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Part 3. Submission Processing

Chapter 11. Returns and Documents Analysis

Section 213. Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return

3.11.213  Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return

All Official Use Only content has been replaced with ≡.

3.11.213.1  (01-01-2009)
General Information

  1. This section provides instructions for general processing actions required to be taken on returns or other input documents as opposed to the specific line item instructions required in the subsequent section. The document to be processed by this Section is the Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return. Forms 1066 are filed at Ogden Submission Processing Campus.

  2. Form 1066 is used to report the income, deductions, gains and losses from the operation of a real estate mortgage investment conduit (REMIC). See Exhibit 3.11.213-1. In addition, the form is used to report and pay the taxes on net income from prohibited transactions, foreclosure property, and contributions after the startup day. A REMIC must file Form 1066 by the 15th day of the 4th month following the close of the tax year. The MFT is 07, tax class 3 and document code 60. The program code is 12200.

  3. Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns, may be filed if additional time to file is needed. Since Tax Year 2005, the extensions previously requested with Forms 8736, Application for Automatic Extension of Time To File U.S. Return for a Partnership, REMIC, or for Certain Trusts, and Forms 8800, Application for Additional Extension of Time To File U.S. Return for a Partnership, REMIC, or for Certain Trusts, can now be obtained with Forms 7004.

  4. The REMIC uses Schedule Q to notify Residual Interest Holders (RIH) of their quarterly share of the taxable income or net loss. A copy is sent to each RIH by the last day of the month following the end of the calendar quarter. The original Schedule Q (Copy A) for all quarters is filed with Form 1066.

  5. Form 1066 can be amended. It will be "G" coded and sent to Accounts Management.

3.11.213.1.1  (01-01-2009)
Section 3705(a) IRS Employee Contacts

  1. This sub-section provides guidelines for employees to follow when communicating with taxpayers and/or their representatives on tax-related matters.

3.11.213.1.1.1  (01-01-2009)
Background

  1. The Restructuring and Reform Act of 1998, Section 3705, provides identification requirements for all IRS employees working tax related matters.

  2. All employees are required to give their title, last name, and unique identification number (IDRS number or badge number) during taxpayer telephone, face to face, and written contact. In addition, a telephone number is required on all taxpayer correspondence.

  3. Correspondex letters will require a specific employee name and telephone number only if the employee initiating the correspondence is in the best position to respond to any questions that the taxpayer may have about the correspondence or the employee is asking the taxpayer to provide additional case-related information.

    Caution:

    Before disclosing any tax information, you must be sure you are speaking with the taxpayer or authorized representative. See IRM 21.1.3.2.3, Required Taxpayer Authentication Guidelines. Also, before leaving any messages on a taxpayer's answering machine, review IRM 11.3.2.6.1, Leaving Information on Answering Machines/Voice Mail.Prior to faxing confidential information to the taxpayer, review Fax procedures contained in IRM 11.3.1.10, Facsimile Transmission of Tax Information.

  4. Otherwise, if the taxpayer does not need to contact a specific employee, the correspondence needs only an IRS telephone number and standard signature.

3.11.213.1.1.2  (01-01-2009)
Key Points

  1. The Restructuring and Reform Act of 1998, Section 3705, provides identification requirements for all IRS employees working tax related matters. IRS employees are required to give their name and unique identification number during taxpayer telephone, face to face, and written contact. In addition, a telephone number is required on all taxpayer correspondence. This will provide taxpayers with enough information to identify an IRS employee who has previously assisted with tax related matters.

  2. All IRS employees, in the field, national, and regional offices, who communicate, by telephone, correspondence, or face to face, with taxpayers, or their personal representatives, on tax-related matters, are required to provide (at a minimum) the following information:

    1. Telephone Contact:Their title (e.g., Mr., Mrs., Ms., Miss), their last name, and their badge identification (ID Card) number.

    2. Face to Face Contact:Their title (e.g., Mr., Mrs., Ms., Miss), their last name, and their ID (badge) number.

    3. Correspondence: All correspondence must include a telephone number where the taxpayer's question can be answered. In addition, manually–generated and handwritten correspondence must include their title (e.g., Mr., Mrs., Ms., Miss), their last name, and their IDRS, letter system, or ID Card (badge) number.

  3. The IDRS number and numbers for some other letter systems are automatically generated. If it is not generated, or a handwritten note is prepared, the ID Card (badge) number must be used.

  4. Toll-Free employees may also provide their location for identification purposes. E-mail and facsimiles to taxpayers on tax-related matters are considered manually-generated correspondence and must include the required information.

    Caution:

    E-mail cannot be used to transmit taxpayer account information.

  5. Correspondence, whether sent directly to the taxpayer or to the taxpayer's representative, must contain the required information.

  6. When a taxpayer insists on speaking with a specific employee who previously handled their inquiry or request, or complains about the level of service previously provided, every attempt should be made to resolve the taxpayer's inquiry. If the issue cannot be resolved, the employee should refer the inquiry, using established procedures, to his or her manager.

  7. Correspondex letters will require a specific employee name and telephone number only if the employee initiating the correspondence is in the best position to respond to any questions that the taxpayer may have about the correspondence, or the employee is asking the taxpayer to provide additional case-related information.

  8. Otherwise, if the taxpayer does not need to contact a specific employee, the correspondence needs only an IRS telephone number and standard signature.

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

  10. It is not necessary to repeat the ID Card (badge) 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 telephone or in-person) their ID Card (badge) number on the first contact.

3.11.213.1.2  (01-01-2009)
Form 911, Request for Taxpayer Advocate Service Assistance (And Application for Taxpayer Assistance Order )

  1. If during taxpayer contact it appears there may be a hardship situation, or the taxpayer asks to be referred to the Taxpayer Advocate Service (TAS), or taxpayer meets TAS criteria, and you can't resolve the taxpayer's issue in the "same day" , complete Form 911, Request for Taxpayer Advocate Service Assistance (and Application for a Taxpayer Assistance Order) and refer the taxpayer to TAS. See IRM 13.1.7 for more information.

    Note:

    If you are able to resolve and close the TAS issue on the same day as the taxpayer contact, do not refer the inquiry to TAS. The definition of "same day" is within 24 hours. There will be times you can completely resolve the issue within 24 hours. There will also be times that although you cannot completely resolve the issue within 24 hours, if you have taken steps within 24 hours to resolve the taxpayer's issue, these cases also meet the definition of "same day" . Do not refer these cases to TAS unless the taxpayer asks to be transferred to TAS. Refer to IRM 13.1.7.4, Same Day Resolution by Operations. When referring cases to TAS, use Form 911 or Form e-911.

3.11.213.1.3  (01-01-2009)
♦TAS Service Level Agreements♦

  1. The National Taxpayer Advocate and the Commissioner, W&I Division have reached an agreement (effective February 1, 2008) outlining the procedures and responsibilities for processing Taxpayer Advocate Service (TAS) casework when either the statutory or delegated authority to complete a case transaction rests with the W&I Division.

  2. In preparation for a case being referred to an W&I Division function, the TAS employee is responsible for:

    1. Preparing Form 12412, Operations Assistance Request (OAR).

    2. Securing all necessary supporting documentation.

    3. Forwarding Form 12412 and documentation on Form 3210, Document Transmittal, to the W&I Business Unit Liaison.

    4. Clearly identifying an OAR requiring expedited processing.

  3. W&I Division is responsible for:

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

    2. Acknowledging receipt of the case via Form 3210 within one (1) workday for cases requiring expedited processing or within three (3) days for all other cases .

    3. Responding to TAS within three (3) workdays in writing, via facsimile or hand delivery of relief/no-relief decision.

    4. Providing TAS with the name and telephone number of the W&I group manager or employee assigned the case.

    5. For cases not designated as expedited, negotiating with TAS a reasonable time frame for case resolution.

  4. For further information, refer to the Service Level Agreement online at http://tasnew.web.irs.gov/secure/portal/library/docs/WI_SLA_2008–02–12.pdf or IRM 13.1.19.2, TAS Operations Assistance Request (OAR) Process.

