Reflected below are explanations for the line items on the Form 5599 that should be completed at the group level of review by the Specialist. The circled numbers correspond with the explanations on the sample Form 5599.

1 - TIN (P7-18, Form 5599) (Completed by Specialist) The Taxpayer Identification Number (TIN), i.e., EIN or SSN will be included on the audit label or must be entered in the left-most position.

2 - MFT (P21-22, Form 5599) (Completed by Specialist) The Master File Tax Code (MFT) or Non-Master File Tax Code (NMFT) must be entered. Refer to Document 11308, Government Entities Computer Systems Codes, for a complete listing of MFTs.

3 - Tax Period (P24-29, Form 5599) (Completed by Specialist) The correct tax period must be entered in YYYYMM format. For Forms 11C and 730, the beginning of the tax period must be entered.

4 - Name Control/Check Digit (P31-34, Form 5599) (Completed by Specialist)
The name control is the first four characters of the name, the last name of an individual, or the first partner for partnership returns. No spaces are used except at the end of the name control. If the last name is less than four letters, the remaining positions will be blank.
A check digit is the two alpha characters printed on the examination label that follow the tax period on the first line. If a check digit or name control does not appear on the first print line of the examination label, underline the name control on line two. If the check digit was used to establish the account, the check digit must be used at closing. Enter the check digit in positions 33 and 34.

5 - Name (Item C, Form 5599) (Completed by Specialist)
The name must appear completely and legibly. When entering the name of an individual, the last name will appear first, followed by a comma, then the first name and middle initial, if any.

6 - Penalty Reason Code (Item 02, Form 5599) (Completed by Specialist)
A penalty reason code must be input when penalties are abated.

7 - Agreement Date (Item 08, Form 5599) (Completed by Specialist) The agreement date is the date the agreement from the taxpayer was received in the IRS office. This should be a date stamp or a handwritten date initialed by the person receiving the document.

8 - Interest Computation Date (Item 11, Form 5599) (Completed by ESS)

9 - Tax Liability Adjustment (Item 12, Form 5599) (Completed by Specialist)
Transaction code (TC) identified as "Code" on Form 5599. The "Code" must be three digits. The DOC Code for each TC placed on Form 5599 is 47. The increase in tax dollars and decrease in tax dollars may be up to 11 digits. The adjustment penalty, penalties, and interest may also be up to 11 digits.

Determination of the Tax Adjustment:

It is very important that the person closing the case accurately identify the tax adjustment. The correct tax adjustment is determined by the following formula:

CORRECTED TAX – PREVIOUSLY ADJUSTED TAX = TAX ON FORM 5599

The previously adjusted amount on the report must match the tax liability on the transcript. This tax amount from the transcript is subtracted from the corrected tax liability to arrive at the tax adjustment that will be entered in Item 12 on Form 5599.

Increases in Tax are entered in Item 12 with " +" circled

Decreases in Tax are entered in Item 12 with " -" circled

10 - Disposal Code (Item 13, Form 5599) (Completed by Specialist)One Disposal Code must be entered that best describes the examination results. Refer to Document 11308, Government Entities Computer Systems Codes, for Disposal Code definitions.

11 - Statute Extended to (Item 14, Form 5599) (Completed by Specialist)If a valid Form SS–10, Consent to Extend the Time to Assess Employment Taxes, is secured, the Statute Extended to Date must be entered in item 14. The updated statute date must be input on AIMS (by submitting Form 5595, TE/GE Update to Management Assistant), before the Form 5599 is forwarded for closure off of AIMS. Must be in "MMDDYYYY" format.

12 - Credit and Tax Computation Adjustment (Item 15, Form 5599) (Completed by the Specialist) A Credit/Item Reference Number is a three-digit code used to adjust taxpayer information according to the type of return being audited. This information should be taken from Form 4668. When making any entry in Item 15 of Form 5599 ensure that the "+" or the "-" is identified in the last column. The "+" or the "-" must be circled to ensure that the correct Reference Information or Credit Adjustment is made to the taxpayer’s account.

