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

(1) This transmits revised IRM 3.11.213, Returns and Documents Analysis, Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.

(1) IRM 3.11.213.1.5(1) - Added new terms and acronyms used throughout the IRM.

(2) IRM 3.11.213.2(3) - Added "See Exhibit 3.11.213-2, Form 1066 - Return Due Dates."

(3) IRM 3.11.213.2.4.1(2) - Corrected the Taxpayer Advocate Service (TAS) Service Level Agreements link per Consistency Template. (IPU 25U0025 issued 01-06-2025)

(4) IRM 3.11.213.2.5 - Deleted subsection per feedback as it does not apply to Form 1066. (IPU 25U3537 issued 07-31-2025)

(5) IRM 3.11.213.2.5 - Added new subsection for religious exemption per Notice 2024-18. (IPU 25U3456 issued 07-02-2025)

(6) IRM 3.11.213.2.10(3) - Removed CCC "U" because it is not valid for Form 1066.

(7) IRM 3.11.213.3.2(3) - Corrected the title of Figure 3.11.213-2, Example of Preparing Form 1066 for Correspondence. (IPU 25U0025 issued 01-06-2025)

(8) IRM 3.11.213.3.2(6) - Updated Action Codes to clarify information. (IPU 25U0226 issued 02-18-2025)

(9) IRM 3.11.213.3.2(8) - Updated Action Codes to clarify information. (IPU 25U0226 issued 02-18-2025)

(10) IRM 3.11.213.3.3(1) If/Then Table - Added "(whichever is later)" after "return due date" and added a Note defining refund, consistent with the rest of the table. (IPU 25U0226 issued 02-18-2025)

(11) IRM 3.11.213.3.3(1) - Removed CCC "U" and the Note for routing because it is not valid for Form 1066.

(12) IRM 3.11.213.5(1)b, c - Removed c as contained the same information as the note in 1b and reworded note per feedback.

(13) IRM 3.11.213.5(2) - Correct the title for Form 4797, Sales of Business Property, and added a reference to "see IRM 3.11.213.16.1, CCC B - Electing Out of Installment Sales Method, for more information" (IPU 25U0233 issued 02-19-2025)

(14) IRM 3.11.213.5(2) - Form 14157 - Corrected the title for Form 14157, Return Preparer Complaint, per Consistency Template. (IPU 25U0025 issued 01-06-2025)

(15) IRM 3.11.213.6.3(1) b - Added the title of Figure 3.11.213-4, Editing Name Control Without the Word "The" . (IPU 25U0025 issued 01-06-2025)

(16) IRM 3.11.213.6.3.1(2) - Clarified the Entity Perfection - "In-care-of" Name information. (IPU 25U0226 issued 02-18-2025)

(17) IRM 3.11.213.7(1) - Corrected the current year Tax Period example to "202412" and added a cross reference to Figure 3.11.213-6, Example of Editing the Tax Period. (IPU 25U0025 issued 01-06-2025)

(18) IRM 3.11.213.8(2) If/Then Table - Clarified the Private Delivery Service (PDS) information. (IPU 25U0226 issued 02-18-2025)

(19) IRM 3.11.213.11(2) - Corrected the title for Figure 3.11.213-7.

(20) IRM 3.11.213.11(3) d. - Added "see IRM 3.11.213.16.4" to clarify information and match the rest of the list.

(21) IRM 3.11.213.13(3) - Updated Statute Returns from 2020 to 2021 per latest guidance. (IPU 25U0226 issued 02-18-2025)

(22) IRM 3.11.213.16.1(1) - Corrected the title for Form 4797, Sales of Business Property. (IPU 25U0233 issued 02-19-2025)

(23) IRM 3.11.213.20(1) - Added the title of Figure 3.11.214-9, Example of Editing the TEFRA Code. (IPU 25U0025 issued 01-06-2025)

(24) IRM 3.11.213.21(2) - Corrected the title of Form 4797, Sales of Business Property. (IPU 25U0025 issued 01-06-2025)

(25) IRM 3.11.213.23(2) - Added the title of Figure 3.11.213-10, Example of Editing the Installment Sale Indicator. (IPU 25U0025 issued 01-06-2025)

(26) Exhibit 3.11.213-2 - Added new Exhibit - Form 1066 - Return Due Dates. Renumbered remaining exhibits Clarified filing year requirements.

(27) Revised the Internal Revenue Manual (IRM) where necessary for the following types od editorial changes:

Plain language, simpler words

Spelling, grammar and formatting

IRM references, citations and links

Updated Forms, titles, lines, tax periods, year, etc.

Consistency items updated to agree with BMF Consistency templates and other IRMs

Updated all graphics including figures and exhibits.

Scott Wallace Director, Submission Processing Customer Account Services Taxpayer Services

This section contains instructions for perfecting Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, for processing throughout the Submission Processing pipeline.

Purpose: This section provides instructions for perfecting tax returns filed by taxpayers using Form 1066. These instructions apply to the Submission Processing Pipeline, Document Perfection Branch to Code and Edit (perfect) documents.

Audience:

Supervisory Tax Technician

Lead Tax Technician

Tax Examining Technician

Supervisory Clerk

Lead Clerk

Clerk

Policy Owner: Director, Submission Processing.

Program Owner: Return Processing Branch, Business Master File (BMF) Section

Primary Stakeholders: Other areas that may be affected by these procedures include (but not limited to):

Accounts Management (AM)

Small Business/Self-Employed (SB/SE)

Large Business and International (LB&I)

Chief Financial Officer (CFO)

Taxpayer Advocate Service (TAS)

Statistics of Income (SOI)

Tax Exempt Government Entities (TEGE)

Compliance, Modernized E-File (MEF)

Submission Processing (SP)

The purpose of Document Perfection is to Code and Edit (perfect) returns and other documents for input to the Master File (MF) through the Integrated Submission and Remittance Processing System (ISRP) or the Service Center Recognition Image Processing System (SCRIPS). In addition, Document Perfection forwards any other documents or attachments not related to the processing of the returns to the function responsible for handling them. It is not the purpose of Code and Edit to mathematically verify or to check the validity of the returns and other documents being processed unless otherwise specified in the applicable section. The computer and/or Error Correction (Resolution) will perform these functions if the returns and other documents are coded and edited as prescribed in the applicable subsections of this section.

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

IRC 6201(a)

IRC 6213(b)

The above list may not be all inclusive of the various updates to the IRC.

All Policy Statements for Submission Processing are contained in IRM 1.2.1, Servicewide Policies and Authorities, Servicewide Policy Statements.

The Campus Director is responsible for monitoring operational performance for the Submission Processing campus.

The Operation Manager is responsible for monitoring operational performance for their operation.

The team manager/lead is responsible for performance monitoring and ensuring employees have the tools to perform their duties.

The team employees are responsible for following the instructions contained in this IRM and maintain updated IRM procedures.

Program Goal: Ensure documents are Code and Edit ready for transcription.

Program Reports: The Batch Block Tracking System (BBTS) captures and stores a vast amount of inventories used for processing.

Program Effectiveness:

Embedded Quality Submission Processing (EQSP)

Balanced Measures

Managerial Reviews

Annual Review: Review the processes included in this manual annually to ensure accuracy and promote consistent tax administration.

The table lists commonly used acronyms and abbreviations and their definitions.

Acronyms and Abbreviations

Definition

AAR

Administrative Adjustment Request

ADP

Automated Data Processing

AM

Accounts Management

AMRH

Accounts Maintenance Research

APO

Army Post Office

BMF

Business Master File

c/o

Care of

C&E

Code and Edit

CAS

Correspondence Action Sheet

CCC

Computer Condition Code

CDP

Collection Due Process

CFO

Chief Financial Officer

CI

Criminal Investigation

CII

Correspondence Imaging Inventory

CP

Computer Paragraph

DLN

Document Locator Number

DPO

Diplomatic Post Office

EEFax

Enterprise Electronic Fax

e.g.

For Example

EIN

Employer Identification Number

ERS

Error Resolution System

etc.

Et Cetera

Exam

Examination

Fax

Facsimile

FedEx

Federal Express Corporation

FPO

Fleet Post Office

FRP

Frivolous Return Program

GNMA

Government National Mortgage Association

ID

Identification or Identity

IDRS

Integrated Data Retrieval System

ISRP

Integrated Submission and Remittance Processing

IMF

Individual Master File

IPU

Interim Procedural Update

IRC

Internal Revenue Code

IRS

Internal Revenue Service

LB&I

Large Business and International

MCC

Major City Code

MeF

Compliance, Modernized Electronic Filing

MFT

Master File Transaction

N/A

Not Applicable

OAR

Operations Assistance Request

OID

Original Issue Discount

OMB

Office of Management and Budget

OSPC

Ogden Submission Processing Center or Ogden Submission Processing Campus

P&A

Planning and Analysis

PTIN

Preparer Tax Identification Number

Rev. Proc.

Revenue Procedure

RIH

Residual Interest Holders

RO

Revenue Officer

RRA98

Restructuring and Reform Act of 1998

SBSE or SB/SE

Small Business and Self-Employed

SERP

Servicewide Electronic Research Program

SFR

Substitute for Return

SLA

Service Level Agreement

SOI

Statistics of Income

SP

Submission Processing

SPDC

Submission Processing Design Center

SSN

Social Security Number

TAS

Taxpayer Advocate Service

TBOR

Taxpayer Bill of Rights

TC

Transaction Code

TE

Tax Examiner

TEFRA

Tax Equity & Fiscal Responsibility Act of 1982

TEGE or TE/GE

Tax Exempt and Government Entities

TIN

Taxpayer Identification Number

TS

Taxpayer Services

U.S.

United States

UCC

Uniform Commercial Code

USPS

United States Postal Service

ZIP

Zone Improvement Plan

The following resources may assist in performing the work as outlined in this IRM.

Servicewide Electronic Research Program (SERP)Servicewide Electronic Research Program (SERP)

Instructor's Corner for Submission Processing Instructor’s Corner for Submission Processing

This IRM cannot address every possibility that occurs while coding and editing returns or documents. Take taxpayer intent into consideration. Refer issues not addressed in this IRM to the Subject Matter Expert (SME), lead or manager to determine the corrective action.

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, which is filed at Ogden Submission Processing Campus.

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, Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, for transcription information. 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. For the 2016 tax year and thereafter, a REMIC must file Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, by the 15th day of the 3rd month following the close of the tax year. Additionally, see IRM 21.7.4.4.3.1, Business Tax Returns and Non-Master File for further information regarding Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) due dates, payments, and extensions. See Exhibit 3.11.213-2, Form 1066 - Return Due Dates. The MFT is 07, tax class 3 and document code 60. The program code is 12201.

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.

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, U.S. Real Estate Mortgage Investment Conduit (REMIC).

Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC), can be amended. It will be G coded and sent to Accounts Management (AM) after processing.

The purpose of this initiative is to achieve consistency in the Business Master File (BMF) Error Resolution System (ERS) processing IRMs.

Ogden, Kansas City, and Return Processing Branch, BMF Code and Edit and Error Resolution System (ERS) identified and developed topics for BMF Consistency.

A ♦ (diamond) before and after the subsection title shows BMF Consistency subsections.

Text in normal print is the common processes for BMF returns. The text in BOLD print is form-specific and applies to this IRM only.

Submit IRM deviations in writing following instructions from IRM 1.11.2.2.3, When Procedures Deviate from the IRM, and elevate through proper channels for executive approval.

The Internal Revenue Service (IRS) Restructuring and Reform Act of 1998 (RRA 98) Section 3705(a), gives identification requirements for all IRS employees working tax-related matters.

All IRS employees who communicate by telephone, correspondence or face-to-face, with taxpayers or their personal representatives, on tax-related matters are required to provide (at minimum) the following information:

Telephone Contact - Their title (e.g., Mr., Mrs., Ms., Miss), last name and badge identification (ID Card) number. Toll-free employees may also give their location for identification purposes. Treat faxes to taxpayers on tax-related matters as correspondence and include the required information.

Face-to-Face Contact - Their title (e.g., Mr., Mrs., Ms., Miss), give as appropriate during the conversation, their last name and badge identification (ID Card) number.