3.11.213.1.4  (01-01-2009)
Incomplete Returns

  1. The following are procedures for ensuring the return is complete:

    If Then
    Incomplete return When the return serves only as a transmittal for statements, schedules and other attachments, or is otherwise incomplete, analyze the supporting documents and supply the missing entries on the form itself.
    Data on the substitute schedules is in suitable format for transcription It is not necessary to transfer the data to an IRS form.

  2. A primary consideration is the proper presentation of income and deduction items for subsequent transcription and computer processing. Document Perfection is responsible for arranging the return in the following order:

    • page 1

    • page 2

    • page 3

    • Schedules (or Attachments) A, B, C etc.

  3. Enter only transcription items. Leave lines blank if the entry would be a zero amount. See Figure 3.11.213-1.

    Figure 3.11.213-1

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Example of an Incomplete Form 1066

3.11.213.1.5  (01-01-2009)
Prior Year Conversion

  1. If the line items on a prior year form do not agree with line items on the current form, transfer the data to the appropriate line items on a current form. Fold back the entity area of the current form and attach below the entity area of the prior year form, or renumber the prior year to comply with current year line items.

3.11.213.1.6  (01-01-2009)
♦BMF Consistency♦

  1. The purpose of the BMF IRM Consistency initiative is to achieve consistency in the BMF Code & Edit processing IRMs.

  2. Topics for IRM Consistency were identified and developed as a coordinated effort between Cincinnati, Ogden and W&I (BMF Policies, Procedures, and Guidance Branch).

  3. IRM Consistency tridocs are identified by a diamond symbol ♦ before and after the tridoc title.

  4. The text in normal print within a consistency tridoc signifies the common processes to be used for all BMF returns. The text in bold print is form-specific and applies to this IRM only.

3.11.213.2  (01-01-2009)
General Editing Guidelines

  1. The Document Perfection tax examiner will have the first opportunity to identify a record having a problem which requires correspondence, research or other action in order to make the return processable.

    Note:

    Effective 1-1-2009, the edit sheet was eliminated for use with Forms 1066. Entries previously found on the edit sheet will now be edited to the designated area on the return.

  2. The tax examiner will determine the kind of action required and assign an Action Code to the return.

3.11.213.2.1  (01-01-2009)
♦Edit Marks♦

  1. Edit marks are edited on the return for transcription to the Automatic Data Processing (ADP) System through ISRP. The editing can be entered in brown, red, orange, purple or green pencil/pen.

  2. The only items edited on a return are those to be transcribed except where specific instructions require editing of a non-transcribed item. Lines are left blank if the entry would be a zero amount unless otherwise instructed.

  3. The original entry on a return is never obliterated, altered or erased when deleting or correcting an entry. Exercise care to ensure that the original entry remains legible. Perfected entries provide a legible "edit trail" for anyone who may work with the return later.

  4. The tax examiner should use the following types of edit marks:

    EDIT MARK DESCRIPTION
    "X" or "/" The "X" is used to delete tax data or to indicate that an item is not to be transcribed.
    The "/" can be used when deleting a form or schedule that is not being transcribed.
    Circle Indicates that an entry is not to be transcribed. A circle is used to delete a Received Date.
    Note: If the taxpayer circles an entry, edit the entry.
    Underline Indicates an entry is to be transcribed (e.g., Name Control or Tax Period, etc.)
    Arrow Indicates the correct placement of a misplaced entry. An arrow may be used if the misplaced item is close to the correct line and there is no question where the entry belongs.
    Note: A double arrow may be used if the same figure is to be transcribed in two different places (along with any required transcription data between the two arrows).
    Check Mark Indicates that an entry has been manually math verified and is correct.
    Bracket/Parentheses/Minus sign Indicates a negative numerical amount.

    Note:

    C&E is no longer required to bracket negative amounts when brackets are preprinted on the form or schedule or when the taxpayer clearly indicates a negative amount with brackets (-) sign. It will be necessary to bracket negative entries on transcription lines (i.e., computing and entering a line entry, entering a missing line entry, etc.)

    Vertical Line or Decimal Point Indicates the separation of dollars and cents if no distinction was made by the taxpayer.
    Zero, Dash or None "ZERO" , "DASH" or "NONE" are considered valid entries except when specific instructions require editing of an entry.
    Edit Marks made by other IRS functions Edit marks entered by another area (such as Collections or Accounts Management (Adjustments)) are not to be re-edited except to place the marks in the correct area.
    Rocker Indicates the amount paid when drawn under a remittance amount.

3.11.213.2.2  (01-01-2009)
♦Action Codes♦

  1. Action Codes are used to indicate whether correspondence, research, or some other action is needed. The Action Code will set the suspense period to be assigned to the return and place the return in the workable or unworkable suspense inventory.

  2. When necessary, a three-digit Action Code will be assigned by the tax examiner.

  3. Edit Action Code preceded by "10-" in the bottom left margin of Form 1066. See Figure 3.11.213-2.

    Figure 3.11.213-2

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Preparing Form 1066 for Correspondence.

  4. Assign Action Codes in the following priority order:

    1. Action Code 310 (Statute Control).

    2. Action Code 320 (Entity Control).

    3. Action Code 4XX.

    4. Action Code 6XX.

    5. Action Code 3XX.

    6. Action Code 2XX (Correspondence).

      Exception:

      Use Action Code 211 before Action Code 341 to ensure the return is complete before a manual refund is issued.

  5. Form 4227 is required when more than one Action Code is needed.

  6. Only one Action Code can be assigned to a return at one time. If more than one Action Code is needed, edit the second Action Code on Form 4227.

  7. If more than one Action Code of the same priority is required (e.g.: 342 and 355), edit the Action Code with the shortest suspense period and attach Form 4227 to indicate the second unprocessable condition.

  8. Edit the following Action Codes when a return cannot be perfected from the information present:

    Action Code Description
    211 (First Correspondence)

    • Return is so illegible, incomplete, or contradictory that it is not acceptable for computer processing

    • Unsigned returns

    • The taxpayer notates on the return or attachment that they are reporting tax for more than one Tax Period or for more than one type of tax

    225 (Missing Signature Correspondence) Unsigned return (only issue for correspondence)
    610 (Renumbered Non-remittance) or 611 (Renumbered with Remittance) A return is mis-blocked (e.g. Form 1065 found in a 1066 batch of work)
    650 (AC International)

    • The return is an International return and must be forwarded to OSPC.

    • Return has a foreign address and must be forwarded to OSPC.

      Note:

      An APO/FPO address is not considered foreign.

    480 The return is an early-filed current return.
    640 (Void) To delete the assigned DLN on the return (e.g. Re-entry Returns)

  9. Continue perfecting the return after editing the Action Codes.

  10. For a list of valid Action Codes, see Exhibit 3.11.213-4.

3.11.213.2.3  (01-01-2009)
Refund Returns - 45-Day Jeopardy and Million Dollar Refunds

  1. Document Perfection is responsible for identifying refunds and for initiating requests for manual refunds.

    Note:

    Expeditious processing of refund returns is critical if the 45-day period is about to expire.

    If Then
    The processing date is more than 20 days after received date or the return due date (whichever is later) and the 45-day interest free period is in jeopardy and the refund amount is≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ,

    Note:

    Refund in this instruction means only the amount requested to be refunded by the taxpayer, not overpayments transferred to other periods.

    		1. Edit Action Code 341.
    2. Attach Form 4227 and give the return to the manager.
    The refund is $1,000,000 or more, 1. Do not leave the return in the block.
    2. Edit Action Code 341 for numbered and unnumbered returns.
    3. Attach Form 4227 and give the return to the manager.
    The W&I Submission Processing Liaison for TAS issues walks a return through Code & Edit In addition to normal editing procedures, perform the actions below:

    1. Edit CCC "O" to freeze the refund.

    2. Edit CCC "Y" to send the return to ERS.

    3. "X" the refund line on the return.

3.11.213.3  (01-01-2009)
Unprocessable Conditions

  1. Perfect all documents, if possible. Examine schedules and other attachments for the information necessary to make document processable.

