Section 110. Processing Form 1042 Withholding Returns

(1) This transmits revised IRM 3.21.110, International Returns and Documents Analysis - Processing Form 1042 Withholding Returns.

(1) IRM 3.21.110.7.1(2) - Corrected the Taxpayer Advocate Service (TAS) Service Level Agreements link. (IPU 25U0259 issued 02-24-2025.)

(2) IRM 3.21.110.8- Added subsection for Religious Exemption procedures based on feedback from Office of Servicewide Penalties.

(3) IRM 3.21.110.16.4

(3) - Updated Statute Returns clearing exception from 2020 to 2021. (IPU 25U0259 issued 02-24-2025.)

(4) - Corrected Delinquent Return Form 942 to 944.

(4) IRM 3.21.110.16.7(3) - Added to edit the received date to 1042T/S that are being detached.

(5) IRM 3.21.110.16.10(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 25U0259 issued 02-24-2025.)

(6) IRM 3.21.110.16.12(6) - Updated Action Codes to clarify information. (IPU 25U0259 issued 02-24-2025.)

(7) IRM 3.21.110.17.4(2) - Clarified the Private Delivery Service information in the If/Then chart. (IPU 25U0259 issued 02-24-2025.)

(8) IRM 3.21.110.17.4.1(1) - Updated Received Date Chart.

(9) IRM 3.21.110.19.3(2) - Changed "Circle" the street address to "Underline" the second street address in the If/Then chart. (IPU 25U0259 issued 02-24-2025.)

(10) Exhibit 3.21.110-2 - Added Direct Deposit "T" lines.

(11) Exhibit 3.21.110-7 - Updated glossary term Possessions to Territories.

(12) Revised the Internal Revenue Manual (IRM), where necessary, for the following types of editorial changes:

Plain language and editorial updates to improve readability.

Dates, tax periods and years to reflect current year processing.

Updated figures and exhibits to reflect current year processing.

Updated line 71 to 71a to reflect revised processing year 2026 Form 1042.

Scott Wallace Director, Submission Processing Taxpayer Services Division

Purpose: This section of the IRM provides instructions for reviewing and editing Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons.

Audience: Tax examiners in the International Code and Edit Unit, Ogden Submission Processing Center, Taxpayer Services (TS) Division are the primary users of this IRM.

Policy Owner: The Director of Submission Processing is responsible for the policies in this IRM.

Program Owner: The Code and Edit/ERS IMF Section of the Return Processing Branch of Submission Processing is responsible for the procedures and all updates related to this IRM.

Primary Stakeholders: Submission Processing (SP), Modernized E-file (MeF), and Large Business and International (LB&I).

Program Goals: To timely and accurately code and edit Form 1042 returns to prepare them for transcription.

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 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) performs these functions if the returns and other documents are coded and edited as prescribed in applicable subsections of this section.

Instructions in this manual are for Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons.

for these procedures includes the following sections of the Internal Revenue Code (IRC) and their corresponding Treasury Regulations:

IRC 1441-1446

IRC 1461-1464

IRC 1471-1474

IRC 6201(a)

IRC 6213(b)

IRC 6302

IRC 6402(a)

IRC 6511

The Director, SP Office is responsible for monitoring operational performance for the Submission Processing campus.

The Operations 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 maintaining updated IRM procedures.

Program Reports: The Monitoring Section under Submission Processing Program Management/Process Assurance monitors the Code and Edit reports.

Program Effectiveness: The program goals are measured by the following reviews:

Embedded Quality Submission Processing (EQSP)

Balanced Measures

Managerial Reviews

Annual Review: This IRM is updated and published annually after review by affected offices according to the clearance process established in IRM 1.11.9, Internal Management Document System, Clearing and Approving the Internal Revenue Manual (IRM).

Quality Review is conducted following Embedded Quality Submission Processing (EQSP) procedures in IRM 3.30.30, Embedded Quality for Submission Processing (EQSP) System. The EQSP system provides a method to monitor, measure, and improve the quality of the work throughout Submission Processing. Review data is used to identify trends, problem areas, training needs, and opportunities for improvement. A statistical valid sample size of returns are pulled weekly and input into the EQSP system for review and to ensure IRM guidelines are followed.

See Exhibit 3.21.110-7 for a list of terms and definitions used within this IRM.

The Submission Processing Design Center has created Job Aid 2544-701 to help tax examiners with processing this form.

The Form 1042 is processed under:

Program Code: 12500

File Source: BMF

Tax class: 1

Master File Transaction Code (MFT): 12

Document Code: 25

DLN: XX125-ddd-501-999

File Location Codes: Paper - 29 (domestic address), 60 (Foreign address), and 78 (U.S. Possession address) Modernized e-file (MeF) - 60 (Foreign address), 78 (U.S. Possession address), 88 (Foreign address) and 92/93 (Domestic address)

This IRM cannot address every possibility that occurs while perfecting 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.

The purpose of this initiative is to achieve consistency in the Business Master File (BMF) Code and Edit (C&E) 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 titles identifies BMF Consistency subsections.

Text in normal print is the common process 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.

For returns completed in other than U.S. currency, process as filed. However, if corresponding for missing/incomplete item(s), include a request in Letter 1791C, U.S. Annual Return of Income Paid at Source Incomplete for Processing, to resubmit in U.S. currency.

Remove returns marked as "Protective Claims" , "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 (CCC) "G" and follow normal processing procedures.

The Taxpayer Advocate Service 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, see 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 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 Service Criteria, for information on cases 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 and Self-Employed (SBSE) Division, Tax Exempt Government Entities (TEGE) Division, Criminal Investigation (CI), Independent Office of Appeals, and Large Business and International (LB&I) Division, that outline the procedures and responsibilities for processing Taxpayer Advocate (TAS) casework when either the statutory or delegated authority to complete case transactions rests outside of TAS. The agreements are known as Service Level Agreements (SLAs).

The SLAs are found at TAS Service Level Agreements

Counsel issued Notice 2024-18 which established the procedures for taxpayers to notify the Service of their religious exemption from electronic filing of information returns by filing a Form 8508, Application for Waiver from Electronic Filing of Information Returns. Filers of business tax returns must notate “Religious Exemption” at the top of the paper filed returns. Follow procedures below if “Religious Exemption” is notated at the top of page 1 of the tax return.

If

Then

Religious Exemption is notated,

Notate "RE-TC016" in the upper left margin.

Pull the return for research/input of TC 016 by the Code and Edit Research Clerk.

Follow procedures below for religious exemption research/input of TC 016 on IDRS

If

Then

CC ENMOD / BMFOLE / IMFOLE displays the religious exemption indicator "RLG-EX IND" as a value of "1" ,

Continue processing the return. No action is required.

CC ENMOD / BMFOLE / IMFOLE displays the religious exemption indicator "RLG-EX IND" as a value of blank,

Input a TC 016 to record a religious exemption on IDRS: CC ENMOD, followed by CC: ENREQ, which becomes CC: BNCHG/INCHG Input a "1" in the "RLG-EX>" field. Continue processing the return.

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, face-to-face, or any other method of correspondence with taxpayers or their personal representatives on tax-related matters, must give (at a 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 proper during the conversation, their last name, and badge identification (ID Card) number.

Correspondence (sent to the taxpayer and authorized representatives) - A telephone number 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. They must provide 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.

BMF ID Theft is increasing. If a case with attachments or correspondence showing the taxpayer is a victim of "ID Theft" , give the whole case to the manager/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 they are a victim of "ID Theft" ; do not send cases that are subject to Criminal Investigation (CI), Examination (Exam), or "Fraud" review.

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

Select 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

Edit marks are edited on the return for transcription to 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. Exercise care to ensure 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 3.21.110.14.3, Correspondence Imaging Inventory (CII) Returns, and IRM 3.21.110.16.5, Re-Entry Return Procedures.

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

EDIT MARK

DESCRIPTION

"X"

Delete 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 be 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."

"%" or "c/o"

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).

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 an entry was manually math verified and is correct.

Bracket/ Parenthesis

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).

Vertical Line or Decimal Point

Indicates the separation of dollars and cents.

Zero, Dash, None, or N/A

"ZERO" , "DASH" , "NONE" , OR "NA" are valid entries except when specific instructions require editing of an entry.

Rocker

Indicates the amount paid when drawn under a remittance amount.

A return must contain the following specific items before it is considered processable:

A Taxpayer Identification Number (TIN) or Employer Identification Number (EIN)

A legible name (for the name control)

A valid Tax Period

Legible tax data (if tax liability is shown)

Jurat and Signature

Perfect all documents to the extent possible from schedules and other attachments.

Conditions which make a document unprocessable are:

The name is so illegible or incomplete the name control cannot be determined.

A social security number (SSN) or individual taxpayer identification number (ITIN) is used instead of the withholding agent's EIN and cannot be perfected from information on the return or attachments.

The TIN is other than nine numeric digits and cannot be perfected from information on the return or attachments.

The document has two or more different TINs.

The Taxpayer has stated they have combined liability for more than one tax period or more than one type of tax.

Tax data entries are so incomplete, illegible or contradictory the tax liability cannot be determined.

The document is mis-blocked.

The return is unsigned.

The return has only entity data and no other statements or attachments from the taxpayer.

Any condition set forth as unprocessable in the sections on processing specific documents.

All Other Unprocessable Conditions — Initiate correspondence by preparing Letter 1791C CAS, if applicable unless other instructions are given in the IRM.

Service Centers keep all refund, credit-elect, and zero balance returns In-House instead of sending the return back to the taxpayer when corresponding for signature, missing information, and supporting schedules and documentation. Document Analysis, Code and Edit, will follow the instructions they currently use for correspondence when the return cannot be sent back to the taxpayer.

There are two types of correspondence 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 the 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 4442, Inquiry Referral.

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

Is taxpayer waiting for a response from the IRS?

Is taxpayer waiting for the IRS to take an action?

Is taxpayer asking a question?

A Post-It-Note, Sticky Note, or some other type of note stuck on the return by another function, 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) -Returns prepared by Exam, "Substitute for Return" (SFR) -Dummy Returns prepared by the IRS

If the return is incomplete and doesn’t appear to be a return meant for filing or is a conduit for providing information (e.g., indicates "payment only" ), give the return to the lead. The lead must determine the correct course of action. The lead researches for a Transaction Code (TC) 150 and any other information necessary to determine if the return should continue processing, is as an amended return, or must be routed to another function. An incomplete return could include any of the following:

A one-page return, with or without a signature

Incomplete returns 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 Letter 1791C CAS, indicating the MFT code, and the proper paragraphs.

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

Attach the approvedLetter 1791C CAS, 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 approvedLetter 1791C CAS, indicating the MFT and the proper 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 Letter 1791C CAS, below the entity area on front of the return copy. Be sure the name and address clearly show above the Letter 1791C CAS.

Forward the copy to the correspondence area.

Edit an Action Trail (e.g., 1791C SENT mmddyy) in the lower left corner going vertically up the side of the return.

Finish editing the return and leave in batch.

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

If missing page 2, correspond using Letter 1791C CAS, and mark Line 22.

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

"CII" returns show a "CII Image - Do not correspond for Signature" stamped below the signature line or a "CII" annotation 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 not complete (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 incomplete information, 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, or other proper routing slip.

The CII return has a Form 13596 attached and the return is not complete (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 attached,

The return is not complete (e.g., missing, schedules or forms),

Follow normal correspondence procedures.

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 is stamped "Process as Original" .

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

Edit the name and EIN (if not present) on the detached document. Also, edit the return received date (e.g., Rec’d MM/DD/YY) in the lower left margin of the detached document before routing.

Follow the general guidelines below for each attachment:

Document

Detach

Descriptions/Actions

CP 504 or CP 504B

No

Pull CP 504 to the front.

Route notice and return to Accounts Management.

CP 518

Do not route to Statute Control Unit for clearance. See IRM 3.21.110.16.4, Statute Returns, for more information.

No

Correspondence is attached or taxpayer’s response shows:

Taxpayer disagrees 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 the 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

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. Notate see CP Notice and leave attached.

CP 259 and CP 959 (Spanish version)

Do not route to Statute Control Unit for clearance. See IRM 3.21.110.16.4, Statute Returns, for more information.

No

Correspondence is attached or taxpayer’s response shows:

Taxpayer disagrees 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 the 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

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. Notate see CP Notice and leave attached.