Correspondence (sent to the taxpayer and authorized representatives) - A telephone number that taxpayers can call for answers to questions. In addition, manually generated correspondence must have the employee’s title (e.g., Mr., Mrs., Ms., Miss), last name, Integrated Data Retrieval System (IDRS) number, and letter system number, which are systemically generated by IDRS. Treat faxes to taxpayers on tax-related matters as correspondence and include the required information.

Correspondex letters - Specific employee name and telephone number if the employee initiating the correspondence is in the best position to respond to any questions the taxpayer may have or if the taxpayer is being asked to give more case-related information. If the taxpayer does not need to contact a specific employee, the correspondence needs only an IRS telephone number and standard signature.

When a taxpayer requests to speak with a specific employee who previously worked their inquiry or request, or complains about the level of service previously given, make every attempt to resolve the taxpayer's inquiry. If unable to resolve the issue, refer the inquiry using established procedures to the manager.

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

It is not necessary to repeat the badge identification (ID Card) number on a subsequent contact, when the nature of an employee's work involves multiple contacts with the same taxpayer and the employee has given the taxpayer (either by telephone or in-person) their badge identification (ID Card) number on the first contact.

The Taxpayer Advocate Service (TAS) is an independent organization within the Internal Revenue Service (IRS), led by the National Taxpayer Advocate, that helps taxpayers and protects taxpayer rights. TAS offers free help to taxpayers when a tax problem is causing a financial difficulty, when they’ve tried and been unable to resolve their issue with the IRS, or when they believe an IRS system, process, or procedure just isn't working as it should. TAS strives to ensure that every taxpayer is treated fairly and knows and understands their rights under the Taxpayer Bill of Rights. TAS has at least one taxpayer advocate office located in every state, the District of Columbia, and Puerto Rico.

TAS uses Form 12412, Operations Assistance Request (OAR), to start the OAR process of referring a case to the Taxpayer Services (TS) Division, to affect the resolution of the taxpayer’s problem. For more information, refer to IRM 13.1.19, Taxpayer Advocate Service, Taxpayer Advocate Case Procedures, Advocating With Operations Assistance Requests (OARs).

Refer taxpayers to TAS when the contact meets TAS criteria or when Form 911, (Request for Taxpayer Advocate Service Assistance and Application for Taxpayer Assistance Order) is attached and steps cannot be taken to resolve the taxpayer's issue the same day. See IRM 21.1.3.18, Taxpayer Advocate Service (TAS) Guidelines.

The definition of "same day resolution" is within 24 hours. The following two situations meet the definition of "same day resolution" :

The issue can be resolved within 24 hours.

The IRS takes steps within 24 hours to resolve the taxpayer’s issue.

When making a TAS referral, use Form 911, and forward to TAS following your local procedures.

For more information, see IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria, and IRM 13.1.7.4, Exceptions to Taxpayer Advocate Services Criteria, for information on cased that TAS will no longer accept.

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

The SLAs are found at TAS Service Level Agreements.

BMF (ID)Theft is increasing. If a case is found with attachments or correspondence showing the taxpayer is a victim of "ID Theft" , give the entire case to the senior/lead.

The manager/lead will expedite the case to the Planning and Analysis (P&A) staff for referral to one of the Submission Processing (SP) BMF ID Theft liaisons. The taxpayer must show that they are a victim of “ID Theft”; do not send cases that are subject to Criminal Investigation (CI), Examination (Exam), or Fraud review.

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.

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

Enter only transcription items. Leave lines blank if the entry would be a zero amount. See Figure 3.11.213-1, Example of an incomplete Form 1066.

Figure 3.11.213-1

Please click here for the text description of the image.

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.

For returns completed in other than U.S. currency, process as filed. However, if corresponding for missing/incomplete item(s), include in the letter to resubmit in U.S. currency.

Remove returns marked as "Protective Claim" , "Protective Claim for Refund" , or similar statement from the batch and route to Accounts Management (AM). Notate "Protective Claim" in the remarks box of Form 4227, Intra-SC Reject or Routing Slip.

If the return is amended, do not remove from batch. Edit Computer Condition Code G and follow normal processing procedures.

Criminal Investigation (CI) investigates potential criminal violations of the Internal Revenue Code (IRC) and related financial crimes. Criminal violations of the IRC include willful attempts to evade or defeat the income tax. Criminal tax violations also include the willful failure to collect or pay over tax and false claims for refunds based on bogus return information.

If CI has stamped the return, do not send for further CI action.

For returns with refund claims ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, do the following:

Refund Claim

Ogden

≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Make a copy of the first two pages of the tax return along with any page of the return that appears suspicious.

Attach Form 4227, Intra-SC Reject or Routing Slip, to the copy.

Route the copy to Ogden, Mail Stop 9001, Criminal Investigation (CI).

Edit an action trail Copy to CI, or CI Referral, or similar language in the lower left corner going vertically up the side of the return.

Edit Action Code 341. See IRM 3.11.213.3.3, Refund Returns (45 Day Jeopardy and High Dollar Refunds)

Continue processing the return.

Because of the repetitive nature of the Code and Edit (C&E) function, C&E Tax Examining technicians often recognize income tax return data which is outside of the norm for data found on similar returns for each income tax return type. If C&E finds return characteristics not meeting Audit Code or Exam referral criteria it deems suspicious, CI is available to review the referral.

If a suspicious return is found, do the following:

Make a copy of the first two pages of the tax return along with any page of the return that appears suspicious.

Attach Form 4227, Intra-SC Reject or Routing Slip, to the copy.

Route the copy to: Ogden Service Center, Mail Stop 9001, Criminal Investigation (CI).

Edit an action trail Copy to CI, or CI Referral, or similar language in the lower left corner going vertically up the side of the return.

Continue processing the return.

If the return fits other criteria (e.g., Frivolous Argument), take proper action.

The primary goal in identifying tax returns for Examination (Exam) is to promote the highest degree of voluntary compliance. Exam gives support and helps Submission Processing (SP) with any questionable return found during processing. Exam has a vast multitude of programs and tolerance criteria already found in several IRM sections. SP can refer questionable return to Exam, unless prohibited by instructions currently found in several IRMs.

The Document Perfection tax examiner will identify a return that is unprocessable and requires correspondence, research or other action to make the return processable.

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

Edit marks are edited on the return for transcription to the Automatic Data Processing (ADP) System through the Integrated Submission and Remittance Processing (ISRP) System. Enter edit marks in brown, red, orange, purple, or green pencil or pen.

Only edit items on the return that are for transcription except where specific instructions require editing of a non-transcribed item. Leave lines blank if the entry would be a zero amount unless otherwise instructed.

Do not obliterate, alter, or erase the original entry on a return when deleting or correcting an entry. Always 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.

Do not re-edit edit marks entered by other areas, such as Collections, Entity or Accounts Management, except to place the marks in the correct area or perfect for legibility.

Photocopied Returns.

Photocopied Returns - Re-edit or underline any valid, black edit marks. See IRM 3.11.213.4.4.1, Correspondence Imaging Inventory (CII) Returns, and IRM 3.11.213.14, Re-Entry Document Procedures

For a description of specific edit marks, see the table below:

Edit Mark

Description

"X"

Deletes tax data or indicates do not transcribe an item. For example, if deleting an original entry, edit an "X" to the left of the entry to delete. Edit the correct entry to the left or above the "X" .

“/” (slash)

Indicates do not transcribe a form or schedule.

“//$”

Identifies the beginning and ending of a foreign country code in the entity area. For example, “/EI/$” is edited for “Ireland” or “/GM/$” is edited for “Germany”.

“c/o” or “%”

Indicates an “in-care-of” name for transcription.

Circle

Indicates do not transcribe an entry. Also, deletes entity data or a Received Date.

If the taxpayer circles an entry, edit the entry.

Underline

Identifies an entry for transcription (e.g., Name Control, Tax Period, etc.).

Arrow

Indicates the correct placement of a misplaced entry. Use an arrow if the misplaced item is close to the correct line and there is no question where the entry belongs.

Use a double arrow to identify the same figure for transcription in two different places (along with any required transcription data between the two arrows).

Check Mark

Indicates that an entry was manually math verified and is correct.

Bracket/Parentheses

Indicates a negative numerical amount.

Code and Edit (C&E) is not 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 "()" or "-" sign. Bracket negative amounts when editing negative entries on transcription lines (e.g., computing and entering a line entry, entering a missing line entry, etc.).

Vertical Line or Decimal Point

Indicates the separation of dollars and cents.

Zero, Dash, None, or N/A

"ZERO" , "DASH" , "NONE" , or "N/A" are valid entries except when specific instructions require editing of an entry.

Rocker

Indicates the amount paid when drawn under a remittance amount.

Action Codes are used to indicate whether correspondence, research, or some other action is needed. The Action Code sets the suspense period for the return and places the return in the workable or unworkable suspense inventory.

When necessary, assign a three-digit Action Code.

Edit the Action Code in the bottom left margin of Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return. See Figure 3.11.213-2, Example of Preparing Form 1066 for Correspondence, which provides an example of Editing the Action Code for Correspondence Request.

Figure 3.11.213-2

Please click here for the text description of the image.

Assign Action Codes in the following priority:

Action Code 310 (Statute Control)

Action Code 320 (Entity Control)

Action Code 4XX

Action Code 6XX

Action Code 3XX

Action Code 2XX (Correspondence)

Use the following table if more than one Action Code is needed:

IF

THEN

Action Codes include 211, 215, 225 or 226 and Action Code 341,

Action Codes include 211, 215, 225 or 226 on the Form 1066.

Edit Action Code 341 on the Form 4227 Intra-SC Reject or Routing Slip.

Action Codes have the same priority,

Edit the Action Code with the shorter suspense period on the Form 1066.

Edit the second Action Code on the Form 4227, Intra-SC Reject or Routing Slip.

See IRM 3.11.213.3.2(8), Action Codes for suspense periods.

Action Codes have different priorities,

Edit the Action Code with the higher priority on the Form 1066.

Use Action Code 211, 215, 225 or 226 before Action Code 341 to ensure the return is complete before a manual refund is issued.

Edit the second Action Code on the Form 4227, Intra-SC Reject or Routing Slip.

Edit the following Action Codes when a return cannot be perfected:

Action Code

Description

211 - First Correspondence (Missing Information, or Missing Information and Signature ) or 215 - First International Correspondence (Missing Information or Missing Information and Signature )

Return is illegible, incomplete, or contradictory and therefore unprocessable.

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 - Correspondence (Signature Only)

Unsigned return (only issue for correspondence)

226 - International Correspondence (Signature Only)

Unsigned foreign return (only issue for correspondence)

480 (Early Filed Suspense)

Early filed return.

610 (Renumbered Non-remittance) or 611 (Renumbered with remittance)

Mis-batched return (e.g., Form 1065 found in a 1066 batch of work)

640 (Void)

To delete the assigned Document Locator Number (DLN) on the return (e.g., Re-entry Returns)

650 (International)

An International return processed in Ogden Submission Processing Center (OSPC).

An Army Post Office (APO) / Diplomatic Post Office (DPO) / Fleet Post Office (FPO) address is not considered foreign.

Continue perfecting the return after editing the Action Codes.

Valid Action Codes are listed below:

Action Code

Description

Workday Suspense Period

211

First Correspondence (Missing Information or Missing Information and Signature)

40

212

Second Correspondence

25

215

First International Correspondence (Missing Information or Missing Information and Signature)

45

216

Second International Correspondence

45

225

Correspondence (Signature Only)

40

226

International Correspondence (Signature Only)

40

310

Statute Control

10

320

Entity Control

10

331

Frivolous Review

3

341

Manual Refund

10

342

Credit Verification

10

343

Black Liquor

10

352

Name Research

3

360

Other-in-House Research

10

420

Management Suspense A

5

440

Manager's Suspense C

15

450

Management Suspense D

20

480

Early Filed Suspense

150

610

Renumber - Non-remit

0

611

Renumber - Remit

0

640

Void

0

650

International

0

For more information and applicable Action Codes, see IRM 3.12.38.3.4, Error Resolution System (ERS) Action Codes, and the exhibit in IRM 3.12.38-1, Action Codes.