  2. Use the following table to identify an unprocessable condition:

    If Then
    A document is missing:
    1. An Employer Identification Number (EIN),
    2. A legible name (for transcribing name control),
    3. A legible address (for correspondence, if necessary),
    4. A valid tax period, or
    5. legible tax data, if tax liability is indicated.     		The return is unprocessable.

  3. If an unprocessable condition exists:

    If Then
    Unprocessable On all unprocessable conditions other than BMF entity, initiate correspondence action when the document cannot be perfected from attachments or schedules.
    Exception: The name and address are missing or so illegible that correspondence is impossible, or correspondence was conducted on the same issue but the document is still unprocessable 1. If document is numbered, continue editing, leave the document in the block and edit the appropriate Action Code to the bottom left margin.
    2. If document is unnumbered, do not continue editing, withdraw the document from processing and give it to the manager for review.

  4. The following information pertains to multiple return information on one return:

    If Then
    Liability for two or more Form 1066 returns was reported on one unnumbered return and the information necessary for the preparation of the individual return is present 1. Adjust the line entries on the period return to reflect the liability for the earliest period and prepare additional period returns.
    2. Retain all the unnumbered returns in batch.
    The original return is numbered 1. Edit Action Code 360 and leave in the block.
    2. Attach Form 4227, Intra-SC Reject or Routing Slip, for Reject Correction. Notate "Multiple Period" .
    If there is not enough information to prepare additional period returns Correspond.

3.11.213.3.1  (01-01-2009)
Suppression of Delinquency Check

  1. The following information pertains to suppression of the delinquency check.

    If Then
    An unnumbered, unprocessable return is withdrawn from processing Input TC 599, Closing Code "17" to suppress the normal delinquency check and edit in the top of the left margin. See Figure 3.11.213-3.

    Figure 3.11.213-3

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Example of a Form 1066 with TC-599, CC 17

3.11.213.3.1.1  (01-01-2009)
TC 599, Closing Code 17

  1. The following information pertains to TC 599:

    If Then
    Inputting TC 599 via IDRS
    The following information is necessary:
    1. EIN
    2. Name Control
    3. MFT (07 for Form 1066)
    4. Tax Period
    The above information is present. Flag the return for input of TC 599, Closing Code "17" via IDRS.
    Using TC 599, Closing Code "17" Use only with management approval per instructions in IRM 3.30.123, Processing Timeliness: Cycles, Criteria and Critical Dates.

3.11.213.3.2  (01-01-2009)
♦Correspondence♦

  1. There are unprocessable conditions that require corresponding with the taxpayer to resolve.

  2. Do not correspond or send back returns prepared by Compliance (6020(b) and SFR).

  3. Do not send back returns when corresponding on returns secured by Compliance (notated as "Process as original" , "TC 59X" , "ICS" ).

  4. Examine the return so that all conditions can be included in the same correspondence. If additional information is needed, the second correspondence must include a paragraph of apology for any inconvenience.

    • Notice 695, Request for Missing Signature to Complete Return, is used to send the tax return back to the taxpayer requesting a signature only.

    • Form 6800, Request for Missing Information or Papers to Complete Your Return, is used to send the tax return back to the taxpayer. Use Form 6800 for unnumbered or zero-balance returns.

    • Form 3696, Correspondence Action Sheet, is used to correspond on numbered returns, unnumbered balance due returns and secured returns.

      Note:

      Other approved Correspondence Action Sheet established through local correspondence procedures may be used.

      If And Then
      Unnumbered refund or zero-balance returns (with no IRS edit marks) correspondence requires a response 1. Correspond using Form 6800.
      Exception: Do not use Form 6800 if the return is delinquent.
      2. Check the appropriate boxes on both pages of Form 6800.
      3. Remove any internal documents.
      4. Circle the word "over" (bottom right corner) when using the second side of Form 6800.
      5. Remove any internal documents.
      6. Circle all Received Dates on the return.
      7. Attach Form 6800 below the Entity area.
      8. Remove from batch and forward to Correspondence for mailing.
      Numbered returns and Unnumbered Balance Due returns correspondence requires a response 1. Complete Form 3696 (or other approved Correspondence Action Sheet) indicating the letter number (86C, 854C, etc.), MFT, number of copies and the appropriate paragraphs. See Figure 3.11.213-3.

      Note:

      Within these paragraphs there may be fill-ins that the tax examiner will be required to enter, such as: tax period, form number, DLN, etc.


      2. Attach Form 3696 (or other approved Correspondence Action Sheet) to the front of the return below the Entity area.
      3. Edit Action Code 211 (First Correspondence)
      4. Continue editing the return.
      5. Leave the return in the batch.
      Numbered returns and Unnumbered Balance Due returns correspondence does notrequire a response 1. Complete Form 3696 (or other approved Correspondence Action Sheet) indicating the letter number (86C, 854C, etc.), MFT, number of copies and the appropriate paragraphs.
      2. Photocopy Form 3696 (or other approved Correspondence Action Sheet) below the Entity area on the front of the return. Be sure the name and address shows clearly above the Form 3696.
      3. Complete the copy of the Form 3696 (or other approved Correspondence Action Sheet).
      4. Forward the copy to the Correspondence area.
      5. Edit an Action Trail (e.g. "854C sent" ) in the lower left corner going vertically up the side of the return.
      6. Finish editing the return and leave in the batch.
      7. Continue processing the return.

    Note:

    There may be additional letters that are exclusive to the tax examiner's submission processing campus. These letters are for specific forms or conditions where it was deemed necessary for ease of processing. The tax examiner should go to the Lead or Manager for copies of these letters to facilitate processing.

  5. When the taxpayer responds to the correspondence, edit as follows:

    If Then
    Reply is received Process based on the information provided.
    Note: If Form 6800 is used on multiple returns, notate "CORR SENT" on the action/working trail when reply is received.
    No reply, correspondence was undeliverable, or the reply is incomplete or does not address the original condition 1. Edit CCC "3" .
    2. Continue processing.

3.11.213.3.2.1  (01-01-2009)
♦Correspondence Imaging System (CIS) Returns♦

  1. Correspondence Imaging System (CIS) is an inventory system for scanning all Accounts Management (AM) receipts (including Forms 1066) into digital images and working the cases from those images.

  2. "CIS" returns are identified with "CIS Image-Do not correspond for Signature" stamped below the signature line or "CIS" annotated on the front of the return.

  3. Follow the instructions below for processing "CIS" returns.

    If... And... Then...
    The "CIS" return has a Form 13596 or Form 3893 attached

    Note:

    If there is an indication on the return that correspondence has been sent (e.g., CCC "3" is edited on the return), do not route the return to Accounts Management. Continue processing the return

    		The return is not complete (e.g., missing signature, schedules or forms), Remove the return from the batch and route to Accounts Management.

    Note:

    Do not correspond for missing information on "CIS" reprocessable/reinput returns.

    The "CIS" return does not have a Form 13596 or Form 3893 attached, The return is not complete (e.g., missing signature, schedules or forms), Follow normal correspondence procedures.

3.11.213.3.2.2  (01-01-2009)
Use of Fax for Taxpayer Transmissions

  1. Tax return information can be received via fax as part of return perfection even if a taxpayer signature is required. In circumstances where contact with the taxpayer has been made and documented, fax signatures are acceptable.

  2. Contact with the taxpayer may be by telephone or correspondence. Follow local procedures to determine which method of contact will be used.

    Caution:

    Before disclosing any tax information, you must be sure you are speaking with the taxpayer or authorized representative. See the Taxpayer Authentication guidelines in IRM 21.1.3 (Operational Guidelines Overview). Also, before leaving any messages on a taxpayer's answering machine, review IRM 11.3.2.6.1 (Disclosure of Persons with a Material Interest). Fax procedures contained in IRM 11.3.1.10 (Introduction to Disclosure) must be reviewed prior to faxing confidential information to the taxpayer.

  3. Code & Edit examiners will indicate the fax paragraph on the Form 3696, Correspondence Action Sheet, to advise taxpayers of the option to fax their response.