Letter 112C

Letter 282C

Letter 2284C

Do not route to Statute Control Unit for clearance. See IRM 3.21.110.16.4, Statute Returns, for more information.

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

Kansas City - Mail Stop N2 6800

Route letters initiated by Collections as follows:

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

Taxpayer disagrees 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 the 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.

Letter 5935, Offshore Compliance Status Letter

Yes

Route to: LB&I, Stop 4301, AUSC

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 proper 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 Room 3244 1111 Constitution Avenue, NW Washington, DC 20224

State Tax Returns (Original or Copy With Original Signature)

Yes

Route to Receipt and Control

State Tax Returns (Photocopy, facsimile or no signature

No

Leave attached.

Statement Establishing Reasonable Cause for delinquent filing

No

Send Letter 1382C, Penalty Removal Request Incomplete.

Continue editing the return.

See IRM 3.21.110.16.7, Delinquent Returns for more information.

Remittance Found

No

Immediately hand carry the 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 copy to the return.

Route the original attachment to the proper office for necessary action.

Requests for Installment Agreement

Yes

Route as follows: Ogden - Route to Collections Mail Stop 5500. Kansas City — Route to Mail Stop P4 5000.

Request for Adjustment to another document.

Yes

Route to the proper function. The attachment must contain a name, address, EIN, and received date. Edit if missing.

Request for money transfer

Yes

If the taxpayer attaches a request to transfer money to the return you are processing:

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

Detach the transfer request.

Hold the return for 2 cycles before processing.

Prepare Form 3465, to route the request to Accounts Management.

Edit CCC "X" to freeze overpayment.

Detach the transfer request.

Continue processing return.

Request for Forms or Schedules

No

If requesting current year forms:

Prepare Form 4190, Order Form for Tax Forms 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.

A General Power of Attorney or a Durable Power of Attorney or Tax Information Authority is submitted on any document other than Form 2848, Power of Attorney and Declaration of Representative, or Form 8821, Tax Information Authorization

No

Take no action. Leave the Power of Attorney or Tax Authorization attached to the return. Do not route to the Centralized Authorization File (CAF) function.

Claims for Collective Refund

No

Take no action.

W-8, Certificate of Foreign Status, Series or a substitute thereof (in the form of a statement)

No

Take no action.

Form 433-B, Collection Information Statement for Businesses

Yes

Route as follows: Ogden - Route to Collections Mail Stop 5500. Kansas City - Route to Mail Stop P4 5000.

Form 433-D, Installment Agreement

Yes

Route as follows: Ogden - Route to Collections Mail Stop 5500. Kansas City - Route to Mail Stop P4 5000.

Form 1000, Ownership Certificate

No

Take no action.

Form 1042-S Copy A/Form 1042-T

Yes

Prior to detaching Form 1042-S Copy A and Form 1042-T, verify the following information is present on the returns and edit missing information on the appropriate return:

Withholding Agents Name

Withholding Agents Address

Withholding Agents EIN

Lines 61-63 Form 1042

Do not separate Form 1042-T from associated Form(s) 1042-S.

Route to Receipt and Control for rebatch.

Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, Copy B (C, D, and/or E) ONLY, or

Letter signed by "U.S. Competent Authority" , or

Taxpayer statement supporting the amount of U.S. source substitute dividends received from the withholding agent

Not applicable for Forms 1042 filed for calendar years starting on or after January 1, 2025.

No

Leave attached to Form 1042 for verification of Line 67a/67b. See IRM 3.21.110.29, Credit for Amounts Withheld by Other Withholding Agents - Lines 67a and 67b for more information.

Form 2848, Power of Attorney and Declaration of Representative

Yes

Edit taxpayer name and EIN on Form 2848 if missing.

Edit received date on Form 2848.

Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts

Yes

Route to Receipt and Control for rebatch, if original signature is on Form.

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

Yes

Route to Receipt and Control for rebatch, if original signature is on Form.

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

Yes/No

If the extension is for a different period or different Form, detach and Route to Receipt and Control for re-batch. If the Form 7004 is a photocopy do not detach.

Form 8233, Exemption from Withholding on Compensation for Independent (and Certain Dependent) Personal Services of a Nonresident Alien Individual

No

Take no action.

Form 8288, U.S. Withholding Tax Return for Certain Dispositions by Foreign Persons of U.S. Real Property Interests

Yes

Route to the International BMF Accounts Management Foreign Investment in Real Property Tax Act (FIRPTA) Unit.

Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests

Yes

Route to the International BMF Accounts Management Foreign Investment in Real Property Tax Act (FIRPTA) Unit.

Form 8300, Report of Cash Payments over $10,000 Received in a Trade or Business

Yes

Route to the Detroit Computer Center (DCC). This form is used to report cash payments in excess of $10,000.

Form 8804, Annual Return for Partnership Withholding Tax (Section 1446)

Yes

Route to Receipt and Control for rebatch.

Form 8813, Partnership Withholding Tax Payment Voucher (Section 1446)

Yes

Route to the International BMF Accounts Management FIRPTA Unit.

Form 8821, Tax Information Authorization

Yes

Edit taxpayer name and EIN on Form 8821 if missing.

Edit received date on Form 8821.

Edit action trail on tax return.

Form 9465, Installment Agreement Request

Yes

Route as follows: Ogden - Route to Collections Mail Stop 5500. Kansas City - Route to Mail Stop P4 5000.

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 15023, Offshore Compliance Status

Yes

Route to: LB&I, Stop 4301, AUSC

For procedures when processing unusual Form 1042 conditions, this subsection covers the following topics:

Early-Filed Returns

Non-Taxable Returns With No Line Entries

Fiscal Year Returns

Voluntary Compliance Program (VCP)

Statute Returns

Re-Entry Returns

Amended Returns

Delinquent Returns

Compliance Secured/Prepared Returns

IRC 6020(b) - Prepared by Collection

Collection Secured

Examination Prepared

Examination Secured

Frivolous Argument

Refund Returns (180-Day Jeopardy and Refunds $500,000 or more)

Form 1042 - Prior Year Returns Processing

Early-filed returns must be held for processing at the beginning of the appropriate processing year. See Figure 3.21.110-1.

An early-filed Form 1042 for Tax Period 2026 (filed before January 1, 2027) must be held for processing until January 2027.

Edit Action Code 480 on early-filed returns to suspend them to Rejects until the returns can be processed.

Figure 3.21.110-1

Please click here for the text description of the image.

Process a signed return containing no line entries as a non-taxable return. This includes a signed return with notations such as Not Liable, etc.

Process as final any return stating Final, No longer in business, Do not file this form, etc. if the required signature is shown. A signature is not required if the taxpayer shows they received the wrong type of return, and another type of return is filed provided the following actions are taken before CCC "F" is entered:

Prepare Form 4227 (or Form 6882, IDRS/Master File Information Request, if your Center prefers), for research to be performed to determine whether the proper filing requirement was established for the return the taxpayer states was filed. Notate in the remarks area, "research for the entity and MFT" of the appropriate return.

If research shows the taxpayer has a filing requirement for the appropriate return, process the incorrect return as final to turn off the filing requirement.

If research shows the taxpayer does not have a filing requirement for the return, attach the research papers to the invalid return and forward to Entity Control on Form 4227 for filing requirement determination. If the filing requirement is incorrect, Entity Control changes it and notate the change on Form 4227. The return is sent back to Document Perfection to be converted to the proper return.

If the Form 1042 shows it is a Fiscal Year return:

Change the return to show the current calendar year.

Prepare Letter 1791C CAS, to inform the withholding agent Form 1042 must be filed on a calendar year basis with the following literal: “We received your Form 1042 for tax period beginning _______ and ending _______. We cannot process it because Form 1042 must cover a calendar year. Please submit a new Form 1042 covering the appropriate calendar year. If your Form 1042 reflected monies paid during two calendar years, please submit a Form 1042 for each year.”

≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Any return with a received date 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 6020(b) returns.

Secured by Examination/Collections, including TEGE or TEGE Employee Plan (EP) Exam.

Returns with Transaction Code "TC 59X" or "ICS" (Integrated Collections System) notated on the face of the return.

Returns showing "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 90 days.

Return is a 2021 and 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 and 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. See IRM 3.21.110.15, Routing Guide for Attachments, for more information.

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

Letter 2255C, Delinquent Return (Forms 720, 1041, 1065, 1120)

Letter 2284C, Delinquent Return (Form 940, 941, 944, 943)

If a return has a 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 on 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 cleared by Statute Control.

If

Then

Numbered Returns,

Edit Action Code 310.

Leave the return in the batch and continue processing.

Unnumbered Returns,

Do not continue processing.

Pull the return from the batch.

Attach Form 4227, Intra-SC Reject or Routing Slip, and route to 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 account module.

Some re-entry returns may have originally been filed electronically (E-File) or via Modernized E-file (MeF). These returns may be identified by the presence of Mod E-File printouts in lieu of the actual return. Do not correspond for missing signatures on these documents.

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

Form 3893 is used to re-input documents not posted to an account or module.

Form 13596 is used to reprocess documents to the correct account or module, when they had previously posted to the wrong account or module.

Always leave Form 3893 or Form 13596 on the front of the return. It must remain as a permanent part of the document.

Examine Form 3893 or Form 13596 to determine the action needed to make the return processable (See Figure 3.21.110-2)

If the IRS received date is two years and nine months or more after the Return Due Date, see Statute procedures before re-entering or reprocessing the return. See IRM 3.21.110.16.4, Statute Returns.

If

Then

Neither Form 3893 nor Form 13596 is present,

Edit Action Code 610 to post the return to the proper account or module.

Route to Receipt and Control using Form 4227, Intra-SC Reject or Routing Slip.

Leave the return in the batch.

Form 3893 or Form 13596 is attached,

Determine if the return is edited according to current processing instructions.

If more than one return is in the batch and only the top Form 3893 has an entry in Box 1 (Alpha/Numeric Block Control Number), edit all returns using current processing instructions, and keep all returns clipped together.

If it is determined an unprocessable condition exists, edit the proper CCC. Circle out any incorrect CCC(s) and any other edit marks no longer applicable. Re-edit according to current processing instructions.

Line through DLN.

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

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

Circle the CCC "G" , if present.

Do not edit CCC "G" on amended returns.

Do not send Letter 1382C, if a request for reasonable cause is attached.

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

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

Form 3893

Action Taken

Box 14 (Remarks)

Ensure the information is edited to the return.

Box 15 (Process as)

Circle any green rocker and edit marks indicating a receipt of remittance.

Do not change any tax due amounts.

Examine returns with any color other than red editing in the tax data section to determine if the corrections are due to improper perfection or taxpayer error.

If

Then

Improper perfection,

Edit the same correction in red/green (per local procedure) to the correct area.

Taxpayer error,

Leave the entries as shown on the document.

An IRS received date must be present on all re-input returns.

If

Then

IRS received date is not present,

Edit an IRS received date to the middle of the return.

Multiple IRS received dates 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, for the proper action (e.g., correspondence, research).

When perfection is not possible, edit Action Code 640 on the return, and attach Form 4227 noting, "perfection not possible" , and leave in batch.

Figure 3.21.110-2

Please click here for the text description of the image.

Form 13596, Reprocessing Returns, is used to reprocess a return to the correct account or module 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 1382C if a request for reasonable cause is attached.

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

If the return is edited according to current processing instructions ensure the information from Form 13596 is edited on the return.

Form 13596

Action Taken

TIN correction

Edit correct TIN on return.

Tax Period correction

Edit correct Tax Period ending on return.

Reasonable cause

Edit proper Computer Condition Code:

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

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

Examine returns with any color other than red editing in the tax data section to determine if the corrections are due to improper perfection or taxpayer error.

If

Then

Improper perfection,

Edit the same correction in red/green (per local procedure) to the correct 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 indicate a receipt of remittance.

When more information is still needed to make the return processable prepare an approved Correspondence Action Sheet or Form 4227, for the proper action (e.g., correspondence, research).

A return is considered Amended based on the following:

The Amended Box is checked.

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.

Examine the return for attachments:

Do not separate any related attachments submitted to explain the reason for the Amended Return. Accounts Management may use the information.

Detach any unrelated documents and route them to correct function using Form 4227, Intra-SC Reject or Routing Slip, and edit the Action Trail on the return.

