3.41.277. Form 940 Processing on Service Center Recognition/Image Processing System

(1) Filers send paper unemployment forms to the Internal Revenue Service (IRS) to fulfill their requirement to file an annual unemployment tax return and provide their taxpayer identification number (TIN). The IRS must convert the information present on the paper filings to an electronic data record. Employees input and validate the data present and the IRS systems for these records during conversion to electronic data records.

(1) Authority for these procedures is found in Title 26 of the United States Code (USC) commonly known as the Internal Revenue Code (IRC). The IRC is amended by acts, public laws, treasury determinations, rules, and regulations such as the following:

• American Taxpayer Relief Act (ATRA)

• Consolidated Appropriations Act (Extenders)

• Health Care and Education Reconciliation Act (HCERA)

• Hiring Incentives to Restore Employment (HIRE) Act

• The Federal Unemployment Tax Act (FUTA)

• The Protecting Americans from Tax Hikes (PATH) Act

(2) All policy statements for Submission Processing are found in IRM 1.2.1.4, Servicewide Policies and Authorities, Policy Statements for Submission Processing Activities:

• Code sections that provides the IRS with the authority to issue levies.

• Congressional Acts that outline additional authorities and responsibilities like the Travel and Transportation Reform Act of 1998 or the Tax Act of 1986.

• Policy Statements that provide authority for the work done.

(1) The Director, Submission Processing approves and authorizes issuance of this IRM.

(2) The Planning and Analysis staff provides feedback and supports local management to monitor and achieve scheduled goals.

(3) The Operation Manager secures, assigns, and provides training for the staff needed to perform the duties presented in this IRM.

(4) The Team Manager assigns, monitors, and controls the workflow to complete the work timely.

(5) The Employee applies the instruction for the duties presented in this IRM on the SCRIPS system to accurately convert paper data to an electronic data record for proper posting for use by the IRS.

(1) Program Reports: These reports listed below show work schedules, receipts, production and inventory for conversion of paper returns to electronic data. Management uses these reports to monitor the daily and weekly status of the program through completion.

• IPS0083, Workstation Operator Statistics Program and Function Summary Report

• IPS0698, Workflow Status

• IPS10610, Run Balancing Report

• IPS06440, Throughput Statistics Report

• PCC 2240, Daily Production Report - Program Sequence

• PCC 6040, SC WP&C Performance and Cost Report

• PCC 6240, SC WP&C Program Analysis Report

• PCB 0440, Daily Workload and Staff Hours Schedule

• PCB 0540, Weekly Workload and Staffing Schedule

(2) Program Effectiveness: Management measures weekly goals using the above reports for each function compared to the established completion schedule. Each function must complete the inventory on or before the program completion, and retain or exceed schedule prior to the program completion date stated in IRM 3.30.123, Work Planning and Control Processing Timeliness: Cycles, Criteria, and Critical Dates. Local management conducts and monitors quality reviews and takes corrective action to ensure quality products. A managerial or product review in the Data Validation function is performed each week on every employee and entered into the Embedded Quality for Submission Processing System (EQSP). Managerial and product reviews supplement the quality review process.

(3) Annual Review: Management reviews the processes in this manual annually to ensure accuracy and promote consistent tax administration.

(1) Management can use local reports to establish additional information for maintaining daily program control. Local reports never replace the established official reports.

(1) The following are terms or acronyms used throughout this instruction.

(1) The following table lists the IRM primary sources of guidance on the processing of paper filed Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return.

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

(3) IRM’s present on the Servicewide Electronic Research Program (SERP) at the following site: http://serp.enterprise.irs.gov/homepage.html. Specific instructional links are available on the BMF Data Conversion Research Portal located at: http://serp.enterprise.irs.gov/databases/portals/sp/bmf/data-conversion/data-conversion.html.

(4) IRM 3.13.62, Campus Document Services, Media Transport and Control, or IRM 10.5.1, Privacy and Information Protection - Privacy Policy, provides information on shipping Personally Identifiable Information (PII). This document is located at: http://publish.no.irs.gov/mailtran/pii.html, titled Postal and Transport Policy. Prepare Form 3210, Document Transmittal, and include with ship documents.

(1) The instructions in this section apply only to the form types listed below for tax years 2006 and later:

• Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return

• Form 940 Schedule A, Multi-State Employer and Credit Reduction Information

• Form 940 Schedule R, Allocation Schedule for Aggregate Form 940 Filers

(1) Use the program codes listed below when entering Form 940 through SCRIPS:

(1) Keystroke Combinations

• Carets enclose simultaneous keystroke combinations

  Example: <Enter>

• A hyphen separates multiple keystroke combinations

  Example: <Ctrl>-P. This means hold down the <Ctrl> key while pressing the P key.

(2) Glossary: IRM 3.41.277.1.6, Terms and Definitions, Exhibit 3.41.277-12, Consolidated List of Acronyms and Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Returns, has a glossary of terms related directly and indirectly to Form 940 SCRIPS processing.

(3) QUICK START - Each function (Original Entry (OE) From Paper, Data Validation (DV) From Image, Original Entry (OE) From Image, etc.) begins with QUICK START instructions intended to speed access to a unit-of-work (UW). For detailed data entry and validation instructions, see IRM 3.41.277.11, General Correction Procedures, Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Returns and the tables and transcription sheet exhibits in the back of the IRM. More general instructions may be found in IRM 3.41.274, Optical Character Recognition Scanning Operations-General Instructions for Processing via Service Center Recognition/Image Processing System.