3.11.213.4  (01-01-2009)
♦Routing Guide for Attachments♦

  1. All attachments to the return must be reviewed before the return can be considered processable.

    1. Attachments should only be detached when specifically instructed.

    2. Edit Action Trail(s) (e.g. "2848 detached" ) in the lower left corner going vertically up the side of the return.

  2. Follow the general guidelines below for each attachment:

    DOCUMENT DETACH ACTION
    CP 259, 515–518 No Route notice and return to the SCCB Function.
    Exception: Do not route to Collections if "599" is attached.
    Includes tax liability for multiple Tax Periods or Types of Tax No 1. Numbered returns - route to Rejects.
    2. Unnumbered returns - prepare a dummy return, if possible, otherwise correspond.
    Other tax returns (original signatures) Yes 1. Edit received date to the detached return.
    2. Route to appropriate function unless specifically directed otherwise.

    Exception:

    Returns attached to a consolidated return will NOT be detached.
    State tax returns, original or copy with original signature Yes Route to Receipt and Control
    State tax returns, (Photocopy, facsimile or no signature) NO Leave attached.
    Statement establishing Reasonable Cause for delinquent filing No See IRM 3.11.213.15.8.
    Remittance found No Immediately hand carry return and remittance to supervisor.
    Request for information or inquiries Yes 1. Photocopy the attachment if it contains any data necessary to continue processing the return.
    2. Attach the copy to the return.
    3. Route original attachment to the proper office for necessary action.
    Request for Adjustment to another document Yes Route to the appropriate function. Attachment must contain Name, Address, EIN, and Received Date. Enter if missing.
    Request for money transfer Yes If the taxpayer notates transfer of money to the return you are processing:
    1. Prepare Form 3465 to route the request to the Rejects Unit.
    2. Hold the return for 2 cycles before processing.
    Request for money transfer Yes If the taxpayer notates transfer on money from the return you are processing:
    1. Prepare Form 3465 to route the request to the Rejects Unit.
    2. Edit CCC "X" to freeze overpayment.
    3. Continue processing the return.
    Request for Form 8109, Deposit Slips, or Coupon Books Yes Complete Form 4417A and route to Entity.
    Request for Forms or Schedules No If requesting for current year forms:
    1. Prepare Form 4190.
    2. Forward to the Forms Distribution Center for processing.
    If requesting for prior-year forms:
    1. Prepare Form 6112.
    2. Forward to the Forms Distribution Center for processing.
    NOTE: Forms 4190 and 6112 are generally used in the Code & Edit function for IMF requests. Therefore, enter all BMF requests for forms and/or schedules in the "WRITE-IN" portions of the forms.

  3. Guidelines for attachments related to Form 1066:

    DOCUMENT DETACH ACTION
    Form 926, Return by a U.S. Transferor of Property to a Foreign Corporation No ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡
    Form 3520-A, Annual Information Return of Foreign Trust with a U. S. Owner Yes Forward to OSPC via Form 4227.
    Form 3753, Manual Refund Posting Voucher No Edit Computer Condition Code "0" to the dotted portion of Section 1, Line 1.
    Form 4797, Sales of Business Property (Also Involuntary Conversions and Recapture Amounts) No None.
    Form 5471, Information Return of U.S. Persons With Respect To Certain Foreign Corporations No ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "" ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡
    Form 5713, International Boycott Report Yes 1. Forward original to OSPC SOI for processing.

    ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡
    Form 6252, Installment Sale Income No For additional instructions, see IRM 3.11.213.24., Installment Sale Indicator.
    Form 7004, Application for Automatic Extension of Time to File Certain Business, Income Tax, Information, and Other Returns No (unless the Form 7004 does not apply to the form being processed) If the Form 7004 does not apply to the return being processed, forward to Receipt and Control, using Form 4227.
    Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR) No ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡
    Form 8271, Investor Reporting of Tax Shelter Registration Number No None.
    Form 8275, Disclosure Statement No ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "" ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡
    Form 8275-R, Regulation Disclosure Statement No ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "" ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ "≡ ≡ ≡ ≡ ≡ " ≡ ≡ ≡ ≡ ≡ ≡ ≡
    Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b) No Edit Computer Condition Code "L" to the dotted portion of Section 1, Line 1.
    Form 8913, Credit for Federal Telephone Excise Tax Paid NO 1. Leave Form 8913 attached to the return.
    2. If not attached, but there is an entry ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ on Line 2b, correspond for missing form.
    SS-4, Application for Employer Identification Number 1. Yes, If Entity Control has assigned an EIN to the Form SS-4
    2. No, if Entity Control has not assigned an EIN to the Form SS-4    		 1. Route to Entity Control.
    2. Route the Form 1066 and Form SS-4 to Entity Control for EIN assignment.

3.11.213.5  (01-01-2009)
♦Entity Perfection♦

  1. The Entity area of a tax return identifies the taxpayer on the Business Master File. The Entity section of the return contains the following:

    1. Check digits (on preprinted label)

    2. Employer Identification Number

    3. Name

    4. Address

  2. There are two types of entities:

    1. Preaddressed - an IRS preprinted label (with check digits)

    2. Non-preaddressed - Handwritten or typed (no check digits)

    Note:

    Some forms have IRS labels printed under the National Change of Address (NCOA) program. These returns can be identified by either a solid black line or by pound signs above and to the left of the entity area. These returns do not contain Check Digits and are not considered to be preaddressed.

3.11.213.5.1  (01-01-2009)
♦Entity Perfection - Employer Identification Number (EIN)♦

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

  2. The EIN is located in the upper right of the form ("Employer Identification Number" box) or the top left corner of the preprinted label. See Figure 3.11.213-4.

    Figure 3.11.213-4
    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Pre-addressed Labeled Form 1066 Showing Location of EIN.

  3. Determine the EIN as follows:

    1. Preaddressed Returns:

      If And Then
      The taxpayer changes the EIN, also changes the first name line 1. Underline the Name Control.
      2. Circle out check digits (if present).
      3. Continue processing the return.
      The taxpayer does not change the EIN, there is a major change to the first name line 1. The return is unprocessable.
      2. Route to Entity for assignment of a new EIN.
      There is an EIN change by the taxpayer, no change to the first name line 1. Research IDRS.
      2. If unable to locate EIN, route to Entity.
      The return has been given a new EIN by Entity Control, is notated TC "011" or "IDRS EIN" (Entity has already taken the necessary action). 1. Underline the Name Control.
      2. Circle out the check digits and old EIN (if present).

    2. Non-preaddressed Returns:

      If And Then
      EIN is missing You can determine the correct EIN from the attachments and/or schedules Edit the EIN to the appropriate location.
      The EIN is either a PTIN or ITIN Unnumbered 1. Remove return from batch.
      2. Attach Form 4227 or follow local procedures.
      3. Forward to Entity Control for EIN assignment.
      Numbered 1. Edit Action Code 320.
      2. Attach Form 4227 and leave in batch.
      Multiple EINs are present Unnumbered 1. Remove return from batch.
      2. Attach Form 4227 or follow local procedures.
      3. Forward to Entity Control for EIN assignment.
      Numbered 1. Edit Action Code 320.
      2. Attach Form 4227 and leave in batch.
      The EIN contains any of the following conditions and cannot be determined from attachments and/or schedules:
      Illegible
      Missing
      Other than 9 digits
      All zeroes; or
      All nines       		Unnumbered 1. Research IDRS.
      2. If not found, route to Entity.
      Numbered 1. Circle out all illegible EINs, zeroes, or nines.
      2. Edit Action Code 320.
      Attach Form 4227 and leave in batch.
      "Pending" , "applied for" , etc. is indicated in the EIN area Unnumbered 1. Research IDRS.
      2. If not found, route to Entity.
      Numbered 1. Edit Action Code 320.
      2. Attach Form 4227 and leave in batch.

