correct suspense code and give return back to the W&I SP liaison.

   Note: The W&I liaison will contact the TAS to obtain the required information needed to complete processing.

(5) Additional Suspense action needed: If the return requires other suspense action, then follow procedures below:

1. Initiate suspense (SSPND) action according to IRM procedures.

2. Inform the W&I liaison the reason for the action taken.

3. Give the return back to the liaison.

Note: The W&I liaison will contact TAS, who in turn will take the necessary action to complete the processing of the return.

(6) Assigning TPNCs/Math Error: When a math error is identified, do the following:

1. Assign the TPNC according to IRM procedures.

2. After all TPNCs have been assigned, inform your liaison of TPNCs issued.

3. Suspend (SSPND) with correct code (suspense must be done at the generated point of error and give the return to the liaison).

   Note: The W&I liaison will contact the TAS, who in turn will take the necessary action to complete the processing of the return.

(7) When Balance Due/ Overpayment Math Error Code generates do the following:

1. Make screen print of the Error Code Display, highlight the Computer-Generated Refund Amount, and attach the print to the front of the return with the entity portion of the return visible.

2. Enter the amount the taxpayer claimed as the amount they requested to be refunded back in to Field 07B/R.

3. If Balance Due/Overpayment Math Error Code regenerates because the taxpayer made a math error when computing their refund, then make a screen print of the Error Code Screen Display and highlight the computer-generated refund amount. Attach the print to the front of the return keeping the entity area visible and assign the correct TPNC.

4. Once return completes processing, give the return, Form 12412, Operations Assistance Request (OAR), and the ERS screen print to the W&I SP liaison.

(8) Rejects Suspense Procedures:

1. Follow specific instruction given by W&I SP liaison. Correspond and assign as directed.

2. Refer to paragraphs (6) and (7) above.

(1) General Information - This subsection has general instructions for processing correspondence items. If instructions in this subsection differ from specific instructions in other parts of this IRM, follow the specific instructions.

(2) Replies to Correspondence:

1. The Correspondence Received Date (CRD) must be present when returns have been held in suspense and the reply is received after the due date of the return. The field format is YYYYMMDD. This field will be invalid when day of the month (DD) exceeds the allowable number of days for the transcribed calendar month (MM).

2. Enter the Received Date of the correspondence reply in the Correspondence Received Date Field, 01CRD, except when the correspondence reply was received before the due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ of the return or the correspondence was required because of an IRS processing error, we didn’t ask for all required information, or the correspondence was sent in error.

3. Correct the screen display and the return if necessary with the information received, including address changes.

(3) Missing Information - Do not correspond a second time if one contact from any processing area has already been made. Missing information on a return should be treated as a no reply.

(4) Frivolous Replies - If an item being questioned by the IRS is protested by the taxpayer, follow instructions for protest returns. If in doubt whether an item is a protest, check with your manager, who may consult with Examination for final determination.

(5) All Form 1120-F (Modernized Electronic Filing (MeF) and paper) returns claiming credit on Line 5(i), U.S. Income tax paid or withheld at source, on Form 8288-A, Statement of Withholding on Certain Dispositions by Foreign Persons, must be verified on the INTLWebApps Application. See IRM 3.12.251.36, Form 1120-F Sections and Fields, IRM 3.12.251.36.7.1, Section 07 Field Errors, and IRM 3.12.251.36.18.23, Error Code 188 - Balance Due Math Error.

(6) No Replies/Incomplete Replies

1. If there is no reply or an incomplete reply to correspondence, perfect the document from available information and resolve any doubt in favor of the Internal Revenue Service.

2. Disallow unsubstantiated credits where substantiation is required.

   Example: Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains and Form 4136, Credit for Federal Tax Paid on Fuels.

3. When unable to identify an excess remittance, transfer the remittance to the Unidentified Remittance File.

4. Enter CCC "X" on refund returns with a missing signature.

5. Refer to the chart of "No Reply" returns at the end of the section.

6. Edit a CCC "3" in Field 01CCC for no reply returns.

(7) Undeliverable

1. When working reject cases, if the correspondence is returned "Undeliverable," check to see if the address was correctly input on the letter. If it was not, resuspend using Action Code "212" to have another letter sent. Examine the return or attachments for a second address. If one is found, resuspend using Action Code "212" to have another letter sent.

2. If none of the above conditions apply, process as a "No Reply."

(8) Late Replies - When a reply to correspondence is received after "No Reply" procedures have been implemented, special routing instructions are required. Follow procedures in IRM 3.12.38, BMF General Instructions.

(9) Return Secured by Audit - If a return secured by Audit is unprocessable due to missing information, do not correspond. Treat the return as "No Reply."