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

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

IF

THEN

A refund return is batched in a non-refund batch,

Pull the return from the non-refund batch and merge into a refund batch using local procedures.

Code and Edit the return as completely as possible.

Follow the instructions below when the processing date is more than 20 days after the Received Date or the return due date (whichever is later) OR the refund ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡.

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

The processing date is more than 20 days after the Received Date or the Return Due Date (whichever is later) and the refund amount is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

Unnumbered Returns:

Pull the return from the batch.

Code and edit the return as completely as possible.

Edit Action Code 341.

Give the return to the manager for expedite processing.

Code and edit the return as completely as possible.

Edit Action Code 341 and leave in batch.

The refund ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

Unnumbered Returns:

Pull the return from the batch.

Code and edit the return as completely as possible.

Edit Action Code 341.

Make a copy of the first two pages of the tax return along with any page of the return that appears suspicious. See IRM 3.11.213.2.10, Criminal Investigation (CI) Referral.

Edit an action trail Copy to CI, or CI Referral, or similar language in the lower left corner going vertically up the side of the return.

Expedite processing.

Code and edit the return as completely as possible.

Edit Action Code 341.

Attach Form 4227, Intra-SC Reject or Routing Slip to the return, edit Action Code 341 on Form 4227, Intra-SC Reject or Routing Slip and leave in batch.

Make a copy of the first two pages of the tax return along with any page of the return that appears suspicious. See IRM 3.11.213.2.10 Criminal Investigation (CI) Referral.

Edit an action trail Copy to CI, or CI Referral, or similar language in the lower left corner going vertically up the side of the return.

The Taxpayer Services Submission Processing TAS Liaison walks a return through Code and Edit,

In addition to normal editing, edit the following:

Computer Condition Code (CCC) "O" , to freeze the refund.

CCC "Y" , to send the return to Error Resolution (ERS).

The Document Perfection tax examiner will have the first opportunity to identify a return having a problem which requires correspondence, research or other action to make the return processable. An Action Code is edited to identify these unprocessable returns. See IRM 3.11.213.3.2, Action Codes.

The tax examiner will determine the kind of action required and assign an Action Code to the return which will force it to the Error Resolution System (ERS) (on-line correction system). The code will indicate whether correspondence, research or some other action is needed.

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

IF

THEN

Liability for two or more Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, returns was reported on one unnumbered return and the information necessary for the preparation of the individual return is present,

Adjust the line entries on the period return to reflect the liability for the earliest period.

Prepare Dummy returns as necessary for additional periods.

Retain all the unnumbered returns in batch.

The original return is numbered,

Edit Action Code 360 and leave in the block.

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.

The following information pertains to suppression of the delinquency check.

IF

THEN

An unnumbered, unprocessable return is withdrawn from processing,

Input Transaction Code (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, Example of Form 1066 with TC 599, CC 17

Figure 3.11.213-3

Please click here for the text description of the image.

The following information pertains to TC 599:

IF

THEN

Inputting TC 599 via Integrated Data Retrieval System (IDRS),

The following information is necessary:

Employer Identification Number (EIN)

Name Control

MFT 07 (for Form 1066)

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.

There are two types of correspondence that Code and Edit may encounter:

Correspondence received from taxpayers, and

Correspondence issued to taxpayers.

Correspondence is all written communications from a taxpayer or their representative, excluding tax returns, whether solicited or unsolicited. This includes:

Written communications in response to IRS requests for information or data.

Written communications, including annotated notice responses, that provide more information or dispute a notice.

A telephone call that results in a written referral or research (Form E-4442, Inquiry Referral).

The key to identifying taxpayer correspondence is to ask the following questions:

Is taxpayer waiting for a response from IRS?

Is taxpayer waiting for IRS to take action?

Is taxpayer asking a question?

A Post-It-Note, Sticky Note, or some other type of note stuck on the return by another, for example "Taxpayer (TP) requests penalties be waived" , does not constitute correspondence from the taxpayer.

Issue correspondence to resolve any conditions causing the return to be unworkable or unprocessable.

Do not correspond on returns prepared by Collections, IRC 6020(b) or by Examination, Substitute for Return (SFR).

If the return is incomplete and appears to be a duplicate, give the return to the lead. The lead researches for a Transaction Code (TC) 150 and/or any other information necessary to determine if the return should continue processing. If research determines a duplicate return, see IRM 3.11.213.11, Amended Returns, and continue processing. A duplicate return could include any of the following:

A one-page return, with or without a signature

Incomplete return indicating "Payment Only" .

Incomplete returns indicating they have previously E-filed

This list is not all inclusive, Tax examiners may see other unusual documents not addressed in this subsection or in other areas of the IRM.

Examine the return for all unprocessable conditions before initiating correspondence.

IF

AND

THEN

The return needs correspondence

Requires a response,

Complete an approved Correspondence Action Sheet indicating the Letter number (e.g., 3463-C), Referring Taxpayer Inquiry/Forms to Another Office, Letter 854-C, (Penalty Waiver or Abatement Disallowed/Appeals Procedure Explained, etc.), Master File Tax (MFT) code, and the appropriate paragraphs.

Some paragraphs may require fill-ins to enter, such as : tax period, form number, Document Locator Number (DLN), etc.

Attach the approved Correspondence Action Sheet to the front of the return below the Entity area.

Edit Action Code 211 (First Correspondence) or 215 (International Correspondence) on the return.

Finish editing the return and leave in the batch.

The return needs correspondence

Does not require a response,

Complete an approved Correspondence Action Sheet indicating the Letter 86-C, Referring Taxpayer Inquiry/Forms to Another Office, Letter 854-C, Penalty Waiver or Abatement Disallowed/Appeals Procedure Explained, etc., MFT code, and the appropriate paragraphs.

Some paragraphs may require fill-ins to enter, such as tax period, form number, DLN, etc.

Photocopy first page of return and attach the approved Correspondence Action Sheet below the Entity area on the front of the return copy. Be sure the name and address clearly show above the approved Correspondence Action Sheet.

Forward the copy to the Correspondence Area.

Edit an Action Trail (e.g., Letter 854-C sent), Penalty Waiver or Abatement Disallowed/Appeals Procedure Explained, etc., in the lower left corner going vertically up the side of the return.

Finish editing the return and leave in the batch.

There are more campus exclusive letters. They are for processing specific forms or conditions. Go to the lead or manager for copies of these letters.

Correspondence Imaging Inventory (CII) is an inventory system for scanning all Accounts Management (AM) receipts into digital images and working the cases from those images.

Correspondence Imaging System (CIS) changed to Correspondence Imaging Inventory (CII)

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

Verify all edit marks and ensure placement is correct on a "CII" return.

IF

THEN

The edit marks are black,

Underline the edit mark if correct or circle if incorrect.

The edit marks are red or green,

Circle if incorrect.

The edit marks are missing or incorrect,

Perfect as necessary.

Follow the correspondence instructions below for "CII" returns.

IF

AND

THEN

The "CII" return has a Form 13596, Reprocessing Returns, attached,

The return is incomplete (e.g., missing signature, schedules or forms),

Do not correspond.

Remove the return from the batch and route to AM.

If the return comes back from AM with the information still incomplete, send the return to AM again to secure all the missing information. Indicate "More information needed to process incomplete CII return" , or similar language on Form 4227, Intra-SC Reject or Routing Slip, (or other proper routing slip).

The “CII” return has a Form 13596, Reprocessing Returns attached and the return is incomplete (e.g., missing signature, schedules, or forms),

The return shows correspondence was sent (e.g., CCC "3" is edited on the return),

Do not route the return to AM. Continue processing the return.

The CII return does not have a Form 13596, Reprocessing Returns, attached,

The return is incomplete (e.g., missing signature, schedules or forms),

Follow normal correspondence procedures.

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

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

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

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

IRM 21.1.3.2.3, Required Taxpayer Authentication

IRM 21.1.3.2.4, Additional Taxpayer Authentication

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

IRM 10.5.1.6.7.2, Answering Machine or Voicemail

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

Review all attachments to the return before the return can be considered processable.

Only detach attachments when specifically instructed.

Consider a return or document an original if it has an original signature or was stamped Process as Original

Edit Action Trail(s) (e.g., Form 2848, Power of Attorney and Declaration of Representative, DETACHED) in the lower left corner going vertically up the side of the return.

When a document is detached and routed for processing, edit the name, address and EIN if not present. Also, edit the return received date (e.g., Rec'd MM/DD/YY), and edit a postmark date (e.g., Postmark MM/DD/YY) to the upper left margin if a postmark is present, onto the detached document before routing.

The Routing Guide for Attachments is included only for use in assisting in the identification of possible forms or conditions that require action or routing to other functions. The guide should not be used in place of the completed IRM section governing those conditions, since space limitations do not always allow for full instructions in the Attachment Guide.

Follow the general guidelines below for each attachment:

DOCUMENT

DETACH

ACTION

CP 259, Master file Generated 1st TDI CP 959 (Spanish) 1st Return Delinquency Notice,

Do not route to Statute Control Unit for clearance. See IRM 3.11.213.13, Statute Returns.

No

If Correspondence is attached or taxpayer’s response indicates:

Taxpayer disagrees that they are required to file the return.

Only page one of the return is attached.

Employer Identification Number (EIN) on notice does not match EIN on return.

Return requested on notice not the same as return submitted.

Taxpayer asking question(s) or requesting IRS take action(s) on their account.

Case involves any other IRS action(s) Code and Edit not trained to complete.

Brookhaven - Stop #662

Memphis - Stop #81

Philadelphia - 4-N31.142

Move the notice to the back of the return.

Continue processing the return.

If the return is unsigned, but the taxpayer signed the CP notice under the jurat, it is not necessary to correspond for the signature.

CP 259 A through H, Master File Generated 1st TDI Notice,

No

Ogden Submission Processing Center, (OSPC) Mail Stop 6273.

CP 504/504B, Final Notice Balance Due,

No

Pull CP 504, Final Notice Balance Due, to the front.

Route notice and return to Accounts Management.

CP 518, Final Notice-Return Delinquency,

No

If Correspondence is attached or taxpayer’s response indicates:

Taxpayer disagrees that they are required to file the return.

Only page one of the return is attached.

EIN on notice does not match EIN on return.

Return requested on notice not the same as return submitted.

Taxpayer asking question(s) or requesting IRS take action(s) on their account.

Case involves any other IRS action(s) Code and Edit not trained to complete.

Brookhaven - Stop #662

Memphis - Stop #81

Philadelphia - 4-N31.142

Move the notice to the back of the return.

Continue processing the return.

If the return is unsigned, but the taxpayer signed the CP notice under the jurat, it is not necessary to correspond for the signature.

Letter 112-C, Individual Return-Incomplete for Forms 1040, 1040A and 1040EZ Letter 282-C, Return not Received: Copy Requested/Received, Letter 2255-C, Delinquent Return (Forms 720,1041,1065 and 1120) or Letter 2284-C, Delinquent Return (Forms 940, 941, and 943),

No

Identify which organization initiated the letter to the taxpayer (e.g., what organization signed the letter?).

Route letters initiated by Accounts Management (AM) to Accounts Maintenance Research (AMRH):

Ogden - Mail Stop 6712

Route letters initiated by Collections as follows:

If correspondence is attached or taxpayer’s response indicates any of the following:

Taxpayer disagrees that they are required to file the return.

Only page one of the return is attached.

EIN on letter does not match EIN on return.

Return requested on letter not the same as return submitted.

Taxpayer asking question(s) or requesting IRS take action(s) on their account.

Case involves any other IRS action(s) C&E not trained to complete.

Brookhaven - Stop #662

Memphis - Stop #81

Philadelphia - 4-N31.142

If none of the above apply, correspondence or written response to the letter is not attached and/or, no 599 is notated: Then move the letter to the back of the return and continue processing.

If the return is unsigned, but the taxpayer has signed the letter under the jurat, it is not necessary to correspond for the signature.