(4) Tables

(5) Transcription Sheets provide most of the information needed to process Form 940 on SCRIPS. The following Exhibits contain the transcription sheets for use in the OE and DV functions.

(1) When preparing returns for scanning, send only the following items for scanning and organize the pages in the order listed below:

• Form 940, Page 1

• Form 940, Page 2

• Form 940, Schedule A

• Form 940, Schedule(s) R

• Form 940, Schedule(s) R Continuation Sheet

(2) If the Form 940 Schedule R(s) attached to the Form 940 is a nonconforming document (i.e., a spreadsheet, list, or similar format) pull the return from the block and route to Code and Edit for perfection.

(3) When preparing Form 940 for the scanner, the most critical area for repair is the right side of the 940. If preprinted information is present in the upper right corner (where the DLN prints), do not cover (band-aid) that information. The scanner prints the DLN to the left of the information.

(4) The Pre-Doc Prep function must perform the following actions on all Form 940:

1. If staples holes exist around the Form ID on Page 1 of the Form 940 near the top of the right side of the form then place "White" tape, over the back side to cover the holes.

2. Carefully remove all staples from the Form 940, if present. It is permissible to cut off the left corner of the return providing no identifying information is damaged or lost (e.g., the return year, entity information, etc.).

Note: Form identification (ID) number on 940 Page 2 of a duplex form if lost or damaged does not have to be replaced. The identifying information is on 940 Page 1.

3. Line through any extraneous information located above the Form ID code (850108, 850109, 860108, 860109, 8701089, 870109, 880108, 880109, 890108, 890109, etc.) in the upper right corner of the return.

4. Line out non-conforming Form ID numbers.

   Reminder: The correct Form ID codes for each page of the Form 940 are xx01xx for 940 Page 1, xx02xx for 940 Page 2.

   Example: 940 Page 2 has a Form ID 850113 instead of 850213 or 940 Page 1 has a Form ID 850213 instead of 850113.

   Reminder: The correct Form ID codes for each page of the Form 940 Schedule R are xx05xx for 940 Schedule R Page 1, xx06xx for 940 Schedule R Continuation Sheet.

   Example: 940 Schedule R Continuation Sheet has a Form ID 860517 instead of 860617 or 940 Schedule R Page 1 has a Form ID 850617 instead of 850517.

   Note: Printed fax information located at the top of the page does not require a line through.

   Caution: Do not use felt tip markers to line through information. Use ONLY black or blue ink pens.

5. Write in the full EIN if both the Name and EIN are missing on 940 Page 2 (non-duplex), Schedule A, 940 Schedule R and/or 940 Schedule R Continuation Sheet in the EIN block, if not present. If the Name is present on 940 Page 2, Schedule A, 940 Schedule R and/or 940 Schedule R Continuation Sheet, write in only the last four digits of the EIN in the EIN block.

6. Ensure all pages face in the correct direction and sequential order (940 Page 1, 940 Page 2, Schedule A, 940 Schedule R, 940 Schedule R Continuation Sheet) for scanning. The correct orientation for pages designed or printed in portrait format is front-facing with Form ID code located in the UPPER RIGHT CORNER of the page. The correct orientation for pages designed or printed in landscape format is front-facing with Form ID code located in the UPPER LEFT CORNER of the page.

   Note: 2017 and later revisions of the 940 Schedule R and 940 Schedule R Continuation Sheet are printed in landscape format. The correct direction or orientation of these 940 Schedule R and 940 Schedule R Continuation Sheet within a block or unit-of-work is directly behind the Form 940 or Form 940 Schedule A (both remain in portrait format) with the Form ID positioned in the UPPER LEFT CORNER of the form. To ensure correct recognition of the 940 Schedule R pages and 940 Schedule R Continuation Sheet pages, the Form ID must be at the top of the page (based on orientation) as it goes through the scanner.

7. Repairing any rips, tears, or large holes approximately 1 inch or larger on the RIGHT side of the Form 940 that may cause the scanner to jam.

(5) The Pre-Doc Prep function must perform the following actions when processing "Perfect" batches of Form 940:

(6) The Pre-Doc Prep function must perform the following actions when processing "Imperfect" batches of Form 940.

1. Stamp the attachment(s) and envelope and return (in upper left margin) with the same sequence number. If the return has multiple attachments, stamp the first attachment, and staple the remaining attachments together. Remove and destroy blank vouchers and instruction pages to make the return perfect.

2. Place attachment(s) and envelope in a colored folder at the back of the gusset folder for each block, maintaining sequential order.

3. Insert a Form 1332-SC, Block Selection Control Record SCRIPS, at beginning of each gusset folder.

(7) During scanning, certain documents may reject because the submissions are invalid. The scanning function routes these submissions (documents) to the Pre-Doc Prep function for disposition. The Pre-Doc Prep function must re-batch the documents for scanning. When a return is missing pages (940 Page 1 or 940 Page 2), route to Code and Edit for correspondence.

(1) The system automatically re-prioritizes the work every time the cycle on the system changes.

(2) The system automatically sets the Unit Task Prioritization using the following criteria:

(1) From the Workstation Main Menu, select Original Entry (OE).

(2) From the Original Entry (OE) Selection Menu, select Forms Identification Selection Menu.