Follow the instructions in the chart below when there is an indication of an amended return.

If

Then

Compliance Services Entered "TC 59X" or "ICS" on the return,

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

Statute stamped the return "Delinquent Original Cleared for Processing,"

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

Form 3893 or Form 13596 is attached,

Do not edit CCC "G" . See IRM 3.21.110.16.5, Re-Entry Document Procedures.

None of the above is present,

Edit CCC "G" . Do not use any other codes with CCC "G."

CCCs "W" , "3" and Error Resolution System (ERS) Action Codes may be used with CCC "G" .

The following data must be present on all amended returns:

Name Control

EIN

Tax Period

CCC "G"

IRS Received Date

Signature

A return is normally delinquent if it is not received on or before the Return Due Date (RDD). However, accept the return as timely filed if the received date is within the ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ See IRM 3.10.72, Receiving, Extracting, and Sorting or IRM 3.10.73, Batching and Numbering.

Accept a return as timely if:

The return was mailed in time to reach the IRS through normal handling within the legal period but,

Through no fault of the taxpayer, it was not delivered or not timely delivered.

Consider a return timely if the Post Office might have sent it to another government agency in error, or if the original envelope bears a timely postmark or a timely date stamp by that agency. However, if the return was erroneously addressed to another agency, it is date stamped with the date when the IRS received it.

Edit the corrected received date to 1042T/S that are being detached.

See IRM 3.21.110.17.4.1, Received Date Chart, for information on the due date of Form 1042.

If a return is delivered to the IRS after the date prescribed for filing, but the postmark date falls on or before the prescribed date for filing the return, then consider the return timely, and edit the timely postmark date in MMDDYY format on the dotted part of Line 62b(1).

If the Form 1042 is delinquent, check the return for an explanation of late filing. If the taxpayer attaches correspondence with a reasonable cause explanation for failure to file a timely return, take the following action:

Detach the reasonable cause explanation correspondence from the return.

Complete Form 3499, Informational Transmittal, and forward to Ogden International Accounts Management Campus (OAMC), BMF INT'L unit 1973 N Rulon White Blvd., Ogden, Utah 84404 M/S 6552. In the remarks area write "Process attached Reasonable Cause Correspondence. TC 150 to post in 4 weeks."

Prepare Correspondence Action Sheet for IDRS Letter 1382C (use paragraphs "A and S" ) and assign it to a clerk for input to IDRS or follow local procedures. It may or may not include the Rejects function. Photocopy page 1 of the Form 1042, LTR and attach to 1382C. Edit action trail 1382C sent on the return and continue processing.

Do not edit CCC "R or 7" on the return. OAMC will address the taxpayers reasonable cause letter.

Edit CCC "R" and continue processing if the return is stamped by the IRS: "Do not assess late file penalty"

Continue processing Form 1042. Do not attach the Correspondence Action Sheet, Letter 1382C to the return.

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

Compliance notates:

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

Secured tax returns with "TC 59X" or "ICS" or "Process as Original" with a Form 13133, Expedite Processing Cycle, attached with the "Delinquent Return" box 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 does not 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 IRC 6020(b) of the Internal Revenue Code" which is located in the center bottom of Page 1 of the return.

Returns must have an IRS received date. If missing, follow the normal procedures for editing the IRS received date. See IRM 3.21.110.17.4, Received Date.

Compliance Function representatives must sign returns. If not signed, route to Compliance using Form 4227.

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

Edit CCC "4" .

Do not use CCC "R" with CCC "4" .

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

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" .

Edit CCC "W" if the 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 3.21.110.17.3.9, CCC "W" - Return Cleared by Statute Control.

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

Do Not edit CCC "G" on these returns.

Use Letter 1791C CAS, to correspond for conditions that are unprocessable (e.g., missing signatures, schedules or entries).

Edit CCC "W" if the 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 3.21.110.17.3, Computer Condition Codes, for more information.

If there are indications penalties require suppression, edit the proper Computer Condition Code(s). See IRM 3.21.110.17.3, Computer Condition Codes, 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 received date is present, follow the normal procedures for editing the received date. See IRM 3.21.110.17.4, Received Dates.

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

If Form 13133, Expedite Processing Cycle, is attached, edit the Computer Condition Codes(s) 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.

Edit CCC "W" if the 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 3.21.110.16.4, Statute Returns.

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

Do not edit CCC "G" on these returns.

Use Letter 1791C CAS, to correspond for conditions that are unprocessable (e.g., missing signatures, missing schedules).

Edit the Computer Condition Codes checked on Form 13133, Expedite Processing Cycle.

Edit CCC "W" if the 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 3.21.110.17.3.9, CCC "W" - Return Cleared by Statute Control.

If Form 13133 (or something similar) shows penalties require suppression, edit the proper Computer Condition Code(s). See IRM 3.21.110.17.3, Computer Condition Codes, for more information.

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. See IRM 25.25.10, Frivolous Return Program, and Exhibit 3.21.110-6, Potential Frivolous Arguments for Examination Review, for a list of recognized frivolous arguments made by businesses.

Review the return to decide if it is a frivolous return.

If

Then

The return meets any of the conditions shown as a frivolous return Exhibit 3.21.110-6., Potential Frivolous Arguments for Examination Review.

If the return shows Action Code 331 and has a Form 4227 attached with the remarks, "Refer to Exam FRP for audit after processing," continue to next procedure.

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

Examination has selected the return as frivolous,

shown by an Action Code 331 and a Form 4227, with the remarks, "Refer to Exam FRP for audit after processing," but sends the return for processing.

Continue processing the return using procedures in IRM. 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 with only zeros, blanks, or no entries.

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

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 and Kansas City

≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Make a copy of the first two pages of the tax return along with any page of the return appearing 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 or CCC "U" (whichever is applicable) on the return. See IRM 3.21.110.16.10.

Continue processing the return.

Due to 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 considers 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 as shown on the table below.

Ogden

Kansas City

Mail Stop 9001, Criminal Investigation (CI)

Mail Stop S2 9000, 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 is to promote the highest degree of voluntary compliance. Examination 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 any questionable return to Exam, unless prohibited by instructions currently found in several IRMs.

Document Perfection identifies refunds in jeopardy and requests 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 or CCC "U" (whichever is applicable).

For returns with CCC "U" , attach Form 4227, Intra-SC Reject or Routing Slip, and check the "Reject Correction" box.

Give the return to the manager for expedite processing.

Numbered Returns:

Code and edit the return as completely as possible.

Edit Action Code 341 (or CCC U as applicable) and leave in batch.

For returns with CCC "U" , attach Form 4227 and check the "Reject Correction" box.

The refund 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 or CCC "U" (whichever is applicable).

For returns with CCC "U" , attach Form 4227 and check the "Reject Correction" box.

Make a copy of the first two pages of the tax return along with any page of the return that appears suspicious. See IRM 3.21.110.16.9.1, 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 (or CCC "U" as applicable)

Attach Form 4227 to the return, edit Action Code 341 on Form 4227, and leave in batch.

For returns with CCC "U" , attach Form 4227 and check the "Reject Correction" box.

Make a copy of the first two pages of the tax return along with any page of the return that appears suspicious. See IRM 3.21.110.16.9.1, 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.

Upon receipt of a prior year Form 1042 return with a tax year prior to the current processing tax year, first determine if the return is for the year shown on the return or for the current year.

If the return is for the current processing tax year,

Edit the correct tax year,

draw a line thru prior year line numbers that have been changed, and

edit new Line numbers on form to conform to current year format.

If necessary, dummy the current year form.

If the return is for a prior tax year:

Edit the prior year return to conform to current year line format.

Draw a line thru prior year line numbers that have been changed.

Edit new Line numbers on form to conform to current year format.

If not possible to edit the form, dummy the current year form.

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 the return.

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 or 215, and Action Code 341,

Edit the Action Code 211 or 215 on the Form 1042.

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 1042.

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

See IRM 3.21.110.16.12(8), Action Codes for suspense periods and Exhibit 3.21.110-5

Action Codes have different priorities,

Edit the Action Code with the higher priority on the Form 1042.

Use Action Code 211 or 215 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 and/or Signature (Refund Returns))

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

Taxpayer notates on the return or an attachment they are reporting tax for more than one Tax Period or for more than one type of tax.

If the address is domestic, it is a domestic return.

215 - First International Correspondence Missing Information and/or Signature (Refund Returns))

Return is illegible, incomplete, or contradictory, and therefore cannot be processed.

Taxpayer notates on the return or an attachment they are reporting tax for more than one Tax Period or for more than one type of tax.

If the address is foreign, it is a foreign return.

225 - Correspondence (Signature Only - Balance Due/Zero Balance/Credit Elect Returns)

Unsigned domestic return (only issue for correspondence)

If the address is domestic, it is a domestic return.

226 - International Correspondence (Signature Only - Balance Due/Zero Balance/Credit Elect Returns)

Unsigned foreign return (only issue for correspondence).

If the address is foreign, it is a foreign return.

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 Form 1042 batch of work).

640 (Void)

To delete the assigned DLN on the return (e.g., Re-Entry Returns).

650 (International)

An international return: Processed in Ogden Submission Processing Center (OSPC).

Continue perfecting the return after editing the Action Codes. For a valid list of Action Codes, see Exhibit 3.21.110-5.

For more information and applicable Action Codes, see:

IRM 3.12.38.3.4, Error Resolution System (ERS) Action Codes

Exhibit in IRM 3.12.38-1, Action Codes

Exhibit 3.21.110-7

If the Form 1042 shows 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.

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

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

Form 1042 is the annual tax return used by withholding agents to report tax withheld under sections IRC 1441-IRC 1443 on certain income of foreign persons; tax withheld under chapter 4 on withholdable payments; tax withheld under IRC 5000C on specified federal procurement payments; certain distributions made by publicly traded trusts and qualified investment entities under IRC 1445; certain payments subject to IRC 877A; distributions of effectively connected income made by publicly traded partnerships under section 1446 purposes and amounts realized subject to section 1446(f) withholding. See Exhibit 3.21.110-1.

Form 1042 is to be filed by all individuals, corporations, trusts and partnerships having the control, receipt, custody, disposal, or payment of interest, dividends, rent, salaries, etc. (amounts subject to withholding under Treas. Reg 1.1441-2(a)), to the extent any such items constitute gross income from sources within the United States to nonresident alien individuals, foreign partnerships, foreign corporations and other foreign persons.

Form 1042 must be filed whether any tax is withheld or must be withheld (i.e., income is exempt from withholding or income is erroneously withheld upon).

Payment of Taxes - Effective January 1, 2011, taxpayers must deposit tax withheld using the EFTPS. Form 8109, Federal Tax Deposit Coupon, can no longer be used.

The amount of taxes withheld determines the frequency of deposits.

If at the end of any quarter-monthly period, the total amount of undeposited taxes is $2,000 or more, the taxes must be deposited within three business days after the end of the quarter-monthly period. A quarter-monthly period ends on the 7th, 15th, 22nd and the last day of each month.

If at the end of any month, the total amount of undeposited taxes is $200 or more but less than $2,000, taxes must be deposited by the 15th day of the following month.

If at the end of the year, the total amount of undeposited taxes is less than $200, the entire amount must be deposited via EFTPS or remitted with Form 1042 on or before March 15 of the current tax year.

Identifies whether the return is an amended return or original. See IRM 3.21.110.16.6 Amended Returns.

The IRS Use Only box is used to list:

Computer Condition Codes (CCC) IRM 3.21.110.17.3

Penalty and Interest Codes (PIC) IRM 3.21.110.17.5

Schedule Indicator Codes (SIC) IRM 3.21.110.22

identify special conditions or computations for the computer. CCCs post to the Master File.

CCC’s are edited on the CC line of the For IRS Use Only box in the upper right corner of Form 1042.

Edit CCC "A" if the taxpayer marks the box on Page 2, Section 4, identifying themselves as a Qualified Derivatives Dealer (QDD).

Do not edit CCC "D" if the taxpayer requests abatement for "Failing to Pay Timely" when the return is submitted. Send Letter 1382C, to inform the taxpayer of the proper procedure to follow to request penalty abatement if a penalty is assessed. See IRM 3.21.110.16.7(6), Delinquent Returns.

Edit CCC "D" if an internal use form or routing slip is attached and shows "Do not assess failure to pay penalty."