Includes tax liability for Multiple Tax Periods or Types of Tax,

No

Numbered returns route to Rejects.

Unnumbered returns, prepare a dummy return if possible; otherwise, correspond.

Other Tax Returns (original signature),

Yes

Edit received date to the detached return.

Route to appropriate function unless specifically directed otherwise.

Returns attached to a consolidated return will NOT be detached.

Petitions in opposition of tax law provisions,

Yes

Do not edit an action trail when detaching a petition.

Route to: IRS ≡ ≡ ≡ ≡ ≡ 1111 Constitution Avenue, NW Washington, DC 20224

State Tax Returns, original or copy, with an 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

Issue Letter 1382-C, Penalty Removal Request Incomplete.

Continue editing the return.

Remittance found,

No

Immediately hand-carry return and remittance to supervisor.

Request for Acknowledgement,

No

No action required.

Request for information or inquiries,

Yes

Photocopy any data necessary to process the return.

Attach the photocopy to the return.

Route original attachment to the proper office for necessary action.

Requests for Installment Agreement,

Yes

Route as follows: Ogden - Route to Collections, Mail Stop 5500.

Request for adjustment to another document,

Yes

Route to appropriate function. Attachment must contain Name, Address, EIN and IRS Received Date. Edit if missing.

Request for money transfer,

No/Yes

No - Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, notates transfer of money TO the return you are processing:

Prepare Form 3465, Adjustment Request, and:

Indicate in the Routing box Rejects.

Notate See attached money transfer request in the Remarks Box.

Edit Action Code "450" to route the request to Rejects.

Edit CCC "X" to freeze overpayment.

Detach transfer request.

Prepare Form 3465, Adjustment Request, and:

Indicate in the Routing box Adjustments.

Notate the requested action in the Remarks Box.

Attach Form 3465, Adjustment Request, to the request and route to Accounts Management.

Continue editing the return.

Request for Forms or Schedules,

No

If requesting current year forms:

Prepare Form 4190, Order Form for Tax Form and Publications.

Forward to National Distribution Center (NDC) for processing.

Prepare Form 6112, Prior Year Tax Products Order Form.

Forward to National Distribution Center (NDC) for processing.

Use the write-in sections of Form 4190, and Form 6112 for all BMF forms and schedule requests.

Form 433-B, Collection Information Statement for Businesses,

Yes

Route as follows: Ogden - Route to Collections, Mail Stop 5500.

Form 433-D, Installment Agreement,

Yes

Route as follows: Ogden - Route to Collections, Mail Stop 5500.

Form 926, Return by a U.S. Transferor of Property to a Foreign Corporation,

No

Edit Audit Code "2" preceded by "8-" in the left margin of the Deductions Section.

Form 1065-X, Amended Return or Administrative Adjustment Request (AAR),

No

Route Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return and Form 1065-X, Amended Return or Administrative Adjustment Request (AAR), to Accounts Management.

Form 2848, Power of Attorney and Declaration of Representative,

Yes

Route as follows: Ogden - route to Mail Stop 6737.

Form 3520-A, Annual Information Return of Foreign Trust with a U.S. Owner,

Yes

Forward to Ogden Submission Processing Campus (OSPC) via Form 4227, Intra-SC Reject or Routing Slip.

Form 3753, Manual Refund Posting Voucher,

No

Edit Computer Condition Code 0 to the dotted portion of Section 1, Line 1.

Form 3949, Information Report Referral,

Yes

Route Form 3949, Information Report Referral, according to page 2 of Form 3949, Information Report Referral, to CI, Exam, Disclosure, etc., following local procedures.

Continue processing the return.

Form 3949-A, Information Referral,

Yes

Route as follows: Ogden:

Route Form 3949-A to R&C.

Continue processing the return.

Route Form 3949-A to Ogden Service Center.

Continue processing the return.

Form 4797, Sales of Business Property,

No

See IRM 3.11.213.16.1, CCC B - Electing Out of Installment Sales Method, for more information.

Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations,

No

Edit Audit Code "2" preceded by "8-" to the left margin of the Deductions Section.

Form 5713, International Boycott Report,

No

Leave original or copies attached and edit Audit Code "2" preceded by "8-" to the left margin of the Deductions Section if attached or there is a "yes" answer to the Foreign Trust Question I, Page 3, Additional Information. See IRM 3.11.213.22, Audit Codes.

Form 6252, Installment Sale Income,

No

Edit Installment Sale Indicator in the left margin of the Deductions Section preceded by "9-" . See IRM 3.11.213.23, Installment Sale Indicator.

Form 7004, Application for Automatic Extension of Time To File Certain Business, Income Tax, Information, and Other Returns,

Yes/No

Yes - If Form 7004, Application for Automatic Extension of Time to File Certain Business, Income Tax, Information, and Other Returns, is for other than the tax return or Tax Period being filed, route to Receipt & Control. No- If Form 7004 is for the tax return it is attached to.

Request for Form 8109, Deposit Slips or Coupon Books,

No

No action required.

Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR),

No

Edit Audit Code "1" preceded by "8-" to the left margin of the Deductions Section.

Form 8271, Investor Reporting of Tax Shelter Registration Number,

No

No action required.

Form 8275, Disclosure Statement,

No

Edit Audit Code "1" preceded by "8-" to the left margin of the Deductions Section.

Letter 8275-R, Regulation Disclosure Statement,

No

Edit Audit Code "1" preceded by "8-" to the left margin of the Deductions Section.

Form 8821, Tax Information Authorization,

Yes

Route as follows: Ogden - Route to Mail Stop 6737

Form 8822, Change of Address, or Form 8822-B, Change of Address or Responsible Party - Business,

Yes/No

Yes - If the information is different from the return, route to Entity Control. See IRM 3.11.213.6.4, "Entity Perfection-Domestic Addresses" . No - If the information is the same as on the return. Form 8822, Change of Address or Form 8822-B, Change of Address or Responsible Party - Business.

Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b),

No

Edit CCC "L" to the dotted portion of Section 1, Line 1.

Form 9465, Installment Agreement Request,

Yes

Route as follows: Ogden - Route to Collections, Mail Stop 5500.

Form 14039-B, Business Identity Theft Affidavit,

No

If a specific function is indicated by the envelope address or an IRS CP notice or IRS letter, place the Form 14039-B on top and route Form 14039-B and the return to the specific function. If Ogden or Kansas City receives a Form SS-4, Application for an Employer Identification Number and Form 14039-B, route the returns to: Internal Revenue Service Ogden BMF Entity Mail Stop 6273 Ogden, UT 84201 For the following returns:

Loose Form 14039-B

No correspondence attached (e.g., no IRS CP notice or IRS letter).

The envelope is not addressed to a specific function.

Form 14157, Return Preparer Complaint,

Yes

Route to: Attn.: Return Preparer Office 401 W. Peachtree Street NW Mail Stop 421-D Atlanta, Georgia 30308

Form SS-4, Application for Employer Identification Number,

Yes/No

Yes - If Entity Control has assigned an EIN to the Form SS-4, Application for Employer Identification Number, route to Entity Control, No - If Entity Control has not assigned an EIN to the Form SS-4, route the Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, and Form SS-4 to Entity Control for EIN assignment.

The Entity area of Form 1066 identifies the taxpayer on the Business Master File. The Entity area of the return contains the following:

Employer Identification Number (EIN)

Name

"In-care-of" name

Address

If the Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Tax Return, indicates bankruptcy (e.g., shows "RECEIVER" , "TRUSTEE" , or "DEBTOR IN POSSESSION" ) in the entity area or on an attachment, route to Entity Control. Follow local procedures using Form 13934, Entity Document/C&E Merge Transmittal.

Do not route Amended Returns to Entity Control.

Completely edit the return except the name control prior to routing to Entity Control.

Do not route to Entity Control if there is an indication Entity has already edited the return, usually orange/purple editing of the EIN and name control.

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

The EIN is located in the upper right of the form (Employer Identification Number Box A).

Determine the EIN as follows:

IF

AND

THEN

EIN is missing,

You can determine the correct EIN from the attachments and/or schedules,

Edit the EIN to the proper location.

The EIN is either a Preparer Tax Identification Number (PTIN) or Individual Taxpayer Identification Number (ITIN),

Unnumbered,

Remove return from batch.

Route to Entity Control following local procedures using Form 13934 Entity Document/C&E Merge Transmittal for EIN assignments.

The EIN is either a PTIN or ITIN,

Numbered,

Edit Action Code 320.

Leave return in batch.

Multiple EINs are present,

Unnumbered,

Circle out all illegible EINs, zeros, and/or nines.

Research IDRS.

If found, edit to the proper location.

If not found, route to Entity Control following local procedures using, Form 13934, Entity Document/C&E Merge Transmittal.

Multiple EINS are present,

Numbered,

Edit Action Code 320.

Leave the return in the 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 zeros; or

All nines,

Unnumbered,

Circle out all illegible EINs, zeros, and/or nines.

Research IDRS.

If found, edit to the proper location.

If not found, route to Entity Control following local procedures using, Form 13934, Entity Document/C&E Merge Transmittal.

The EIN contains any of the following conditions and cannot be determined from attachments and/or schedules:

Illegible;

Missing;

Other than 9 digits;

All zeros; or

All nines,

Numbered,

Circle out all illegible EINs, zeros, and/or nines.

Edit Action Code 320.

Leave the return in the batch.

"PENDING" , "APPLIED FOR" , etc., is indicated in the EIN area,

Unnumbered,

Research IDRS.

If found, edit to the proper location.

If not found, route to Entity Control following local procedures. Using Form 13934, Entity Document/C&E Merge Transmittal

PENDING, APPLIED FOR, etc., is indicated in the EIN area,

Numbered

Edit Action Code 320.

Leave the return in the batch.

The Name Control consists of four characters or less.

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

Disregard the word "THE" in the Name Control only when more than one word follows. See Figure 3.11.213-4, Editing Name Control Without the Word The. The Figure provides an example of editing the Name Control without using the word The.

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

If a "GNMA" pool number is present, use the first four digits of the pool number except do not include any leading zeros or trailing alphas. If there are fewer than four numbers, use the "GNMA" to complete the Name Control.

See Job Aid Document 7071A, Name Control Job Aid - For Use Outside the Entity Area, to determine the Name Control.

Figure 3.11.213-4

Please click here for the text description of the image.

If box Name Change on Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, is checked, route the return to Entity Control following local procedures.

Edit the Name Control as follows:

IF

AND

THEN

Able to determine the Name Control

Underline the Name Control.

Unable to determine the Name Control,

Unnumbered,

Research IDRS.

If found, edit to the proper location.

If not found, route to Entity Control following local procedures using Form 13934, Entity Document/C&E Merge Transmittal.

Unable to determine the Name Control,

Numbered,

Edit Action Code 352 (Name Research).

Leave return in batch.

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

Ensure the in-care-of name is located in the proper location.

IF

THEN

The "in-care-of" name is located on the street address line preceding the street address,

Do not edit.

The "in-care-of" name is located above the first name line or below the street address,

Arrow the" in-care-of" name so it appears below the first name line and above the street address.

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,

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.

Underline the second street address.

Notate "TC 014" in the upper left margin.

Pull the return for research/input of TC 014 by the Code and Edit Research Clerk.

A "TC 014" must be input to retain the street address as a location address and the P.O. Box as the mailing address.

Always circle 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.

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

Taxpayer edits or added to the "in-care-of" name (e.g., original "in-care-of" name crossed out, new name added, etc.)

IF

THEN

An "in-care-of" name is changed but there is no indication of an address change,

Edit the "in-care-of " name as shown above.

Continue editing the return.

An "in-care-of" name is present and the "Address change" box (Page 1, Item D, Box 3) is checked (or there is an indication of an address change),

Edit the "in-care-of" name as shown above.

Correct the address. See IRM 3.11.213.6.4, Entity Perfection - Domestic Addresses.

Continue editing the return.

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

Do not perfect the address on amended returns (Computer Condition Code (CCC) "G" ).

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

BMF ISRP is not programmed for a mailing address and a location address. A TC 014 must be input into IDRS to capture both a location address and mailing address.