BMF Credit/Item Reference Nos.

Form 941: On all Form 941 series adjustments all increases and decreases in tax must use reference nos. for employment tax returns. The sum of REF nos. 003, 007, and 008 must equal the tax amount that is being adjusted.

Form 940:All increases and decreases in tax must show reference nos. associated with the State indicated on the return. The total of the tax reference amounts must equal the tax amount that is being adjusted. If the increase or decrease in wages, a wage reference number is required.

13 - Appeals Office Code (Item 16, Form 5599) (Completed by Reviewer)If the case is going to an Appeals Office, enter the applicable three-digit Appeals Office Code. See Exhibit 4.5.2-6. and Document 6209 for Appeals Office codes.

14 - EO/GE Appeals Issue Code (Item 17, Form 5599) (Completed by Reviewer)If the case is going to an Appeals Office, enter the applicable three-digit Appeals Issue Code. See Document 11308, Government Entities Computer Systems Codes.

15 - Unagreed Amount (Item 18, Form 5599) (Completed by Reviewer)If the case is going to an Appeals Office, enter the unagreement amount.

16-20 - Revenue Base Protection Section (RBP) (Items 20-24, Form 5599) (Completed by Specialist)
Protection of the revenue base includes the work done by FSLG personnel to prevent the release of money from the Treasury to a taxpayer. Items 22, 23, and 24 are to be completed only if Revenue Base Protection applies. The most common example of RBP is the examination of a claim submitted by a taxpayer whose account has no outstanding liability for a claim that has been filed. If they disallow such claim, FSLG Specialists are expending resources to prevent the inappropriate release of money from the Treasury. We measure this valuable contribution by FSLG personnel, through the completion of the Revenue Base Protection Section of Form 5599, Items 20-24.
A claim is only considered as RBP if we are preventing money from leaving the Treasury. If an outstanding balance is due on the account, the RBP amount will not be the entire amount of the claim. A calculation must be done to determine how much of the claim qualifies as RBP. Since the taxpayer can be making payments on the outstanding liability while the examination is taking place; the Specialist must make the calculation when the examination is completed.
Not all claims are considered RBP; therefore, a claim Source Code does not have any relationship with RBP. Although the following situations are sometimes called " claims," they do not qualify as RBP:
Audit reconsideration, Source Code 73 (Taxpayer's Request), (if the tax has not been paid). FSLG received credit for this closure when it was originally closed. Therefore, if the audit reconsideration is being referred to Appeals, leave the RBP items blank and enter $1 in Item 18 to get the case through the terminal. Entering the amount of the "audit reconsideration" will cause duplicate results.

16 - Claim Rejection Date (Item 20, Form 5599) (Completed by Specialist)
(a) An entry should not be made if the service center previously allowed the claim.

(b)If a date is entered, the DC must be 01, 03, 07, 10, or 11 and the Source Code must be 30. DC 34 cannot be used. Items 21-24 are required entries for DC 01, 07, or 11. When DC 03 or 10 is used, Items 21-24 and 28 are required entries. Item 28 is needed for DC 07 or 11 if non-revenue issues are involved.

17 - Amount Claimed (Item 21, Form 5599) (Completed by Specialist)

18 - Claim Amount Disallowed (Item 22, Form 5599) (Completed by Specialist)

19 - Claim Hours (Item 23, Form 5599) (Completed by Specialist)Time spent on Revenue Base Protection, will be entered by the Specialist in whole hours only. Specialists must include any hours or fractions of hours spent on non-revenue in Item 28.

20 - Claim Type (Item 24, Form 5599) (Completed by Specialist)
All Claims with examination criteria will be slotted into one of two categories for screening. The examination criteria are divided into two categories: Category A and Category B. Category A criteria are issues that do not meet potential. Category B criteria are issues that do not meet Category A criteria and have a refund of at least $200.00 or more. The allowable alpha codes identify the type of revenue base protection.