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

Enter CCC "D" when ALL the following applies:

Withholding Agent’s Chapter 3 status code is equal to "08" or "09."

There is an entry on 65b, Total paid during subsequent year.

Enter CCC D for tax years 2017-2024, if the filer notated “Dividend Equivalent- Partnership” anywhere on the return or attachments.

Edit CCC "E" as follows:

If

And

Then

The taxpayer has checked the credit elect box on Line 71a, Form 1042,

The overpayment is $1.00 or more on Lines 70a and/or 70b,

Edit CCC "E" .

The taxpayer has attached a statement requesting a credit election,

The overpayment is $1.00 or more on Lines 70a and/or 70b,

Edit CCC "E" .

Neither the Credit Elect nor Refund box is checked on Line 71a,

The overpayment is $1.00 or more on Lines 70a and/or 70b,

Edit CCC "E" .

Both the Credit Elect and the Refund box is checked on Line 71a,

The overpayment is $1.00 or more on Lines 70a and/or 70b,

Edit CCC "E" .

An overpayment is to be applied to another type of tax,

Do not edit CCC "E" , edit CCC "X" . See IRM 3.21.110.17.3.10, CCC "X" .

An overpayment is the result of excess remittance paid with the return,

Do not edit CCC "E" .

Only Refund box is checked,

Do not edit CCC "E" .

If CCC "F" is edited, do not edit CCC "E" , instead edit CCC "S" .

Edit CCC "F" when the final return box is checked or there is an indication the taxpayer is not liable for future returns. Notations may include, but are not limited to:

Final

Deceased

Out-of-Business

Liquidation

Exempt Under IRC 501(c)(3)

Dissolved

Cites IRC 708(b)(1)(B)

Notates, Filed in Accordance with Rev. Proc. 2003-84

Do not edit CCC "F" if the date entered for the final income paid is after the tax period. For example, if the tax form submitted is a printed 2021 form, but the taxpayer made a handwritten entry of paying their last income on March 5, 2022, it is not a final return.

Edit CCC "G" if there is a clear indication on the return or on an attachment that the return being processed is not the first return filed for the tax period. See IRM 3.21.110.16.6 for instructions.

Edit CCC "J" when a notation of "3121 Agreement" or "VCP" is on the return. See IRM 3.21.110.17.3.7, CCC R – Reasonable Cause for Failing to Timely File Return. Also edit a Schedule Indicator Code (SIC) of 2.

For tax years 2017-2024 enter CCC J if:

There is an entry on Line 65b, tax paid in subsequent year AND

"Dividend Equivalent Partnership" is written on the return or attachments.

Also enter CCC "D" for tax years 2017-2024 ONLY, if the filer notated “Dividend Equivalent- Partnership” anywhere on the return or attachments.

Do not edit CCC "J" if the taxpayer requests abatement for Failing to Make Timely Deposits. Instead, follow the step list instructions in IRM 3.21.110.16.7 (6), Delinquent Returns.

Enter CCC J if "Withholding Under Lag Method" is noted on the return OR the withholding agent Chapter 3 status code is an "8" or "9" and there is an entry on Line 65b.

For tax year 2019 and later, CCC J is computer generated and is not required to be edited if the Chapter 3 status code is 08 or 09 and line 65b has an entry. However, editing is still required for tax years 2017 and 2018.

TY 2017 only: CCC "J" is edited for an amount present on Line 62b(1).

Do not edit CCC "R" when a reason is given by the taxpayer for a delay in filing a return. Send Letter 1382C and continue editing the return.

Edit CCC "R" on the return when any of the following conditions are present:

There is an indication such as "Do not assess failure to file penalty" on a secured return annotated with "599" .

If an internal use form or routing slip is attached and shows do not assess failure to file penalty.

The return shows an assessment of a fraud penalty (IRC 6663 or IRC 6664).

A notation of "VCP" is on the return.

All "R" coded returns must have an IRS received date. If one is not present, edit the IRS received date in the middle of the return.

Do not use CCC "R" with CCC "4" . Do not edit CCC "R" if CCC "7" (Reasonable Cause Denied) is present.

Withholding under Lag Method may be noted on return. Do not edit CCC "R" , the CCC "R" is computer generated.

Edit CCC "S" when the overpayment is $1.00 or more on Lines 70a and/or 70b and:

The refund box, Line 71a, Form 1042 is checked, or

A statement requesting the money be refunded is attached, or

The return is a final return.

See IRM 3.21.110.32, Overpayment - Lines 70a and 70b for more information.

Edit CCC "W" when Statute Control cleared the return. See instructions in IRM 3.21.110.16.4, Statute Returns.

Edit CCC "X" when any of the following conditions occur:

If

Then

The taxpayer has requested part of the refund applied to another account,

Edit CCC "X" .

Photocopy Page 1 of Form 1042.

Prepare Form 3465, attach to the photocopy, and forward to Accounts Management.

Notate "FORM 3465 prepared" on the original Form 1042.

Correspondence for a signature is returned as a No reply and a refund is due,

Edit CCCs "X" and "3" .

Photocopy Page 1 of Form 1042.

Prepare Form 3465, attach to the photocopy, and forward to Accounts Management.

Notate "FORM 3465 prepared" on the original Form 1042.

If the taxpayer has requested a refund on Excise Tax Only returns,

Edit CCC "X" .

Also edit CCC “X” as noted in specific line by line instructions.

Edit CCC "3" when the taxpayer does not respond to correspondence, or the correspondence is returned undeliverable.

Edit CCC "3" when the return is unprocessable and there is a sign correspondence was sent and no reply received.

If the return is overpaid (refund) and the correspondence is for signature only, then also edit CCC "X" . See IRM 3.21.110.17.3.10, CCC X, for more information.

There may be other times CCC "X" is edited on Refund returns, follow specific line by line instructions.

Edit CCC "4" when the IRS's Compliance Branch has prepared a return and the revenue officer entered IRC 6020(b).

CCC "7" is used when the taxpayer’s statement for failing to file or pay taxes timely is not acceptable.

This CCC is rarely used because code and edit tax examiners do not make decisions on reasonable cause request.

Refer to the step list instructions in IRM 3.21.110.16.7 (6), Delinquent Returns.

CCC "7" cannot be used with CCCs "D, R or J" .

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

All 1042 returns require an IRS received date.

If

Then

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

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 date 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 Service (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 and Confirm" record attached to the return (should be in front of the envelope). Use the "Acceptance" date on the record to determine timeliness and follow normal editing procedures. If the "USPS.com Track and Confirm" record is not attached, take no action.

When a Form 1042 is delinquent and the taxpayer explains the return is late due to the rejection of a timely filed electronic return, check the return for a MeF rejection notification.

Taxpayers are instructed to notate in red in the top margin of the return REJECTED ELECTRONIC RETURN to indicate the timely filed return cannot be filed electronically. The notation could be anywhere on the return and is not required, but they are required to attach a copy of the MeF rejection notification in order to show they qualify for an edited Received Date.

If a MeF rejection notification is not attached, perfection of the Received Date is not necessary. If a notification is attached, edit the IRS Received Date in MMDDYY format as follows:

The taxpayer has 10 days to resubmit an electronically filed return after being rejected and 10 days to submit a paper return after the last rejection. The first transmission of any rejected return must have been filed on or before the due date of the relevant form for this rule to apply.

If

And

Then

The postmark date is within 10 days of the date of the rejection,

Edit the IRS Received Date to be the date of the rejection. For example, postmark date is 03-22-2026 and first rejection is 03-12-2026. Change Received Date to 031226.

The postmark date is more than 10 days after the date of the rejection,

Leave the IRS Received Date as is. For example, postmark date is 03-25-2026 and first rejection is 03-12-2026. Leave the Received Date as is.

Change the Received Date to the postmark date if the postmark date makes the return timely.

There are two rejections,

Within 10 days of one another and one is within 10 days of the postmark date,

Edit the IRS Received Date to be the date of the first rejection. For example, postmark date is 03-22-2026, the second rejection is 03-12-2026. The first rejection is 03-09-2026 Change the Received Date to 030925.

There are two rejections with the time between the first rejection and the second rejection greater than 10 days,

The second rejection is within 10 days of the postmark date,

Edit the IRS Received Date to be the date of the second rejection. For example, postmark date is 03-22-2026, the second rejection is 03-12-2026. The first rejection is 03-01-2026 Change the Received Date to 031226.

There are two rejections and the time between the first rejection and the second rejection is greater than 10 days,

The second rejection is not within 10 days of the postmark date,

Leave the IRS Received Date as is. For example, postmark date is 03-25-2026, the second rejection is 03-12-2026. The first rejection is 03-01-2026. Leave the Received Date as is.

Change the Received Date to the postmark date if the postmark date makes the return timely.

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

A valid received date Stamp may consist of the following (MMDDYY):

The word "Received"

Month (alpha or numeric)

Day (numeric 01-31)

"1" or "01"

Year (numeric) - 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 Services Collection Operations (CSCO), Examination, Image Control Team (ICT), Correspondence Imaging Inventory (CII), Accounts Management (AM)).

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 has a received date stamp from other than a Taxpayer Assistance Center (TAC), Lockbox, or the 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 IRS received date in MMDDYY format to the dotted part of Line 62b(1) on the Form 1042. Edit the IRS 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), Foreign Postmark, or Private Delivery Service are as follows:

If

Then

An envelope is not attached,

Use the 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 was attached to the return (should be in front of the envelope). Use the "acceptance" date on the record to determine timeliness and follow normal editing procedures. If the "USPS.com Track & Confirm" record is not attached, take no action.

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 metered postmark.

An envelope has only one private metered postmark,

Use the private metered postmark.

≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

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

Revenue officer's signature date.

Signature date (only if within current year).

Use the signature date on prior year returns only when it is signed in the current year. DO NOT use the signature date stamp to determine the received date for replies to correspondence.

Julian control date minus 10 days.

Current date minus 10 days.

Edit the received date as follows:

If

Then

A timely 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.

Treat Received Dates circled out by another function as if they are not present.

A federal return is addressed to the IRS but delivered to a state agency,

Use the postmark date as the IRS received date.

A federal return is addressed to a state agency,

Use the IRS received date.

The only received date on the return is a TAS received date,

Circle out the TAS or Chief Counsel received date and edit the IRS received date according to instructions. See IRM 3.21.110.17.4(5), Received Date.

Check any envelope attached to the return for remittance. If found, hand carry remittance to manager.

If a return was faxed to another area of the IRS and then sent to Submission for processing, do not edit the Enterprise Electronic Fax (EEFax) Date as the IRS received date. Edit a received date according to normal procedures. See IRM 3.21.110.17.4, Received Dates.

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

The received date chart below provides return due date information. The dates are subject to local adjustments for State/D.C. Holidays.

Calendar Year Ending Date

Due Date (Weekends and Holidays Considered)

Delinquent

(7004) Extended Due Date Weekends and Holidays Considered

Delinquent Return

12-31-25

03-16-26

≡ ≡ ≡ ≡ ≡

09-15-26

≡ ≡ ≡ ≡ ≡ ≡ ≡

≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Valid characters are 1 and blank.

Edit this code on the "I" line of the For IRS Use Only box in the upper right corner of Form 1042 when the pre-computed delinquency penalty and/or interest is shown on a return with a received date (stamped or improvised) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

If the taxpayer has entered a single digit number in the box, it is not necessary to edit a “0” in front of the number.

If blank and 1042-S is attached, edit the code from 1042-S box 12b or 12c; if not present on box 12b and/or box 12c, take no action unless you are corresponding for other missing information then, correspond for Status Code if both chapter 3 and chapter 4 are blank. Use the following literal when corresponding: “Please provide the missing chapter 3 and/or chapter 4 status code on page 1.”

Edit CCC "D" when ALL the following applies:

If Withholding Agent’s Chapter 3 status code is equal to 08 or 09.

There is an entry on 65b, Total paid during subsequent year.

The entity section of a tax return identifies the taxpayer on the Business Master File. The entity section of the return has the following:

Employer Identification Number

Name

Address

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

The EIN is in the upper right of Form 1042.

Form 1042 cannot be processed with an SSN or an IRS ITIN.

Do not accept an SSN or ITIN in place of an EIN.

Determine the EIN as follows:

If

And

Then

If Form 1042 is filed with an SSN or ITIN instead of an EIN or QI-EIN,

Circle out the SSN/ITIN.