The procedures for perfection of addresses are as follows:

IF

AND

THEN

An attachment shows the address was changed,

Edit the new address in the Entity section of the return.

Form 8822, Change of Address or Form 8822-B, Change of Address or Responsible Party - Business is attached,

All apply:

Mailing address information is the same, Form 8822 or Form 8822-B Line 7, does not list a location address,

No entry on Form 8822-B, Lines 8 or 9

Take no action.

Form 8822, Change of Address, or Form 8822-B, Change of Address or Responsible Party-Business, is attached,

Any applies:

Mailing address information is different,

Form 8822 or Form 8822-B Line 7, lists a location address Form 8288-B, Lines 8 or 9, have an entry,

Detach Form 8822, or Form 8822-B, and route to Entity Control following local procedures using Form 13934, Entity Document/C&E Merge Transmittal.

Both a P.O. Box and a street address are shown,

Notate "TC 014" in the upper left margin.

Pull the return for research/input of "TC 014" by the Code and Edit Research Clerk.

A "TC 014" must be input to retain the street address as a location address and the P.O. Box as the mailing address.

Two street addresses are shown,

Underline the second street address.

Notate "TC 014" in the upper left margin.

Pull the return for research/input of TC 014 by the Code and Edit Research Clerk.

A "TC 014" must be input to retain the street address as a location address and the P.O. Box as the mailing address.

One street address is shown,

The Form 1066 changed the address to a P.O. Box,

Notate "TC 014" in the upper left margin.

Pull the return for research/input of TC 014 by the Code and Edit Research Clerk.

A TC 014 must be input to retain the street address as a location address and the P.O. Box as the mailing address.

The city and state are not shown on the return but are shown on an attachment,

Edit the city and state in the Entity section of the return.

The ZIP Code is missing or illegible,

Is not available from the return or attachments,

See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, to determine the ZIP Code.

Edit the three-digits followed by "01" of the first Zip Code listed for the applicable state (e.g., "99501" for Alaska).

Only the first three-digits of the ZIP Code can be determined,

Edit "01" for the fourth and fifth digits.

The Form 1066Address Change box is checked,

An "in-care-of" name is present,

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.

The National Change of Address (NCOA) label is present,

Underline the Name Control.

It is necessary to edit the street address,

See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries, for current Address/Street Abbreviations.

The address contains information other than a street address or P.O. Box,

Do not perfect. ISRP will enter the complete address.

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

The U.S. Postal Service established new address requirements for APO/DPO/FPO addresses. If the old address appears, convert it to the new State Code abbreviation based on the ZIP Code (e.g., APO New York, NY 091XX would be converted to APO AE 091XX). See Figure 3.11.213-5, Form 1066 with APO Address. APO/DPO/FPO addresses are considered domestic addresses. Refer to APO/DPO/FPO Conversion Chart below:

Zip Code

State Code

34000

AA

090-098

AE

962-966

AP

Figure 3.11.213-5

Please click here for the text description of the image.

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

Returns with APO, DPO or FPO addresses are considered domestic addresses. See IRM 3.11.213.6.4, Entity Perfection-Domestic Addresses.

Route returns with a foreign address to the Ogden Submission Processing Campus (OSPC) for processing. Prepare Letter 86-C, Referring Taxpayer Inquiry/Form to Another Office, to inform the taxpayer IRS sent the return to Ogden.

Consider returns with addresses in the following U.S. Possessions/Territories as foreign for processing purposes. Edit the same way as domestic addresses.

Edit a two-character alpha code for the Possession/Territory name.

U. S. Possession/Territory

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

A ZIP code must be present for U.S. Possessions/Territories. Edit the appropriate ZIP Code if one is not provided. See Document 7475, State and Address Abbreviations, Major City Codes (MCC's), Zip Codes and Countries.

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

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

Circle the foreign country and edit the country code preceded by a / and followed by a /$ (e.g., /GM/$ is edited for Germany). See Document 7475, State and Address Abbreviations, Major City Codes (MCCs), ZIP Codes and Countries for official foreign country codes.

A unique country code will be edited for returns filed with an address in Canada. See IRM 3.11.213.6.5.1, Country Code - Canada.

Coding and Editing BMF Tax Returns, Foreign Addresses Job Aid (Number 2324-002) provides examples for editing foreign addresses.

If the foreign address is from Australia, Brazil, Cuba, Italy, Mexico or The Netherlands, check if the address includes a province, state, or territory.

There may be other countries with provinces, states, and territories not listed above, see Coding and Editing BMF Tax Returns, Foreign Addresses Job Aid (Number 2324-002) for additional information.

IF

THEN

A province, state, or territory name is present,

Circle the province, state, or territory name.

Edit the appropriate abbreviation. See Exhibit 3.11.213-4, Province, State and Territory Abbreviations.

A province, state, or territory name is not present,

Continue editing the return.

A province, state, or territory is shown in abbreviated format,

Continue editing the return.

A ZIP Code or state 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.

To assist Compliance with workload assignment, returns filed with an address in Canada will be edited using a unique country code based on the Province/Territory.

IF

THEN

The foreign address contains a Canadian Province/Territory name, or abbreviation shown in the table below,

Circle the country name.

Edit the appropriate country code for the province/territory preceded by a / and followed by a /$ as the last entry in the address.

The foreign address does not contain a Canadian Province/Territory name or abbreviation shown in the table below,

Circle the country name.

Edit the country code /CA/$ as the last entry in the address.

Canadian Province/Territory

Province Abbreviation

Country Code

Alberta

AB

XA

British Columbia

BC

XB

Manitoba

MB

XM

New Brunswick

NB

XN

Newfoundland and Labrador

NL

XL

Northwest Territories

NT

XT

Nova Scotia

NS

XS

Nunavut

NU

XV

Ontario

ON

XO

Prince Edward Island

PE

XP

Quebec

QC

XQ

Saskatchewan

SK

XW

Yukon

YT

XY

The rest of the foreign address is edited using procedures in IRM 3.11.213.6.5, Entity Perfection - Foreign Addresses.

Edit the Tax Period to the right of the form title in YYMM format if the year ending is other than the current processing year (e.g., 202512). See Figure 3.11.213-6, Example of Editing the Tax Period.

Figure 3.11.213-6

Please click here for the text description of the image.

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

The return is final,

Edit CCC "F" to the dotted portion of Section 1, Line 1 and edit the fiscal year notated on the final return.

If the taxpayer indicates the Tax Period ending date is other than 12 and it is not a final return, take the following action:

IF

THEN

Unnumbered,

Send the return back to the taxpayer. Inform the taxpayer that all REMIC filers must file a calendar year return.

Send a photocopy of Page 1, via Form 4227, Intra-SC Reject or Routing Slip, to Entity Control to remove Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, filing requirements.

Numbered,

Correspond with taxpayer to inform them a REMIC must file a calendar year return.

Void the DLN, per local procedures.

Photocopy Page 1 of the return and send it to Entity Control to remove the filing requirements.

The date a document is received in the Campus or IRS Office is the date stamped as the "IRS Received Date."

All Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Returns, require an IRS Received Date.

IF

THEN

The return is received ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

The return is considered timely.

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.

The IRS Received Date stamp ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ of the legal or extended due date and the postmark or shipment date is on or before the legal or extended due date,

Edit the Received Date to agree with the postmark or shipment date.

The postmark or shipment date includes returns delivered by:

U.S. Postal Service,

Private Delivery Services (PDS), e.g., Federal Express Corporation (FedEx) or United Parcel Services (UPS),"designated" by the IRS and delivered via an acceptable type of service. See IRM 3.10.72, Receiving, Extracting, and Sorting, for a list of designated private delivery services and types of services, or

Returns with a foreign postmark.

For certified mail only - If a postmark Is not present, look for a "USPS.com Track & Confirm" record that has been attached to the return (should be before the envelope). Use the "Acceptance" date on the record to determine timeliness and follow normal editing procedures. See Exhibit 3.11.213-5, USPS Track and Confirm, If the "USPS.com Track & Confirm" record is not attached, no action is required.

The IRS Received Date may or may not be stamped on the face of the return.

A valid IRS Received Date Stamp may consist of the following:

The word Received

Month (alpha or numeric)

Day (for example 1 or 01)

Year - four digits

Area Office, Campus, Field Office, Taxpayer Assistance Center (TAC), plus the city, location, or functional area within one of these sites (e.g., Compliance Service Collections Operation (CSCO), Exam, Information and Communication Technology (ICT), Collection Information System (CIS), Accounts Management (AM), etc.).

Not all IRS offices are designated places for filing, and not all IRS employees are authorized to accept a tax return for processing. If a return contains a received date stamp from other than a Taxpayer Assistance Center (TAC), Lockbox, or IRS campus (Compliance, Accounts Management (AM), or Submission Processing (SP)), circle out the invalid received date and edit the correct received date according to instructions below. For example, returns received by the Taxpayer Advocate Service (TAS) or the IRS Office of Chief Counsel are not properly filed and a received date by that office is not the IRS Received Date.

If the IRS Received 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:

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

IF

THEN

An envelope is not attached,

Use the postmark date stamped on the face of the return.

A document was returned for insufficient postage,

Use the postmark date that corresponds with the correct delivery of the return.

The postmark is missing and the envelope is certified,

Look for the "USPS.com Track & Confirm" record that has been attached of the return (should be before the envelope). Use the "Acceptance" date on the record to determine timeliness and follow normal editing procedures. See Exhibit 3.11.213-5, USPS Track and Confirm. If the USPS.com Track & Confirm record is not attached, no action is required.

An envelope has a USPS and private metered postmark,

Always use the USPS postmark.

An envelope has a foreign and private metered postmark,

Always use the Foreign 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.

Service Center Automated Mail Processing System (SCAMPS) digital date.

Revenue Officer's signature date.

Signature date (only if within current year).

Julian control date minus 10 days.

Current date minus 10 days.

Edit the IRS Received Date as follows:

IF

THEN

A timely IRS Received Date is the only Received Date stamped on the return,

Do not edit.

Two or more dates stamped on the return,

Use the earliest IRS Received Date stamped on the return.

Circle all other dates.(handwritten or stamped) not needed for transcription.

Received dates that have been circled out by another function should be treated as if they are not present.

A Federal return is addressed to the IRS,

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.

The only Received Date on the return is a Taxpayer Advocate Service (TAS) or Chief Counsel Received Date,

Circle out the TAS or Chief Counsel Received Date and edit the Received Date according to instructions.

If an envelope is attached to the return, check the envelope for remittance. If found, hand carry remittance to manager.

If a return is faxed to another area of the IRS and then sent to Submission Processing for processing, do not edit the Enterprise Electronic Fax (EEFax) Date as the IRS Received Date. Edit a received date according to normal procedures.

Do not use the EEFax date as the IRS Received Date.

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

Returns prepared under IRC Section 6020(b). These returns must be signed by a Compliance Function representative. See IRM 3.11.213.12.1, IRC Section 6020(b) Prepared by Collections.

Accept electronic or typed revenue officer (RO) signatures as valid the return.

Returns prepared by Examination, for example Substitute for Return. "SFR" or "SUBSTITUTE RETURN" . See IRM 3.11.213.12.3, Examination Prepared

Dummy returns prepared by IRS

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

Correspondence containing a signature and jurat is attached showing that the taxpayer is responding to an IRS letter or notice (See paragraph (5) below.)

Re-entry returns originally filed electronically (E-File). These returns may be identified by the presence of Mod E-File printouts or efile GRAPHIC print - Do Not Process or Tax Return (TRPRT) Do Not Process in lieu of an actual return.

If the efile GRAPHIC print states efile GRAPHIC print - Do Not Process or the TRPRT print states TRPRT Print Do Not Process in the top margin, circle the words Do Not Process.

Do not correspond for a signature on Correspondence Imaging Inventory (CII) returns that have Form 13596, Reprocessing Returns, attached. See IRM 3.11.213.4.4.1, Correspondence Imaging Inventory (CII) Returns, for processing instructions.

If a signature is missing, correspond.

IRM 3.11.213.4.4 Issuing Correspondence for returns that are incomplete and appear to be duplicate filings.