(3) From the Forms Identification Selection Menu, select 940 Forms Identification.

(4) The first group of images, from a unit-of-work (UW), requiring identification opens.

(5) If an incorrect option is selected from the Forms Identification Selection Menu., press the <Ctrl>-P key combination to set post-to-close, followed by <F9> to suspend the block and return to the Forms Identification Selection Menu.

(6) If you need to stop processing FI:

• Press the <Ctrl>-P key combination to end FI after completing the current UW.

• Press the <Ctrl>-P followed by <F9> to suspend the block immediately.

  Note: For a complete list of key functions, See Exhibit 3.41.277-8, Function Key List.

(7) The system returns you to the Forms Identification Selection Menu when you complete the last image identification in the UW.

(1) The system assigns a six-digit sequence number instead of a DLN to the documents it cannot identify. This number assists in locating the documents within a UW when researching the documents. Once the tax year/page type identification occurs, the system assigns a DLN to the submission.

(2) To identify the image, make the correct letter or number selection from the template in the Form Identification Menu The table below appears on the SCRIPS workstation.

(3) Always press the <Enter> key to complete a selection.

(4) Documents scanned backwards need research to determine the document type. If you cannot identify the image,

• Press <F9> to suspend the document for research.

• If the image is unprocessable, press <X> to remove the document from further processing.

(5) Some unprocessable conditions include:

• Not a Form 940

• Form 940 is a 2005 or prior revision

• Form 940 with a Tax Year of 2005 or prior

• Form 940 with a Foreign Address

(6) To end a session, press <Ctrl>-P key combination to set post-to-close. The system returns you to the Original Entry (OE) Selection Menu when you complete the last image in the UW.

(1) From the Workstation Main Menu, select Original Entry (OE) Selection Menu.

(2) From the Original Entry (OE) Selection Menu, select OE Image Selection Menu.

(3) From the OE Image Selection Menu, select 940 OE Image Selection Menu.

(4) From the 940 OE Image Selection Menu, select one of the following:

• All 940s (1114x) OE Image

• 940 Refund (11141, 11146) OE Image

• 940 All Other (11140, 11145) OE Image

• 940 With Remit (11142, 11147) OE Image

(5) After the selection is entered press <Enter> as prompted or press <Alt>-X to exit to the previous menu.

(6) The first whole unit-of-work (UW), or first individual document (because an entire UW may not require OE Image) requiring OE opens. See Exhibit 3.41.277-1, Transcription Sheets - Form 940 Entity and Code and Edit Fields.

1. The scanned image of the document displays on the left side of the workstation screen.

2. Data is input in the specific field window, displayed on the right side of the workstation screen.

(7) If an incorrect option is selected, press the <Ctrl>-P key combination followed by <F9> to suspend this UW.

(8) If the last data entered is not the last field of the page and there is no other data present on the page, press the <F6> key to release a document and display the next template.

(9) Press the <Ctrl>-P key combination to end OE Image.

(10) The system returns you to the Original Entry (OE) Selection Menu when you complete the last document in the current UW.

(1) The Status Line at the bottom of the screen displays the following information:

1. The Program field displays one of the following:

Program (Displayed)	Description (Not Displayed)
11140	Perfect - All Other
11141	Perfect - Refund
11142	Perfect - With Remit/Lockbox
11145	Imperfect - All Other
11146	Imperfect - Refund
11147	Imperfect - With Remit/Lockbox

2. The DLN field displays the DLN of the document being displayed.

3. The SUB field displays the relative count of the document.

   Example: If it is the first document in a UW that has 80 documents, the SUB field displays a count of "1 of 80".

4. The Pg field displays the relative count of the page of the document.

   Example: If it is Form 940 Page 1, the Pg field displays "1 of 2"; 940 Page 2 displays as "2 of 2" depending on the length of the return filed.

5. The Status Line displays "Ins" when the insert mode is on and "Num" when the numeric mode is on.

(2) In OE Image, you manually enter information into the template using a scanned image of the return as a source.

(1) From the Workstation Main Menu, select Original Entry (OE) Selection Menu.

(2) From the Original Entry (OE) Selection Menu, select OE Paper Selection Menu.

(3) From the OE Paper Selection Menu, select 940 OE Paper Selection Menu.

(4) From the 940 OE Paper Selection Menu, select the form type:

• 940 Refund (11146) OE Paper

• 940 All Other (11145) OE Paper

• 940 With Remit (11147) OE Paper

(5) If the wrong program is selected and the first page of the first document has not been completed, press the <Esc> key to cancel the entry. A window displays asking, "Are you sure you want to cancel the inserted document?" Answer "YES" to go back to the 940 OE Paper Selection Menu.

(1) In OE Paper, the workstation operator manually enters the information into the system which eliminates all transport processing. The operators need the paper Form 940 unit-of-work to perform OE Paper.

(2) The reason a document is processed using OE Paper is because it cannot be scanned (oversized pages, tissue paper, writing too light, substitute forms, or half pages, etc.).

(3) These documents come batched separately and the BBTS Transmittal clearly marked as "OE Paper".

(4) Once the workstation operator has successfully completed steps 1 through 4 in IRM 3.41.277.9.3, OE Paper QUICK START, input the following information:

• BBTS Number = The four-digit Batch Number located in the upper right corner of the BBTS Transmittal.

• Cycle Number = The last two digits of the Cycle located below the Batch Number (Batch No) and Release Date (Rel Date) in the upper right corner of the BBTS Transmittal.