3.11.213.5.2  (01-01-2009)
♦Entity Perfection - Name Control♦

  1. The type of entity present on the return determines the Name Control procedures.

    1. Individuals,

    2. Corporations,

    3. Partnerships,

    4. Trusts and Estates, and

    5. Other organizations.

      Note:

      If an individual and a trade name are present and it can be determined that the trade name is for a corporation or a partnership, follow the Name Control procedures for corporations and partnerships. If other than a corporation or partnership, follow the Name Control procedures for individuals, regardless of which line the individual owner's name is listed

  2. The Name Control consists of four characters or less.

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

    2. Disregard the word "The" in the Name Control only when more than one word follows. See Figure 3.11.213-5.

    Figure 3.11.213-5

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Editing Name Control Without the Word "The"

  3. See Job Aid Document 7071–A to properly determine the Name Control.

  4. Edit the Name Control as follows:

    1. Preaddressed Return:

      If And Then
      Check digits are present no changes were made to the IRS label by the taxpayer No editing is necessary.
      A first name line change clearly relates to the same taxpayer is a minor change that does not affect the Name Control Input Transaction Code "013" and note on the return "TC 013" . A new EIN is not needed. See Figure 3.11.213-6.
      There is a change to the primary name line affecting the Name Control and the EIN is not changed. Note: Be sure to check the "Name Change" checkbox in the Entity Section for an indication of a change. Unnumbered 1. The return is unprocessable.
      2. Route to Entity.
      Numbered 1. Edit Action Code 320.
      2. Attach Form 4227 and leave in batch.       See Figure 3.11.213-7.
      There are any questionable entity changes Unnumbered Route to Entity.
      Numbered 1. Edit Action Code 320.
      2. Attach Form 4227 and leave in batch.

      Figure 3.11.213-6

      This image is too large to be displayed in the current screen. Please click the link to view the image.

      Simple Name Change Not Requiring a New EIN

      Figure 3.11.213-7

      This image is too large to be displayed in the current screen. Please click the link to view the image.

      Name Change Affecting Name Control

    2. Non-preaddressed return:

      If And Then
      The check digit is not present or has been altered   Underline the Name Control.
      A second name line is present and begins with "FKA" (formerly known as) Unnumbered Route to Entity.
      Numbered 1. Edit Action Code 320.
      2. Attach Form 4227 and leave in batch.
      A second name line is present and begins with "AKA" (also known as) or "DBA" (doing business as).   Circle out the abbreviations.
      Unable to determine the Name Control. Unnumbered Research IDRS.
      Numbered 1. Edit Action Code 352 (Name research).
      2. Attach Form 4227 and leave in batch.

    Note:

    If a return indicates that the taxpayer has filed bankruptcy (e.g. shows "receiver" , "trustee" , or "debtor in possession" in the entity area, signature line or an attachment), route to Entity.

3.11.213.5.2.1  (01-01-2009)
"♦In Care Of" Name♦

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

  2. Ensure that the "in-care-of" name is located above the street address.

    If… Then…
    The "in-care-of" name is located below the street address 1. Arrow the "in-care-of" name above the street address.
    2. Continue editing the return.
    The "in-care-of" name is shown on an attachment Edit the "in-care-of" name above the street address beginning with the "%" or "c/o" in the first position.
    The street address for the "in-care-of" name is different from the street address of the REMIC 1. Arrow the "in-care-of" street address below the "in-care-of" name or edit the "in-care-of" street address below the "in-care-of" name if located on an attachment.
    2. Circle the REMIC street address and input "TC 016" . (See IRM 3.11.213.5.3.)
    Continue editing the return.
    Note: Always circle out the "in-care-of" symbol ("%" or "c/o" ) if it is present with an address. Do not use the ampersand (&) and the percent sign (%) when editing address information.

  3. A change in the "in-care-of" name can be determined by any of the following:

    • A check mark in the "Name change" box (Page 1, Item D, Box 2), or

    • A check mark in the "Address change" box (Page 1, Item D, Box 3), or

    • An indication that the "in-care-of" name is changed (i.e., the taxpayer crossed out the original "in-care-of" name and added the new name or has entered a new "in-care-of" name in brackets).

    If… Then…
    An "in-care-of" name is changed but there is no indication of an address change 1. Edit the "in-care-of" name as shown above.
    2. Continue editing the return.
    An "in-care-of" name is present and the "Address change" box is checked (or there is an indication of an address change) 1. Edit the "in-care-of" name as shown above.
    2. Correct the address (see IRM 3.11.213.5.3.)
    3. Continue editing the return.

  4. An "In-Care-Of" Name can be identified by the words "in care of" or the symbols "c/o" or "%" .

  5. Ensure that the in-care-of name is located above the street address.

    IF THEN
    The "in-care-of" name is located below the address. 1. Arrow up the "in-care-of" name above the street address.
    2. Continue editing the return.
    The "in-care-of" is shown on an attachment, 1. Edit the "in-care-of" name above the street address beginning with the "%" or "c/o" in the first position.
    2. Continue editing the return.
    The street address for the "in-care-of" name is different from the street address of the REMIC. 1. Arrow the "in-care-of" street address below the "in-care-of" name or edit the "in-care-of" street address below the "in-care-of" name if included on an attachment.
    2. Circle the REMIC address and input TC "016" .
    3. Continue editing the return.

    Note:

    "Always" circle out the "in-care-of" symbol ("c/o" or "%" ) if it is present with an address. DO NOT use the ampersand (&) or the percent sign (%) when editing address information.

  6. Special to Form 1066: If a valid "Care of Name" is present, determine if the "Care of Name" has been changed by the taxpayer, or that the "Care of Name" is being added for the first time. A change to the "Care of Name" can be determined by a check mark in the applicable box(es)("Name Change" , "Address Change" , or "Amended Return" ), or the taxpayer crossed out the original "Care of Name" and hand wrote a new name, or has entered a "Care of Name" .

3.11.213.5.3  (01-01-2009)
♦Entity Perfection - Domestic Addresses♦

  1. Perfection of the address is necessary when the mailing address (street or P.O. Box) is not easily identified.

    Exception:

    Do not perfect the address on amended returns (CCC G).

  2. The procedures for perfection of address for preaddressed returns indicating an address change and non-preaddressed returns are as follows:

    If And Then
    The address contains information other than a street address or P.O. box   No perfection is necessary. ISRP will enter the complete address.
    There is an indication on an attachment that the address has been changed   Edit the new address in the entity section of the return. See Exhibit 3.11.213-2. for address abbreviations.
    Form 8822 (Address Change Requested) is attached information is the same Take no action.
    information is different Detach Form 8822 and route to Entity.
    Both a P.O. box and a street address are shown   1. Input TC 014 to retain location address.
    2. Notate "TC 014" in the upper left margin of the return.
    Two street addresses are shown   1. Underline the second street address.
    2. Input TC 014 to retain location address.
    3. Notate "TC 014" in the upper left margin of the return.
    One street address is shown the taxpayer changes the address to a P.O. box 1. Input TC 014 to retain location address.
    2. Notate "TC 014" in the upper left margin of the return.
    The city and state are not shown on the return, but are shown on an attachment   Edit the city and state on the form in the entity section.
    The Zip Code is missing or illegible Is not available from the return or attachments Determine Zip Code by using Exhibit 3.11.213-3, State Code and Zip Code Perfection Chart. See Exhibit 3.11.213-3.
    Only the first three digits of the Zip Code can be determined   Edit "01" for the fourth and fifth digits. See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), and ZIP Codes and Countries.
    The "Address Change" box, item D(3), Page 1, Form 1066, is checked   Edit address.
    The "Address Change" box, item D(3), Page 1, Form 1066, is checked An "in care of name" is present 1. Edit the "%" (percent sign) or "c/o" to the left of the "In care of name" (in the first position) followed by the appropriate name.
    2. Correct the address.
    3. Continue editing the return.
    The National Change of Address (NCOA) label is present   Underline the Name Control.

    Note:

    Always circle out the "care of" symbol ("c/o" or "%" ) if it is present with an address. Do not use the ampersand (&) and percent symbol (%) when editing address information.