(1) It is important to leave a legible "Working Trail" (or "Action Trail") using blue ink for those who may work with the return later.

(2) Write all Taxpayer Notice Codes (TPNCs) 90 on the front of the return in the upper left corner (or use Form 12648, Error Correction 90 TPNC), see IRM 3.12.251.3.13, Taxpayer Notice Codes (TPNC), for more information.

(3) If corresponding with a non-suspense letter, "X" and write the corrected money amounts to the left of each original point(s) of error. Write money amounts in dollars only or dollars and cents, as applicable. Arrowing is allowed for money amounts when there are no intervening entries between the arrow and the line to which the money is to be entered.

(4) Leave a working trail on the return when changes are made to the following items:

• Employer Identification Number (EIN)

• Tax Period

• Received Date

• Computer Condition Code

• Correspondence Received Date (CRD)

(5) When working Reject re-inputs, circle out any previous Action Codes shown on the front of the return, if no longer applicable.

(6) When working Rejects, write "Voided" with the date above the DLN in red, when voiding a return.

(1) If a taxpayer filed Form 1120-S and the Entity Control Unpostable Unit has determined the taxpayer does not have a valid Form 2553, Election by a Small Business Corporation, on file, the Form 1120-S must be converted to Form 1120 to be processed.

(2) Entity Control Unpostables will edit the name control, CCC "3" (if applicable), Received Date, Field 01NAI, Schedule K, Line 2a, Tax Period and Audit Code 4.

(3) If a field other than those mentioned above has been entered, delete it.

(4) Do not enter any tax data on the "blank" Form 1120. No conversion to a Form 1120 should be attempted.

(5) If the converted form displays with Error Code 026 and there is an indication that Entity has taken action to resolve the tax period, clear the Error Code. If there is no indication that Entity has taken action on the tax period follow instructions for Error Code 026.

(6) When reprocessing an original e-filed (MeF) Form 1120-S as Form 1120, ensure that the received date is properly edited on the return. The received date is the same as the original DLN Julian date. Do not subtract ten days.

(1) Homeowners Associations may file on Form 1120. When they do so, they are to be taxed at the normal corporate tax rate.

(2) If the taxpayer shows Section 277 or states "minimum amount of tax" when there is no amount for taxable income present, accept the taxpayer's figures by using one or more verified fields.

(1) Instructions in this subsection apply to tax periods 201712 through 202012,

(2) A Section 965 return can be identified by any of the following:

• 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 is attached (201712 returns).

(3) IRC 965 affects returns for tax periods 201712 through 202012, see IRM 3.12.251.3.24.1, Section 965 - Tax Period 201712 - 201811 and IRM 3.12.251.3.24.2, Section 965 - Tax Period 201812 through 202012 and later for specific instructions according to the year the taxpayer reported their Section 965 tax liability.

(4) Corporate taxpayers can elect under Section 965(h) to pay their Section 965(h) net tax liabilities in installments over a period of 8 years. They will use Form 965-B, Corporate and Real Estate Investment Trust (REIT) Report of Net Tax Liability and Electing REIT Report of 965 Amounts, to report their transactions, payments, adjustments, and transfers during the 8 year period.

(5) The table below shows required annual installment amounts:

(6) Modernized e-File (MeF) created naming conventions to identify "965" on the return. Some returns may not be true Section 965 returns. The numbers "965" may appear in the address, banking account number, EIN or anywhere on the return. If determined that the return is not Section 965, delete CCC "J," correspond for missing information and continue processing.

(7) New fields and programming have been created that will automatically input Transaction Code 971 with Action Codes 114 and 115. It is not necessary to input these transactions. CCC "X" will automatically generate. The new fields capture the net tax liability under Section 965 (Field 0796I/0896I) and the net Section 965 tax paid for the reporting year (Field 0796P).

(8) Computer programming is in place to compute the Section 965(h) deferred tax amount by subtracting Field 0796P (Net Section 965 tax paid for the reporting year) from Field 0796I/0896I (Section 965 Tax Liability).

(9) The table below shows the new fields that have been created:

(10) Paper filed Section 965 returns: If the taxpayer has elected to defer payment of tax under Section 965(h), scan the pages of the return with Section 965 tax data, the IRC 965 Transition Tax Statement and/or the Form 965 and E-mail the scan to the Chief Financial Office (CFO) at *CFO Tax Reform 965

(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 a “Deemed Payment.”

• Transfer a credit to another taxpayer.

• Claim the credit as a General Business Credit.

(2) For tax periods 202201 - 202212, identify a "Deemed Payment Election" when the taxpayer writes "IRA22DPE", on Form 3800, an attachment or on any of the following lines:

(3) When a return is identified with a "Elective or Deemed Payment Election", and Code and Edit has not done so, do the following:

1. Enter RPC "J" in Field 01RPC.

2. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet under the Entity portion of the return.