• Tax Year = The Form Year of the first document so the system can generate the correct template.

(5) A blank Form 940 template displays for the first document in the block. Input the information from the document starting with the DLN taken from the first document in the block. The DLN must have 14 digits (for example: LC840102790000). When all fields have been input, press <F6> to get the next template.

(6) For Tax Years 2011 and later once you have input the Schedule A or pressed <F6>, a window appears to select your next process. The window is titled "Next Page Selection" and the options include:

• Form 940

• Schedule R

• Schedule R Continuation

• End Block

(7) If Form 940 is selected, the system prompts for the next sequence number (located in the 12th and 13th position of the DLN) for each document input (01, 02, 03, etc.). You cannot skip or repeat a sequence number.

(8) The system returns you to the 940 OE Paper Selection Menu when you release the last document in the UW.

(9) The Status Line at the bottom of the monitor screen displays the following information:

• The Program field displays 11145 (All Other), 11146 (Refund) or 11147 (With-Remit).

• The DLN field displays the DLN of the current document.

• The SUB field displays the relative count of the document. The field shows "1 of 3" if this is the first document in the block. As each subsequent paper document is processed the count increases to "2 of 3", "3 of 3", etc.

• The Status Line displays "Ins" when the insert mode is on and "Num" when the numeric mode is on.

(1) For OE Image, when you release the last document in a UW, a question appears asking if you want to release the UW.

1. If you answer "YES" to the question in the window and <Ctrl>-P has been pressed before releasing the UW, the OE Selection Menu opens.

2. If you answer "YES" to the question in the window and <Ctrl>-P has not been pressed, another UW opens.

3. If you answer "NO" to the question in the window, the current block remains open for entry until you answer yes.

(2) For OE Paper, to end a block for Tax Years 2011 or prior, once the last document is input, press <F8> and answer the question "Do you want to release this UW?".

1. If you answer "NO" to the question window that opens, a template appears for the next Form 940 entry.

2. If you answer "YES" to the question window, and <Ctrl>-P has not been pressed, a Form 940 template appears to begin a new UW.

3. If you answer "YES" to the question window, and <Ctrl>-P has been pressed, the OE Selection Menu opens.

(3) For OE Paper, to end a block for Tax Year 2012 and later:

1. Press <Ctrl>-P while entering, but before releasing the last document in the UW.

2. Once the last document is input, press <F6> to bring up the "Next Page Selection" Window. Select the "End Block" option and answer "YES" to "Do you want to release this UW?"

(1) You can select a specific Form 940 UW for OE by following these steps:

1. From the Workstation Main Menu, select the numeric code for OE. The Workstation Main Menu closes, and the OE Selection Menu opens. The menus shown on the screen vary depending on how your supervisor profiled you.

   Example: This option is grayed out (or not present) on the Original Entry (OE) Function Menu if it is not in your profile.

2. From the OE Selection Menu, enter the numeric code for OE Select Block. The OE Selection Menu closes, and the "Open Block/Unit-of-Work" window opens.

3. Enter the first 11 digits of the DLN from the Form 940.

4. Press the <Enter> key. The "Open Block/Unit-of-Work" window closes, and selected UW opens.

5. Once the designated UW opens, enter data using the instructions found in Exhibit 3.41.277-1, Transcription Sheets - Form 940 Entity and Code and Edit Fields and/or Exhibit 3.41.277-2, Transcription Sheets - Form 940 Page 1 Part 1 through Part 4, Exhibit 3.41.277-3, Transcription Sheets - Form 940 Page 2 Part 5 through Part 7, Exhibit 3.41.277-4, Transcription Sheets - Form 940 Schedule A, Exhibit 3.41.277-5, Transcription Sheets - Form 940 Schedule R and Schedule R Continuation Sheet (All Revisions).

6. If the block is not available, an error message is displayed indicating the block is not available. For instance, a message displays if you previously worked on this block, or if another operator is currently working on the Block/UW.

7. If an incorrect option is selected from the OE Selection Menu, press the <Ctrl>-P key combination followed by <F9> to suspend the UW.

(1) From the Workstation Main Menu, select Data Validation (DV).

(2) From the Data Validation (DV) Selection Menu, select DV Selection Menu.

(3) From the DV Selection Menu, select 940 DV Selection Menu.

(4) From the 940 DV Selection Menu, select one of the following:

• All 940s (1114x) DV

• 940 Refund (11141,11146) DV

• 940 All Other (11140,11145) DV

• 940 With Remit (11142,11147) DV

(5) The first UW opens, and the cursor stops at the first highlighted field when AUTO is on. Use the exhibits in this IRM and the general correction procedures to make necessary corrections.

(6) If an incorrect option is selected from the DV Selection Menu before entering any data, press <Ctrl>-P, followed by <F9> to suspend and return to the DV Selection Menu.

(7) Press the <Ctrl>-P key combination to end the current UW upon completion of DV Image.

(8) The system returns you to the Data Validation (DV) Selection Menu when you release the last document.

(1) The Status Line at the bottom of the screen displays the following information:

1. The Program field displays one of the following:

Program (Displayed)	Description (Not Displayed)
11140	Perfect - All Other
11141	Perfect - Refund
11142	Perfect - With Remit/Lockbox
11145	Imperfect - All Other
11146	Imperfect - Refund
11147	Imperfect - With Remit/Lockbox

2. The DLN field displays the DLN of the document being displayed.

3. The SUB field displays the relative count of the document.

   Example: If it is the first document in a UW that has 80 documents, the SUB field displays a count of "1 of 80".