21 - Specialist's Time (Item 28, Form 5599) (Completed by Specialist)
(a) Enter total time spent on non-revenue base protection issues for each return examined. Do not include this time in Item 23. No time should be entered for partially agreed cases.
(b) If the return has been reestablished from status 90 using CC AMSTUR or returned from Appeals using CC AMSTUB, the total time from both closings must be entered in this field.
(c) An entry is required for all examined returns and is reported in full hours and tenths of hours. The entry must be in the range 0000.1 - 9999.9.

(d) The entry for cases also involving protection of the Revenue Base must only include Revenue Production Time. The protection of the Revenue Base Time is entered in whole hours in Item 23.
(e) An entry is not made for Surveyed Claims, DC 34.

22 - Examination Technique (Item 30, Form 5599) (Completed by Specialist)
An entry is required for all examined returns. No entry is made for surveyed claims. Valid codes for this item are:

23 - Specialist's Grade (Item 31, Form 5599) (Completed by Specialist)
Enter the two-digit grade of the Specialist who closed the case. This is a required entry for all examined returns. An entry is not required for Surveyed Claims. Valid range of grades are 05 through 14.

24 - Case Grade (Item 32, Form 5599) (Completed by the Field Manager)
(a) Field Managers determine grade of case for all returns. The Field Manager will consider both the primary and related returns to determine the grade level. The first position must be 1, the second position must be 1-3 (1 - Grade 11, 2 - Grade 12, 3 - Grade 13), the third position must be 1, and the fourth position must be blank or R. See Exhibit 4.90.12-5.
(b) The related returns are graded to be the same as the primary return, therefore, the same three-digit code is used followed by an "R." When other Specialists examine the related entities, each Field Manager grades the separate entities as separate cases and they do not enter the "R."

25 - Specialist's Name (Item 33, Form 5599) (Completed by Specialist)
This item is a required entry for all examined returns. An entry is not required for Surveyed Claims. Enter the last name first, followed by a space and the first initial.

26 - Exam Adjustment Amount (Item 34, Form 5599) (Completed by Specialist)
Exam Adjustment Amount (Item 34, Form 5599) (Completed by Specialist)

27 - Delinquent Return Code (Item 37, Form 5599) (Completed by Specialist)
(a) Item 37 must always be completed when closing delinquent returns picked up during the examination and sent to the service center for processing. This entry is what gives FSLG credit for a delinquent return pick-up on Report 20.
(b) If the delinquent return is incorporated into the examination, this item must be left blank.
(c) If Item 37 is entered, Item 414 is required and Item 35 requires a $1.00 amount.
(d) Segregate the closing records of delinquent returns secured by MFT code. For each type of return included in the case file, the Specialist will:
Enter a "T" in Item 37 if there is only one delinquent return.

Enter an "R" in Item 37 on the rest of the closing records having the same MFT code as the closing record marked with a "T."
Example: Eight delinquent returns are secured from a taxpayer - Forms 941 for each quarter of 1993 and 1994 year(s). A "T " should be entered on the closing documents of the latest quarter of the Form 941 return. The balance of the closing documents are marked with an "R."

28 - Fraud Condition (Item 38, Form 5599) (Completed by Specialist)
This item may be blank or contain an entry of "C" (Civil) or "F" (Fraud).

29 - Special Project Code (Item 40, Form 5599) (Completed by Specialist)
Project Codes are used to identify a Priority Emphasis Program or a referral to Examination Division. Refer to Document 11308, Government Entities Computer Systems Codes for valid Project Codes.

30 - ARDI Code (Item 42, Form 5599) (Completed by Specialist)
(a) Enter a one-digit code in this item for an agreed deficiency under the Accounts Receivable Dollar inventory (ARDI) project. Refer to Document 11308, Government Entities Computer Systems Codes for valid ARDI Codes.
(b) When closing multiple years and an overassessment from one year will be used to offset an assessment from another year, consider the overassessment as payment secured. Full Paid or Partially Paid depends on the amount of the overassessment.
(c) The ARDI Code is valid for all FSLG MFT Codes. Valid Disposal Codes are 03, 06, 09, and 12.
Reminder: DC 05 must contain an ARDI Code if an entry is present in Item 34.