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

3. Suspend with Action Code "450".

4. Sign the DLN out of the block using Form 1332, Block and Selection Record.

5. Give the return to the lead. The lead will place the return in the designated area for LB&I review.

(4) When a return is identified In ERS with a "Credit Transfer", and Code and Edit has not done so, do the following:

1. Enter RPC "K" in Field 01RPC.

2. Place a flag at the top of the return and attach the "IRA22 DPE/TRE Reminder" sheet under the Entity portion of the return.

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

3. Suspend with Action Code "450".

4. Sign the DLN out of the block using Form 1332, Block and Selection Record.

5. Give the return to the lead. The lead will place the return in the designated area for LB&I review.

(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 3.12.251.29.37, Error Code 178 - General Business Credit Math Error.

(1) If the money amount on a return exceeds the maximum field length allowable, enter the maximum amount of tax in Field 07GVT. Prepare Form 3465, Adjustment Request, to have the remainder assessed by Accounts Management.

(2) If a correction causes a difference of≡ ≡ ≡ ≡ ≡ ≡ ≡ or more between taxpayer tax and computer tax, correspond for an explanation or follow local Submission Processing Campus procedures. If no reply, send TPNC 40.

(1) Correctable Section 01 fields are listed below:

(1) This field is transcribed from the name line in the entity portion of the return. The field is used for the name control (the first four significant characters of the corporation's name).

(2) Invalid Condition - Field 01NC is invalid if:

• The Name Control is present, and the first position is not alpha or numeric.

• The Name Control 2nd, 3rd and 4th positions are not alpha, numeric, ampersand, hyphen, or blank.

• There are any intervening blanks between characters.

(3) Correction Procedures:

1. If the Name Control is invalid initiate research.

2. If the Name Control has been transcribed incorrectly, enter the correct Name Control.

3. If the Name Control is missing and cannot be found, initiate research using local campus procedures.

4. If found, enter the correct Name Control in Field 01NC and on the return.

5. If you are still unable to find the Name Control, SSPND the record with Action Code "320."

(1) The EIN is a number assigned by IRS for identification of a business tax account. The field is found in the EIN block on page 1 of the return or on the IRS preprinted label.

(2) Invalid Condition - Field 01EIN is invalid if:

• The field is less than 9 digits.

• The EIN is not numeric.

• The EIN is all zeros or nines.

• The first two digits are: 00, 07, 08, 09, 17, 18, 19, 28, 29, 49, 69, 70, 78, 79, 89, and 96.

(3) Correction Procedures:

(1) The tax period is found in the upper right corner of the return. It is the ending month and year of the tax period covering the return. If the tax period is not the current calendar year, it is edited in year/month (YYYYMM) format. For example, December 31, 2023, is edited as "202312."

(2) Invalid Condition - Field 01TXP is invalid if:

• The field is not numeric.

• The last two digits (month) are not 01 through 12.

• The tax period is equal to or after the current year and month.

• The tax period is blank.

(3) Correction Procedures:

1. Correct coding and transcription errors and misplaced entries.

2. Check the upper right corner of Page 1 of the return for a correct tax period.

If	Then
Final return,	Change the tax period to the month preceding the Received Date.
Tax period is later than the Received Date by four months or more,	SSPND with Action Code "211" Correspond using Letter 319C, Return Covers Other Than 12-month Accounting Period. and request confirmation of the tax period ending. Note: When confirmed, the return will be processed after the end of that tax period.
Tax period is later than the Received Date by less than four months,	SSPND with Action Code "480" and attach Form 4227, Intra-SC Reject or Routing Slip, noting that the return should be held and processed after the end of the tax period.

3. If account shows there are prepaid credits and/or extensions and the return is for a short period, SSPND with Action Code "351" and attach Form 4227 to have the credits and/or extensions moved to the correct period. The following table shows the placement of prepaid credits on the Form 1120 series.

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
Form 1120-F	Line 5a, 5b, or 5e
Form 1120-H	Line 23a, 23b, 23d
Form 1120-L	Line 27a, 27b, 27c, or 27e (Lines 28a, 28b, 28c or 28f for 2022 and prior).
Form 1120-PC	Line 15a, 15b, 15c, or 15e (Line 15e for 2022 and prior).
Form 1120-REIT	Line 25a, 25b, 25e
Form 1120-RIC	Line 28a, 28b, or 28e (Lines 29a, 29b, 29c for 2022 and prior).

4. 52-53 Week Rule. Corporations may elect to file a 52-53 week year end return under Treasury Regulation 1.441-2T(a).