4. The Pg field displays the relative count of the page of the document.

   Example: If it is Form 940 Page 1, the Pg field shows "1 of 2"; 940 Page 2 displays as "2 of 2" depending on the length of the return filed.

5. The Status Line displays "Auto" when the automatic mode is on, "Ins" when the insert mode is on, and "Num" when the numeric mode is on.

(1) You can select a specific UW of Form 940, for DV by following these steps:

1. From the Workstation Main Menu, select the numeric code for Data Validation (DV). The Workstation Main Menu closes, and the Data Validation (DV) Selection Menu opens. The menus shown on the screen vary depending on how your supervisor profiled you.

   Example: This option is grayed out (or not present) on the Data Validation (DV) Function Menu if it is not in your profile.

2. From the DV Selection Menu window, enter the numeric code for DV Select Block. The DV Selection Menu closes, and the "Open Block/Unit-of-Work" window opens.

3. Enter the first 11 digits of the DLN from the Form 940.

4. Press the<Enter> key. The "Open Block/Unit-of-Work" window closes, and the selected UW opens.

5. Once the designated UW opens, enter data using the instructions found in Exhibit 3.41.277-1, Transcription Sheets - Form 940 Entity and Code and Edit Fields and/or Exhibit 3.41.277-2, Transcription Sheets - Form 940 Page 1 Part 1 through Part 4, Exhibit 3.41.277-3, Transcription Sheets - Form 940 Page 2 Part 5 through Part 7, Exhibit 3.41.277-4, Transcription Sheets - Form 940 Schedule A, Exhibit 3.41.277-5, Transcription Sheets - Form 940 Schedule R and Schedule R Continuation Sheet (All Revisions).

6. A "Select Block" or "Suspended Block" in DV requires the operator to restore the "AUTO On" mode using the <Ctrl>-A key combination.

7. If the block is not available, an error message is displayed indicating the block is not available. For instance, a message displays if you previously worked on this block in OE or FI, or if another operator is currently working on the Block/UW.

8. If an incorrect option is selected from the DV Selection Menu, press the <Ctrl>-P key combination followed by <F9> to suspend the UW.

(1) For DV Image, when you release the last document in a UW, a question appears asking if you want to release the UW.

1. If you answer "NO" to the question window that opens, the current block, remains open for more entry, correction, or validation.

2. If you answer "YES" to the question window and have NOT issued a post-to-close (<Ctrl>-P), a Form 940 template appears to begin a new UW.

3. If you answer "YES" to the question window and have issued a post-to-close (<Ctrl>-P), the DV Selection Menu opens.

(1) When the Name Control is illegible, enter four hyphens "- - - -", if the EIN is present. If EIN is not present, delete the document as "Unprocessable 940".

(2) When the EIN is illegible, press <F3> to clear the field, if Name Control is present. If the Name Control is not present, delete the document as "Unprocessable 940".

(1) If the EIN is unaltered on a pre-printed label and the Check Digit is presented, enter the Check Digit, if legible. Otherwise, enter the Name Control. If Name Control is presented instead of a Check Digit, always use the Name Control.

(1) The presence of a "%" (percent sign) or "C/O" followed by a name identifies an "In Care of Name".

(2) Search the Name Line, Trade Name Line and Street Address for an "In Care of Name".

(3) Enter "%", space, and then the name immediately following the "%" or "C/O" indicator.

(4) Returns identified by a solid black line above and to the left of the entity area or pound (#) signs to the left of the entity area, represent an IRS label under the National Change of Address (NCOA) program. These labels do not have a Check Digit and are not considered an IRS pre-printed label. The "In Care of Name" information REQUIRES ENTRY if present.

(5) Valid characters include alpha, numeric, "-" hyphen, "&" ampersand, and "%" percent sign. The field length is 35 positions long. You must spell out any other symbols (e.g., "$" input as Dollar).

(6) If the In Care of Name is illegible, enter "%-" (percent hyphen without a space between) this sends the document to Error Resolution System (ERS) for more research.

(7) If the document has an IRS pre-printed label without changes to the In Care of Name line, leave blank.

(1) Edit marks and their descriptions:

(1) Code and Edit fields listed and described in Exhibit 3.41.277-1, Transcription Sheets - Form 940 Entity and Code and Edit Fields.

(2) Code and Edit fields along with 940 Page 1 of the Image presents to the operator.

(3) Press the <Ctrl>-S key combination to get out of the Code and Edit fields (during OE and DV).

(4) Code and Edit writes the Computer Conditions Codes (CCC) either to the right of "You MUST fill out both pages of the form and SIGN IT," in the center of the return below Line 15 or in the "bottom middle margin" of the return. It is the responsibility of the operators to input all CCC edited, stamped, or underlined on the return.

(5) The following Computer Conditions Codes (CCC) automatically generate:

(6) Both CCC "F" and "G" require sight verification by the operator. If CCC "G" is input, the system prompts ONLY for the following fields if they are flagged for OE:

• Name Control/Check Digit

• Tax Year

• Received Date

• Type of Return - Amended

• Type of Return - Successor employer

• Type of Return - No payments to employees in 20XX

• Type of Return - Final

• CCC

• Correspondence Received Date

• Schedule R Fields

(7) The IRS Received Date, often referred to as "Received Date," is the date a document is first received by the IRS. It is stamped or edited on Page 1 of the 940 return.