Research IDRS or attachments for EIN.

If not found, attach Form 4227 to route to Entity Control.

The EIN is missing,

You can determine the correct EIN from the attachments,

Arrow or edit the EIN to the correct location.

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

Unnumbered return,

Remove return from batch.

Route to Entity Control following local procedures, using Form 13934 for EIN assignment.

The EIN is either a PTIN or ITIN,

Numbered return,

Edit Action Code 320.

Leave return in batch.

Multiple EINs are present,

Unnumbered return (see Figure 3.21.110-3),

Research IDRS or attachments.

If found edit to proper location and circle out wrong EIN.

If not found, route to Entity Control following local procedures, using Form 13934 for EIN assignment.

Multiple EINs are present,

Numbered return,

Edit Action Code 320.

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

Illegible,

Missing,

Other than 9 digits,

All zeros, or

All nines or other repeating digits,

Unnumbered return (see Figure 3.21.110-4),

Research IDRS.

If found, edit to the proper location.

If not found, route to Entity Control (e.g., Form 13934).

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

Illegible,

Missing,

Other than 9 digits,

All zeros, or

All nines,

Numbered return,

Circle out all illegible EINs, zeros, or nines.

Research IDRS.

If not found, edit Action Code 320.

Pending, Applied for, etc., is shown in the EIN area,

Unnumbered return,

Research IDRS.

If found, edit to the proper location.

If not found, route to Entity Control following local procedures, using Form 13934.

Pending, Applied for, etc., is shown in the EIN area,

Numbered return,

Edit Action Code 320.

Figure 3.21.110-3

Please click here for the text description of the image.

Figure 3.21.110-4

Please click here for the text description of the image.

Listed below are the most common conditions indicating an entity change requiring a new EIN.

Individual owner dies and estate takes over business.

Individual owner dies, Surviving Spouse takes over when no estate is involved.

Individual ownership changes to a corporation.

Individual ownership changes to a partnership.

Partnership changes to individual ownership or disregarded entity (except where the resulting business changes from an individual owner to another individual owner).

Partnership changes to corporation (except for elective change caused by filing Form 8832).

There is a sale or exchange of 50 percent or more of the interests in a partnership within a 12-month period.

Corporation changes to an individual ownership or disregarded entity (except where the resulting owner already has an EIN).

Corporation changes to a partnership (except for elective change caused by filing Form 8832).

Sole proprietor shows bankruptcy.

The type of entity present on the return determines the name control procedures.

Individuals

Corporations

Partnerships

Trusts and Estates

Other organizations

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 Document 7071-A BMF Name Control Job Aid to properly determine the name control.

Edit the name control as follows:

If

And

Then

A second name line is present and begins with "FKA" (formerly known as),

Unnumbered Return,

Remove return from batch.

Attach Form 4227 or follow local procedures.

Route to Entity Control.

A second name line is present and begins with "FKA" (formerly known as),

Numbered Return,

Edit Action Code 320.

A second name is present and begins with "AKA" (also known as) or "DBA" (doing business as),

Circle out the abbreviations.

Able to determine the name control,

Underline the name control.

Unable to determine the name control,

Unnumbered Return,

Research IDRS.

If not found, Route to Entity Control.

Unable to determine the name control,

Numbered Return,

Edit Action Code 352 (name research).

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

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

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

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

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 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.

Continue editing the return.

The street address for the in-care-of name is different from the street address of the Form 1042,

Arrow the in-care-of street address below the in-care-of name or edit the in-care-of street address below the in-care-of name if included on an attachment.

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.

Determine a change in the in-care-of name by any of the following:

A mark in the "Name Change" box, or

A mark in the "Address Change" box, or

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

If

Then

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

Edit the "in-care-of" name as per table above.

Continue editing the return.

An "in-care-of" name is present and there is a sign of an address change,

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

Correct the address. See IRM 3.21.110.19.4, Entity Perfection – Domestic Address.

Continue editing the return.

"Special Considerations"

APO/FPO/DPO addresses us the following format:

Line

EXAMPLE:

Applicable Field

Payee Name

PVT. Willard J. Doe

02ADD

Mailing Address

Company F. PSC Box 100 167 Infantry REGT

02ADD

Payee City

APO, FPO or DPO

02CTY

Payee State

AE, AA, or AP*

02ST

Payee ZIP Code

09801

02ZIP

*AE is the designation for ZIPs beginning with 090-098, AA for ZIP 340, and AP for ZIPs 962-966

Perfect the address when the mailing address (Street or P.O. Box) is not easily identified.

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

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

Perfect the address as follows:

If

And

Then

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

No perfection is necessary. ISRP enters the complete address.

Attachment shows address was changed,

Edit the new address in the entity section of the return. Delete old address.

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

All the following applies:

Mailing address information is the same,

Form 8822/8822-B, Line 7, does not list a location address,

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

Take no action.

Continue processing the return.

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 8822/8822-B, Line 7, lists a location address,

Form 8822-B, Lines 8 or 9, have an entry

Detach Form 8822/ 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,

Underline the P.O. Box

Notate "TC 014" in the upper-left margin of the return.

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,

An "in-care-of" name includes a street address other than the withholding agent’s street address,

Circle the withholding agent’s street address.

Notate the "TC 014" in the upper left margin.

Completely edit the return.

Pull from batch, place in designated area.

Two street addresses are shown,

Underline the second street address.

Notate "TC 014" in the upper-left margin of the return.

Completely edit the return.

Pull from batch, place in designated area.

One street address is shown,

The taxpayer changed the address to a P.O. Box,

Notate "TC 014" in the upper-left margin of the return.

Completely edit the return.

Pull from batch, place in designated area.

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

Edit the city and state on the form in the entity section.

The zip code is missing or illegible,

Is not available from the return or attachments,

Determine the zip code by using Exhibit 3.21.110-4.

Only the first three digits of the zip code can be determined,

Edit "01" for the fourth and fifth digits.

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

Underline the name control.

No address is shown on the return or attachments,

You must research IDRS for an address,

If no address is found route the return to Entity Control following local procedures using Form 13934, Entity Document/C&E Merge Transmittal.

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

Do not perfect. ISRP enters the complete address.

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

The U.S. Postal Service established new address requirements for APO/FPO/DPO addresses. If it is an old address (i.e., APO New York, NY 191XX), convert to the new state code abbreviation based on the zip code. (i.e., the previous example would be converted to APO AE 091XX). Consider APO/FPO/DPO addresses as domestic addresses. See the Conversion Chart below:

If

Then

Only the first three digits of the zip code can be determined,

Edit 01 for the fourth and fifth digits.

No address is shown on the return or attachments,

Route the return to Entity.

APO/FPO/DPO addresses use the following format:

Line:

EXAMPLE:

Payee Name

PVT. Willard J. Doe

Mailing Address

Company F. PSC Box 100 167 Infantry REGT

Payee City

APO, FPO or DPO

Payee State

AE, AA, or AP*

Payee ZIP Code

09801

*AE is the designation for ZIPs beginning with 090-098, AA for ZIP 340, and AP for ZIPs 962-966

The following table is an APO/FPO/DPO Conversion Chart.

City Code: APO/FPO/DPO

State Code: AA/AE/AP

State Location

ZIP Code

APO

AA

Americas

34000–34049

FPO

AA

Americas

34050–34099

DPO

AA

Americas

340XX-340XX

APO

AE

Europe

090XX-094XX and 096XX

FPO

AE

Europe

095XX

DPO

AE

Europe

090XX-098XX

APO

AP

Pacific

962XX–965XX and 98700-98759

FPO

AP

Pacific

966XX and 98760-98799

DPO

AP

Europe

962XX-966XX

Figure 3.21.110-5

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Figure 3.21.110-6

Please click here for the text description of the image.

Use Job Aid 2324–002, Coding and Editing BMF Tax Returns, Foreign Addresses Job Aid, to edit foreign addresses.

Submission Processing BMF Foreign Address Job Aid provides examples for editing foreign addresses.

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

Consider returns with Army Post Office (APO)/Fleet Post Office (FPO)/Diplomatic Post Office (DPO) addresses as domestic addresses. See IRM 3.21.110.19.4, Entity Perfection - Domestic Address.

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

Consider returns with addresses in the following U.S. possessions/territories as foreign for processing purposes. Edit in 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 Island (U.S.)

VI

A ZIP code must be present for U.S. Possessions/Territories. Edit the ZIP code if one is not provided. See Exhibit 3.21.110-3, U.S. Possessions ZIP Codes.

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

Ensure the foreign country is 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.

Edit a unique country code for returns filed with an address in Canada. //$ (e.g., /CA/$).

If the foreign address is from Australia, Brazil, Cuba, Italy, Mexico, or the Netherlands, check if the address has 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 more information.

If

Then

A foreign state, province, or territory is present,

Circle out the foreign state, province or territory name

Edit correct abbreviation.

A province, state or territory is not present,

Continue editing the return.

province, state or territory is shown in abbreviated format,

Continue editing the return.

ISRP enters the two-digit state code

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

All returns must have a tax period. If it is missing, incomplete, or illegible, search the return or attachments for the correct period. Edit the tax period to the left of the printed Tax Year in YYYY format.

The tax period is preprinted on this current annual return. Therefore, editing usually is not required unless the tax period is changed by the taxpayer or is other than the tax period being processed (i.e., Fiscal Year, Prior Year, Delinquent, or Early Filed). See Figure 3.21.110-1.

If the taxpayer has indicated a tax period other than the period shown on the preprinted return, edit the tax period based on the taxpayer's indication.

After searching, if you are still unable to determine the tax period, process the return for the annual year currently being processed.

These lines contain the Tax Liabilities for each week of the tax year.

If present, only numeric characters are valid.

Entries must be present in the weekly Tax Liability lines when the monthly Tax Liability lines exceed $2,000.

Beginning with Tax Year 2011, a 2 percent (%) tax on specified federal procurement payments is included in the ROFTL. The total liability for specified federal procurement payments is reflected on Line 64d.

If an entry on any monthly Tax Liability line is $2,000 or less, and the weekly Tax Liability Lines for that month are blank, double arrow the amount from the monthly total to the last weekly Tax Liability line for that month.

Do not edit SIC 1 after monthly liability is arrowed to weekly liability.

If an entry on any monthly Tax Liability line exceeds $2,000, and if no amounts are entered on the weekly Tax Liability lines for that month, correspond.

If there is an entry for the Total Net Tax Liability (Line 64e) and if Lines 1 thru 60 are blank, correspond for the missing ROFTL amounts.

Do not correspond for Lines 1 thru 60 if the total amount for Line 64e is less than or equal to ≡ ≡ ≡ ≡ ≡ ≡ ≡

≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Entries on Lines 1 thru 60 cannot contain negative amounts. If any negative entries are present,

Edit SIC 1 and continue processing the return.

ISRP will not input the quarter monthly liability amounts.

A SIC is used to notify the computer the ROFTL is:

Incomplete,

Unnecessary, or

A penalty will not be assessed.

Monthly totals are missing.

Edit the Schedule Indicator Code to the SIC line of the "For IRS Use Only box" in the upper right-hand corner of Form 1042.

Edit a SIC 1 if any of the following conditions exist:

Negative entries are present on Lines 1 thru 60.

Monthly Money totals are missing.

Lines 64b, 64c, and 64d equals Line 62c.

There are money amounts shown on a nontaxable return. A nontaxable return is when Line 64e shows "None" , "Dash (-)" , N/A or a "zero" is present on it.

The return is prepared under IRC 6020(b).

Line 64e (Total Tax Liability) equals 0.

Line 64a equals Line 64e.

No editing of the ROFTL is necessary if SIC 1 is edited.

Edit a SIC 2 if any of the following conditions exist:

CCC "J" is edited due to a notation of 3121 Agreement or VCP on the return. See also IRM 3.21.110.17.3.7, CCC R – Reasonable Cause for Failing to Timely File Return.

TY 2017 only: CCC "J" is edited for an amount present on Line 62b(1).

Line 61a has the number of paper-filed Form 1042-S Copy A filed.

Always verify the taxpayer’s information by counting the paper Forms 1042-S "Copy A" attached and comparing the number attached with the entry on Form 1042 Line 61a and on Form 1042-T Line 1d.