Examples
52-53 week tax year that ends on the last Friday of the month can end as much as 6 days before the last day of the month.	Tax year ends August 25, 2023. tax period should be 202308.
52-53 week tax year that ends on the Friday that is nearest to the last day of the month can end as much as 3 days before, or 3 days after, the last day of the month.	Tax year ends June 2, 2023. tax period should be 202305.

(1) The Received Date is edited in YYYYMMDD format. The Received Date must be present on all Forms 1120. This field will show on the return in MMDDYY format. On the ERS Screen it displays as YYYYMMDD.

(2) Invalid Condition - Field 01RCD is invalid if:

• The Received Date is not present.

• The Received Date is not numeric.

• The Month is not 01 through 12.

• The Day is not valid for the month.

• The Received Date is later than the current processing date.

• The Received Date is not in YYYYMMDD format.

(3) Correction Procedures:

1. Correct coding and transcription errors and misplaced entries.

2. Field 01RCD is transcribed from the stamped or edited date in the center of Page 1 of the return.

If	Then
The Received Date stamp is invalid (i.e., "20220115" in lieu of "20230115"),	Change the Received Date year to the current year.
The Received Date is illegible or missing,	Determine the correct Received Date in the following priority: U.S. postmark date on envelope or a postmark set up by an acceptable designated private delivery service. See IRM 3.10.72, Receiving, Extracting and Sorting, for more details. Service Center Automated Mail Processing System (SCAMPS) digital date. Revenue Officer's signature date Signature date unless information shows it is not valid or the return is for a prior year. DLN Julian Date minus 10 days, unless MeF return. Use the original Julian Date when assigning a received date for MeF returns. Current date minus 10 days

(1) The Paid Preparer Checkbox is found next to the Signature area of the return. The Paid Preparer Checkbox is used to show whether the taxpayer has elected to allow the preparer shown on the return to discuss the return with the IRS. Code and Edit will enter a "1" in the margin to the right of the box if the "Yes" box is checked.

(2) Invalid Condition - Field 01CBI is invalid if not "1" or blank.

(3) Correction Procedures:

• Correct coding and transcription errors and misplaced entries.

If	Then
The "Yes" box is checked,	Enter a "1" in Field 01CBI.
The "No" box is checked, neither box is checked, or both boxes are checked,	Delete entry in Field 01CBI.

(1) The Computer Condition Code (CCC) is transcribed from the dotted portion of the Income section of the return. Computer Condition Codes are used to notate a specific condition, attachment, or computation and will post on the Master File.

(2) Invalid Condition for Form 1120:

(3) Correction Procedures:

1. Correct coding and transcription errors and misplaced entries.

2. When the code(s) entered on the return are illegible or invalid, examine the return and refer to the Computer Condition Code Chart below.

3. Determine the correct code(s) and enter on the screen.

4. When CCC "Y" is needed you may also need to GTSEC 07 and put the verified tax amount in Field 07MCT. If tax is zero enter .01 in Field 07MCT.