(8) An "Official Received Date Stamp" may consist of no less than:

1. "Month" — alpha or numeric characters.

2. "Day" — two-digits: 01–31. (For example, -1, 1, or 01.)

3. "Year" — two or four digits.

4. Area Office (AO), Campus, Field Office, TAC Office (or similar term for an IRS location) plus the City/Location of the site, or

5. A functional area within one of these sites (e.g., Compliance Services Collection Operations (CSCO), Examination (Exam), Image Control Team (ICT), Correspondence Imaging Inventory(CII), Accounts Management (AM), etc.).

(9) The Received Date is input in MMDDYY format. For Example:

• March -7, 2022 is input as 030722,

• June 09, 2022 is input as 060922,

• October 10, 2022 is input as 101022, etc.

(10) The "Received Date" must be an "Official" stamp or edited on the return. If two or more Received Dates are stamped on the return and neither has been edited, pick up the earliest date.

(11) If the return has a "Post Mark Date" and a "Received Date," enter the Received Date.

(12) If the return has a "Post Mark Date" and a "Received Date," and the Received Date is circled or edited out, leave the field blank.

(13) If the "Post Mark Date" is the only date on the document, enter 090999.

(14) If the "Received Date" is incomplete, illegible, an invalid day of the month, or a future date, enter 090999. If unsure if the received date requires input, enter 090999.

(1) The EIN on the Form 940 Page 1 must contain nine numeric digits or blank.

(2) If the EIN is more than or less than nine digits, illegible, missing, or there is more than one EIN present, press <F3> to clear the field and <Enter>.

(3) For 940 Schedule R EIN instructions, see Exhibit 3.41.277-5, Transcription Sheets - Form 940 Schedule R and Schedule R Continuation Sheet (All Revisions).

(1) With the implementation of the Enhanced Entity Index File (EEIF) a window may appear asking "Is Address changed?" This message includes the In Care of Name Line (%), Street Address, City, State and ZIP Code. If the document has an IRS pre-printed address with no changes, you should answer "NO." You should answer "YES" if the IRS pre-printed address has changes (including % name line).

(2) If the return has an IRS pre-printed label without changes to the Street Address, City, State or ZIP Code, all these fields must be left blank during OE and/or DV. If any of the fields display information, press <F3> and <Enter> to remove the information from the field.

(3) ​If the return has an IRS pre-printed label without changes to the In Care of Name Line but has a change to the Address, leave the In Care of Name Line blank and enter the Street Address, City, State and ZIP.

(4) Returns identified by a solid black line above and to the left of the entity area or pound (#) signs to the left of the address, represent an IRS label under the National Change of Address (NCOA) program. These returns do not have Check Digits and are not considered an IRS pre-printed label, therefore all In Care of Name Line and Address information require entry.

(5) Enter the Street Address information exactly as shown on the document except as instructed below. See Exhibit 3.41.277-11, Valid Characters.

1. Never enter "local" as the first word in the Street Address. Enter information to the right of "local" only.

2. If the only Street Address is "local,", leave the street Address, City, State and ZIP blank. If any of the fields display information, press <F3> and <Enter> to remove the information from the field.

3. If the Street Address has only the DBA, Trade Name or Business Name, leave the Street Address, City, State and ZIP blank. If any of the fields display information, press <F3> and <Enter> to remove the information from the field.

4. If the Street Address has an EIN or SSN, DO NOT input this information. If the only Street Address is the EIN or SSN, leave the Street Address, City, State and ZIP blank.

(6) Enter street abbreviations as shown in Exhibit 3.41.277-6, Street Abbreviations.

(7) If the Street Address and/or City is illegible, suspend the UW as "Poor Quality Image." If unable to correct the Street Address and/or City from the paper document, leave the Street Address, City, State and ZIP fields blank. If necessary, press <F3> and <Enter> to remove any information present in the fields.

(8) If the Street Address and/or City are missing, leave the Street Address, City, State and ZIP fields blank. If necessary, press <F3> and <Enter> to remove any information that may be in the fields.

(9) If return has a US Possession or other foreign address, delete the document as "Unprocessable 940".

(10) If an address is input during OE or DV, all elements (Street Address, City, State and ZIP) must be entered.

(11) If two street addresses are present with the same City, State and ZIP Code, enter the first street address.

(12) If two addresses are present with different cities, states, and ZIP Codes, enter the first address.

(13) If there is a street address and a PO Box, enter only the PO Box. Treat both "POB" and "PO Drawer" as if they read PO Box.

(14) If a document has PO BOX, POB, PO Drawer or Post Office Box, you can enter an asterisk (*) followed by a space in the first two positions of the Street Address instead of "PO BOX." It is not necessary to change "PO BOX" to an asterisk if "PO BOX" is scanned.

(15) Omit C/O or % (In Care Of) if shown with an address.

(16) Always enter "AND" if an ampersand (&) is shown in the Address Line.

(17) If @ is shown in the Street Address, enter "AT".

(18) Major City Codes listed in Exhibit 3.41.277-7 may be used. The system generates a valid five-digit ZIP Code if a Major City Code is used, and a ZIP is not present.