If unable to verify (no Form 1042-S Copy A attached), accept taxpayer entry and take no action.

If the entry on Line 61a is correct, take no action.

If the entry on Line 61a is incorrect, delete the entry and edit the correct number to the line.

If blank, edit the number of Form 1042-S Copy A attached.

Do not correspond for Line 61a information or for Form 1042-S if not attached.

Always verify all information on the Form 1042 prior to detaching the Form 1042-S Copy A and Form 1042-T. If entity information is missing on Form 1042-S and/or Form 1042-T, edit from Form 1042 prior to detaching.

Line 61b has the number of electronically filed Form 1042-S. Accept the taxpayer’s entry.

If Line 61b has an entry, Line 61a is blank, and there are Form 1042-S, Copy A attached, edit the number of 1042-S Copy A attached to Line 61a. If the number attached equals the entry on Line 61b, consider Line 61b a misplaced entry and delete.

If Line 61a and 61b are blank and there is no indication of the number of Form 1042-S filed (paper or electronic), on either the Form 1042 or any attachments, correspond.

Do not correspond on a non-taxable return as shown by the words "none" , "zero" , "N/A" or a "dash (-)" on Line 64e. See IRM 3.21.110.16.2, Non-Taxable Returns with No Line Entries.

Line 62 is header information only.

Reporting components are broken down into 62a, b(1), b(2), c, and d.

"X" any negative entries.

If blank, take the following action:

Enter the amount from Form 1042-T, Line 2.

If no Form 1042-T is attached, total the amounts from Box 2 of all Form 1042-S Copy A, attached and edit the total to Form 1042, Line 62a. DO NOT include any amounts from Form 1042-S Copy B (C, D, and/or E).

If required to edit, entries must be made in Dollars and Cents.

May or may not be present.

"X" any negative entries.

May or may not be present.

"X" any negative entries.

May or may not be present.

If blank and there are entries leading to a total, compute and enter by adding lines 62a-b.

If required to edit, entries must be made in dollars and cents.

"X" any negative entries.

May or may not be present.

All amounts must be positive.

"X" a negative entry.

If required to edit, entries must be edited in dollars and cents.

If the return is completely blank, follow instructions in IRM 3.21.110.16.2, Non-Taxable Returns With No Line Entries.

Line 63 is not a reporting field; it has header information only.

Reporting information is broken down in 63a, b(1), b(2), c(1), c(2), d, and e.

May or may not be present.

"X" any negative entry.

May or may not be present.

"X" any negative entry.

May or may not be present.

"X" any negative entry.

Line 63c is not a reporting field and contains header information only.

Reporting information is broken down in 63c(1) and 63c(2).

Line 63c, Adjustments to Overwithholding must equal the total of amounts in box 9, Overwithheld tax repaid to recipient pursuant to adjustment procedures, on all Form 1042-S filed by the withholding agent for the calendar year.

May or may not be present, accept taxpayer’s entry.

Entry is always a negative number.

May or may not be present.

"X" a negative entry.

May or may not be present.

"X" any negative entry.

Delete entry if that line is being used as a subtotal line (i.e., Line 63a=63d=63e).

This line must match the total of amounts in box 11 on all Form 1042-S.

"X" a negative entry.

If Line 63e is blank:

And

Then

There are entries on Lines 63a-d,

Compute and edit to Line 63e.

Lines 63a-d are blank, and Form 1042-T is attached,

Edit the amount from Line 3a and 3b on Form 1042-T to Line 63e.

Lines 63a-d are blank, Form 1042-T is NOT attached, and one or more Form 1042-S Copy A are attached,

Compute Line 63e as follows:

Add amounts from 1042-S, Copy A boxes 10 plus 11.

Edit the total to Line 63e of Form 1042.

Line 64 is not a reporting field; it has header information only.

Reporting information is broken down in 64a, b, c, d, and e.

May or may not be present.

May be positive or negative.

TY15 and prior: A statement justifying the adjustment must be attached. Correspond if missing using Letter 1791C CAS, and open paragraph 0 (zero) with the following literal: "Your Form 1042 for tax year xxxx contains an amount listed as an adjustment to total net tax liability. A statement justifying the adjustment must be attached. Please submit the required statement."

TY15 and prior - Any document stating the reason for underwithholding is acceptable.

May or may not be present.

"X" any negative entries.

If Line 64a-64d are blank and 64e has an entry, edit the Line 64e amount to Line 64b.

May or may not be present.

"X" any negative entries.

May or may not be present.

"X" any negative entry.

Perfect Line 64e as follows:

If

Then

Line 64e is blank,

Compute Line 64e by adding Line 64a thru 64d. Edit to Line 64e.

If lines 64a - 64e are blank, and there are money amounts on lines 1 - 60,

Correspond for missing information on Lines 64a - 64e. Use Letter 1791C CAS, use paragraph L.

Do not correspond on a non-taxable return as indicated by the words "none" , "zero" , "N/A" , or a "dash (-) " on Line 64e.

Line 64e has entry and Lines 64a-64d are blank,

Edit the Line 64e amount to Line 64b.

Line 64e is negative,

"X" Line 64e.

Line 65 is not a reporting field, it is header information only.

Reporting information is broken down in 65a and 65b.

May or may not be present.

X a negative amount.

May or may not be present.

X a negative amount.

Enter CCC D when ALL the following applies:

There is an entry on 65b, Total paid during subsequent year.

Withholding Agent’s Chapter 3 status code is equal to "08" or "09" .

May or may not be present.

"X" a negative amount.

All amounts must be positive and may or may not be present.

"X" a negative amount.

Entries on Line 67a and Line 67b must be substantiated by attaching a copy of Form 1042-S, Copy B (C, D, and/or E), or Form 1099. Review Form 1042 for supporting documentation.

The Recipient’s name on the Form 1042-S (Box 13a) must be the same as the filer’s name on the Form 1042, and the Recipient Chapter 3 Status Code (Form 1042-S Box 13f) must be 09, 11, 12, 13, 14, or 35.

The Withholding Agent named on the Form 1042-S Box 12d may not also be the recipient on Form 1042-S box 13a.

Chapter 3 status codes 13, 14, and 35 cannot be used for Forms 1042 filed for calendar years starting on or after January 1, 2025.

If the Recipient's name on the attached recipient's copy of Form 1042-S (box 13a) is unknown recipient (or some variation of unknown recipient), then the Intermediary or Flow-through entity's name on the recipient's copy of Form 1042-S (box 15d), must match the filer's name on Form 1042; and the chapter 3 status code on Form 1042-S (box 15b) must be 08, 10, 25, or 39.

The Withholding Agent named on the Form 1042-S (box 12d) may not also be the Intermediary on the Form 1042-S.

If a recipient copy of Form 1099 is attached, the recipient’s name on the Form 1099 must be the same as the filer name on the Form 1042.

If none of the above apply, delete the amount claimed on Line 67a or 67b, unless (4) or (5) applies.

It is not necessary to math verify amounts on Lines 67a and 67b.

If the Form 1042-S is missing and a credit is claimed for U.S. source substitute dividends paid from a withholding agent that has not issued a Form 1042-S, the filer may attach a statement to Form 1042 to support the amount on Line 67b with all the following info:

The withholding agent's name, address, and EIN (if known).

The amount of U.S. source substitute dividends received from the withholding agent.

The amount of credit forward included in connection with these substitute dividends.

This will no longer be applicable for Forms 1042 filed for calendar years starting on or after January 1, 2025.

If

Then

all the information is present, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡,

≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

any of the information is missing, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡,

allow the credit.

any of the information is missing, ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡,

follow instructions in (6).

If the taxpayer attaches a letter signed by a "U.S. Competent Authority" instead of Form 1042-S Copy B, accept the withholding amounts claimed.

If Form 1042-S, Copy B (C, D, and/or E) is missing, and no acceptable substitute statement is attached (e.g. Form 1099-INT or Form 1099-DIV), correspond using Letter 1791C CAS, and mark paragraph line 5.

≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

Form 1042-S, Copy B or Form 1099 must remain attached to Form 1042 to substantiate the amount of withholding at source claimed on lines 67a and 67b. See Figure 3.21.110-7a and 7b.

Figure 3.21.110-7a

Please click here for the text description of the image.

Figure 3.21.110-7b

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Intermediary Form 1042-S:

If

And

Then

Form 1042-S, Copy A is attached,

It was issued by another withholding agent,

Line thru the "A" ,

Edit a "B" to the right side of the "A" , and

Attach the 1042-S to the 1042.

Form 1042-S, Copy A, B, C, D, or E is attached,

Form 1042-T is also attached,

Detach Form 1042-T and Form 1042-S, Copy A, and forward them together to Batching and Numbering for processing. See Figure 3.21.110-8a, 8b, and 8c.

Leave Form 1042-S, Copies B, C, D, and E attached to the 1042 return.

Form 1042-S is attached,

The taxpayer is an Intermediary, BUT the supporting 1042-S documentation for the entry on lines 67a and 67b is not a different withholding agent (i.e., it is the same withholding agent/taxpayer),

Prepare Letter 1791C CAS, to correspond for the correct Form 1042-S document that does not list the taxpayer as the withholding agent.

Figure 3.21.110-8a

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Figure 3.21.110-8b

Please click here for the text description of the image.

Figure 3.21.110-8c

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If Line 68 is blank or negative, and there are entries on Lines 65 thru 67, calculate and edit the amount on Line 68.

If the total is 0 or greater, edit the amount on Line 68.

If the total is less than 0 (negative), "X" Line 68.

If lines 65a through 67b are blank and there is an amount on line 68, then arrow the amount on line 68 to line 69.

If you identify a potential Erroneous Refund Return, (see IRM 3.12.38, BMF General Instructions, for more instructions), contact the lead or manager, as you may be advised to place the return in the locally designated basket for further review by Examination.

An entry may or may not be present.

If line 69 is blank and line 64e is larger than line 68, then edit the difference on Line 69.

If the taxpayer has included penalty or interest in the amount for balance due, then subtract the penalty/interest from Line 69 and edit the correct amount to Line 69.

If lines 70a and 70b are both blank and Line 68 is greater than Line 64e, do the following:

Perfect Line 70a by subtracting Line 64e from Line 68 and enter the result on Line 70a

If there is an overpayment (Line 68 is greater than Line 64e), and the only liability reported is on Line 64d (i.e., lines 64a-64c are blank and only Line 64d includes an amount and that amount is equal to the total net tax liability on Line 64e if completed), then enter the overpayment on Line 70b.

Take the following actions if Line 70a and/or 70b is $1.00 or more and the following conditions exist:

If

Then

The "Credit" box is checked on Line 71a,

Edit CCC "E" on the CC line of the "For IRS Use Only" box in the right corner of Form 1042.

The "Refund" box is checked,

Edit CCC "S" on the CC line of the "For IRS Use Only" box in the right corner of Form 1042.

Neither box or both boxes are checked, and the return is not final,

Edit CCC "E" on the CC line of the "For IRS Use Only" box in the right corner of Form 1042.

Neither box or both boxes are checked, and the return is a final,

Edit CCC "F" and CCC "S" on the CC line of the "For IRS Use Only" box in the right corner of Form 1042. See Figure 3.21.110-9.

Attachment requesting money be refunded,

Edit CCC "S" on the CC line of the "For IRS Use Only" box in the right corner of Form 1042.

If this is an Excise Tax only return (the only return entries are in ROFTL and the same amount is on Line 64d), and the Refund box is checked, edit a CCC "X" . See IRM 3.21.110.17.3.10, CCC "X" .

Figure 3.21.110-9

Please click here for the text description of the image.

This is a one position field that identifies whether the withholding agent has elected to apply their overpayment as a credit on next year’s Form 1042 account or request a refund of their overpayment. See IRM 3.21.110.32, Overpayment – Lines 70a and 70b for possible CCC "E" or CCC "S" editing.

Do not compute and edit if Section 2 is blank. See IRM 3.21.110.34, Section 2 - Reconciliation of Payments of U.S. Source FDAP Income.

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The Third Party Designee election was created to allow a withholding agent or an individual paid preparer of the return to discuss the Form 1042 with the IRS, if questions arise during processing.

The Third Party Designee checkbox is located above the taxpayer signature line. It shows whether the taxpayer has elected to allow the Third Party Designee to answer questions about the taxpayers return as it is processed. No action is required.