5. Computer Condition Code Chart:

Code	Edited if:	Shows
A	Tax year beginning was before December 31, 1987 and non-penalty Form 2220, Underpayment of Estimated Tax by Corporations, is present.	Waiver of the Estimated Tax penalty.
B	Corporation checks the Schedule M-3 box or Schedule M-3 is attached.: Form 1120, Page 1, Box A, 4. Form 1120-C, Page 1, Box A, 2. Form 1120-F, Page 1, Schedule M-3 Box Form 1120-L, Page 1, Box A, 3. Form 1120-PC, Page 1, Box A, 3.	Form 1120 with Schedule M-3 attached.
C	Qualified Derivatives Dealers (Form 1120-F)	"Yes" answer From Page 2, Question CC.
D	Reasonable cause for failure to pay
E	Possible Identity Theft filing
F	The taxpayer checks the "Final Return" box on Page 1 of the return, or there is any other indication that the taxpayer is not liable for future returns.	Final return
G	An amended return is identified per IRM 3.11.16, Corporate Income Tax Returns. Note: No other Computer Condition Codes are allowed, except CCC "W," "S," "T" or "3."	Amended return
H	CCC H is no longer required.
I	Form 6781 is attached.	Tax Straddles and Regulated Futures Contract claimed are attached to Form 1120, Form 1120-C, Form 1120-F, Form 1120-L and Form 1120-PC.
J	The tax period is 201712 through 202012 and the return shows any of the following and the taxpayer is reporting Section 965 Tax Liability for the reporting year : 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 965 Tax Liability and Electing REIT Report of 965 Amounts is attached. IRC 965 Transition Tax Statement is attached to the return. See the following IRM references: IRM 3.12.251.3.24, Section 965 Returns - General Instructions. IRM 3.12.251.3.24.1, Section 965 Returns - Tax Period 201712 - 201811. IRM 3.12.251.3.24.2, Section 965 - Tax Period 201812 and later.	Section 965 (Repatriation Provision), Treatment of deferred foreign income upon transition to participation exemption system of taxation for U.S. Shareholders of Specified foreign corporations per Tax Cuts and Jobs Act (Tax Reform), Provision Section 14103, Public Law 115-97 (H.R.1) is applicable.
K	Form 8697, Interest Computation Under the Look-Back Method for Completed Long-Term Contracts, is attached and shows a balance due in Part I, Line 10 and/or Part II, Line 11. Note: The tax will be claimed on Form 1120 Schedule J, Line 9c, (2010 and prior: Line 9).	Form 8697 tax is claimed.
L	Form 8833 is attached to the return, or "Section 6114 Election."	The treaty- based position statement is not made per IRC 6114 but is subsequently claimed on the return.
M	Form 8949, Sales and Other Dispositions of Capital Assets, Opportunity Zone Enter CCC "M" when: Tax period is 201712 and later, and Form 8949 has a code “Z” and/or "Y" in column (f).	Tax Cuts and Jobs Act of 2017, P.L. 115-97 (H.R. 1), Section 13823, Opportunity Zones. Taxpayers who elect to defer gain on the sale of an asset by investing in an Opportunity Zone Fund will show that they are deferring the gain by entering code "Z" in column (f).
N	An unusual credit more than $5,000,000 is claimed on Form 1120, Page 3, Schedule J, Lines 13 through 22 (Lines 12 through 19 for 2017-2011) Form 1120-L, Page 4, Schedule K, Lines 5a through 5e Form 1120-PC, Page 1, Lines 8a through 8e Form 1120-FSC, Page 1, Lines 2a through 2g Form 1120-SF, Page 1, Lines 16a through 16e . Unusual credits are defined as: Form 1120-PC, Line 15h states: By reciprocal for tax paid by Attorney in Fact under Section 835(d). A credit claimed under IRC 1341 or a "Claim of Right" for refund of excessive prior year taxes. Credits claimed under IRC 1383 in a later year for a refund of excessive prior year taxes.	Form 1120 Joint Committee Case
O	Module Freeze condition is applicable.	Manual Refund
P	Field 08FTC has an amount of ≡ ≡ ≡ ≡ ≡ ≡ ≡ for the following forms: Form 1120, Schedule J, Line 5a. Form 1120-C, Schedule J, Line 5a. Form 1120-REIT, Schedule J, Line 3a. Form 1120-RIC, Schedule J, Line 3a.	Form 1118, Foreign Tax Credit
Q	Form 8913 (This field is no longer used, but is still in ERS programming. Tax period 2006 to 200711)
R	Reasonable cause for late filing.
S	Form 8883, Asset Allocation statement under section 338, is attached.	Form 8883 attached to: Form 1120 Form 1120-C Form 1120-F Form 1120-L Form 1120-PC Form 1120-REIT Form 1120-RIC
T	Form 8886, Reportable Transaction Disclosure Statement.	Form 8886 attached to: Form 1120 Form 1120-C Form 1120-F Form 1120-H Form 1120-L Form 1120-PC Form 1120-REIT Form 1120-RIC
V	Form 8913 (This field is no longer used, but is still in ERS programming. Tax period 2006 to 200711)
W	Return has been "cleared by Statute"	Cleared by the Statute Control Group
X	Refund/Settlement freeze condition is shown	Return settlement is frozen
Y	Short period return for change of accounting period is shown	Return must be manually verified. Master File will accept return as submitted. Updates the entity fiscal month.
Z	Schedule UTP is attached to Form 1120, 1120-F,Form 1120-L or Form 1120-PC for Tax Year 2011	Uncertain Tax Position Statement with assets that equal or exceed $100 million.
1	Form 8824 (Valid on Form 1120 and Form 1120-REIT)	Like Kind Exchange
2	Shows that a Form 8938 is attached.
3	The taxpayer either fails to respond to correspondence or the correspondence is returned undeliverable	Account will not receive credit interest
5	Bank Holding Co. Tax Act	Special installment status
6	Tax Period is 201812 and prior and Form 1120, Page 3, Schedule J, Part III, Line 14 (Part II Line 13 for 2017-2011)(with notation such as Special Estimated Tax Payments (SETP) or 8816); and/or Form 1120-L, Page 1 Line 28b (Page 1, Lines 29b and/or 29d for 2017 and prior) ; and/or Form 1120-PC, Page 1, Line 15b (Page 1, Lines 14b and/or 14d for 2017 and prior). (Form 1120, Form 1120-L and Form 1120-PC only)	Section 847 Deduction, Special Estimated Tax Payments
7	Reasonable cause denied
8	Annualized income is computed on Schedule A, Pages 3 and/or 4 of Form 2220, or Form 2220, Part II Box 6 or Box 7 (prior year Part I, Box 1 or Box 2) is checked.	Waiver of the Estimated tax penalty
9	Low-income Housing Credit is shown: Form 1120, Schedule J, Line 9b has a significant entry. Form 1120-C, Schedule J, Line 8 has a significant entry. Form 1120-REIT or Form 1120-RIC, Schedule J, Line 6 has a significant entry. Form 8611 or Form 8693 is attached, Taxpayer notates "Form 8693," Form 8609 is attached, Form 8609-A is attached. Form 8586 with entries on Line 1 or 3.	The Low-income Housing Credit is claimed