IF

THEN

The return is not signed on the line designated for the Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, or

The jurat is not present on the line designated for the Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return (non-standard return), or

Only the Entity information is present and there are no attachments containing tax data,

Edit Action Code 225 (Correspondence for Signature only) or 226 (International Correspondence for Signature only).

Leave in batch and continue editing.

If the jurat is altered or stricken (crossed out), see IRM 3.11.213.15, Frivolous Arguments, for frivolous return instructions.

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

If the signature declaration is altered or stricken (crossed out), see IRM 3.11.213.15, Frivolous Arguments, for frivolous return instructions.

If the Taxpayer responds with a self-prepared signature declaration, it must contain the same language as the jurat on the tax return: e.g., "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" .

The following types of signatures are not valid for Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return,

Faxed signature

Electronic signature

DocuSign digital signature

Typed font

If Form 1066 is mailed on or after August 28, 2020, accept a digital signature.

Tax Examiners are not handwriting experts. 26 Code of Federal Regulations (CFR) Section 301.6064-1 allows the IRS to presume that the signature on a return, statement or other document is the true signature of the person who actually signed the document.

Do not accept a ✓ or "X" on the signature line as a valid taxpayer signature.

Only one correspondence attempt is required for a signature.

The Paid Preparer Section is located below the Signature area at the bottom of Page 1 of 4, Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.

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.

No action is required on amended returns.

Take the following actions when an entry is present in the Paid Preparer Checkbox:

IF

THEN

Only the Yes box is checked,

Take no action.

The No box is checked, neither box is checked, or both boxes are checked,

Circle the Paid Preparer's telephone number, if present. See IRM 3.11.213.10.2.

The Paid Preparer's Phone Number is located below the Paid Preparer's EIN at the bottom right-hand corner of Page 1 of 4, Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.

IF

THEN

The return is amended,

No action is required.

The Preparer's Phone Number is more than 10 digits,

No action is required.

The Preparer's Phone Number is illegible or less than 10 digits,

Circle the Phone Number.

The Paid Preparer's Social Security Number (SSN) (2009 and prior revisions) or Preparer's Taxpayer Identification Number (PTIN) is located to the right of the Preparer's signature in the PTIN Box (Preparer's SSN or PTIN box for 2009 and prior revisions) at the bottom right of Form 1066 on Page 1.

No action is required on amended returns.

The Preparer's SSN is a nine-digit number. Circle the SSN if all zeros or all nines.

A PTIN begins with the alpha "P" followed by an eight-digit number (e.g., PXXXXXXXX). Circle the PTIN if all zeros or all nines.

The Firm's EIN (Paid Preparer's EIN - 2009 and prior revisions) is located below the Preparer's PTIN Box (Preparer's SSN or PTIN box for 2009 and prior revisions) at the bottom right-hand corner of Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, on Page 1.

No action is required on amended returns.

The Firm's EIN (Paid Preparer's EIN - 2009 and prior revisions) is a nine-digit number. Circle the EIN if all zeros or all nines.

A return is considered amended based on the following:

The Amended box is checked.

Beginning January 2012, Form 1065-X, Amended Return or Administrative Adjustment Request (AAR), will be used to file an amended Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return. The amended box will not be present on the 2011 and subsequent revision of Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.

Words such as "Supplemental" , "Corrected" , or "Additional" , are present.

Any indication from the taxpayer that a previous return was filed

Words such as Copy or Duplicate are not sufficient indicators and must be accompanied by a statement from the taxpayer that a previous return was filed.

Follow the instructions in the chart below when there is an indication the return is amended and:

IF

THEN

Form 1065-X, Amended Return or Administrative Adjustment Request (AAR), is attached,

Route Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, and Form 1065-X, Amended Return or Administrative Adjustment Request (AAR), to Accounts Management.

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,

Do not edit CCC "G" Process the return as an original.

Form 3893, Re-Entry Document Control, or Form 13596, Reprocessing Returns, is attached,

Do not editCCC "G" . See IRM 3.11.213.14.1 Form 3893 - Re-Entry Document Control and IRM 3.11.213.14.2, Form 13596 - Reprocessing Returns.

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" .

CCC "W" , and/or "3" or other Error Resolution System (ERS) Action codes may be indicated on G coded returns.

Figure 3.11.213-7

Please click here for the text description of the image.

The following data must be edited on all amended returns:

Name Control - see IRM 3.11.213.6.3.

EIN - see IRM 3.11.213.6.2.

Tax Period - see IRM 3.11.213.7.

CCC "G" - see IRM 3.11.213.16.4.

Received Date - see IRM 3.11.213.8.

Signature - see IRM 3.11.213.9.

Compliance functions (Collections and Examination) secure returns from the taxpayer and also prepare returns if the taxpayer does not provide them.

Prepared tax returns are notated with 6020(b) or SFR (Substitute for Return).

Secured tax returns are notated with TC 59X or ICS (Integrated Collection System) or notated Process as Original with an attached Form 13133, Expedite Processing Cycle. The Delinquent Return box on Form 13133 should be checked.

If "RD" (Return Delinquency) is notated on the front of the return and not circled, remove from the batch and route to Collections.

When the taxpayer fails to file a required return, IRC 6020(b) is the authority for the IRS to prepare the return.

These returns are identified by the notation: PREPARED AND SIGNED UNDER THE AUTHORITY OF SECTION 6020(b) OF THE INTERNAL REVENUE CODE which is located in the center bottom of Page 1 of the return.

Returns must have a Received Date. If missing, follow the normal procedures for editing the IRS Receive Date, see IRM 3.11.213.8, Received Date.

Returns must be signed by Compliance Function representatives. If not signed, route to Compliance, using Form 4227, Intra-SC Reject or Routing Slip.

Starting July 1, 2013 the Revenue Officer's (RO) electronic or typed signature will be accepted as a valid signature on the return.

Edit CCC "4" (See IRM 3.11.213.16.11, CCC "4" - (6020(b) Return).

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

Edit CCC "D" if the Compliance Function Representative notates DO NOT ASSESS FAILURE TO PAY PENALTY and the return due date (without regard to extensions) is July 30, 1996 or prior.

Do not edit CCC "D" if the return due date is after July 30, 1996 (without regard to extensions) even if the Compliance Function representative notates DO NOT ASSESS FAILURE TO PAY PENALTY

Do not correspond with the taxpayer for unprocessable conditions. If the return is unprocessable, edit CCC "3" and continue processing.

Edit CCC "W" if the IRS Received Date is more than two years and nine months after the Return Due Date. Do not send the return to Statute Control. See IRM 3.11.213.13, Statute Returns.

These returns are identified by the notations: "TC 59X" or "ICS" .

Do not edit CCC "G" on these returns.

Use approved Correspondence Action Sheet to correspond for conditions that cannot be processed (e.g., missing signatures, missing schedules, etc.).

A taxpayer's signature on a notice with a jurat is acceptable.

Edit CCC "W" if the Received Date is more than 2 years and 9 months after the Return Due Date. Do not send the return to Statute Control. See IRM 3.11.213.13, Statute Returns.

If there is an indication a penalty or penalties should be suppressed, edit the appropriate Computer Condition Code(s). Please refer to IRM 3.11.213.16 for more information.

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

Return must have an IRS Received Date. If no IRS Received Date is present, follow the normal procedures for editing the IRS Received Date.

Do not correspond with the taxpayer for unprocessable conditions. If the return is unprocessable, edit CCC "3" and continue processing.

If the Form 13133, Expedite Processing Cycle, is attached, edit the Computer Condition Codes that are checked on the form.

Do not enter CCC D unless the return due date (without regard to extensions) is July 30, 1996 or prior, even if the CCC "D" box is checked on Form 13133, Expedite Processing Cycle

Edit CCC "W" if the Received Date is more than 2 years and 9 months after the Return Due Date. Do not send the return to Statute Control. See IRM 3.11.213.13, Statute Returns.

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

Do not edit CCC "G" on these returns.

Use approved Correspondence Action Sheet to correspond for conditions that are unprocessable (e.g., missing signatures, missing schedules, etc.).

Edit the Computer Condition Code(s) that are checked on Form 13133, Expedite Processing Cycle.

Edit CCC "W" if the Received Date is more than 2 years and 9 months after the Return Due Date. Do not send the return to Statute Control. See IRM 3.11.213.13, Statute Returns.

If Form 13133, Expedite Processing Cycle, (or something similar) indicates a penalty or penalties should be suppressed, edit the appropriate Computer Condition Code(s). Please refer to IRM 3.11.213.16 for additional information.

Any return with a Received Date that is two years and nine months or more after the Return Due Date is a potential statute control return.

Route statute returns to the Statute Control Unit daily or more often if needed.

If any of the conditions listed below are present, don’t route to Statute Control Unit for clearance. Instead, edit CCC "W" and continue processing:

Compliance IRC Section 6020(b) returns

.Secured by Examination/Collections including TE/GE or TE/GE Employee Plan (EP) Exam.

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

Returns that are substitute returns prepared by Examination (SFR) in top margin of the return

Returns with a stamp indicating a previous clearance by Statute Control within the last ninety (90) days.

Return is a 2021 or prior year original. Due to the COVID-19 pandemic and subsequent Submission Processing (SP) and Accounts Management (AM) site closures, SP and AM developed procedures to bypass AM statute clearance and be processed. In addition, any 2021 or prior year returns previously cleared by AM statute will not be returned by SP to AM to be cleared again if the 90-calendar day statute stamp has expired.

If a return has any of the following computer paragraphs (CPs) or letters attached, do not route to Statute Control Unit for clearance. Edit CCC "W" if the return needs processing.

CP 259, Master File Generated 1st TDI Notice

CP 959, Master File Generated 1st TDI Notice (Spanish version)

CP 518, Final Notice - Return Delinquency

Letter 112C, Payment/Overpayment/Credit Applied; No Record of Return Filed

Letter 282C, Return Not Received: Copy Requested/Received

If a return has Form 12412, Operations Assistance Request (OAR), from TAS and is a potential statute control return but is not stamped "Cleared by Statute" give it to the lead. The lead contacts the TAS employee listed in the OAR for rejection of the return and sends it back to TAS for clearance by the Statute Control Unit.

If the return is within 90 days of the statute expiration date, advise the TAS employee of such and route the return directly to Statute Control for clearance.

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

IF

THEN

The return is numbered,

Edit Action Code 310 to the bottom left margin ofForm 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return.

Leave the return in the batch and continue processing.

The return is unnumbered,

Do not continue processing.

Pull the return from the batch.

Attach Form 4227, Intra-SC Reject or Routing Slip, and check the box for Statute Control Unit.

Edit CCC "W" if the Statute Control Unit stamps or shows clearance on the front of the return.

Follow the chart below to determine if CCC "W" is needed:

IF

AND

THEN

The return received date is two years and nine months or more after the Return Due Date,

The return is stamped, "No Statute issue", Statute N/A, or a similar statement indicating there is no statute issue,

Edit CCC "W"

The return Received Date is less than two years and nine months from the Return Due Date,

The return is stamped, "No Statute issue" Statute N/A, or a similar statement indicating there is no statute issue,

Do not edit CCC "W"

Reprocess a return posted to the wrong account or module to post it to the correct module.

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

Form 3893, Re-Entry Document Control, is used to re-input documents that have not posted to an account or module

Form 13596, Reprocessing Returns, is used to reprocess documents to the correct account or module that had previously posted to the wrong account or module

Always leave the Form 3893, Re-Entry Control Document, or Form 13596, Reprocessing Returns, on the front of the return. It must remain as a permanent part of the document.

Examine Form 3893, Re-Entry Document Control, or Form 13596, Reprocessing Returns, to determine the action needed to make the return processable.

If the Receive Date is 2 years and 9 months or more after the Return Due Date, refer to Statute procedures before re-entering or reprocessing the return. See IRM 3.11.213.13, Statute Returns.

Form 3893, Re-Entry Document Control, is used to re-input a return that has not posted to an account or module.

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

Circle the CCC "G" if present.

Do not edit CCC "G" on amended returns.