  3. The U.S. Postal Service established new address requirements for APO/FPO addresses. If the old address appears (i.e. APO New York, NY 091XX), convert it to the new State Code abbreviation based on the Zip Code (i.e. the previous example would be converted to APO AE 091XX). See Figure 3.11.213-8. APO/FPO addresses are considered domestic addresses. Refer to Conversion Chart below:

    APO AE Europe 090-094, 096-098
    FPO AE Europe 095
    APO AA Americas 34000-34049
    FPO AA Americas 34050-34099
    APO AP Pacific 962-965,
    98700-98759
    FPO AP Pacific 966,
    98760-98799

    Figure 3.11.213-8

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Form 1066 With APO Address

3.11.213.5.4  (01-01-2009)
♦Entity Perfection - Foreign Addresses♦

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

  2. Returns with APO or FPO addresses are considered domestic addresses.

  3. Route returns with a foreign address to the Ogden Submission Processing Campus (OSPC) for processing.

  4. Returns with addresses in the following American Possessions are considered to have foreign addresses for processing purposes:

    1. A two-character alpha code must be edited for the possession name.

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

    2. A ZIP code must be present. Edit the appropriate ZIP code if one is not provided.

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

    1. The foreign country must be the last entry in the address.

    2. Circle out the foreign country and edit the country code preceded by a "/" and followed by a "/$" . See Exhibit 3.11.213-8 for official foreign country codes (Job Aid).

    3. If the foreign country is Australia, Brazil, Canada, Cuba, Italy, Mexico or The Netherlands, check if the address contains a province, state, or territory. See Exhibit 3.11.213-9, Province, State, and Territory Abbreviations.

      If . . . Then. . .
      A province, state, or territory is present 1. Circle out province, state, or territory name.
      2. Enter appropriate abbreviation. (See Exhibit 3.11.213-10.)
      A province, state, or territory is not present. Continue editing the return.
      Province, state, or territory is shown in abbreviated format, Continue editing the return.

    4. A ZIP code is not required on a foreign address. Foreign addresses use a postal code that is entered before the city or foreign country and is part of the address.

  6. Prepare Letter 86C ("Referring Taxpayer Inquiry/Forms to Another Office" ) to inform the taxpayer that the return has been sent to the Ogden Submission Processing Center (OSPC) for processing.

3.11.213.6  (01-01-2009)
Tax Period

  1. The tax period is edited into four digits (YYMM) which define the year and month in which the tax period ends. The current tax year does not need to be edited for tax period.

  2. The tax period is edited to the upper right corner between form title and OMB number. See Figure 3.11.213-9.

    Figure 3.11.213-9

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Tax Period Editing Example

  3. A REMIC return must always be a calendar year return with a tax period ending of December 31, unless the Form 1066 is a final return.

    If Then
    A final return Edit CCC "F" to the dotted portion of Section 1, Line 1 andskip the steps in 4 below.

  4. If the taxpayer indicates the tax period ending is other than 12, take the following action:

    If Then
    Unnumbered 1. Send the return back to the taxpayer. Inform the taxpayer that all REMIC filers must file a calendar year return.
    2. Send a photocopy of Page 1, via Form 4227, to Entity Control to remove Form 1066 filing requirements.
    Numbered 1. Correspond with taxpayer to inform him a REMIC must file a calendar year return.
    2. Void the DLN, per local procedures.
    3. Photocopy Page 1 of the return and send it to Entity Control to remove the filing requirements.

3.11.213.7  (01-01-2009)
♦Received Date♦

  1. A Received Date is required on all Forms 1066.

  2. A return is considered timely if received within ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ . If the due date falls on a weekend or legal holiday, the return is timely if postmarked by the first business day following the weekend or legal holiday.

  3. Returns that do not meet the requirements in (2) above are considered delinquent. Edit the received date to agree with the postmark date if the IRS received date stamp ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and the postmark or shipment date is on or before the due date.

  4. The received date may or may not be stamped on the face of the return.

  5. If the date stamp is not present or the date is illegible or invalid, edit the Received Date in MMDDYY format in the middle of Page 1 of the return. Edit the Received Date according to the following priority:

    1. The earliest legible Postmark Date (U.S. Postal Service, foreign, or Private Delivery Service) on the envelope. Rules for using the U.S. Postal Service Postmark (USPS) date are as follows:

      If Then
      An envelope is not attached Use the postmark date stamped on the face of the return.
      An envelope has both a USPS and private metered postmark Always use the USPS postmark.
      An envelope has two private metered postmarks Always use the latest private postmark.
      An envelope has only one private metered postmark Use the private metered postmark.

      Note:

      A private metered postmark is to be considered timely if received ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

    2. Revenue Officer's signature date.

    3. Signature date (only if within current processing year).

    4. Julian control date.

    5. Current date.

  6. Edit the Received Date as follows:

    If . . . And . . . Then . . .
    A timely received date is the only received date stamped on the return   No editing is required.
    Two or more dates stamped on the return   1. Use the earliest IRS stamped received date.
    2. Circle out all other dates.
    A Federal return is addressed to the IRS Delivered to a State agency Use the postmark date as the received date.
    Federal return is addressed to a State agency   Use the IRS date stamp as the received date.
    Envelope is attached to the return The return is timely 1. Check envelope for remittance.
    2. If found, hand carry remittance to your manager.

3.11.213.8  (01-01-2009)
♦Signature Area♦

  1. A signature and jurat are required on all returns except the following:

    Note:

    If a signature does not appear on the designated line for the taxpayer's signature, follow the procedures in the IF/THEN table below. Also, if the jurat is altered or stricken (crossed out), see IRM 3.11.213.14 , Frivolous Returns and Claims.

    • Returns prepared under IRC 6020(b). These returns must be signed by a Revenue Officer or Compliance Services representative.

    • Returns prepared by Examination, i.e. SFR (Substitute for Return).

      Reminder:

      Returns secured by Examination do require a signature and jurat.

    • Dummy returns prepared by IRS.

    • Returns filed under Section 501(d) (Religious or Apostolic Organization).

    • Correspondence is attached showing that the taxpayer is responding to an IRS letter or notice.

    • "CIS" returns that have Form 13596 or Form 3893 attached. See IRM 3.11.213.3.2.1 (Correspondence Imaging System (CIS) Returns) for processing instructions.

  2. If a signature is missing, correspond when:

    1. The return is not signed on the line designated for the taxpayer's signature, or

    2. The jurat is not present on the line designated for the taxpayer's signature. (non-standard return).

      Note:

      Do not correspond for a signature on "CIS" returns that have Form 13596 or Form 3893 attached. See 3.11.213.3.2.1 (Correspondence Imaging System (CIS) Returns) for processing instructions.

      If . . . Then . . .
      Balance due or numbered returns. 1. Correspond, using Form 3696 or other approved Correspondence Action Sheet.
      2. Edit Action Code "225" .
      3. Leave in batch and continue editing.
      Unnumbered refund or zero-balance returns, 1. Correspond, using Form 6800 or Notice 695.
      2. Circle all received dates on the return.
      3. Attach Form 6800 to the front of the return, below the Entity area.
      4. Pull the return from the batch and forward for correspondence.

      Note:

      Use Form 3696, or other approved Correspondence Action Sheet, for "Secured" or delinquent returns.

      Only the Entity information is present and there are no attachments containing tax data, Correspond for signature, using Notice 695 or Forms 6800.

      Note:

      Use Form 3696, or other approved Correspondence Action Sheet, for "Secured" or delinquent returns.

  3. If the jurat is altered or stricken (crossed-out), see IRM 3.11.213.14 for frivolous return instructions.

  4. Accept a "signature declaration" (i.e., a signature with a jurat obtained through IRS correspondence) if attached to the return.

    1. If the "signature declaration" is altered or stricken (crossed-out), see IRM 3.11.213.14, for frivolous returns instructions.

    2. If the taxpayer responds with a self-prepared "signature declaration" , it must contain the same language as the jurat on the tax return: i.e., "UNDER PENALTIES OF PERJURY, I DECLARE THAT I HAVE EXAMINED THIS RETURN, INCLUDING ACCOMPANYING SCHEDULES AND STATEMENTS, AND TO THE BEST OF MY KNOWLEDGE AND BELIEF, IT IS TRUE, CORRECT AND COMPLETE."