6. If CCC "G" is present, and:

If	Then
Return is not an amended return,	Delete CCC "G" and leave other codes. Input all information from the return.
Return is an amended return,	Delete CCCs other than "G," "W," "S," "T" and "3."

7. If more than 10 codes are present, retain codes in the following priority: F, N, O, Y and others (up to 10 codes).

(1) Return Processing Code (RPC) is an alpha or numeric character used to alert the computer to a special condition. The RPC is edited on Page 1, in the right margin next to Line 1c of Form 1120.

(2) Invalid Condition

• Characters are not "A" through "N" or "1" through "7" and "9."

• There are more than 35 characters.

(3) Correction Procedures:

1. Correct misplaced entries and transcription errors.

2. When the code(s) entered on the return are illegible or invalid, examine the return and enter the correct code from the table below:

   Note: RPCs do not have to be entered in any specific order.

(1) Field 01TXB will be an 8 character date edited to the left of the form title at the top of Page 1 of the tax return. It will be edited in YYYYMMDD format.

(1) The North American Industry Classification System Code (NAICS) is transcribed from Form 1120, Schedule K, Line 2a (Business activity code no.)

(2) Invalid Condition - Field 01NAI is invalid if:

• The field is not present (except returns with CCC "G").

• The field is not numeric.

• The field is not 000001 through 999999.

(3) Correction Procedures:

1. Correct coding and transcription errors and misplaced entries.

2. Make the following changes if the Form 1120 is not an amended return:

If	Then
The NAICS Code is found on Form 1120, Schedule K, Line 2a,	Enter the code in Field 01NAI.
The NAICS Code is not found on Form 1120, Schedule K, Line 2a,	Enter 999999 in Field 01NAI.
The taxpayer provides a number that is less than 6 digits,	Enter leading zeros to make it a 6 digit number.

3. If Form 1120 is an amended return, delete any entry in Field 01NAI. GTSEC 01 and input CCC "G."

(1) Field 01CRD is the date stamped on the reply to correspondence and is an ERS Input Only field.

1. The 45-day interest free period for processing refund returns does not begin until after the return is considered processable. If correspondence is initiated for missing information, the Correspondence Received Date must be input on the Master File for the purpose of computing credit interest.

2. This field will show on any correspondence in MMDDYY format. On the ERS Screen it displays as YYYYMMDD.

   Note: Code and Edit no longer edits the Correspondence Received Date.

(2) Invalid Condition - Field 01CRD is invalid if:

• The Correspondence Received Date (CRD) is present, and it is not numeric.

• The format is not YYYYMMDD.

• The month is not 01 through 12.

• The day is not valid for a particular month.

(3) Correction Procedures:

1. The Correspondence Received Date may not be required.

If	Then
Correspondence was required because of an IRS processing error, such as a request for a return or schedule that we lost during processing, We didn’t ask for all the required information, or The correspondence reply is received before the return due date, Correspondence was not needed,	Delete Field 01CRD if any of these conditions are present.

2. If the Correspondence Received Date is applicable, use the date the correspondence reply was received in the Submission Processing campus.

If	Then
The reply was not date stamped,	Use the postmark date on the envelope attached to the reply. Enter the Correspondence Received Date in Field 01CRD.
No reply or the correspondence was undeliverable,	GTSEC 01 and enter a CCC "3" on the return and in Field 01CCC. Note: The CCC "3" suppresses the credit interest.
There is an indication that Entity Control has assigned an EIN to the return,	Enter the entity assignment date found in the lower left-hand corner in Field 01CRD if it is later than the Received Date.
More than one CRD is present,	Use the CRD that made the return complete and processable.

(1) The Preparer Taxpayer Identification Number (PTIN) is transcribed from the "PTIN" box in the "Paid Preparer Use Only" section of the return.