The Third Party Designee phone number is located below the checkbox. No action is required.

Circle out if illegible. This field can be up to 5 characters long. The entry may be any alpha (i.e., A to Z) numeric (0 to 9), or any combination of both. The PIN number is self-selected by the taxpayer or designee. It is not assigned by the IRS.

A signature and jurat is required for all returns except the following:

Faxed signatures are acceptable. See IRM 3.21.110.11, Use of Fax for Taxpayer Submissions.

Returns prepared under IRC 6020(b). These returns must be signed by a Compliance Function Representative. See IRM 3.21.110.16.8.1, IRC 6020(b) – Prepared by Collection.

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

Returns prepared by Examination, for example Substitute for Return "SFR" or "Substitute Return" See IRM 3.21.110.16.8.3 (3), Examination Prepared.

Returns by Examination do require a signature and jurat. See IRM 3.21.110.16.8.4, Examination Secured, for more information.

Dummy returns prepared by the IRS.

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

Returns attached to taxpayer response to the IRS correspondence containing a jurat and the taxpayer’s signature. 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 Print (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 "CII" returns with a Form 13596, attached. SeeIRM 3.21.110.14.3, Correspondence Imaging Inventory (CII) Returns, for processing instructions on CII Returns.

If a signature is missing, correspond:

If

Then

The return is not signed on the line designated for the 1042 signature, or

The jurat is not present on the line designated for the 1042 signature (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).

See IRM 3.21.110.16.12(5)

Leave in batch and continue editing.

Paper returns sent in by the filer stating their return was rejected through the E-file system require a signature. Form 8879 or Form 8453 is not an acceptable substitute for a paper return.

If the jurat is altered or stricken (crossed out), see IRM 3.21.110.16.9, Frivolous Arguments, for frivolous return instructions.

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

If the signature declaration is altered or stricken (crossed out), see IRM 3.21.110.16.9, 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 (i.e., "Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledge and belief, it is true, correct and complete." )

Tax examiners are not handwriting experts. Federal Regulations 301.6064-1 allows the Service to presume the signature on a return, statement, or other document is the true signature of the person who signed the document.

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

Correspond one time for the signature. If you do not receive a reply after the prescribed suspense period, input the return:

If

Then

The return has an overpaid condition,

Edit CCC "3" and CCC "X" and continue processing.

The return is a balance due or zero condition,

Edit CCC "3" and continue processing.

Facsimile Signature -

Rather than providing a handwritten signature, an owner, partner, corporate officer, or duly authorized agent may use a "facsimile" (e.g., computer generated, mechanical device, or rubber stamp) signature when filing Form 1042.

If a facsimile signature is used, the person filing the form must keep a letter, signed by the individual authorized to sign the return(s), declaring under penalties of perjury the facsimile signature on the form is the signature adopted by the authorized person and the signature was placed there by the authorized person or under the authorized person’s direction.

Correspond if no signature is found.

If Form 1042 is mailed between August 28, 2020, through October 31, 2023, accept a digital signature.

A signature may or may not be present; do not correspond if not present.

Do not correspond for a missing signature on any return prepared by a Compliance function.

Do not question any signature on the return. Treas. Reg. 301.6064-1 allows the IRS to presume the signature on the return, statement or other document is the true signature of the person who signed the document.

A constructive signature (a signature on an accompanying check, letter, etc.) is not acceptable unless the signature follows a perjury statement containing the same language as the jurat of the tax return.

The Preparer's EIN or PTIN is located to the right of the Preparer's Signature at the bottom of Form 1042.

If the return is for 2009 or prior, then the PTIN box is named Preparer's SSN or PTIN.

No action is required on amended returns.

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

The FIRM's EIN (Paid Preparer's EIN - 2009 and prior revisions) must be a nine-digit numeric number. The FIRM's EIN is entered in NN-NNNNNNN format. The FIRM's EIN cannot be all zeros or all nines.

No action is required on amended returns.

Circle the FIRM's EIN (Paid Preparer's EIN - 2009 and prior revisions) if all zeros, all nines, or any repeating 9 digits.

The Paid Preparer's Phone Number is located below the Paid Preparer's EIN at the bottom right corner of Form 1042.

ISRP inputs the first 10-digits only.

If

Then

A complete Paid Preparer Telephone Number is located elsewhere on the return or attachments,

Edit to the "Phone No." line.

The return is amended,

No action required.

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

No action required.

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

Circle the incomplete or illegible phone number.

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

Please click here for the text description of the image.

Please click here for the text description of the image.

American Samoa (AS)

City

Zip Code

Faga'itua

96799

Leone

96799

Olosega Manua'

96799

Pago Pago

96799

Federated States of Micronesia (FM)

City

Zip Code

Chuuk

96942

Kosrae

96944

Pohnpei

96941

Yap

96943

Marshall Islands (MH)

City

Zip Code

Ebeye

96970

Majuro

96960

Palau (PW)

City

Zip Code

Koror

96940

Palau

96940

Northern Mariana Islands (MP)

City

Zip Code

Capitol Hill

96950

Rota

96951

Saipan

96950

Tinian

96952

Virgin Islands (VI)

City

Zip Code

Charlotte Amalie

00802

Christiansted

00820

Cruz Bay

00830

Downtown

00840

Frederiksted

00840

Kingshill

00850

Saint Croix

00820

Saint John

00830

Saint Thomas

00805

Sunny Isle

00850

Veterans Annex

00820

Guam (GU)

City

Zip Code

Agana

96910

Inarajan

96917

Merizo

96916

Tamuning

96931

Umatac

96915

Yona

96915

Puerto Rico (PR)

City

Zip Code

Adjuntas

00601

Aguada

00602

Aguadilla

00603

Agnes Buenas

00703

Aguirre

00704

Aibonito

00705

Anasco

00610

Angeles

00611

Arecibo

00612

Arroyo

00714

Bajadero

00616

Barceloneta

00617

Barranquitas

00794

Barrio Obrero Station

00935

Bayamon

00956

Boqueron

00622

Cabo Rojo

00623

Caguas

00725

Camuy

00627

Canovanas

00729

Caparra Heights

00920

Carolina

00982

Catano

00962

Cayey

00736

Ceiba

00735

Cerro Gordon

00754

Ciales

00638

Cidra

00739

Coamo

00769

Comerio

00782

Condado

00907

Corozal

00783

Coto Laurel

00780

Culebra

00775

Dorado

00646

Ensenada

00647

Esperanza

00765

Fajardo

00738

Fernandez Juncos

00936

Florida

00650

Fort Buchanan

00934

Garrachales

00652

Guanica

00653

Guayama

00784

Guayanilla

00656

Guaynabo

00965

Gurabo

00778

Hatillo

00659

Hato Rey

00936

Hormigueros

00660

Humacao

00791

Isabela

00662

Jayuya

00664

Juana

00795

Juncos

00777

La Cumbre

00926

Lajas

00667

La Plata

00786

Lares

00669

Las Marias

00670

Las Piedras

00771

Levittown

00949

Loiza

00772

Loiza Street Station

00936

Luquillo

00773

Manati

00674

Maricao

00606

Maunabo

00707

Mayaguez

00680

Mercedita

00715

Minillas Center

00936

Moca

00676

Morovis

00687

Naguabo

00718

Naranjito

00719

Orocovis

00720

Palmer

00721

Patillas

00723

Penuelas

00624

Ponce

00731

Puerta de Tierra

00936

Puerta Real

00740

Punta Santiago

00741

Quebradillas

00678

Ramey

00603

Rincon

00677

Rio Blanco

00744

Rio Grande

00721

Rio Piedras

00927

Rosario

00636

Sabana Grande

00637

Sabana Hoyos

00688

Sabana Seca

00952

Saint Just

00978

Salinas

00751

San Antonio

00690

San Francisco

00927

San German

00683

San Juan

00936

San Lorenzo

00754

San Sebastian

00685

Santa Isabel

00757

Santurce

00936

Toa Alta

00953

Toa Boa

00949

Trujillo Alto

00976

University

00936

Utuado

00641

Vega Alta

00692

Vega Baja (box 1-9049)

00694

Vieques

00765

Villalba

00766

Yabucoa

00767

Yauco

00698

State Name

State Abbreviation

Zip Code Range

Alabama

AL

350-369

Alaska

AK

995-999

Arizona

AZ

850-865

Arkansas

AR

716-729

California

CA

900-928, 930-961

Colorado

CO

800-816

Connecticut

CT

060-069

Delaware

DE

197-199

District of Columbia

DC

200, 202-205

Florida

FL

320-339, 341-342, 344, 346, 347, 349

Georgia

GA

300-319, 399

Hawaii

HI

967-968

Idaho

ID

832-838

Illinois

IL

600-629

Indiana

IN

460-479

Iowa

IA

500-528

Kansas

KS

660-679

Kentucky

KY

400-427

Louisiana

LA

700-714

Maine

ME

039-049

Maryland

MD

206-219

Massachusetts

MA

010-027, 055

Michigan

MI

480-499

Minnesota

MN

550-567

Mississippi

MS

386-397

Missouri

MO

630-658

Montana

MT

590-599

Nebraska

NE

680-693

Nevada

NV

889-898

New Hampshire

NH

030-038

New Jersey

NJ

070-089

New Mexico

NM

870-884

New York

NY

005, 100-149

North Carolina

NC

270-289

North Dakota

ND

580-588

Ohio

OH

430-459

Oklahoma

OK

730-731, 734-741, 743-749

Oregon

OR

970-979

Pennsylvania

PA

150-196

Rhode Island

RI

028-029

South Carolina

SC

290-299

South Dakota

SD

570-577

Tennessee

TN

370-385

Texas

TX

733, 750-799

Utah

UT

840-847

Vermont

VT

050-054, 056-059

Virginia

VA

201, 220-246

Washington

WA

980-986, 988-994

West Virginia

WV

247-268

Wisconsin

WI

530-549

Wyoming

WY

820-831

APO/FPO/DPO ZONE

Name

Zip Code Range

AA

340

AE

090-098

AP

962-966

Action Code

Description

Workday Suspense Period

211

First Taxpayer Correspondence

40

212

Second Taxpayer Correspondence

25

215

International Correspondence

45

225

Taxpayer 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

352

Name Research

3

360

Other-in-House Research

10

420

Management Suspense A

5

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

Potential Frivolous Arguments for Examination Review

Frivolous Arguments

Explanation

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 (Uniform Commercial Code) 1-207 or UCC 1-308

Return has income and deductions but the jurat was altered or stricken. May include reference to UCC 1-207/UCC 1-308 or a statement 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 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 several types of deductions, credits, or overpayments/refunds that have no relation to reality and due to their outrageous character, qualify as frivolous returns.

Files a 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 several types of rambling dialogue and/or confusing arguments no one could reasonably view as a good faith effort to follow the law.

Files a return with some type of message or protest to the IRS but does not 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 several administrative authorities such as delegation orders, summons authority, Privacy Act, etc. Argues 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 Title 26 of the United States Code is not law because it was never enacted as named.

Collection Issues

Files frivolous documents contending several collections issues are invalid (e.g., Offers in Compromise, Collection Due Process Requests, Installment Agreements, Appeals Requests, etc.) because they are not filed and 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 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 S Corporations from sources within the United States is taxable.

Form 1099-OID (Original Issue Discount)

An individual or business files a return reporting false amounts of income ("Other or Miscellaneous" income) and claims 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 attached, and some have Form 1096. Other false financial instruments may be filed in the place of or in addition to the Form 1099-OID such as Form 2439, promissory notes, bonds, sight drafts, etc.

IRC 861 Business Employment Tax (BMF 861)

Argument targets employers and advises them 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 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 a taxpayer is not a "person" within the meaning of IRC 7701(a)(14).

Obscene, Vulgar, Harassing

Submits documents or other materials indicating 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. vs. Long

Submits a return with zero money amounts. To explain the zeros inserted on the form the individual references U.S. vs. Long.

Unsigned Returns

The individual completes a return but does not sign, a statement indicating disagreement with the tax system is attached or added to the return.

Valuation

Income is not taxable due to 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 (ZERO)

Submits a return with zero money amounts on all or most Line items on the form (e.g., IRC 861, Form 2439, OID, and other BMF filings that claim no income and request refunds). See Rev. Rule. "2004-34" . A statement is attached claiming there is no section of the Internal Revenue Code that established an income tax liability. The statement may also have arguments about 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 show None, Not Liable, etc. with no evidence of a frivolous argument are not to be considered as frivolous returns.

