Note:

If the FTD penalty changes by less than ≡ ≡ ≡ ≡ an adjustment notice will not generate.

A review of this penalty will be made whenever timely payments are transferred into or out of an account containing an FTD penalty.

Command Code PIFTD (with no definer code) can be used to obtain the computer’s FTD computation on a screen display for Forms 940, 941, 943, 944, 945 and 1042.

Command Code FTDPN ( Definer Code A) can be used to manually compute the FTD penalty. For more information on CC FTDPN, see, IRM 2.3.28, Command Code FTDPN. The penalty can be adjusted with a TC 180 and the applicable Penalty Computation Code (PCC) to increase the penalty or a TC 181 with the applicable Penalty Reason Code (PRC) to decrease the penalty, using Blocking Series 00 or 15.

When transferring credits, use CC FTDPN (with no definer code) to decide penalty recomputation See the caution in item d) below.

The computer will abate the FTD penalty if the penalty when computed using the Most Recent or First in First Out (FIFO) method is less than ≡ ≡ ≡ ≡ ≡ for returns due after January 1, 2001. Before January 1, 2001, the computer will abate the FTD penalty if it recomputes under ≡ ≡ ≡ ≡.