31 - Employee group Code (Item 50, Form 5599) (Completed by Specialist)
The Employee Group Code (EGC) is a four-digit code designating a specific group. An EGC is a required entry on all Examined full closures with the exception of disposal code 34 – Surveyed Claims. The following list identifies the EGC used by TE/GE:

32 - CEP Case - Enter L (Item 400, Page 2, Form 5599) (Completed by Specialist) If the examination is a large case examination, as defined in IRM 4.90.13, an "L" should be entered. This entry is valid only in the district having primary responsibility for a large case examination.

33 - International Specialist Time (Item 402, Page 2, Form 5599) (Completed by Specialist)
Percentage of Total Case time reported in Item 28, Page 1, Form 5599.

34 - International Exam Results (Item 403, Page 2, Form 5599) (Completed by Specialist)
Percentage of Total Audit Results.
RELATED RETURN INFORMATION SECTION (Item(s) 405 – 412) Enter data from primary return.

35- Primary Return TIN (Item 405, Page 2, Form 5599) (Completed by Specialist)

36 - Primary Return MFT (Item 406, Page 2, Form 5599) (Completed by Specialist)

37- Primary Return Tax Period (Item 407, Page 2, Form 5599) (Completed by Specialist)

38 - Related Return Alpha Code (Item 408, Page 2, Form 5599) (Completed by Specialist)
P - Primary Return
S - Secondary Return

39 - Aging Reason Code (Item 410, Page 2, Form 5599) (Completed by Specialist)

40- Installment Agreement Code (Item 412, Page 2, Form 5599) (Completed by Specialist)

41 - Delinquent Return Amount (Item 414, Page 2, Form 5599) (Completed by Specialist)
(a) In order to capture accurate results when FSLG secures delinquent returns, a separate field has been initiated. Previously this amount was entered in the dual-purpose field, Item 34, Adjustment Amount. Effective January 1999, Item 34 will be used to reflect adjustments to nontaxable returns and Item 414 will be used for delinquent returns secured by FSLG.

(b) For taxable returns, the amount entered in Item 414 must reflect the balance due or refund amount per the return that was forwarded to the service center for posting of the TC 150. If this amount is zero, enter $1 in this field.
(c) For nontaxable returns, enter the amount in Item 414 of the ordinary net income/loss or special allocation items per return forwarded to the service center for posting of the TC 150. If this amount is zero, enter $1 in this field.
(d) If Item 414 is entered, Item 37, Delinquent Return Code must also be entered and vice versa.(e) If Item 414 is entered, Item 13, Disposal Code must not be 02 or 34.
(f) If there is no balance due/refund due or no change to income/loss, enter $1 in Item 414.

42 - Amended Return Amount (Item 415, Page 2, Form 5599) (Completed by Specialist)
(a) In the past, if a taxpayer filed an amended return with the service center, even if it was due to an ongoing examination, FSLG could not take credit for the adjustment. To accurately capture the Specialists' efforts, a new Item 415 has been initiated. This entry is only valid if MF 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 MF, 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 date.
(b) For taxable returns, enter the amount of the TC 29X, less any credits posted. In most cases this is the balance/refund due.
(c) For nontaxable returns, enter the adjustment amount to income/loss.(d) Item 415 can be corrected by CC AMAXUO.

43 - Fax Agreement Ind. (Item 416, Page 2, Form 5599) (Completed by Specialist)
Enter a "1" if a FAX agreement has been received.

44- Principal Issue Codes (Item 701, Page 2, Form 5599) (Completed by Specialist)
Reference Document 11308, Government Entities Computer Systems Codes booklet for a listing.

45 - Employment Tax (Item 722, Page 2, Form 5599) (Completed by Specialist)
Enter the deficiency or overassessment.

GS-12 specialists can work above grade cases for no more than 25% of their inventory (per pay period).

Field Managers should consider the case grading implications of converting a compliance check into an examination. For example, a grade 12 compliance check may be a grade 13 examination due to the taxpayer’s employment tax liability and/or the complexity of its structure.