(19) If North, South, East, or West is shown as part of the city name, use the standard abbreviation (i.e., North = N, South = S, etc.). Do Not use a Major City Code in this instance unless found in Exhibit 3.41.277-7, Alphabetical Listing of Major Cities with Major City Codes and Zone Improvement Plan (ZIP) Codes. Example: East Lansing, Mi = ET and South Bend, IN = SB.

(20) If a city has numerics, enter as alphas.

(21) Enter standard abbreviations for states.

(22) If the system presents all nine digits of the ZIP Code correctly, accept them. If the ZIP Code requires correction, only enter the first five digits of the ZIP Code. If less than five digits use the system default ZIP Code.

(23) If there is no State, but a ZIP Code is present, press the <Enter> key in the ZIP field. This generates the State Code for this ZIP Code in the Status Line. Follow the screen prompts to accept this State Code or to enter a different State Code.

(24) If there is no ZIP Code but a State is present, press the <Enter> key in the ZIP field. The system generates the default ZIP Code for that State.

(25) If the State does not match the ZIP Code presented, delete the ZIP, and generate the default ZIP Code for this State.

(26) If both the State and ZIP are blank, leave the Street Address, City, State and ZIP blank. If necessary, press <F3> and <Enter> to remove any information that present in the fields.

(27) Transcribe Army Post Office (APO), Diplomatic Post Office (DPO) and Fleet Post Office (FPO) addresses with the proper two-character State Code followed by the corresponding unique five-digit ZIP Code.

1. When APO, DPO or FPO is used, do not enter any other data in the City field.

2. When APO, DPO or FPO is transcribed in the City field, the State Code field must correspond with the following ZIP Codes:

ZIP CODE	STATE CODE
340	AA
090–098	AE
962–966	AP

(1) All money fields consist of dollars and cents.

(2) Enter money amounts as follows:

1. If a dollar and cents amount is present, enter as is.

2. If a dollar amount is present without cents, enter dollar amount and two zeros for cents.

3. If a dollar amount is present and it is followed by a line, dash, or hyphen, enter dollar amount and two zeros for cents.

4. If a dollar amount is present and the cents are lined through, enter dollar amount and two zeros for cents.

5. If there is a single numeric digit in the cents column or following the period, enter the digit followed by a zero.

6. If three or more digits appear in the cents column or following the period, enter the first two-digits.

7. If money amount is larger than 15 numeric characters, enter only the first 15 digits.

8. If money amount is a negative zero (e.g., -00, -0.00. -00.00, etc.), REMOVE IT. Press <F3> to clear the field and then press <Enter>.

(3) Enter negative amounts (identified with a minus "-" before the amount or the amount is within brackets), where allowed, by leading the amount with a hyphen.

(4) If a negative money amount appears in a positive only field, enter amount as positive.

(5) If two or more money amounts appear on the same line, press <F3> to clear the field, and then press <Enter>, unless otherwise instructed.

(6) If a money amount without a decimal displays with leading zeros (for example: amount on document is 01 and system captured as 001), press <F3> to clear the field and enter the amount as shown on the document.

(7) If the money amount is illegible, suspend the UW as "Poor Quality Image" (<F9>; press "S"; select "Poor Quality Image").

(8) If after suspending for "Poor Quality Image" you still cannot determine the correct money amount from the physical document, press <F3> to clear the field and then press <Enter>.

(9) If a code or other non-monetary entry appears in a money field press <F3> to clear the field and then press <Enter>.

(1) Occasionally the Image of the return presented to the OE or DV operator is unreadable. Some reasons for this include:

• Writing on image too light,

• Image too dark to read the writing,

• Image illegible, or

• Image incomplete, etc.

(2) When working in OE Image or DV Image, if you cannot determine the data for ANY field including the Street Address, City, State and ZIP Code, suspend the UW as "Poor Quality Image" (<F9>; press "S"; select "Poor Quality Image").

(3) The Team Lead or designated employee reviews the Work Status Report for suspended "Poor Quality Image" items and pulls the original return/document from the block and gives to the employee that suspended the UW.

(4) The employee resumes the suspended block, corrects the data using the paper return and then gives the paper return back to the Team Lead or designated employee.

(5) The Team Lead or designated employee re-files the return in its original block.

(1) Currently some returns cannot process through SCRIPS or require processing as OE Paper.

(2) Delete all returns determined as unprocessable by selecting "Unprocessable 940" for the Pull-Doc Report. (<Ctrl>-<Shift>-<Delete/Del>; select "Unprocessable 940").

(3) Some unprocessable conditions:

1. Return does not have an EIN AND Name Control (if either one of the EIN or Name Control is present, continue processing).

2. Returns with a U.S. Possession or foreign address. (Processed through ISRP).

3. If all transcription lines are not available for input due to the form being cut off or folded.

4. Returns without BOTH entity and money amounts (entirely blank forms).

5. Forms other than Form 940. (Processing of these returns is done using the correct SCRIPS program or through ISRP).

6. Form has an "X" or "/" across the entire page without an explanation.

Note: If only the Schedule A has an "X" or "/" through the page, delete the Schedule A only as an "Unprocessable Attachment."

7. The Tax Year is 2005 or prior. (Processed through ISRP).

(1) The title of the report is 940 DLN Output Report (IPS10640).

(2) The report reflects the entire production for the site for a given time frame.