Do not send Letter 1382-C, Penalty Removal Request Incomplete, if a request for reasonable cause is attached.

If the return was not edited according to current processing instructions, circle any Action Codes, Computer Condition Codes and any other edit marks that are no longer applicable. Re-edit according to current processing instructions.

If the return was edited according to current processing instructions, ensure that the information from Form 3893, Re-Entry Document Control, is edited on the return.

Form 3893, Re-Entry Document Control

Action Taken

Box 14 Remarks

Ensure that the information is edited to the return.

Box 15 (Process as)

Circle any green rocker and edit marks that may indicate a receipt of remittance.

Do not change any tax due amounts.

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/green (per local procedure) to the appropriate area.

Taxpayer error,

Leave the entries as shown on the document.

A Received Date must be present on all re-input returns:

IF

THEN

IRS Received Date is not present,

Edit a Received Date to the middle of the return.

Multiple IRS Received Dates are present,

Circle all but the earliest date.

When more information is still needed to make the return processable, prepare approved Correspondence Action Sheet or Form 4227, Intra-SC Reject or Routing Slip, for the appropriate action (e.g., correspondence, research, etc.).

When perfection is not possible, edit Action Code 640 on the return and attach Form 4227, Intra-SC Reject or Routing Slip, noting, PERFECTION NOT POSSIBLE and leave in batch.

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.

Circle CCC "G" if present.

Do not edit CCC "G" on amended returns.

Do not send Letter 1382-C, Penalty Removal Request Incomplete if a request for reasonable cause is attached.

If the return was not edited according to current processing instructions, circle any Action Codes, Computer Condition Codes and any other edit marks that are no longer applicable. Re-edit according to current processing instructions.

If the return was edited according to current processing instructions, ensure that the information from Form 13596, Reprocessing Returns, is edited on the return.

Form 13596 Reprocessing Returns

Action Taken

TIN correction

Edit correct TIN on return.

Tax Period correction

Edit correct Tax Period ending on return.

Reasonable cause

Edit appropriate computer condition code.

Edit CCC "R" if the Failure to File, (FTF) box is checked.

Edit CCC "D" if the Failure to Pay, (FTP) box is checked.

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/green (per local procedure) to the appropriate area.

Taxpayer error,

Leave the entries as shown on the document.

An IRS Received Date must be present on all reprocessed returns.

IF

THEN

IRS Received Date is not present,

Edit an IRS Received Date to the middle of the return.

Multiple Received Dates are present,

Circle all but the earliest date received by the IRS.

Circle any green rocker and edit marks that may indicate a receipt of remittance.

When additional information is still needed to make the return processable, prepare approved Correspondence Action Sheet or Form 4227, Intra-SC Reject or Routing Slip, for the appropriate action (e.g., correspondence, research, etc.).

Businesses use frivolous arguments for expressing dissatisfaction with the substance, form or administration of the tax laws by trying to illegally avoid or reduce tax liabilities. Recognized frivolous arguments made by businesses include, but are not limited to, the examples shown in Exhibit 3.11.213-3, Potential Frivolous Argument for Examination Review. See IRM 25.25.10, Frivolous Return Program (FRP).

Review the return to decide whether it appears to be a frivolous return.

Frivolous Return Criteria

IF

THEN

The return meets any of the conditions shown as a frivolous return, (See Exhibit 3.11.213-3, Potential Frivolous Arguments for Examination Review).

If the return shows the Action Code 331 and has a Form 4227, Intra-SC Reject or Routing Slip, attached with the remarks, "Refer to Exam, Frivolous Return Processing (FRP) for audit after processing" , continue to next procedure.

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

Examination has selected the return as frivolous, shown by an Action Code 331 and a Form 4227, Intra-SC Reject or Routing Slip, with the remarks "Refer to Exam Frivolous Return Processing (FRP)" , for audit after processing, but sends the return for processing,

Continue processing the return using procedures in IRM 3.11.213. However, do not circle or void the Action Code showing a frivolous return.

Do not consider the following returns as frivolous, unless there is other evidence of a frivolous argument:

Returns that have only zeros, blanks, or no entries.

Returns showing "None" , "Not Liable" , etc.

(CCC) are used to identify a special condition or computation for the computer. CCCs post to the Master File.

Computer Condition Codes are edited to the dotted portion of Section 1, Line 1, Form 1066.

Edit CCC "B" when the taxpayer has made an entry in the margin of either Schedule D or Form 4797, Sales of Business Property, electing not to report property sales on the installment basis. Taxpayer's entry will be similar to I elect out of the installment method.

Do not edit CCC "D" if the taxpayer requests abatement for "Failing to Pay Timely" when the return is submitted. Send Letter 1382-C, Penalty Removal Request Incomplete, to inform the taxpayer of the proper procedure to follow to request penalty abatement, if, and when a penalty is assessed.

Edit CCC "D" if an internal use form or routing slip is attached and indicates DO NOT ASSESS FAILURE TO PAY PENALTY

Do not enter CCC "D" if the return was prepared by IRS under IRC 6020(b) and the return due date (without regard to extensions) is after July 30, 1996.

Edit CCC "F" when the Final Return box is checked or there is another indication the taxpayer is not liable for filing future returns. Notations may include (but are not limited to):

Final

Deceased

Out-of-Business

Liquidation

Exempt under IRC Section 501(c)(3)

Dissolved

Edit CCC "L" when the taxpayer has written Section 6114 on the top of the return, and

Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), is attached to the return.

CCC "O" is entered when a Pre-settlement Manual Refund will be made and a Form 3753, Manual Refund Posting Voucher, Form 5792, Request for IDRS Generated Refund, or Form 12857, Refund Transfer Posting Voucher is attached. Verify that the Name Control, EIN, and Tax Period on the return is the same as the data on the form.

When issuing CCC "O" , research to determine if TC 840 (Manual Refund Transaction) has posted.

IF

THEN

TC 840 has posted,

Enter CCC "O" and continue processing.

TC 840 has not posted,

Enter Action Code 341 to issue Manual Refund.

CCC "R" is no longer edited when a reason is given by the taxpayer for a delay in filing a return. Issue Letter 1382-C, Penalty Removal Request Incomplete, and continue editing the return.

Edit CCC "R" on the REMIC return when any of the following condition(s) are present:

There is an indication such as DO NOT ASSESS FAILURE TO FILE PENALTY on a secured return annotated with TC 599.

All CCC "R" coded returns must have a IRS Received Date. If one is not present, edit the IRS Received Date in the middle of the return.

Edit CCC "W" when Statute Control cleared the return. See IRM 3.11.213.13, Statute Returns.

CCC "X" is a refund freeze code to be used as the need arises.

Edit CCC "3" when the return is unprocessable and there is an indication that correspondence has been sent and no reply received.

Edit CCC "4" when the IRS Compliance Branch prepared a return and the Revenue Officer entered IRC 6020(b) Provides a way to prepare returns and secure assessments.

The Total Assets is found in the upper right-hand corner at the top of Page 1, Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, Box C (Enter total assets at end of tax year).

Edit Box C as follows:

IF

AND

THEN

Box C is blank,

Zero (0) is an acceptable entry beginning with Tax Period 202301.

Schedule L, Line 4, Column (b) has an amount,

Edit Schedule L, Line 4, Column (b) amount to Box C (dollars only).

Box C is blank,

Zero (0) is an acceptable entry beginning with 202301.

Schedule L, Line 4, Column (b) is blank,

Edit Schedule L, Line 4, Column (a) amount to Box C (dollars only).

Box C and Schedule L are blank,

No action necessary.

The number of Residual Interest Holders is found on Page 3, Additional Information, Question F, dotted area.

The number of Residual Interest Holders must always be edited.

Edit the number in the left margin of Page 1, Deductions Section preceded by 3-. See Figure 3.11.213-8, Example of the editing of the number of residual holders.

The entry must be all numeric, 1 through 999,999.

Determine the number of Residual Interest Holders as follows:

IF

AND

THEN

A number from 1 through 999,999 is present on Question F,

Edit the number from Question F.

A number is not present on Question F,

Schedules Q are attached,

Count the number of holders receiving the attached Schedule Q’s and edit the total number of Residual Interest Holders.

A number is not present on Question F,

No Schedules Q are attached,

Edit 1 if the Trust or Corporation boxes are checked on Question E.

Edit 2 if the Partnership box is checked on Question E.

If no boxes are checked for Question E, edit 2 as the number of Residual Interest Holders.

A number greater than 999,999 is present on Question F,

Edit "999999" (six nines).

No Page 3 is present,

No Schedules Q are attached,

Edit a "2" as the number of Residual Interest Holders.

Figure 3.11.213-8

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This code is based on the taxpayer's response to Question G, Page 3, Form 1066. If the taxpayer checks the box in Question G, edit "1" preceded by 4- to the left margin of the Deductions Section. See Figure 3.11.213-9, Example of Editing the TEFRA Code.

Figure 3.11.213-9

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The valid Missing Schedule Code is "35" .

Edit Missing Schedule Code following instructions below.

IF

THEN

Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, Page 1, Section I, Line 4, Ordinary gain or (loss), contains an entry, but Form 4797, Sales of Business Property, is not attached or is blank,

Edit code "35" preceded by "5-" to the left margin of the Deductions Section.

The following information pertains to the Audit Code.

IF

THEN

Form 8082, Notice of Inconsistent Treatment or Administrative Adjustment Request (AAR), is attached; Form 8275, Disclosure Statement, or Form 8275-R, Regulation Disclosure Statement, is attached,

Edit Audit Code "1" preceded by "8-" to the left margin of the Deductions Section.

Form 926, Return by a U.S. Transferor of Property to a Foreign Corporation, is attached,

Edit Audit Code "2" preceded by "8-" to the left margin of the Deductions Section.

Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, is attached,

Edit Audit Code "2" preceded by "8-" to the left margin of the Deductions Section.

Form 5713, International Boycott Report, is attached; or there is a yes answer to the Foreign Trust Question I page 3, Additional Information,

Edit Audit Code "2" preceded by "8-" to the left margin of the Deductions Section.

Although Audit Codes 3, 4, 5 and 6 are also valid for this field, no uses for these codes were identified in Forms 1066 processing.

Form 6252, Installment Sale Income, is used to report the sale of property on the installment plan.

Codes are based solely on the taxpayer's response to Question 3 on Form 6252, Installment Sale Income. See Figure 3.11.213-10, Example of Editing the Installment Sale Indicator.

Edit the Installment Sale Indicator code preceded by "9-" to the left margin of the Deductions Section.

Valid codes for the Installment Sale Indicator are as follows:

Code

One Form 6252

Multiple Forms 6252

1

"Yes" response to Question 3.

At least one form has a "Yes" response.

2

"No" response to Question 3.

All "No" responses, or a combination of No and/or blank responses. See Figure 3.11.213-10, Example of Editing the Installment Sale Indicator.

3

"Yes" and "No" are checked or Question 3 is blank.

Question 3 is blank on all forms.

Figure 3.11.213-10

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IMPORTANT: Do not edit Section I. Accept taxpayer's entries.

This subsection provides instructions for the perfection of Section II, Tax and Payments, for Form 1066, U.S. Real Estate Mortgage Investment Conduit, (REMIC), Income Tax Return.

Perfect Form 1066, Section II, Line 1, Total Tax as follows:

IF

THEN

Section II, Line 1 is blank,

Edit amount from Schedule J, Part IV, Line 12.

Section II, Line 1 and Schedule J, Part IV, Line 12 are blank,

Add entries from:

Line 4 If blank compute as follows:

Add Lines 1a, 1b, 1c, 1d and subtract Line 3

If sum is positive, add to the Section II, Line 1 computation

Line 10

Add Lines 5 and 6, subtract Line 8, and multiply by 21 percent

If sum is positive, add to the Section II, Line 1 computation

Line 11 If blank check for an attachment detailing the taxable contributions received after the Startup Date. If present, add to the Section II, Line 1 computation.

Edit the sum of Lines 4, 10, and 11 to Schedule II, Line 1.

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Please click here for the text description of the image.