  5. Since tax examiners are not expected to be handwriting experts, Section 301.6064-1 of Regulations allows the Service to presume that the signature on a return, statement or other document is the true signature of the person who actually signed the document.

    Note:

    A check mark or "X" used to designate where the taxpayer should sign the return is not considered a valid signature.

  6. Only one correspondence attempt is required for a signature. If you do not receive a reply after the prescribed suspense period, input the return:

    If Then
    The return has an overpaid condition Edit CCC "3" and CCC "X" on Line 1 of the Edit Sheet and continue processing.
    The return is a balance due or zero condition Edit CCC "3" on Line 1 of the Edit Sheet and continue processing.

3.11.213.9  (01-01-2009)
♦Paid Preparer Section♦

  1. The Paid Preparer Section is located at the bottom of Form 1066.

3.11.213.9.1  (01-01-2009)
♦Paid Preparer Checkbox Indicator♦

  1. The Paid Preparer Checkbox is located next to the taxpayer signature area. It indicates whether the taxpayer has elected to allow the Paid Preparer to answer questions about the return as it is processed.

  2. No action is required on amended returns.

  3. Take the following actions when an entry is present in the Paid Preparer checkbox:

    1. If Then
      The "Yes" box is checked Take no action.
      The "No" box is checked, neither box is checked, or both boxes are checked, Circle out the Paid Preparer's phone number.

3.11.213.9.2  (01-01-2009)
♦Paid Preparer's Phone Number♦

  1. The Paid Preparer's Phone number is located below the Paid Preparer's EIN at the bottom right hand corner of the return.

  2. No action is required on amended returns.

  3. If a completed Paid Preparer Telephone Number is located on the Paid Preparer's Phone Number line, no editing of this line is necessary.

    Note:

    If more than 10 digits are present, continue processing the return, ISRP will input the first 10 digits only.

  4. If the return is for a tax period prior to 2001, circle the telephone number.

  5. If the Paid Preparer's phone number is illegible or less than 10 digits, review the return and all attachments.

    If Then
    A complete Paid Preparer telephone number is located elsewhere on the return or attachments Edit to the "Phone No." line.
    A complete Paid Preparer telephone number is not located or the number is illegible Circle out the incomplete or illegible telephone number.

3.11.213.9.3  (01-01-2009)
♦Paid Preparer SSN or PTIN♦

  1. The Paid Preparer's Social Security Number (SSN) or Preparer's Taxpayer Identification Number (PTIN) is located to the right of the "Preparer's signature" at the bottom right of Form 1066 on Page 1.

  2. The Preparer's SSN must contain nine numerics. The SSN cannot be all zeroes or all nines.

  3. A Preparer Tax Identification Number (PTIN) is a valid entry in the Preparer's Social Security Number area at the bottom of Form 1066. The PTIN is an eight-digit number preceded by the alpha "P" (e.g. PXXXXXXXX).

  4. Circle-out the Preparer's SSN or PTIN if it is invalid.

3.11.213.9.4  (01-01-2009)
♦Paid Preparer EIN♦

  1. The Preparer's EIN is located below the Preparer's SSN/PTIN at the bottom right corner of Form 1066.

  2. The Preparer's EIN must contain nine numerics. The EIN cannot be all zeroes or all nines.

  3. Circle the Preparer's EIN if it is invalid.

3.11.213.10  (01-01-2009)
♦Amended Returns♦

  1. An amended return may be identified by checking the "Amended" box and/or by such words as "Supplemental," "Duplicate," "Additional," or any positive indication that the taxpayer has filed previously. Filing a "Copy" of a return is not sufficient reason to label a return "Amended" unless accompanied by a positive statement from the taxpayer.

  2. Examine the return for attachments. Do not separate any related attachments from the return that the taxpayer has submitted to explain the reason for the amended return. This information will be used by Accounts Management. Detach any unrelated documents and route them to the appropriate function using, Form 4227. Edit "Action Trail" on the return.

  3. There is an indication the return is amended and:

    If . . . Then . . .
    TC 59X or ICS was entered on the return by Compliance Services Do not edit CCC "G."
    Process the return as an original.
    The return is stamped "Delinquent Original Cleared for Processing" by Statute
    None of the above are present Edit CCC "G" to the dotted portion of Section 1, Line 1. No other codes may be used with CCC "G," except CCC "W" or "3" and/or ERS Action Codes.
    See Figure 3.11.213-10.

    Figure 3.11.213-10

    This image is too large to be displayed in the current screen. Please click the link to view the image.

    Editing of CCC "G"

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

    1. Name Control (unless check digits are present)

    2. EIN

    3. Tax Period

    4. CCC "G"

    5. Received Date

    6. Signature

3.11.213.11  (01-01-2009)
♦Secured/Prepared Returns♦

  1. Compliance functions secure returns from the taxpayer and also prepare returns if the taxpayer does not provide them.

    1. Returns notated "6020(b)" are prepared by Collections.

    2. Returns notated "TC 59X" or "ICS" are secured by Collections.

    3. Returns notated "SFR" (Substitute for return) with an attached Form 13133 (Expedite Processing Cycle) are prepared by Examination. The box "Substitute for Return" on Form 13133 should be checked.

    4. Returns notated "Process as original" with an attached Form 13133 (Expedite Processing Cycle) are secured by Examination. The box "Delinquent Return" on Form 13133 should be checked.

3.11.213.11.1  (01-01-2009)
♦IRC 6020(b) Prepared by Collections♦

  1. When the taxpayer fails to file a required return, §6020(b) of the Internal Revenue Code is the authority for the IRS to prepare the return.

  2. These returns are identified by the notation: "Prepared and signed under authority of Section 6020(b) of the Internal Revenue Code" which is located in the center bottom of Page 1.

    1. Returns must have a received date. If no received date is present per the Compliance function, follow the normal procedures for editing the received date.

    2. Returns must be signed by Compliance function representatives. If not signed, route to Compliance, using Form 4227.

    3. Edit CCC "4" .

      Note:

      CCC "R" should not be used with CCC "4" .

    4. Edit CCC "D" if the Revenue Officer (or Compliance Function representative) notates: "Do Not Assess Failure to Pay Penalty" .

    5. Do not send the return back or correspond with the taxpayer for unprocessable conditions.

    6. Edit CCC "W" if the received date is more than 2 years 9 months after the return due date. Do not send the return to Statute Control function.

3.11.213.11.2  (01-01-2009)
♦Collection Secured♦

  1. These returns are identified by the notations: "TC 59X" or "ICS" (Integrated Collection System).

    1. Do not edit CCC "G" on these returns.

    2. Correspond for conditions that cannot be processed (e.g. missing signatures, missing schedules, etc.).
      Exception: A taxpayer's signature on a notice with a jurat is acceptable.

    3. Edit CCC "W" if the received date is more than 2 years 9 months after the return due date. Do not send the return to Statute Control function.

3.11.213.11.3  (01-01-2009)
♦Examination Prepared Returns - SFR or Substitute for Return♦

  1. These returns are identified by the notation "SFR" or "SUBSTITUTE FOR RETURN" on Page 1.

    1. Return must have a received date. If no received date is present, follow the normal procedures for editing the received date.

    2. Do not send back or correspond with the taxpayer for unprocessable conditions. If the return is completely unprocessable, use "No Reply" procedures.

    3. If the Form 13133 is attached, see the following table:

      If Then
      The CCC "4" box is checked Edit a CCC "4."
      The "Freeze Prepayment" box is checked Edit a CCC "X."
      The Penalties box is checked and the line contains a "D" or "R" Edit the CCC "D" and/or "R" on the return.

      Note:

      CCC "R" should not be used with a CCC "4."

    4. Edit CCC "W" if the received date is more than 2 years 9 months after the return due date. Do not send the return to Statute Control function.