1. Field 01PSN can be blank, or it can be numeric, or

2. The field may have a "P" followed by eight numbers.

(2) Invalid Condition - Field 01PSN is invalid if:

• The PTIN is present, and it is all zeros or all nines.

• An entry is less than nine characters.

• A non-numeric entry is not "P" followed by eight numbers. These numbers cannot be eight zeros or eight nines.

(3) Correction Procedures:

1. Correct coding and transcription errors and misplaced entries.

2. If the PTIN on the return is invalid, do not try to correct the taxpayer’s information. Delete Field 01PSN.

(1) The Preparer EIN is transcribed from the "EIN" box in the "Paid Preparer Use Only" section of the return. Field 01PEN can be blank, or it can be numeric.

(2) Invalid Condition - Field 01PEN is invalid if:

• The Preparer EIN is present, and it is all zeros or all nines.

• An entry is less than nine characters.

• A non-numeric character is present.

(3) Correction Procedures:

1. Correct coding and transcription errors and misplaced entries.

2. If the Preparer EIN on the return is invalid, do not try to correct the taxpayer's information. Delete Field 01PEN.

(1) The paid preparer phone number is transcribed from the bottom right-hand corner of Page 1, in the Paid Preparer Use Only area of the return. If present, the entry in Field 01PTN must be alpha, numeric or a combination of alpha and numeric characters not to exceed 10 positions.

(2) Invalid Condition

• Field 01PTN is invalid if not blank, alpha, numeric or a combination alpha and numeric characters.

(3) Correction Procedures:

• Correct coding and transcription errors and misplaced entries.

• If invalid characters are present, or if the Paid Preparer Phone Number on the return is invalid, do not try to correct the taxpayer's information. Delete Field 01PTN.

(1) The fields listed below are in Section 02, Form 1120. From left to right are the field designator, maximum field length, title of field and the location where the data is obtained from the return.

(1) Description - Field 02CON is in the entity section of the return.

(2) Valid Condition - Field 02CON has 35 positions and the valid characters are alpha, numeric, ampersand, dash, slash or percent (%).

(3) Invalid Condition - Field 02CON is invalid if any of the following conditions are present:

• The first position is % (percent) and the second position is not blank.

• The first position is blank.

• The first character of the "In-Care-of" name is not alpha or numeric.

• There are two consecutive blanks between significant characters.

(4) Correction Procedures:

1. Correct coding and transcription errors and misplaced entries.

2. Refer to the chart below:

In Care of Name Correction Procedures

If	Then
A % (percent) is in the first position,	Verify there is a blank in the second position. If not blank, enter a blank followed by the "in-care-of" name, beginning with an alpha or numeric in Field 02CON.
A blank is in the first position,	Delete blank. Enter the "in-care-of" name, beginning with an alpha or numeric in Field 02CON.
The first character of the "in-care-of" name is not alpha or numeric,	Verify "in-care-of" name on the return. Enter the "in-care-of" name beginning with an alpha or numeric in Field 02CON.
Two consecutive blanks are present between significant characters,	Delete any unnecessary blanks in Field 02CON.

(1) Description - Field 02FAD is in the Entity Section of the return.

1. This field will have an entry when there is a foreign address present on the return.

2. Field 02FAD should not be present on "G" coded short length returns.

(2) Valid Condition - Valid characters are alpha, numeric, and special characters.

(3) Invalid Condition - Field 02FAD generates as an error when any of the following conditions are present:

• The first position is blank.

• Any character follows two consecutive blanks.

• There are more than 35 characters present in the field.

  Note: ISRP will input a pound sign (#) as the 35th character if there are more than 35 characters present for this field on the return.

(4) Correction Procedures:

• Correct coding and transcription errors and misplaced entries.

Foreign Address Correction Procedures

If	Then
Field 02FAD is present,	1. GTSEC 02 2. Ensure Field 02CTY has a foreign country code and Field 02ST (State) has a "." period/space. See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries. Exception: Use the Country Code based on the Province in Field 02CTY if the foreign address is from Canada and the address has a province name or abbreviation.
A province abbreviation is not present for Australia, Brazil, Canada, Cuba, Italy, Mexico or The Netherlands but a Province name is present,	Enter the province abbreviation in the proper position in Field 02FAD.
A foreign address is not present on the return,	SSPND with Action Code "610." Renumber return with domestic DLN.

• If Form 8822, Change of Address, or Form 8822-B, Change of Address - or Responsible Party - Business, is attached to the return, compare the name and address information on the Form 8822 or Form 8822-B to the return.

Note: A business may have two addresses. One is the mailing address and the other is the location address or physical location of the business.