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Form 1066, U.S. Real Estate Mortgage Investment Conduit (REMIC) Income Tax Return, is a calendar year return. Taxpayers must file the federal income tax returns for a REMIC on or before the 15th day of March following the close of the calendar year. Taxpayers filing such returns as its Final Return must file on or before the 15th day of the third month following the date the REMIC ceased to exist. If the due date falls on a Saturday, Sunday, or legal holiday, then the return due date is the next business day.

A six-month extension of time to file Form 1066 is granted if the taxpayer completes Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns, properly and submits it by the due date of the Form 1066.

Period Ending

Return Due Date

≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

December

3/15

≡ ≡ ≡

January

4/15

≡ ≡ ≡ ≡

February

5/15

≡ ≡ ≡ ≡ ≡

March

6/15

≡ ≡ ≡ ≡ ≡ ≡

April

7/15

≡ ≡ ≡

May

8/15

≡ ≡ ≡

June

9/15

≡ ≡ ≡ ≡ ≡

July

10/15

≡ ≡ ≡ ≡

August

11/15

≡ ≡ ≡ ≡

September

12/15

≡ ≡ ≡ ≡ ≡

October

1/15

≡ ≡ ≡ ≡ ≡

November

2/15

≡ ≡ ≡

Description

Alleged Churches/First Amendment

Income from non-religious sources and may claim a vow of poverty.

Altered Form

Altering any or all line items with the intent of facilitating non-compliance with the tax laws.

Altered Jurat/UCC 1-207

Return contains income and deductions but the jurat has been altered or stricken. May include reference to UCC 1-207 or a statement that the return was not signed under penalties of perjury.

Amended Returns/Form 843 Claim for Refund and Request for Abatement

Amended return or a Form 843, Claim for Refund and Request for Abatement, filed to obtain a total refund of all taxes paid in prior years, based on a tax avoidance argument.

C-Filings

This frivolous position includes the following four categories:

Files a return claiming various types of deductions, credits, or overpayments/refunds that have no relation to reality and because of their outrageous character, qualify as frivolous returns.

Files return containing the filers identifying information but does not request a refund, often lacking sufficient information to determine a tax liability.

Files a return with various types of rambling dialogue and/or confusing arguments that no one could reasonably view as a good faith attempt to comply with the law.

Files a return that attempts to send some type of message or protest to the IRS, but fails to include sufficient identifying information for the IRS to either determine the identity of the taxpayer or correspondent or return address.

Challenges to Authority/Due Process

Questions various administrative authorities such as delegation orders, summons authority, Privacy Act, etc., Argues that they must be afforded a hearing or a trial before taxes can be assessed or before property can be seized.

Challenges to Authority/Title 26 or law in Other Documents

Argues that Title 26 of the United States Code is not law because it was never enacted as named.

Collections Issues

Files frivolous documents contending that various collections issues are invalid (e.g. Offers in Compromise, Collection Due Process Requests, Installment Agreements, appeals Requests, etc.,) because they are not filed and/or signed by someone with delegated authority. They may have no certificate of assessment attached, do not comply in form or content with a State or Local law, are not in a certain format or lack a valid OMB (Office of Management and Budget) number or other frivolous positions.

Disclaimer

Submits a disclaimer stating, disclaims the liability for the tax due, making the liability on the return zero.

Fifth Amendment

Assertion of the Fifth Amendment right against self-incrimination as a basis for not providing any financial information.

Foreign Income

Argues that United States citizens and residents are not subject to tax on their wages or other income derived from sources within the United States, as only foreign-based income or income received by nonresident aliens and foreign corporations from sources within the United States is taxable.

Form 1099-OID (Original Issue Discount)

An individual files a return reporting false amounts of income (generally Other or Miscellaneous income) and all of them claim a false amount of income tax withholding approximately equal to the amount of falsely reported income. Although the returns report income, they do not calculate any tax due. Some of the returns have Form 1099-OID (Original Issue Discount) attached and some have Form 1096, Annual Summary and Transmittal of U.S. Information Returns. Other false financial instruments may be filed in the place of or in addition to the Form 1099-OID, Original Issue Discount, such as Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, promissory notes, bonds, sight drafts, etc.

IRC 861 Business Employment Tax (BMF 861)

Argument targets employers and advises them that wages are exempt from withholding. These taxpayers rely on Sections 861 through 865 of the Code and the regulations (in particular, Treasury Regulation §1.861-8), promoters of this scheme advise employers to stop withholding and paying payroll taxes on their employee's wages. In addition, some employers file amended payroll tax returns and request refunds of previously paid payroll taxes.

IRS is a Private Organization/Collects Tribute, Not Taxes

Argues that the IRS is an entity named the Internal Revenue and Tax Service, Inc., which was incorporated in Delaware in 1933, it is a collection agency for the Federal Reserve Bank, or is part of the United Nations and is clandestinely leading the tax-paying public into a New World Order.

Not a Person

Argues that a taxpayer is not a person within the meaning of IRC Section 7701(a)(14).

Obscene, Vulgar, Harassing

Submits documents or other materials indicating that non-filing is due to dissatisfaction with tax policies or taxation in general. Often, this argument is expressed with obscene, vulgar, or crude language and characters in an extremely demeaning manner.

Protest Against Government Action/Inaction

Argues that refusal to file or pay is justified because they disagree with government policies or spending plans.

Sixteenth Amendment

Argues the Sixteenth Amendment was not properly ratified and therefore the federal government does not have the legal authority to collect an income tax without apportionment.

Straw Men

Argues the government has created an entity separate and distinct from the taxpayer - a Straw Man and any tax obligations are exclusively those of the Straw Man.

Taxes are Voluntary/Law Does Not Require

Submits a return, amended return or correspondence that argues income taxes are voluntary.

U.S. v. Long

Submits a return with zero money amounts much the same as the Zero Return category and U.S. v. Long is referenced. See NOTE in Zero returns below.

Unsigned Returns

The individual completes a return but fails to sign, a statement indicating disagreement with the tax system is attached or added to the return.

Valuation

Income is not taxable because of the declining fair market value of the dollar, because the dollar is not backed by gold/silver, because the value of services is offset by the value of the labor (barter income), etc.

Zero Returns

Submits a return with zero money amounts on all or most of the line items on the form (e.g., IRC 861, Form 2439, Notice to Shareholder of Undistributed Long-Term Capital Gains, Original Issue Date (OID) and other BMF filings that claim no income and request refunds). See Rev. Rul. 2004-34. The statement may also contain arguments regarding the definition of income. There are several variations on this type of filing such as those bearing the words nunc pro tunc and not liable

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

Other

All others including those listed in Notice 2010-33 or any subsequent superseding notice. See also http://www.irs.gov/Tax-Professionals/The-Truth-About-Frivolous-Tax-Arguments-Introduction on irs.gov. This category includes non-filer accounts resulting from initial compliance check such as cross-reference TINs.

Frivolous arguments citing Collection Due Process (CDP) should be reviewed by Collections for possible referral to Appeals. Refer to IRM 5.19.8, Collection Appeal Rights, for additional information.

Australia State

Australia State

Abbreviation

Australian Capital Territory

ACT

New South Wales

NSW

Northern Territory

NT

Queensland

QLD

South Australia

SA

Tasmania

TAS

Victoria

VIC

Western Australia

WA

Brazil State

Brazil State

Abbreviation

Acre

AC

Alagoas

AL

Amapa

AP

Amazonas

AM

Bahia

BA

Ceara

CE

Distrito Federal

DF

Espirito Santo

ES

Goias

GO

Maranhao

MA

Mato Grasso

MT

Mato Grosso do Sul

MS

Minas Gerais

MG

Para

PA

Paraiba

PB

Parana

PR

Pernambuco

PE

Piaui

PI

Rio de Janeiro

RJ

Rio Grande do Norte

RN

Rio Grande do Sul

RS

Rondonia

RO

Roraima

RR

Santa Catarina

SC

Sao Paulo

SP

Sergipe

SE

Tocantins

TO

Canada Province/Territory

Canada Province/Territory

Abbreviation

Alberta

AB

British Columbia

BC

Manitoba

MB

New Brunswick

NB

Newfoundland and Labrador

NL

Northwest Territories

NT

Nova Scotia

NS

Nunavut

NU

Ontario

ON

Prince Edward Island

PE

Quebec

QC

Saskatchewan

SK

Yukon

YT

Cuba Province

Cuba Province

Abbreviation

Camaguey

CG

Ciego de Avila

CA

Cienfuegos

CF

Ciudad de La Habana

CH

Granma (Bayamo)

GR

Guantanamo

GT

Holguin

HO

La Habana

HA

Matanzas

MT

Municipio Especial Isla de La Juventud

IJ

Pinar del Rio

PR

Sancti Spiritus

SS

Santiago de Cuba

SC

(Victoria de) Las Tunas

LT

Villa Clara

VC

Italy Province

Italy Province

Abbreviation

Agrigento

AG

Alessandria

AL

Ancona

AN

Aosta/Aoste

AO

Arezzo

AR

Ascoli Piceno

AP

Asti

AT

Bari

BA

Belluna

BL

Beneveto

BN

Bergamo

BG

Biella

BI

Bologna

BO

Bolzano Bozen

BZ

Brescia

BS

Brindisi

BR

Cagliari

CA

Caltanissetta

CL

Campobasso

CB

Caserta

CE

Catania

CT

Catanzaro

CZ

Chieti

CH

Como

CO

Cosenza

CS

Cremona

CZ

Crotone

KR

Cuneo

CV

Enna

EN

Ferrara

FE

Firenze

FI

Foggia

FG

Forli

FO

Frosinone

FR

Genova

GE

Gorizia

GO

Grosseto

GR

Imperia

IM

Isernia

IS

L'Aquila

AQ

La Spezia

SP

Latina

LT

Lecce

LE

Livorno

LI

Lodi

LO

Lucca

LU

Macerata

MC

Mantova

MN

Massa-Carrara

MS

Matera

MT

Messina

ME

Milano

MI

Modena

MO

Napoli

NA

Novara

NO

Nuoro

NU

Oristano

OR

Padova

PD

Palermo

PA

Parma

PR

Pavia

PV

Perugia

PG

Pesaro-Urbino

PS

Pescara

PE

Piacenza

PC

Pisa

PI

Pistoia

PT

Pordenone

PN

Potenza

PZ

Prato

PO

Ragusa

RG

Ravenna

RA

Reggio de Calabria

RC

Reggio nell'Emilia

RE

Rieti

RI

Rimini

RN

Roma

RM

Rovigo

RO

Salerno

SA

Sassari

SS

Savona

SV

Siena

SI

Siracusa

SR

Sondrio

SO

Taranto

TA

Teramo

TE

Terni

TR

Torino

TO

Trapani

TP

Trento

TN

Treviso

TV

Trieste

TS

Udine

UD

Varese

VA

Venezia

VE

Verbania

VB

Vercelli

VC

Verona

VR

Vibo Valentia

VV

Vincenza

VI

Viterbo

VT

Mexico State

Mexico State

Abbreviation

Aquascalientes

AGS

Baja California Norte

BCN

Baja California Sur

BCS

Campeche

CAM

Chiapas

CHIS

Chihuahua

CHIH

Coahuila

COAH

Colima

COL

Distrito Federal

DF

Durango

DGO

Guanajuato

GTO

Guerrero

GRO

Hidalgo

HGO

Jalisco

JAL

Mexico

MEX

Michoacan

MICH

Morelos

MOR

Nayarit

NAY

Nuevo Leon

NL

Oaxaca

OAX

Puebla

PUE

Queretaro

QRO

Quintana Roo

QROO

San Luis Potosi

SLP

Sinaloa

SIN

Sonora

SON

Tabasco

TAB

Tamaulipas

TAMPS

Tlaxcala

TLAX

Veracruz

VER

Yucatan

YUC

Zacatecas

ZAC

The Netherlands Province

The Netherlands Province

Abbreviation

Drenthe

DR

Flevoland

FLD

Friesland

FR

Gelderland

GLD

Groningen

GN

Lemburg

LB

North Brabant

NB

North Holland

NH

Overijssel

OV

South Holland

ZH

Utrecht

UT

Zeeland

SLD

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