Other

All others including those 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) must be reviewed by Collections for possible referral to Appeals. See IRM 5.19.8, Collection Appeal Rights, for more information.

Definitions

Term

Definition

Alien

Individual who is not a citizen of the United States. The person can be either a resident or non-resident alien. Resident aliens are taxed just like U.S. citizens. Form 1042 is concerned with non-resident aliens. Complete information on aliens can be found in Pub 519.

Backup Withholding

Tax withholding from income when a person does not provide a valid TIN to payor.

Beneficial Owner

The person who is required under U.S. tax principles to include the payment in gross income on a tax return.

Calendar Year

Year ending December 31st

Chapter Three Withholding

Tax withheld from income under Title 26, Subtitle A, Chapter 3, Subchapter A, Section 1441-1443, 1445-1446, and 1461-1464 of the U.S. Code.

Chapter Four Withholding

Tax withheld on withholdable payments per Title 26, Subtitle A, Chapter 4, Sections 1471-1474 of the U.S. Code (Foreign Account Tax Compliance Act).

Collective Refund

Procedures that allow a QI/WP/WT, PFFI, or a Reporting Model 1 FFI to obtain a refund on behalf of their account holders, partners, owners, or beneficiaries pursuant to their respective agreement with the IRS. The collective refund is claimed using a Form 1042 and requires the QI/WP/WT to provide more information.

CTW

The abbreviation for Chapter Three Withholding.

EDC Line

Line which appears in the For IRS Use Only box in the URHC of Form 1042. This Line is not in current use.

EIN

Employer Identification Number is a nine-digit number used to identify business taxpayers on the Business Master File. The first two represent the district office code.

Fiduciary

Person responsible for handling money for someone else who cannot, for various reasons. Examples are a trustee for a trust, executor for an estate, or a receiver in a bankruptcy.

FDAP

Fixed, Determinable, Annual, Periodical Income.

52/53 Week Filer

Tax year which can begin or end on a day other than the first or last day of a month (with certain restrictions). It is not allowed on Form 1042.

Fiscal Year

A tax year (12 months) which ends on the last day of a month other than December, e.g., September 1, 2019 through August 31, 2020. While common on other BMF returns, a fiscal year cannot be used on Form 1042.

Flow-Through Entity

An entity that does not pay income tax itself, but through which income "flows" to another partner, beneficiary, or owner who does pay the tax. Examples include certain trusts, partnerships, S-corporations, etc.

Foreign Person

A nonresident alien individual, a foreign corporation, a foreign partnership, a foreign trust, a foreign estate, and any other person who is not a U.S. person. The term also includes a foreign branch or office of a U.S. financial institution or U.S. clearing organization if the foreign branch is a Qualified Intermediary. Generally, a payment to a U.S. branch of a foreign institution is a payment to a foreign person.

For IRS Use Only Box

Outlined area in the URHC of Form 1042 into which various dates, codes and amounts are entered by the IRS, not taxpayers. It takes the place of a separate Edit Sheet (there is no edit sheet for Form 1042).

Form 1000

Document filed with the withholding agent (not to the IRS) by persons with interest on certain types of bonds. These are kept by the withholding agent, but the amounts thereon are summarized on the Form 1042.

Form 1040-NR

Individual Master File (IMF) tax return (similar to Form 1040) filed by a Non-Resident Alien with the recipient's copy of Form 1042-S attached. It is used to report income received and tax withheld, and to pay more tax or claim a refund.

Form 1042-S

Form similar in function to a Form W-2 that shows the individual amount of income received by a foreign person, the tax withheld, and other information. Each receipt of income by a foreign person is recorded on a separate Form 1042-S with special requirements for additional Forms 1042-S issued for certain amounts associated with distributions from publicly traded partnerships. See Form 1042-S instructions. The TOTAL amount of income and tax withheld amounts from a group of Form 1042-S are reported on Form 1042. A copy of each Form 1042-S is sent to the IRS and another copy is given to the recipient, usually used to file a tax return.

Form 1042-T

Form used as a transmittal for a group of paper-filed Form 1042-S, whose amounts are summarized on the Form 1042-T. The Form 1042-T is filed and processed separately from the Form 1042.

Form W-8BEN

Form an individual provides to a withholding agent to certify to foreign status and to claim a reduced rate of withholding pursuant to a treaty (if applicable)

Form W-8BEN-E

Form an entity provides to a withholding agent to certify to its foreign status and its status for purposes of chapters 3 and 4, and to claim a reduced rate of withholding pursuant to a treaty (if applicable).

Form W-8ECI

Form a beneficial owner provides to a withholding agent to certify certain payments it receives constitute income effectively conducted with a trade or business in the U.S. (and thus is not subject to chapter 3 or 4 withholding).

Form W-8IMY

Form an entity provides to a withholding agent to certify its status as a foreign intermediary or flow-through entity and the type of intermediary or flow-through entity (simple or grantor trust, withholding or non-withholding foreign partnership, qualified or nonqualified intermediary, etc.)

Hong Kong

Treated as a separate country apart from China for tax purposes (see Pub 515). Treaties which apply to China may not apply to Hong Kong, or vice versa (see Pub 901).

Income, Foreign-Source

Income from sources outside of the United States. Not taxable to foreign persons by the IRS.

Income, U.S.-Source

Income from sources within the United States. Potentially (depending on Treaty provisions) taxable to foreign persons by the IRS.

Intermediary

Person (U.S. or foreign) who acts as a custodian, broker, nominee, or otherwise as an agent for another person, regardless of whether that other person is the beneficial owner of the amount paid, a flow-through entity, or another intermediary. A foreign intermediary can be either a Qualified Intermediary (QI) or a Nonqualified Intermediary (NQI) and shows which by the EIN used on the return.

Jurat

Certification on an affidavit declaring when, where and before whom it was sworn. It remains attached to the tax return.

MeF

Modernized Electronic Filing

Nonresident Alien (NRA)

Citizen of a foreign country who has not fulfilled the requirements to be a resident alien. An NRA is subject to tax on U.S.-sourced income or income associated with a U.S. trade or business. Form 1042 summarizes the amounts of income paid and the taxes withheld from a group of NRAs (or other foreign persons) for whom the withholding agent is responsible. The NRA, when filing a Form 1040-NR and claiming a credit for an amount withheld reported to them on a Form 1042-S, attaches a copy of their Form 1042-S in support of the claimed credit. This is similar to when a U.S. citizen or resident alien files a Form 1040 with a Form W-2 attached.

Participating Foreign Financial Institution (PFFI)

Foreign financial institution that agreed to follow the requirements of an FFI agreement with the IRS with respect to its chapter 4 withholding obligations. A withholding agent that is a PFFI uses a chapter 4 status code of 05 A PFFI can claim a collective refund using. Form 1042 and following the applicable procedures.

Territories, U.S.

Primarily Guam, U.S. Virgin Islands (NOT the British Virgin Islands), American Samoa and the Commonwealth of the Northern Mariana Islands (CNMI). Puerto Rico is not actually a U.S. possession but is included in IRS information on possessions (such as Pub 570). The Palau Islands are now (since 1993) an independent country but are treated as a U.S. possession for tax purposes. A complete list of U.S. possessions can be found in Publication 570.

Qualified Derivatives Dealer (QDD)

A QI home office or branch that qualifies and has been approved for QDD status and meets the requirements of a QDD and the other requirements in the QI agreement and Treasury regulations, including assuming primary chapter 3 and 4 withholding responsibilities and primary Form 1099 reporting and backup withholding responsibilities for payments made as a QDD. A QDD acts as a QDD for all payments made as a principal with respect to potential section 871(m) transactions and all payments received as a principal with respect to potential section 871(m) transactions and underlying securities, excluding any payments made or received by the QDD to the extent the payment is treated as effectively connected with the conduct of a trade or business within the United States within the meaning of section 864. A QDD does not act as a QDD for any other payments. A QDD must follow the naming convention specified in the QI agreement.

Qualified Intermediary

Foreign institution, primarily banks or investment firms, approved by the IRS to withhold U.S. Federal taxes and assume primary responsibility for their clients to pay those U.S. Federal taxes.

Qualified Intermediary Employer Identification Number (QI-EIN)

A QI-EIN is the employer identification number assigned by the IRS to a QI. A QI's QI-EIN is only to be used when the QI is acting as a QI.

Recipient

Nonresident alien, fiduciary, withholding foreign partnership or withholding foreign trust, foreign corporation, qualified intermediary, or certain U.S. branches of U.S. persons that received payments from a withholding agent. It does not include a non-qualified intermediary or certain qualified intermediaries with respect to payments subject to section 1446 withholding.

Reimbursement Procedures

Procedures to allow a withholding agent to repay a beneficial owner for an overwithheld amount (by the earlier of the date on which a Form 1042-S is filed or the due date for filing such Form), and then reimburse itself by reducing any subsequent deposits made before the end of the following calendar year. The reduced tax liability is reported on Lines 1-60 of the Form 1042 for the period during which the reimbursement occurred, and the total tax withheld is reported as total deposits.

ROFTL

Record of Federal Tax Liability found in the center of Form 1042 showing a breakdown of tax liability during the applicable quarter-monthly period.

Special Character

Any character used in a field on the error register that is NOT a numeric, alpha or blank (such as a slash, hyphen, period, ampersand, etc.).

Taxpayer Identification Number (TIN)

Nine-digit number that identifies a taxpayer and must appear on every IRS form. There are several types of TINs:

SSN

Nine-digit number assigned by the Social Security Administration to an individual for wage and tax reporting purposes.

ITIN

Individual Taxpayer Identification Number assigned by the Internal Revenue Service Austin Campus due to an accepted Form W-7/Form W-7SP/ application. This is a nine-digit valid permanent number beginning with 9 and fourth and fifth digits being 50 through 65, 70 through 88, 90 through 92, and 94 through 99. Appears on MCC or IDRS transcripts with an asterisk and pound sign differentiating it from temporary SSN which are invalid. See also: TIN.

Tax Liability

Foreign persons are subject to U.S. tax at a 30 percent rate on certain fixed or determinable annual or periodical (FDAP income received from U.S. sources. Income includes interest, dividends, rents, royalties, premiums, capital gains, annuities, compensation, etc. The 30 percent rate can be reduced depending on tax treaty provisions or other provisions under the IRC. Different tax rates apply to distributions by publicly traded partnerships to foreign persons and to amounts realized from sales of interests in these partnerships subject to section 1446(f) withholding.

Tax Treaty

Agreement modifying the tax requirements between the United States and another country, such as the reduction of the usual 30 percent tax rate on income. Complete information on tax treaties can be found in Pub 901.

Title 26

Large division or portion of a still-larger work. Title 26 is that portion of the U.S. Code that is the Internal Revenue Code (IRC).

U.S. Code

Arrangement (codification) by subject matter of the general and permanent laws of the United States. It is divided by broad subjects into fifty titles (Title 26 is the Internal Revenue Code). It is published every six years, with annual supplements, by an office in the U.S. House of Representatives.

U.S. Person

A citizen or resident of the United States.

A domestic partnership.

A domestic corporation.

Any estate other than a foreign estate.

Any trust if:

A court within the United States is able to exercise primary supervision over the administration of the trust and

One or more United States persons have the authority to control all substantial decisions of the trust.

Any other person that is not a foreign person.

Withholdable Payment

Payment defined in Treas. Reg. section 1.1473-1(a) subject to withholding under chapter 4 of the Code. These are certain payments of U.S. source fixed determinable annual or periodical income (not effectively connected with a trade or business within the United States).

Withholding Agent

US or foreign person that has control, receipt, custody, disposal or payment of any income of a foreign person that is subject to withholding. The withholding agent may be an individual, corporation, trust, estate, association or partnership, or any other entity.

Withholding Foreign Partnership (WP) or Withholding Foreign Trust (WT)

Foreign partnership or trust that has entered into withholding agreement with the IRS that requires it to assume withholding and reporting responsibilities for payments made to its partners, beneficiaries or owners. Part I of Form W-8IMY identifies a WP or WT. (See Form W-8IMY)

Withholding Rate

Percentage of income withheld as tax. The rate can be modified by treaty.

More Internal Revenue Manual

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