Change of Address

If	And	Then
Form 8822, Change of Address, or Form 8822-B, Change of Address or Responsible Party - Business, is attached,	All the following applies: Mailing address information is the same, No location address is on Form/Form 8822-B, Line 7, No entry on Form 8822-B, Lines 8 or 9,	Take no action and continue processing.
Form 8822, Change of Address, or Form 8822-B, Change of Address of Responsible Party - Business, is attached,	Any of the following applies: Mailing address information is different, Location address is on Form 8822/8822-B, Line 7, An entry is on Form 8822-B, Lines 8 or 9,	Enter address shown on Form 8822/Form 8822-B into Field 02FAD Notate "Form 8822 or Form 8822-B detached" on the tax return Detach Form 8822 /Form 8822-B and route to Entity Control using Form 4227, Intra-SC Reject or Routing Slip. Notate on Form 4227 "CHANGE OF ADDRESS PER Form 8822 or Form 8822-B."

Note: The lead tax examiner must batch all Forms 8822 or Forms 8822-B daily, and hand carry them to Entity Control for expedited processing.

(1) This field is transcribed from the Street Address line of the entity portion of the return.

(2) Invalid Condition - Field 02ADD is invalid if:

• The street address is present, and the first position is blank.

• A character is not alpha, numeric, blank, dash or slash.

• Any character follows two consecutive blanks.

• There are more than 35 characters in this field.

  Note: ISRP will input a pound (#) sign as the 35th character to show an overflow condition.

(3) Correction Procedures:

1. Correct coding and transcription errors and misplaced entries.

2. If the 35th character is a pound sign (#), refer to Document 7475, State Abbreviations, Major City Codes and Address Abbreviations. Abbreviate, the address to 35 or fewer characters.

3. If unable to correct, DLSEC 02.

(1) This field is transcribed from the City, State, Zip line of the entity portion, on Page 1 of the return.

1. Certain cities are designated "Major Cities" and have been assigned a designator that consists of two alpha characters. This code represents both the city and state.

2. Whenever the city is on the Major City list, ISRP will enter the Major City Code instead of entering the entire name of the city and the state.

3. When a Major City Code is used, it will be the first two positions of Field 02CTY.

(2) Invalid Condition - Field 02CTY is invalid if:

• The city is present, and the first position is blank.

• Any character other than alpha or blank is present.

• Any character follows two consecutive blanks.

• A Major City Code is present, and it is not a valid Major City Code.

• The Foreign country code is not valid or Field 02CTY has "XX."

(3) Correction Procedures:

1. Correct coding and transcription errors and misplaced entries.

2. If a valid city is not available from the return or envelope, take any of the following steps. Research using INOLES or ENMOD, refer to Document 7475, State and Address Abbreviations, Major City Codes, Zip Codes and Countries, or if foreign address is shown on the return, enter correct Foreign code.

3. Follow local procedures.

   Note: If major city code is found, GTSEC 02. Enter the code in Field 02CTY and delete 02ST.

4. If unable to correct, DLSEC 02.

(1) This field is transcribed from the City, State, Zip Code line of the entity portion of the return.

(2) If the address is a foreign address, defined as not within the 50 states or the District of Columbia, SSPND with Action Code "650" and attach a Form 4227, Intra-SC Reject or Routing Slip, with a notation to send to the Ogden Submission Processing Campus.

(3) Invalid Condition - Field 02ST is invalid if the entry is not a state code that is listed in the State Code Table in Document 7475, State and Address Abbreviations, Major City Codes, Zip Codes and Countries, and State Codes and Zip Codes Perfection Chart.

(4) Correction Procedures:

1. Correct coding and transcription errors and misplaced entries.

2. If a valid State Code is not available from the return or envelope, take any of the following steps: Research using INOLES or ENMOD to determine state, refer to Document 7475, or follow local procedures to determine state.

   Note: If a major city code is found, GTSEC 02 and enter code in Field 02CTY and delete 02ST.

3. If unable to correct, DLSEC 02.

(1) This field is transcribed from the City, State, Zip line of the entity portion of the return.

(2) Invalid Condition - Field 02ZIP is invalid if:

• The Zip Code is present, and the first 5 positions are not numeric.

• The last 4 positions are not numeric or all blank.

• Positions 4 and 5 are "00."

  Exception: Zip Code 20500

(3) Correction Procedures:

1. Correct coding and transcription errors and misplaced entries.

2. If a valid zip code is not available from the return or envelope, research using any of the following to determine the zip code: INOLES or ENMOD, Document 7475, State and Address Abbreviations, Major City Codes, Zip Codes and Countries, and State Codes and Zip Codes Perfection Chart.

(1) Correctable Section 03 fields are listed below: