- 4.4.12.4 Examined Closings/Surveyed Claims
- 4.4.12.5 Disposition of Form
- 4.4.12.6 Closing Instructions for Cases with RGS Reports
- 4.4.12.7 EOAD Data Capture Procedures
- Exhibit 4.4.12-1 Item 15 Reference Numbers for Forms 706 and 709
- Exhibit 4.4.12-2 Item 15 Reference Numbers for Form 720
- Exhibit 4.4.12-3 Item 15 Reference Numbers for Forms 940, 941, 942, 943, and 945
- Exhibit 4.4.12-4 Item 15 Reference Numbers for Form 1040
- Exhibit 4.4.12-5 Item 15 Reference Numbers for Forms 990C, 1041, 1042, 1066, and 1120
- Exhibit 4.4.12-6 Item 44 and 45, NOL Information Examples
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Enter a "2" in Item 45 for all carryback and/or carryforward tax periods related to the case in which you entered a "1" in Item 45 even if the NOLD was examined and the final result was a no change.
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This item is used if you made adjustments to a credit that was carried forward but did not pick-up the carryforward year return. Enter the amount that was disaIlowed.
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Example: you examined the 199712 return and disallowed the foreign tax credit for $5,000, $2,000 of which was carried forward to 199812. You did not pick up 199812 since it had not been filed.
199712 Form 5344, Item 46 = $2,000
199712 Form 5344, Item 12 = $3,000
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Enter the type of credit that was disallowed in Item 46. If more than one type of credit was disallowed enter " M" for multiple.
A = Reserved
B = Business Energy Credit
C = Reserved
E = Experimental Credit; Research and
F = Foreign Tax Credit
G = Reserved
H = Historical Restoration Credit
I = Investment Tax Credit
J = Reserved
K = Reserved
L = Low Income Housing Credit
M = Multiple
N = Reserved
O = Other
P = Reserved
Q = Reserved
R = Reserved
S = Reserved
T = Tight Formation Gas Credit
U = Reserved
V = Vehicle Credit; Qualified Electric
W = Reserved
X = Reserved
Y = Reserved
Z = Reserved
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The 5 digit secondary business code should be input if the AIMS data base does not contain the correct SBC.
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The examiner’s four-digit employee group code is a required entry for all examined returns. No entry is necessary for surveyed claims.
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1XXX is used for revenue agent groups
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2XXX is used for tax auditor/tax resolution representative groups
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5000 through 5999 is used for all Examination Branch programs at campus
-
-
Employee Group Codes 1000, 1998, 2000, 2072, 2998 or 2999 are not valid entries for closings.
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The name of the tax examiner that prepared the Form 5344 should be entered in the space provided.
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If the case is a Coordinated Industry Case, an "L" should be entered in this field by the industry having primary responsibility for the CIC examination.
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If the AIMS data base currently contains Aging Reason Code 04, the computer will automatically generate an " L" even if it is not input.
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Where the Government’s interest is being protected by making the same adjustment against the same taxpayer for different tax periods, or against two or more taxpayers, an alpha indicator (K=Key case, R=Related case) must be entered to identify the case as a Whipsaw case.
-
The input of this indicator will prevent the duplication of statistics.
"K" AIMS Tables will reflect results
"R" AIMS Tables will reflect return but no results -
If there are additional issues on the return that have been adjusted, the indicator should be used only if the majority of the adjustments were due to the whipsaw.
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Enter the percentage of the total time (Item 28) that represents the International Examiner’s time.
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The total time spent on the case (including the international examiner’s time) is 125 hours. The international examiner spent 15 hours on the case, therefore the entry in this field should be 12 (15/125=12).
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Enter the percentage of the exam results (agreed and unagreed) that is due to the international examiner’s involvement.
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Exam results is $10,000. The portion attributable to the international examiner is $1,500, therefore the entry in this field should be 15 (1,500/10,000=15).
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When a Form 720 is established on AIMS, the data base contains only one abstract code which is located in the activity code field. All activity codes that were examined must be entered in Item 404.
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Entries for the total time spent on the case and all assessments are made on the front of the Form 5344.
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Entries for AIMS statistical reporting purposes are made in Item 404a – 404d on the back of the form.
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Enter the abstract code for each abstract that was examined.
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If more than one abstract code was examined, do not enter an abstract code that was no-changed on the first line of 404a, unless the disposal code that was entered on the front of the Form 5344 is also a no-change disposal code. Enter the abstract code that resulted in a change on the first line if the disposal code on the front of the Form 5344 is a changed disposal code. If the disposal code for the first abstract code is not consistent with the disposal code entered in Item 13, the case will appear on the Accomplishment Error Register and the results of the audit will not be reflected on the AIMS tables until the correction is input.
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Enter the appropriate disposal code for each abstract code examined.
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See IRM 4.4.12.4.67.1.
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Enter the time charged to the examination for each abstract code examined.
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The total of all Item 404c entries must total the amount entered in Item 28.
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Effective 1/1/2004, time can be reported in 15 minute intervals. Enter the following number in the fraction section of Item 28.
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Enter a "3" for 15 minutes
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Enter a "5" for 30 minutes
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Enter a "7" for 45 minutes
-
-
Enter the tax adjustment amount for each abstract code examined.
-
The total of all Item 404d entries must equal the total of the computer generated Examination results.
-
When a taxpayer has reported an excise tax under an incorrect abstract number, Examination will adjust the excise tax to report it under the proper abstract. In such cases, there will be no additional tax that is assessed. These offsetting adjustments are closed with Disposal Code 01. Item 15 will reflect the decrease (-) to the incorrect abstract number and the corresponding increase (+) to the correct abstract, Item 404 a–c will reflect the abstract codes, disposal code and abstract time for each abstract reflected in Item 15. However, the exam results entered in Item 404d is zero. Zero abstract results are entered because the Item 404 results must equal the Exam Results which in flip-flop cases are zero.
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Below, are procedures for processing returns with multiple abstract codes.
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If multiple abstract codes are examined and one is a no-change, do not list the no-change code first. If the disposal code entered in Item 13, is greater than 02, the case will appear on the accomplishment error register.
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If more than 9 abstract codes are examined, check the box in the lower right portion of this item and attach additional Forms 5344 as necessary.
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If the examination included RBP (claim for refund), the RBP time and dollars protected must be entered on the front of the Form 5344. This figure must represent the total RBP time and RBP dollars protected for all abstract codes. The results for the RBP will be reflected on the AIMS tables, under the primary Abstract Code on the AIMS data base. Change the abstract code to represent the abstract that the claim is filed against if it is not already the primary code. The Item 404 entries must NOT include RBP figures.
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Required entry for all examined returns worked by:
-
Revenue Agents in a 1XXX Employee Group Codes,
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Tax Auditors/Tax Resolution Representative in 2XXX Employee Group Codes, and
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Correspondence Examination Examiners in 5XXX Employee Group Codes.
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Exempt from this requirement are TEFRA cases in 58XX Employee Group Codes.
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The information entered must be from the primary return which is the initial return that started the examination.
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If several returns were assigned initially, the Examining Officer will designate one return as primary.
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An audit label may be used but the name control must be lined out and Item 408 entered separately.
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Missing or conflicting information will cause a terminal reject.
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Only Item 408 needs to be completed.
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Enter "P" in Item 408. The computer will generate the primary return information from the front of the F5344.
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Required on all cases (except employee group code 58XX)
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To determine whether the account is full paid or part paid, consider the tax, penalty and interest, adjusted by credits per the examiner’s report. Use the interest amount from the examiner’s report even if a payment is secured at a later date.
Example:
Examiner’s report dated June 1, 1997, shows a balance due of $5,000, interest is $100. A check is received on August 1, 1997 for the entire amount per the RAR. Consider this full paid even though there will be 2 more months of interest charged after the assessment is made.
-
It is not a requirement to check Master File for payments.
-
Select the code based on the payment status of the account at the time of closing from the group.
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No other codes may be used without Headquarters approval.
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Following are the valid payment codes.
F = full paid Amount shows on RAR paid in full; may be unpaid accruals - Frozen refund or payment which covers the balance due in full. P = part paid Includes frozen refund or payment does not cover balance due (also used where there will be an offset from other tax periods that will not completely satisfy the liability). N = no payment Changed cases when refund was not frozen, no payment or agreement received, no change cases, overassessment cases, Appeals cases if no payment received. O = total offset Overassessments from other tax periods that will offset all of the tax.
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Required on all cases except EGC 58XX.
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Select the code base on whether an installment agreement was secured.
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I = Installment agreement received (This includes Estate Tax Return installment agreements under IRC Section 6166.)
-
C = Coordinated with collection
-
N = No installment agreement received
-
-
Effective January 1, 1999, this field will replace Item 34, Adjustment Amount field for delinquent returns secured by Examination and forwarded to the campus for the processing of the TC 150.
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Enter the balance due or refund amount (excluding penalties) per the delinquent return.
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Enter the amount of the ordinary net income/loss or special allocation items per the delinquent return.
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Enter the total of all abstract codes in Item 414. DO NOT make an entry in Item 404 for the delinquent amount. The amount entered in Item 414 will be credited to the Activity/Abstract Code that appears on the AMDISA. You must change the Activity/Abstract Code if you want the delinquent return credited to a different code.
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In the past, if a taxpayer filed an amended return with the campus, even if it was due to an ongoing examination, we could not take "credit" for the adjustment. To accurately capture the examiners’ efforts, a new Item 415 is being initiated. This entry is only valid if Master File shows that the examination was started BEFORE the taxpayer filed the amended return or an original return if the TC 150 is a Substitute for Return (SFR). Enter the amount of the TC 29X that has posted to Master file if the return was filed, as a result of an ongoing examination. A current transcript must be included in the case file supporting the amount entered in Item 415. The TC 42X date must be prior to the TC 29X.
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Enter the amount of the TC 29X less any credits posted. In most cases this is the balance/refund due.
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An examination is being conducted an business expenses are being disallowed resulting in a proposed deficiency of $20,000. Instead of signing an agreement, the taxpayer sends an amended return to the campus no longer claiming these expenses. The campus assesses additional tax in the amount of $20,000. If the TC 290 for $20,000 posts AFTER the TC 42X, enter $20,000 in Item 415.
-
An examination is being conducted an business expenses are being disallowed resulting in a proposed deficiency of $20,000. Instead of signing an agreement, the taxpayer sends an amended return to the campus reporting additional income resulting in additional tax of $10,000. Since this was not an issue included in the examination, no entry is allowed in Item 415 EVEN if the TC 290 was posted after the TC 420. The $20,000 for the disallowance of the business expenses will be reflected in the TC 300 amount.
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An examination is being conducted on a non-filer. The TC 150 posted at Master File represents the SFR that Exam submitted. The taxpayer sends an original return to the campus and the center assesses $10,000 in tax and $3,000 in withholding credit. Enter $7,000 in Item 415 IF the TC 42X date is prior to the TC 29X. If the SFR had not posted, delinquent return (Item 414) procedures should be followed if the TC 42X preceded the TC 150.
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For regular closures see IRM 4.4.28, Terminal Input.
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Staple the Form 5344 to the front of the tax return. It is not necessary to send the Form 5344 to the campus as a source document.
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For offices that are on the LAN system, the RGS data is stored on the LAN, other offices store the data on the disk that is retained with the case file.
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Upon completion of the examination, the examining officer is responsible for completing the Form 5344 screens, running the validation program, and printing the validated Form 5344. Most of the entries that were manually entered by the Examination group or by Case Processing Support now flow from the Examining Officers report to the RGS Form 5344. The remaining items are completed with simple yes/no answers, system prompts, and pop-up screens.
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For cases that are being closed from the group unagreed (NOT CLOSING TO APPEALS), use Disposal Code 10 for the purpose of running the validating program. Once a statutory notice is issued and the case defaults, the Form 5344 will already be prepared. If the case requires special handling or it does not default, a revised Form 5344 will be generated.
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The grade of a case must be entered for validation purposes. The Examining Officer will use the pop-up screens provided for completing this entry. The GS-TYPE entry 11 and below, 12 or 13, will be completed as follows:
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If the manager has made a determination as to the grade, enter that GS-TYPE.
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If the grade determination has not been made by the manager, the Examining Officer will select the GS-TYPE corresponding to their current GS level. The group manager will make the final grade determination and if necessary revise the Form 5344.
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Closing Personnel may be in the groups or a central location depending on local option. They will receive the case files from the Examining Officers for final processing. Cases requiring special handling will be identified by Form 3198.
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RGS cases not identified as requiring special handling, are not required to have the Form 5344 verified by the employee assigned to close the case if the Form 5344 has been validated. (If Item 36, Hash Total is present. F5344 has been validated). Since the information appearing on the Form 5344 flows from the RGS Examination Report and the validation program has been utilized by the examining officer, additional verifying of the entries is no longer required. These files should be assembled, closed through AIMS, and shipped to the campus.
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RGS cases identified as requiring special handling should be processed by a Special Processing Examiner or locally designated personnel. Upon final resolution of the case, a revised Form 5344 will be generated and the same closing procedures as stated above.
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EOAD Data Capture Procedures
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All SBSE and LMSB Forms 1040, 1120, 1120S, 1065, and Employment Tax closed case files should include a data diskette. All diskettes should be labeled with the taxpayer’s name and TIN. The labels of diskettes not created with RGSNT should also include the business unit from which the case originated, and the software used to create the diskette [RGS (DOS), BNA CTAA, or Employment Tax]. Exceptions to this requirement would include:
(1)Closed cases completely processed in a Local Area Network (LAN) environment that do not require diskettes.
(2) Cases forwarded for processing where RGSNT was not used that are so identified as such by a special handling notice. -
All SBSE and all LMSB diskettes should be removed from the case file and processed to capture EOAD data using the appropriate software for the diskette in question. CPS personnel should presume that diskettes were created using RGSNT unless otherwise labeled. Since the appropriate data capture software may change from time to time, the AIMS website will provide up to date information on what software should be used and how to secure updated versions. For cases being forwarded to CPS without diskettes for closure entirely in a LAN environment, EOAD data will be captured through the LAN using software provided for this purpose.
-
EOAD data from unagreed cases forwarded for issuance of a statutory notice should not be captured until after the case closes by default or other method.
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EOAD data from unagreed cases forwarded to Appeals should be captured prior to the case file being forwarded to Appeals using one of the two diskettes provided in these cases.
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All SBSE and LMSB closed cases should also include a Compliance Evaluation Screen (CES) printout that should have been placed in the case file on top of the AIMS Closing Document, Form 5344. Exceptions to this are SBSE cases worked with RGS (DOS) and cases not worked with the software cited in subsection 4.4.12.7(1)(a)(2) above. Closed cases forwarded to CPS by LAN from SB/SE and LMSB that do not require closed case diskettes must still include CES printouts. Any case requiring the inclusion of a closed case diskette and/or a CES printout that is missing these items should be returned to the originating group with a request to provide the missing item(s).
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Within five days after the end of the AIMS Cycle, data collected by the various EOAD data collection programs will be forwarded to Headquarters using data encryption and transmission software provided for this purpose by the EOAD office. Procedures for both the accumulation of EOAD data and its transmission will vary based on software being used over time. The AIMS website will provide updated procedures for this purpose.
-
-
All data disks, regardless of source, will be forwarded to the Area Office Compliance Automation Specialist for recycling once EOAD procedures in 4.4.12.7.(1) are completed.
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If a case is being forwarded to Appeals, the disks must remain in the case file. Upon final closing the disk will be disposed of as stated in IRM 4.4.12.7.(2).
Reference: Text 4.4.1 2.4.26
Reference Numbers for:
| Form 706 | Estate Tax Return | MFT 52 |
| Form 706GS (D) | Generation-Skipping Transfer Tax Return for Distributions | MFT 78 |
| Form 706GS (T) | Generation-Skipping Transfer Tax Return for Terminations | MFT 77 |
| Form 709 | Gift Tax Return | MFT 51 |
| Item Reference Numbers (IREF) are used to update certain informational fields on the Master File and they do not adjust tax, credits or exam results. | ||
| VALID AIMS MFT'S |
MASTER
FILE FIELD TO ADJUST |
NOTES | ||||
|---|---|---|---|---|---|---|
| 51 | 52 | 77 | 78 | 074 | IREF GST Tax | When a decrease would reduce the posted amount to a negative amount, Master File will adjust the posted field to zero. IREF#’S 074–077, the total tax adjustment may consist of one or all of these types of tax depending on the dates of validity and whether adjustment to a specific tax is warranted. The SUM of the IREF#’s used to reflect the change in tax, must equal the TC 30X amount entered in Item 12 of the Form 5344. |
| – | B | * | * | 075 | Section 4981A Tax | Same as # 074. |
| – | B | * | * | 076 | Estate Tax | Same as # 074. |
| C | – | – | – | 077 | Gift Tax | Same as # 074. |
| – | * | * | * | 078 | Interest assessment for state death tax credit taken but not paid. The related dollar amount must be greater than zero. TC 340 must be present | |
| Credit Reference Numbers (CREF#) adjust tax, penalties or credits and are included in exam results. | ||||||
| CREF# | ||||||
| * | B | * | * | 680 |
If a positive amount is entered, a TC 240 will be posted and appropriate CP
210/220/910/920 issued. If a negative amount is entered, TC 241 will be posted and appropriate CP 210/220/910/920 issued. |
|
| D | B | * | * | 681 | Same as # 680 | |
| D | B | * | * | 682 | Same as # 680 | |
| E | B | * | * | 686 | Same as # 680 | |
| * | = | Valid for all tax periods |
| – | = | Not valid for this MFT or tax period |
| A | = | Valid after 8611 |
| B | = | Valid with tax period 0000 |
| C | = | Valid through 9012 |
| D | = | Valid after 7912 |
| E | = | Valid after 8909 |
Reference: 4.4.12.4.26
Reference Numbers for:
| Form 720 | Excise Tax Return | MFT 03 |
| The following are the IRS Numbers found on the Form 720, preceded by "0" . These codes are used to update the excise trust funds. They do not adjust tax, credits or exam results. Effective January 1995, reference numbers 001–199 are all valid for all tax periods on AIMS. Make sure the number entered is present on the Form 720 for the tax period used. |
| IREF# | ||
|---|---|---|
| 001 | — | |
| 002 | — | |
| 003 | — | |
| 004 | — | |
| 005 | — | |
| 006 | — | |
| 007 | — | |
| 008 | — | |
| 009 | — | |
| 010 | — | |
| 011 | — | IRC 444 FY Election TXPD: 8806, 8903, 9003 |
| 012 | ||
| 013 | ||
| 014 | — | Gasoline (Noncommercial Aviation) |
| 015 | — | Reserved |
| 016 | — | Imported Petroleum Products Superfund |
| 017 | — | Imported Chemical Substance |
| 018 | — | Domestic Petroleum Oil Spill |
| 019 | — | Imported products Containing ODCs |
| 020 | — | Floor Stock—Ozone Depleting Chemicals |
| 021 | — | Imported petroleum Products Oil Spill Tax |
| 022 | — | Toll Tele., Teletypewriter Exchange, and Local Tele. Services |
| 023 | — | Reserved |
| 024 | — | Reserved |
| 025 | — | Reserved |
| 026 | — | Transportation of persons by Air |
| 027 | — | Use of International Air Travel Facilities |
| 028 | — | Transportation of property By Air |
| 029 | — | Transportation of persons by Water |
| 030 | — | Policies Issued by foreign Insurers |
| 031 | — | Obligations not in Registered form (TIN) |
| 032 | — | Pistols & Revolvers end 9012 AT&F 1–1–91 |
| 033 | — | Truck/Bus Chassis, Bodies, Tractors |
| 034 | — | Reserved |
| 035 | — | Reserved |
| 036 | — | Coal—Underground Mined $1.10 per ton |
| 037 | — | Coal—Underground Mined $.55 per ton |
| 038 | — | Coal—Surface Mined $1.10 per ton |
| 039 | — | Coal—Surface Mined $.55 per ton |
| 040 | — | Gas Guzzler |
| 041 | — | Fishing Equipment—Rods, Lures |
| 042 | — | Electric Outboard Motors and Sonar Devices |
| 043 | — | Reserved |
| 044 | — | Bow and Arrows, and Crossbows |
| 045 | — | Reserved |
| 046 | — | Firearms (Not #32) End 9012 AT&F 1–1–91 |
| 047 | — | Reserved |
| 048 | — | Reserved |
| 049 | — | Shells & Cartridges end 9012 AT&F 1–1–91 |
| 050 | — | WPT—Producers. F–6047 Repealed 8–23–88 |
| 051 | — | Alcohol Sold—Not Used as Fuel |
| 052 | — | WPT—Annual Filer Due YY03 Repealed 8–23–88 |
| 053 | — | Domestic petroleum Superfund |
| 054 | — | Chemicals |
| 055 | — | Reserved |
| 056 | — | WPT—Withheld from Prod. |
| 057 | — | Floor Stock—Ties not #66 |
| 058 | — | Gas Sold to Make Gasohol—10% |
| 059 | — | Gasohol containing at least 10% alcohol |
| 060 | — | Diesel Fuel |
| 061 | — | Special Motor Fuel |
| 062 | — | Gasoline |
| 063 | — | Reserved |
| 064 | — | Inland Waterways Fuel Use Tax |
| 065 | — | Floor Stock—Gasoline. 1–1–88 |
| 066 | — | Tires (Highway-type) |
| 067 | — | Floor Stock—Gasohol. 1–1–88 |
| 068 | — | Reserved |
| 069 | — | Aviation Fuel—(Other than gasoline) |
| 070 | — | Floor Stock—Diesel for Use in Trains .025 12/1/90 |
| 071 | — | Diesel Fuel for Use in Trains |
| 072 | — | Floor Stock—Gas to Make Gasohol |
| 073 | — | Gasoline Sold for Gasohol Production—7.7% |
| 074 | — | Gasoline Sold for Gasohol production—5.7% |
| 075 | — | Gasohol—7.7% |
| 076 | — | Gasohol—5.7% |
| 077 | — | LUST—Aviation Fuel Non-Commercial |
| 078 | — | Diesel Fuel for use in certain intercity buses |
| 079 | — | Other Alcohol Fuels |
| 080 | — | Unidentified (Only decreases are valid—must increase the correct fund) |
| 081 | — | DPT Vaccine |
| 082 | — | DT Vaccine |
| 083 | — | MMR Vaccine |
| 084 | — | Polio Vaccine |
| 085 | — | Floor Stock—Diesel |
| 086 | — | Floor Stock—Other Alcohol Fuels |
| 087 | — | Floor Stock—Aviation Fuel .035 |
| 088 | — | Floor Stock—Diesel $.245 |
| 089 | — | Total Vaccine Tax |
| 090 | — | Luxury Tax—Airplanes 250K |
| 091 | — | Luxury Tax—Boats |
| 092 | — | Luxury Tax—Cars |
| 093 | — | Luxury Tax—Furs |
| 094 | — | Luxury Tax—jewelry |
| 095 | — | Reserved |
| 096 | — | Reserved |
| 097 | — | Reserved |
| 098 | — | Ozone-Depleting Chemicals (ODCs) |
| 099 | — | Expired/Repealed |
| 100 | — | Reserved |
| 101 | — | Compressed Natural Gas |
| 102–185 | Reserved | |
| 186 | — | Highway Use Tax |
| 187–199 | Reserved | |
| Credit Reference Numbers (CREF#) adjust tax, penalties or credits. Adjustments to tax and credits are included in exam results. | ||
| CREF# Item 15 on Form 5344 | ABS# Item 404a on Form 5344 | |
| 322 | 022 | Local telephone service, toll telephone service and teletypewriter exchange service |
| 323 | 101 | Compressed natural gas |
| 324 | 014 | Aviation gasoline (other than CRN 354) |
| 326 | 026 | Transportation of persons by air |
| 327 | 027 | Use of international air travel facilities |
| 328 | 028 | Transportation of property by air |
| 329 | 029 | Transportation by water |
| 340 | 040 | Gas guzzler |
| 341 | 041 | Sport fishing equipment |
| 342 | 042 | Electric outboard motors and sonar devices |
| 344 | 044 | Bows |
| 345 | 020 | Ozone-depleting chemicals (floor stocks) |
| 346 | 035 | Kerosene (other than CRNs 347 and 348) |
| 347 | 035 | Nontaxable use of undyed kerosene in certain intercity and local buses |
| 348 | 035 | Nontaxable use of undyed kerosene in trains |
| 349 | 019 | ODC tax on imported products |
| 350 | 060 | Nontaxable use of undyed diesel fuel in certain intercity and local buses |
| 351 | 051 | Alcohol sold as but not used as fuel |
| 352 | 061 | Nontaxable use of LPG in certain intercity and local buses |
| 353 | 060 | Nontaxable use of undyed diesel fuel in trains |
| 354 | 014 | Nontaxable use of aviation gasoline in commercial aviation (other than foreign trade) |
| 355 | 069 | Nontaxable use of aviation fuel in commercial aviation (other than foreign trade) |
| 356 | 058 | Use of gasoline for 10% gasohol blending |
| 357 | 073 | Use of gasoline for 7.7% gasohol blending |
| 358 | 058 | Gasoline for 10% gasohol |
| 359 | 059 | 10% gasohol |
| 360 | 060 | Diesel fuel (other than CRNs 350 and 353) |
| 361 | 061 | LPG (other than CRN 352) |
| 362 | 062 | Gasoline |
| 363 | 074 | Use of gasoline for 5.7% gasohol blending |
| 364 | 064 | Inland waterways fuel use |
| 365 | 196 | Form 2290 |
| 366 | 066 | Highway-type tires |
| 367 | 197 | Form 11-C |
| 368 | 198 | Form 730 |
| 369 | 069 | Aviation fuel (other than CRNs 355 and 377) |
| 370 | 102 | Arrow components (IRS no. 102) |
| 371 | 071 | Dyed diesel fuel used in trains |
| 373 | 073 | Gasoline for 7.7% gasohol |
| 374 | 074 | Gasoline for 5.7% gasohol |
| 375 | 075 | 7.7% gasohol |
| 376 | 076 | 5.7% gasohol |
| 377 | 077 | Aviation fuel for use in commercial aviation (other than foreign trade)(other than CRN 355) |
| 378/078 | Dyed diesel fuel used in certain intercity or local buses | |
| 379 | 079 | Other fuels |
| 380 | 030 | Foreign insurance |
| 381 | 031 | Obligations not in registered form |
| 382 | 036 | Coal-underground mined (per ton) |
| 383 | 033 | Truck, Trailer, and semitrailer chassis and bodies, and tractors |
| 384 | 037 | Coal-underground mined (% of sales price) |
| 385 | 038 | Coal-surface mined (per ton) |
| 386 | 039 | Coal-surface mined (% of sales price) |
| 392 | 092 | Passenger vehicles |
| 397 | 097 | Vaccines |
| 398 | 098 | Ozone-depleting chemicals |
| 680 | — | If a positive amount is entered, a TC 240 will be posted and appropriate CP 210/220/910/920 issued. If a negative amount is entered, a TC 241 will be posted and appropriate CP 210/220/910/910 issued. |
| 686 | — | Same as # 680 (Valid after 8909) |
| Reference: IRM 4.4.12.4.26. |
| Reference Numbers for: |
| Form 941 Employer's Quarterly Federal Tax Return | MFT 01 |
| Form 942 Employer's Quarterly Tax Report for Household Employees | MFT 04 |
| Form 943 Employer's Annual Tax Return for Agricultural Employees | MFT 11 |
| Form 945 Payer's Annual Tax Return | MFT 16 |
| Item Reference Numbers (IREF) are used to update certain informational fields on the Master File and they do not adjust tax, credits or exam results. Form 4668, Employment Tax Examination Changes Report, contains the appropriate reference numbers which should be entered in Item 15, Form 5344. | |
|
VALID AIMS MFT'S TO ADJUST |
MASTER FILE FIELD | NOTES | ||||
|---|---|---|---|---|---|---|
| 01 | 04 | 11 | 16 | IREF | ||
| * | * | * | * | 003 | Adj. Total Tax Withheld (01, 04, 11) | The sum of #'s 003, 007 and 008, must equal the TC 30X amount. |
| * | * | * | - | 004 | <9103 Tax. FICA Wages
Pd (01) >9102 SSA Wages (01/16) Total Cash Wages (04) Taxable Cash Wages (11) |
When a decrease would reduce the posted amount to a negative amount, MF will adjust the posted field to zero. Posts IREF# and amount with the posted TC 30X. |
| * | – | – | - | 005 | Taxable Tips Reported (01) | Same as IREF 004 |
| * | * | * | * | 007 | Adj. Total FICA Tax (01,
11, 16) <9103 Adj. Total of FICA Tax (04) >9102 Adj. SSA & Medicare Tax (04) |
Same as IREF 004. Also,
see #003. Same as IREF 004 Same as IREF 004 |
| * | UU | UU | UU | 008 | Adjusted Backup Withholding (01) | Same as IREF 004. Also, see #003. |
| HH | HH | HH | - | 072 | Tips Deemed Wages (01) | Same as IREF 004. |
| II | II | II | - | 073 | <9103 Taxable Hospital (01) Insurance Wages >9102 Medicare Wages & Tips (01/16) Total Medicare Wages (04/11) |
Same as IREF 004 |
| * | * | * | - | 079 | None | ETE/ETAP IRC 3509 Rate: Posts IREF # and amount. Amount must be zero with the posted TC 30X. |
| * | – | * | * | 184 | Adj. to Withholding (01, 11, 16) | None |
| * | – | * | * | - | Adj. to FICA (01, 11, 16) | None |
| Credit Reference Numbers (CREF) adjust tax or credits and are included in exam results. | ||||||
| 01 | 04 | 11 | 16 | CREF | ||
| * | * | * | – | 680 None | If a positive amount is entered a TC 240 will be posted and CP 210/220/910/920 issued. If a negative amount is entered, a TC 241 will be posted and appropriate CP 210/220/910/920 issued. | |
| A | A | A | A | 686 None | Same as # 680 | |
| T | T | T | - | 766 None | Generates TC 766 | |
| T | T | T | - | 767 None | Generates TC 767 | |
| * | = Valid for all tax periods | |||||
| – | = Not valid for this MFT | |||||
| A | = Valid after 198909 | |||||
| T | = Valid after 197908 | |||||
| HH | = Valid before 198812 and after 199312 | |||||
| II | = Valid after 198502 | |||||
| UU | = Valid after 199411 | |||||
| Reference: IRM 4.4.12.4.26. | ||
| Reference Numbers for: | ||
| Form 1040 | Individual Income Tax Return | MFT 30 |
| For Form 1040 only, AIMS has categorized all the following numbers as CREF numbers although they are really both IREF and CREF. Unless specified below, the CREF number updates an informational field at Master File and is not included in exam results. | ||
| VALID AIMS MFT 30 |
MASTER
FILE FIELD TO ADJUST |
NOTES | |
|---|---|---|---|
| IREF# | |||
| 003 | Valid after 199511 - Household Employment Tax — Amounts may be positive or negative but may not equal zero. If decreased below the amount posted at Master File, the transaction will unpost (UPC 189). |
||
| 004 | |||
| 007 | |||
| 073 | |||
| CREF# | |||
| 221 | - Valid
through 198908 — Tax Motivated Transaction Amt (TMT) #222 and TC 340/341 are required entries with #221. — See IRM 20.1 Penalty, and IRM 20.2 Interest, for more information. |
||
| 222 | - Valid
through 198908 — #222 reflects the 120% interest computed on the TMT and may be a positive or negative entry. #221 and TC 340/341 are required entries with #222. For returns due prior to 12/31/84, the normal interest on the TMT from the due date of the return to 12/31/84, MUST BE INCLUDED in the #222 amount. — See IRM 20.1 Penalty for more information. |
||
| 301& | F4136-Gasoline | —ALL CREF#’s 301–312, 318, 766 or 767 are added together and either a TC 766 or 767 is generated. Invalid 1/2002 - use 362 | |
| 302& | F4136-Gasoline to make Gasohol | Same as
# 301 Invalid 1/2002 - use 356, 357 or 363 |
|
| 303& | F4136-Diesel Fuel | Same as
# 301 Invalid 1/2002 - use 346, 347, 350 or 360 |
|
| 304& | F4136-Special Motor Fuel | Same as
# 301 Invalid 1/2002 - Use 352 or 361 |
|
| 305& | F4136-Diesel Fuel Used in Itrc Bus | Same as
# 301 Invalid 1/2002 - Use 348 or 353 |
|
| 306$ | Reserved | Valid for 197901 through 198809 | |
| 307& | F4136-Gasoline used in Aviation | Same as
# 301 Invalid 1/2002 - Use 324 or 354 |
|
| 310& | F4136-Aviation Fuel-Commercial | Same as
# 301 Invalid 1/2002 - use 355, 369, or 377 |
|
| 311$ | Ovrpd WPT Credit | - Valid
for 198003 through 198812 - Same as # 301 |
|
| 312& | F4136-Gasohol Cr | - Valid
after 198003 - Same as # 301 Amount cannot be>$200 Invalid 1/2002 - use 359, 375 or 376 |
|
| 314* | Energy Consrvtn | - Valid
after 197812 - Amount cannot be >$300 |
|
| 315* | Renewable Energy Source | - Valid
after 197812 - If tax period <8001 amount cannot be >$2,200 — If tax period >7912 amount cannot be >$4,000 |
|
| 316* | Energy Credit Carryover | - Valid
for 197910 through 198712 - If tax period <8001 amount cannot be >$2,500 — If tax period >7912 amount cannot be >$4,300 |
|
| 317* | Energy Credit | - Valid for 197810 through 198712 | |
| 318& | - Valid
after 198409 - Same as # 301 |
||
| 319 | Invalid—Use #312 | ||
| 324 | Aviation gasoline (IRS No. 14) (other than CRN 354) | ||
| 326 | Invalid—Use #301 | ||
| 327 | Invalid—Use #301 | ||
| 330& | - Valid
for all tax periods - Adj. to Tax Withheld at Source (Generates TC 766/767) |
||
| 331& | - Valid
for all tax periods - Adj. to Tax Withheld Sect. 1446 (Generates TC 766/767) |
||
| 332& | - Valid
for all tax periods - Adj. to Form 8288A Withheld (Generates TC 766/767) |
||
| 333& | - Valid
for all tax periods - Adj. to Form 1042S (Generates TC 766/767) |
||
| 334& | - Valid
after 197912 - Adj. to Elected Deferral Amount (Generates TC 766/767) |
||
| 335 | - Valid
after 199711 - Household Employment Tax — May be positive or negative but not equal to zero. If decreased below the amount posted at Master File, the transaction will unpost (UPC 189). |
||
| 336*& | - Valid
199812 and subsequent - Child Care Tax Credit (Generates TC 766/767). Will unpost if you attempt to decrease below zero. |
||
| 338 | - Valid 200012 through 200111 | ||
| 346 | Kerosense | - Valid for all tax periods | |
| 347 | Nontaxable use of unyed kerosene in buses | - Valid for all tax periods | |
| 348 | Nontaxable use of undyed kerosene in trains | - Valid for all tax periods | |
| 350 | Nontaxable use of undyed diesel fuel in buses | - Valid for all tax periods | |
| 352 | Nontaxable use of LPG in buses | - Valid for all tax periods | |
| 353 | Nontaxable use of undyed diesel fuel in trains | - Valid for all tax periods | |
| 354 | Nontaxable use of aviation gasoline in commercial aviation | - Valid for all tax periods | |
| 355 | nontaxable use of aviation fuel in commercial aviation | - Valid for all tax periods | |
| 356 | Use of gasoline for 10% gasohol blending | - Valid for all tax periods | |
| 357 | Use of gasonline for 7.7% gasohol blending | - Valid for all tax periods | |
| 359 | 10% gasohol | - Valid after 198003 | |
| 360 | Diesel fuel (other than CRNs 350 and 353) | - Valid for all tax periods | |
| 361 | LPG (other than CRN 3520 | - Valid for all tax periods | |
| 362 | Gasoline | - Valid for all tax periods | |
| 363 | Use of gasoline for 5.7% hasohol blending | - Valid for all tax periods | |
| 369 | Aviation fuel | - Valid for all tax periods | |
| 375 | 7.7% gasohol | - Valid after 198003 | |
| 376 | 5.7% gasohol | - Valid after 198003 | |
| 377 | Aviation fuel for use in commercial aviation | - Valid for all tax periods | |
| 402 | - Valid
for 197810 through 198011 - Obsolete/Can no longer increase. |
||
| 403$ | - Valid
for 197810 through 198011 - Dec. to Bus. Energy lnv. Cr. (Generates TC 637) |
||
| 680& | - Valid
for all tax periods - Increase or decrease to Grass Valuation Overstatement penalty. - For returns due after 12/31/89, #680 will be used for processing and assessment/abatement actions for the Accuracy Related Penalty (Generates TC 240/241) - See IRM 20.1 Penalty, for more information. |
||
| 681& | - Valid
after 197912 - Increase or decrease to Substantial Understatement of Liability Penalty — Generates TC 240/241 — See IRM 20.1 Penalty, for more information |
||
| 685& | - Valid
after 197511 - Penalty for Failure to Notify IRS of Claimed Tax Treaty of Claimed Tax Treaty Provisions. Interest is charged on the penalty from the return due date. Generates TC 240/241 |
||
| 686& | - Valid
for 200012 through 200111 - Fraudulent Failure to File Penalty. Generates TC 240/241 — See IRM 20.1 Penalty, for more information. |
||
| 764& | - Valid
after 197511 - Earned Income Credit Increase Generates TC 764 |
||
| 765& | - Valid
after 197511 - Earned Income Credit Decrease Generates TC 765 |
||
| 766& | - Valid
for all tax periods - Substantiated Credit Increase (Generates TC 766)/766 and #767 should be used when no other reference number is applicable. For example, in claim of right (IRC 1341) cases when an adjustment to credit is needed to satisfy the amount of decrease in tax. |
||
| 767& | - Valid
for all tax periods - Substantiated Credit Decrease—Generates TC 767. For more information see # 766. |
||
| 806& | - Valid
for all tax periods - Withholding Tax Credit increase—generates TC 806. |
||
| 807& | - Valid
for all tax periods - Withholding Tax Credit decrease |
||
| 808 | - Valid
after 198812 - Generates TC 807 |
||
| 878* | Primary SE Inc. | - Valid
for all tax periods - #889 is required if #878 is input — The amount entered should be the lesser of; a. the total adjustment to earnings subject to social security or b. the amount that brings the total to the maximum dollar limitation. — This entry is the amount of SE Income after it is reduced by the applicable percentage. — Do not make an entry if total SE income is less than $400 or if reduced to less than $400 reduce the field to zero. — When adjustments are made to both the primary and secondary taxpayer for SE Income adjustments, and the amounts entered for #878 and #879 are the same, to prevent a terminal reject, increase one of the reference # amounts by $1.00. — If there has been a change to SE Income but no income tax liability, process these reference item adjustments using Disposal Code 01 and enter the appropriate reference number and amount in Item 15. |
|
| 879* | Secondary SE Income | ||
| 881 | Total Positive Income (TPI) | - Valid
for all tax periods - None |
|
| 882* | All Saver's Certificate Exclusion | - Valid
198201 through 198412 - Enter the amount of change (limitation — $1,000 for single returns and $2,000 for joint returns) |
|
| 883 | - Valid
after 197912 - Alternative Fuels Production Credit Change. |
||
| 884 | - Valid
after 198009 - Alcohol Fuels Credit Change |
||
| 885*$ | Advanced EIC | - Valid
after 197911 - None |
|
| 886* | Taxable Income | - Valid
after 197711 - Net change to TI. If an audit adjustment is for a negative amount, enter only the amount that will reduce the TI to zero. An unpostable will occur if the amount input will reduce TI below zero. Example: The TI per return is $8,000. The audit adjustment is for $10,000. The correct #886 amount is $8,000. —If the TI per return is below zero, and the audit adjustment increases the taxable income to a to a positive amount, enter only the amount that exceeds zero. Example: the TI per return is -$5,000. The audit adjustment to TI is $7,000. The correct #886 amount is $2,000. — If the TI and AGI are adjusted by the same amount, input 888 only. Master File will update the 886 amount accordingly. — Effective 1/1/2004, AIMS will not allow the input of 886 and 888 for the same amount. Enter 888 only and MF will update the 886 amount accordingly. — If the TI and AGI are adjusted by different amounts, both amounts must be entered. — If the AGI is adjusted but there is no adjustment to the TI, a $0 must be entered in #886 to prevent the #886 amount from being updated by the #888 amount. — If there has been a change to TI or AGI but no income tax liability, process these reference item adjustments using Disposal Code 01 and enter the appropriate reference number and amount in Item 15. |
|
| 887* | Number of Exemptions | - Valid
after 197711 - The increase or decrease in the number of exemptions must be entered in the cents column, right justified and must not be preceded by a "0" . |
|
| 888 | Adjusted Gross Income | - Valid
after 197711 - The #888 amount must be the NET change to AGI, NOT the total corrected AGI. - If 888 is input without #886, the #886 field will automatically update for the same amount as the #888. - If the #888 amount is for a negative amount, only the amount needed to reduce the #886 amount to zero will be applied. - The automated process will not update the #886 field if the current #886 field is zero. - If there is no change in the #888 amount, do not enter #888. NEVER enter a zero. - If only an adjustment to #888 is needed and the #886 field should not be adjusted (and it is not already zero), input #886 for zero. - Effective 1/1/2004, AIMS will not allow the input of 886 and 888 for the same amount. Enter 888 only and MF will update the 886 amount accordingly. |
|
| 889* | Self-Employment Tax | - Valid
after 197711 - The amount entered with #889 MUST reflect the " TOTAL NET CHANGE" to SE tax and is a required entry if #878 and/or 879 is entered. - If a SE income adjustment does not affect the SE tax, input #889 with a "zero" amount. - See the Social Security Administration Adjustments Chapter. |
|
| 890 | - Valid
after 198312 - Potentially Subject to Backup Withholding Ind. will be set and a TC 924 will be generated if the #890 amount is >$499. - Form 3198, Special Handling Notice, will reflect the amount if underreported income. |
||
| 891* | Primary SS Tip Income | - Valid
after 199011 - Used when there is unreported tip income. - For more information see Social Security Administration Adjustments Chapter. |
|
| 892* | Secondary SS Tip Income | ||
| 895* | Primary Medicare SE Income | - Valid
after 199111 - Amount of SE income adjustment that is subject to Medicare tax. - Do not enter an amount that will cause the total to exceed the maximum dollar limitation. |
|
| 896* | Secondary Medicare SE Income | ||
| 897$ | - Valid
for all tax periods - Adj. to DMF offset |
||
| 898* | Primary Medicare Tip Income | - Valid
after 199111 - Amount of unreported tip income adjustment that is subject to Medicare tax. - Do not enter an amount that will cause the total to exceed the maximum dollar limitation. |
|
| 899* | Secondary Medicare Tip Income | ||
| 903 | - Valid after 199511 - Household Employment Taxes — May be positive or negative but not equal to zero. - If decreased below the amount posted at Master File, the transaction will unpost (UPC 189). |
||
| 904 | |||
| 907 | |||
| 973 | |||
| 993 | - Valid
after 199511 - Related money amount fields must contain 9 numbers which are SSN’s |
||
| 994 | - Same as 993 | ||
| 999 | - Valid
for all tax periods - When separate returns are changed to a joint return, enter 999 for "0" amount for the spouse whose account is being reduced to zero. The entry is made in the decrease portion if Item 15, right justified in the cents column. The purpose of the entry is to prevent the case from subsequently appearing in the service center multiple filer program. |
||
| * Transaction will unpost if attempting to reduce Master File field to <zero ($10 tolerance). | |||
| & Adjusts tax, or credits. Tax and credits are included in exam results. | |||
| $ Adjusts tax, or credits but not included in Exam results. | |||
| Reference: IRM 4.4.12.4.26. |
| Reference Numbers for: |
| Form 99C, | Farmer's Cooperative Association Income Tax Return | MFT 33 |
| Form 1041, | U.S. Fiduciary Income Tax Return | MFT 05 |
| Form 1042, | Annual Withholding Tax Return for U.S. Source Income of Foreign Persons | MFT 12 |
| Form 1066, | U.S. Real Estate Mortgage Investment Conduit Income Tax Return | MFT 07 |
| Form 1120, | U.S. Corporation Income Tax Return | MFT 02 |
| Valid Aims MFT's |
Master
File Field To Adjust |
Notes | ||||
|---|---|---|---|---|---|---|
| 02/33 | 05 | 07 | 12 | IREF | ||
| – | – | – | TT | 006 | Forms 1042S tape filed. | |
| – | – | – | TT | 009 | Forms 1042A paper filed. | |
| – | – | – | * | 011 | Gross Income Paid | If negative, a TC 770 for a negative amount is required. |
| Credit Reference Numbers (CREF#) adjust tax, penalties, or credits and are included in exam results. | ||||||
| 02 | 05 | 07 | 12 | CREF | ||
| D | C | – | – | 221 | None | Posts CREF# and amount with posted TC 30X. Identifies adjustment amount subject to 120% interest. |
| D | C | – | – | 222 | None | Posts CREF# and amount with posted TC 30X. Identifies 120% interest amount. |
| - | - | - | - | 301 | None | No Longer Valid |
| - | - | - | - | 302 | None | Same as # 301 |
| - | - | - | - | 303 | None | Same as # 301 |
| - | - | - | - | 304 | None | Same as # 301 |
| - | - | - | - | 305 | None | Same as # 301 |
| R | R | – | – | 306& | None | All CREF#’s 301–312, 318, 766 and 767’s are added together and either a TC 766 or 767 is generated. See Form 4136 for title of code. |
| - | - | - | - | 307 | No Longer Valid | |
| - | - | - | - | 310 | No Longer Valid | |
| X | X | – | – | 311& | None | Same as # 306 |
| - | - | - | - | 312 | No Longer Valid | |
| HH | HH | – | – | 318 | None | Same as # 306 |
| – | – | – | – | 319& | None | Invalid-use # 312 |
| JJ | – | – | – | 320+ | None | Accumulated Earnings Tax—Triggers special interest computation at Master File. |
| * | – | – | – | 321& | None | Personal Holding Company Tax— "+" or "− " is valid. An unpostable will occur if you attempt to use the increase to CREF# 321 to offset a decrease in tax in the same cycle. You must do a partial for a TC 300 for $0.00 with the # 321 and a hold code. Then input the decrease TC for the appropriate amount. |
| * | * | 324 | Aviation gasoline | |||
| KK | – | – | – | 325& | Used to report changes in environmental tax. | |
| – | – | – | – | 326& | Invalid-use # 301 | |
| – | – | – | – | 327& | Invalid-use # 301 | |
| * | * | - | 346 | Kerosene | ||
| * | * | - | 347 | NT undyed kerosene-buses | ||
| * | * | - | 348 | NT undyed kerosene-trains | ||
| * | * | - | 350 | NT undyed diesel fuel-buses | ||
| * | * | - | 352 | NT LPG - buses | ||
| * | * | - | 353 | NT undyed diesel-trains | ||
| * | * | - | 354 | NT aviation gasoline | ||
| * | * | - | 355 | NT aviation fuel | ||
| * | * | - | 356 | Gasoline 10% gasohol | ||
| * | * | - | 357 | gasoline 7.7% gasohol | ||
| Y | Y | - | 359 | 10% gasohol | ||
| * | * | - | 360 | Diesel fuel | ||
| * | * | - | 361 | LPG | ||
| * | * | - | 362 | Gasoline | ||
| * | * | - | 363 | Gasoline 5.7% gasohol | ||
| * | * | - | 369 | Aviation fuel | ||
| Y | Y | - | 375 | 7.7% gasohol | ||
| Y | Y | - | 376 | 5.7% gasohol | ||
| * | * | - | 377 | Aviation fuel | ||
| P | P | - | – | 402+ | Generates a TC 636 | |
| P | P | - | – | 403+ | Generates TC 637 | |
| * | * | * | – | 680 | If a positive amount is entered, a TC 240 will be posted and appropriate CP 210/220/910/920 issued. If a negative amount is entered, a TC 241 will be posted and appropriate CP 210/220/910/920 issued. | |
| AA | AA | - | – | 681 | Same as # 680 | |
| PP | – | - | – | 685 | Same as # 680 | |
| A | A | A | – | 686 | Same as # 680 | |
| * | * | – | – | 766 | Same as # 301 | |
| * | * | – | – | 767 | Same as # 301 | |
| LL | 806 | |||||
| LL | 807 | |||||
| W | W | – | – | 883& | Fuels for Non-Conventional Sources | |
| Z | Z | – | – | 884& | Alcohol Fuel Credit | |
| * | * | MM | – | 886+ | Income After Deductions (05, 07) | Posts CREF# and amount with posted TC 30X. |
| & Not included in Exam Results |
| + Adjusts informational field at Master File - Not included in Exam results. |
| * Valid for all tax periods |
| - Not valid for this MFT |
| C = Valid through 198908 |
| D = Valid through 198909 |
| P = Valid for 197810 through 198011 |
| R = Valid for 197901 through 198809 |
| X = Valid for 198003 through 198812 |
| Y = Valid after 198003 |
| AA = Valid after 197912 |
| HH = Valid for 198410 through 199608 |
| JJ = Valid through 198512 |
| KK = Valid after 198612 |
| LL = Valid after 198712 |
| MM = Valid after 198811 |
| PP = Valid after 198709 |
| TT = Valid after 199511 |
| NOL C/F Disallowed Amount (Item 44 on Form 5344) — This item is used if all or part of an NOL carryforward is disallowed if the carry forward year return is not picked-up. | ||
| NOL Indicator (Item 45 on Form 5344) — This item is used to identify the 3 types of NOL/Carryforward Returns that will be reflected on the NOL page of Table 37: | ||
| 1. | NOL’s examined: Enter a "1" in Item 45 for tax periods in which the taxable income line on the Form 1040 or 1120 is less than zero, i.e. 199712, Form 1120 Line 30. | |
| 2. | Carryback and/or carryforward tax periods RELATED TO THE NOL: Enter " 2" in Item 45 for all carryback and/or carryforward tax periods related to the case in which you entered a "1" in Item 45 even IF the NOLD was examined and the final result was a no change. | |
| 3. | Non-NOL year returns examined and adjustments are OFFSET by carry overs: Enter a "3" in Item 45 for tax periods in which adjustments on the return were offset either in part or full by a carryover if the carryforward year return is not picked-up. | |
| NON/Related Return Examples: | |||
|---|---|---|---|
| You made no adjustment to the 199712 NOL therefore did not pick up the related years. | |||
| 199712 Form 5344, Item 44 = leave blank | |||
| 199712 Form 5344, Item 45 = "1" | |||
| You made a $10,000 adjustment to the 199712 NOL that was carried back to 199412. | |||
| 199712 Form 5344, Item 44 = leave blank (There was no carryover) | |||
| 199712 Form 5344, Item 45 = "1" | |||
| 199412 Form 5344, Item 44 = leave blank | |||
| 199412 Form 5344, Item 45 = "2" | |||
| 199412 Form 5344, Item 12 = amount of tax assessed on the $10,000 adjustment | |||
| You made a $140,000 adjustment to the 199712 NOL. You picked-up the carryback years and applied $20,000 to 199412, $30,000 to 199512, $40,000 to 199612 but the $50,000 for the carryover year could not be applied since the 199812 return was not yet filed. | |||
| 199712 Form 5344, Item 44 = $50,000 (captures the carryforward amount disallowed) | |||
| 199712 Form 5344, Item 45 = "1" (NOL year) | |||
| 199412, 199512, 199612 Form 5344, Item 44 = leave blank | |||
| 199412, 199512, 199612, Form 5344, Item 45 = "2" (Related years) | |||
| 199412, 199512, 199612 Form 5344, Item 12 = amount of tax assessed on the $20,000, $30,000 and | |||
| $40,000 adjustments | |||
| You made a $140,000 adjustment to the 199612 NOL. You picked-up the carryback years and carryforward years and applied $20,000 to 199312, $30,000 to 199412, $40,000 to 199512 and $50,000 to 199712 | |||
| 199612 Form 5344, Item 44 = leave blank | |||
| 199612 Form 5344, Item 45 = "1" (NOL year) | |||
| 199312, 199412, 199512, 199712 Form 5344, Item 44 = leave blank | |||
| 199312, 199412, 199512, 199712 Form 5344, Item 45 = "2" | |||
| 199312, 199412, 199512, 199712 Form 5344, Item 12 = amount of tax assessed on the $20,000, | |||
| $30,000, $40,000 and $50,000 adjustments | |||
| Offset Examples: | |
|---|---|
| The 199712 return showed taxable income of −$75,000 (taxable income before NOLD = $125,000, NOLD = $200,000). You made a $50,000 adjustment to 199712 changing taxable income before NOLD to $175,000. Your $50,000 adjustment will be totally offset by the NOLD carryover of $200,000. The 199812 return has not been filed therefore cannot be picked up to adjust the carryover. The 199612 return was examined but no changed. | |
| 199712 Form 5344, Item 44 = $50,000 (Amt of adjustment offset by carryover) | |
| 199712 Form 5344, Item 45 = "3" (Offset year) | |
| 199612 Form 5344, Item 44 = leave blank | |
| 199612 Form 5344, Item 45 = "2" (Related years) | |
| The 199712 return showed taxable income of -$75,000 (taxable income before NOLD = -$25,000, NOLD = $50,000). You made a $100,000 adjustment to 199712 changing taxable income before NOLD to +$75,000 that is partially offset by the $50,000 carryover from 199612. The 199812 cannot be adjusted since it has not yet been filed. | |
| 199712 Form 5344, Item 44 = $25,000 (NOL C/F amt disallowed) + $50,000 (offset) | |
| 199712 Form 5344, Item 45 = "1" (Both "1" and "3" apply but "1" always takes precedence). | |
| 199712 Form 5344, Item 12 = amount of tax assessed on the $25,000 adjustment | |
| The 199612 return showed taxable income of -$75,000 (taxable income before NOLD = $125,000, NOLD form 199512 NOL carryover = $200,000). You made a $50,000 adjustment to 199612 changing taxable income before NOLD to $175,000. Your $50,000 adjustment will be totally offset by the 199512 NOL carryover of $200,000. The 199712 return is picked-up and $50,000 of the carryover disallowed. Since the 199712 return was adjusted, no entries in the NOL fields are warranted unless the 199512 NOL was examined and the 199612 and 199712 were related to the NOL. Then Item 45 would be "2" . | |