(3) The report shows the following:

1. Service Center

2. Run Date

3. Page number

4. Program number

5. DLNs and a notation if it is a transmittal DLN or detail DLN

6. File Location Code (FLC), Tax Class and Document Code (TAX/DOC), Julian date, Block number and Volume

(1) The title of the report is 940 Assigned DLN Report (IPS03339).

(2) The report reflects production for the individual scanner for a given time frame.

(3) The report shows the following:

1. Program number

2. Run Date and Time

3. Scanner Job ID

4. Start Time

5. End Time

6. DLNs and a notation if it is a transmittal DLN or detail DLN

7. File Location Code (FLC), Tax Class and Document Code (TAX/DOC), Julian date, Block number and Volume

8. The summary page for the scan job by document code and form type

(1) The title of the report is 940 DLN Assignment Report (IPS10620).

(2) The report reflects the total number of DLN assignments by program number for a given time frame.

(3) The report shows the following:

1. Service Center

2. From and to date range

3. Run Date and clock time

4. Page number

5. Program number

6. Each Batch ID and the coinciding Block Number, Serial Number Range, Unrecognized Documents, Total Documents in Batch and Total Documents Output in Batch for each

7. Total Documents for each program

8. Total Documents Output per program

9. Total Unrecognized Documents per program

(1) The title of the report is 940 Actual Output Report (IPS10650).

(2) The report reflects the entire production for the site for a given time frame.

(3) The report shows the following:

1. Service Center

2. FTP File ID number

3. Run Date and time

4. Page number

5. Program number

6. DLNs and a notation of actual output and number of deleted documents including deleted DLN’s

7. Batch or Form Subtotals

8. Total for All Batches by each program or form type

9. Total for All Batches Output

(1) The title of the report is Workflow Status (IPS0698).

(2) This report lists the task/sub-task number, the sub-task description, blocks at the sub-task, total documents for the block, and documents ready for the sub-task. This report also shows percentages for system capacity used under the following three categories: General, IRP, and IRP/ACA/K1/941/940/Stand-Alone.

(3) This report is used to monitor documents and system capacity throughout each workday.

(1) The title of the report is Inventory Report (IPS03350).

(2) The report reflects inventory for a given time frame reflecting the carry over form volume on the SCRIPS system.

(3) The report shows the following:

1. Initial Inventory

2. Process Date

3. Returns Input

4. Returns Deleted

5. Returns Output

6. Carry Over Inventory

7. End Time

(1) The title of the report is 940 Production Report (IPS10660).

(2) The report reflects the following scanned volumes and year to date output totals.

(3) The report shows the following:

1. Service Center

2. Run Date and clock time

3. Page number

4. Scanned volumes by document code and form type for today, subtotals and totals

5. Output volumes by document code and form type and deletes for year to date along with cumulative, subtotals and totals

6. Status summary for all functions for today/current and year to date cumulative

(1) The title of the report is 940 Run Balancing Report (IPS10610).

(2) The report reflects the entire production for the site for a given date.

(3) The report shows the following:

1. Service Center

2. Run Date

3. Page number

4. FTP File ID number

5. The file name (i.e., OCR1008 for form 940)

(1) The title of the report is Reimage/Pull Document Report (IPS00812).

(2) The report lists submissions and documents required to pull (or counted as deleted) for a date range.

(3) The report shows the following:

1. Service Center

2. Run Date

3. Page # - Number

4. Block

5. Doc DLN/Seq# - Document DLN Sequence number

6. App - Application FI, OE or DV

7. SEID - Standard Employee Identification

   Note: An SEID of 000000 represents the SCRIPS system created the action based on programming and or specific responses to questions posed to the operator.

8. Date/Time

9. Reason

Example: Exhibit 3.41.277-9, Pull Document Report

(1) The title of the report is Throughput Statistics Report (IPS06440).

(2) The report reflects processing function productions for a given date range.

(3) The report rows reflect the following process functions: Scandriver, Transport/Sync, OE Crossover, Form Identification, Block Verification, OE Image, OE Paper, Program Validation, Data Validation, QR Summarization, Block Output, Image Archive, Backup Image Archive and Block Purge.

(4) The report shows the following:

1. Service Center

2. From and to date range and clock time

3. Run Date and clock time

4. Page Number

5. Processing Functions

6. Total Blocks

7. Total Documents

8. Process Time

9. Documents Per Hour

(1) The title of the report is Workstation Operator Statistics Program and Function Summary Report (IPS00803).

(2) The report displays the number of documents processed in each function for a given date range.

(3) The report rows reflect the following process functions: 460, 470, 480, 47X, and 48X.

(4) The report shows the following:

1. Service Center

2. From and to date range

3. Run Date and clock time

4. Page Number

5. Function Code

6. Program Number

7. Process Time

8. Total Key Strokes

9. Document Per Hour

10. Summary by Program

(1) The title of the report is 940 FI/DLN Cross Reference Pull Report (IPS10670).

(2) The report lists submissions and documents that require renumbering within each batch of work for a given Output File ID.

(3) The report shows the following:

1. Service Center

2. Run Date and Time

3. Page # - Number

4. Output File ID number

5. Output Date

6. Program Numbers

7. Batch

8. Scan Block number

9. Doc DLN/Seq# - Document DLN Sequence number

10. New Block number

11. New Doc DLN/Seq# - Document DLN Sequence number

12. Total Reassigned DLNs for each individual program

Example: Exhibit 3.41.277-10, 940 FI/DLN Cross Reference Report.