3.11.213.11.4  (01-01-2009)
♦Examination Secured Returns♦

  1. These returns are identified by the notation "Process as original" on Page 1 of the return and a Form 13133, Expedite Processing Request, attached with the "Delinquent Return" box checked.

    1. Do not edit CCC "G" on these returns.

    2. Correspond for conditions that cannot be processed (e.g., missing signatures, missing schedules, etc.).
      Exception: A taxpayer's signature on a notice with a jurat is acceptable.

    3. On the attached Form 13133:

      If Then
      The CCC "4" box is checked Edit a CCC "4."
      The "Freeze Prepayment" box is checked Edit a CCC "X."
      The Penalties box is checked and the line contains a "D" or "R" Edit the CCC "D" and/or "R" on the return.

      Note:

      CCC "R" should not be used with a CCC "4."

    4. Edit CCC "W" if the received date is more than 2 years 9 months after the return due date. Do not send the return to Statute Control function.

3.11.213.12  (01-01-2009)
♦Statute Returns♦

  1. Any return with a received date that is 2 years and 9 months or more after the Return Due Date is a potential statute control return.

  2. Statute returns must be routed to the Statute Control Unit daily, or more often, if needed.
    Exception: Edit a CCC"W" , continue processing, and do not route to the Statute Control Unit for clearance if any of the following conditions are present:

    • Compliance 6020(b) returns

    • A return with TC 59X or ICS notated on the face of the return

    • Returns that are substitute returns prepared by Examination (SFR in top margin) with Form 13133, Expedite Processing Request, attached.

  3. Statute returns are unprocessable until they are cleared by Statute Control.

    If Then
    The return is numbered 1. Edit Action Code 310 to the bottom left margin of Form 1066.
    2. Attach Form 4227 and check the box for Statute Control Unit.
    3. Leave the return in the batch and continue processing.
    The return is unnumbered 1. Do not continue processing.
    2. Pull the return from the batch.
    3. Attach Form 4227 and check the box for Statute Control Unit.

  4. Approved Statute Control returns will be stamped "CLEARED BY STATUTE" . If "CLEARED BY STATUTE" stamp is present, edit CCC "W" to the dotted portion of Section 1, Line 1 and continue processing.

3.11.213.13  (01-01-2009)
♦Re-Entry Document Procedures♦

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

  2. Each re-entry return must have a Form 3893, Re-entry Document Control or Form 13596, Reprocessing Returns, attached.

    • Form 3893 is used to re-input documents.

    • Form 13596 is used to reprocess documents.

  3. Always leave the Form 3893 or Form 13596 on the front of the return. It must remain as a permanent part of the document.
    Exception: If the return is more than 2 years and 6 months from return due date, do not use Form 3893 or Form 13596 reprocessing procedures. Route return to Statute Control Unit following statute procedures.

  4. Examine Form 3893 or Form 13596 to determine the action needed to make the return processable.

    If Then
    Form 3893 or Form 13596 is missing 1. Edit Action Code 640.
    2. Route to Receipt & Control, using Form 4227.
    3. Leave the return in the batch.
    Form 3893 or Form 13596 is attached Determine if the return was edited according to current processing procedures.

3.11.213.13.1  (01-01-2009)
♦Form 3893 -- Re-entry Document Control♦

  1. Form 3893, Re-entry Document Control, is used to reinput a return that has not posted to an account or module.

  2. If more than one return is in the batch and only the top Form 3893 has an entry in Box 1 (Alpha/Numeric block control no.), edit all returns using current processing instructions and keep all returns clipped together.

  3. If the return was not edited according to current processing instructions, circle out any action codes, Computer Condition Codes and any other edit marks that are no longer applicable. Re-edit according to current processing instructions.
    Note: Do not send letter 1382C if a request for reasonable cause is attached.

  4. If the return was edited according to current processing instructions, ensure that the information from Form 3893 is edited on the return.

    Form 3893 Action Taken
    Box 14 Remarks Ensure that the information is edited to the return.
    Box 15 (Process as) 1. Circle out the green rocker and edit marks that may indicate a receipt of remittance.
    2. Do not change any tax due amounts.

  5. Examine returns that have any color other than red editing in the tax data section to determine if the corrections are the result of improper perfection or taxpayer error.

    If... Then...
    Improper perfection Edit the same correction in red to the appropriate areas.
    Taxpayer error Leave the entries as shown on the document.

  6. A received date must be present on all re-input returns:

    If... Then...
    Received date is not present Edit a received date to the middle of the return.
    Multiple received dates are present Circle out all but the earliest date.

  7. When additional information is still needed to make the return processable, prepare Form 3696 (or other approved Correspondence Action Sheet) or Form 4227 for the appropriate action (e.g., correspondence, research, etc.).

  8. When perfection is not possible, edit Action Code 640 on the return and attach Form 4227 noting, "PERFECTION NOT POSSIBLE." and return to initiator.

3.11.213.13.2  (01-01-2009)
♦Form 13596 -- Reprocessing Returns♦

  1. Form 13596, Reprocessing Returns, is used to reprocess a return to the correct account or module that had previously posted to the wrong account or module.

  2. If the return was not edited according to current processing instruction, circle out any action codes, Computer Condition Codes (including CCC "G" and any other edit marks that are no longer applicable. Re-edit according to current processing instructions.

    Note:

    Do not edit CCC "G" on an amended return.

  3. If the return was edited according to current processing instruction, ensure that the information from Form 13596 is edited on the return.

    Form 13596 Action Taken
    TIN correction Edit correct TIN on return.
    Tax period correction Edit correct tax period ended on return.
    Reasonable cause Edit appropriate computer condition code.
    a. Edit CCC "R" if the "FTF" box is checked.
    b. Edit CCC "D" if the "FTP" box is checked.

  4. Examine returns that have any color other than red editing in the tax data section to determine if the corrections are the result of improper perfection or taxpayer error.

    If... Then...
    Improper perfection Edit the same correction in red to the appropriate area.
    Taxpayer error Leave the entries as shown on the document.

  5. A received date must be present on all reprocessed returns.

    If... Then...
    Received date is not present Edit a received date to the middle of the return.
    Multiple received dates are present Circle out all but the earliest date.

  6. Circle out the green rocker and edit marks that my indicate a receipt of remittance.

3.11.213.14  (01-01-2009)
♦Frivolous Returns and Claims♦

  1. A frivolous argument is used for the purpose of expressing dissatisfaction with the substance, form, or administration of the tax laws by attempting to illegally avoid or reduce tax liabilities. Recognized frivolous arguments made by businesses include, but are not limited to, the examples in IRM 4.19.1 shown in Exhibit 3.11.213-6.

    Note:

    Returns having only zeroes, no entries, are blank or indicate "None" , "Not Liable" , etc., with no evidence of a frivolous argument are not to be considered as frivolous returns.

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

    If Then
    The return meets any of the conditions shown in Exhibit 3.11.213-6. See Exhibit 3.11.213-6.

    Caution:

    If the return shows the Action Code 440 ("OSPC" or "OIRSC" ) or 331 ("CSPC" or "CIRSC" ), a CCC "X" and has a Form 4227 attached with the remarks "Refer to Exam FRP for audit after processing" , then see "If/Then" table below.

    		Extract the return from the batch and place the return in the locally designated basket for Examination, Frivolous Return Processing (FRP) for review.

    Note:

    IRM 4.19.1.6 requires Examination to expedite the return and make a determination whether it qualifies as a frivolous return within two business days. If a determination is not made within the allowed time frame, the Examination examiner will edit on the return in the lower left hand margin AC 440 ("OSPC" or "OIRSC" )) or AC 331 ("CSPC" or "CIRSC" ) to identify it as a potential frivolous filer.

    Exam has selected the return as frivolous, e.g., indicated by an Action Code 440 ("OSPC" or "OIRSC" ) or 331 ("CSPC" or "CIRSC" ), a CCC X, and a Form 4227 with the remarks "Refer to Exam FRP for audit after processing" , but sends the return for processing, Continue to process the return using the procedures in IRM 3.11.213. However, do not circle or void the Action Code or CCC X indicating a frivolous return.


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