Internal Revenue Manual Part 4. Examining Process

Official source: Internal Revenue Manual (https://www.irs.gov/irm/part4/irm_04-019-009), retrieved 2026-10-03. U.S. Government work (17 U.S.C. § 105).

(1) This IRM transmits revised IRM 4.19.9, FCP (FUTA Case Processing) Technical System Procedures.

These procedures are to be followed regardless of the tax year of the case the campuses are working.

(1) IRM 4.19.9.6 Figures Figure 4.19.9-12 archived data added to query screen.

(2) IRM 4.19.9.8.3 "Adjustment Screen" added as new features to track assessment and abatements.

Maha H. Williams Director, Exam Field and Campus Policy Small Business/ Self-Employed

Purpose: This Internal Revenue Manual (IRM) provides instructions for using the FUTA Case Processing (FCP) System.

Audience: The FCP System is used by SB/SE Document Matching Federal Unemployment Tax Act (FUTA) operation for the reconciliation of FUTA cases. This IRM provides instructions to technical staff for using the FCP system which consists of various screens and windows.

Policy Owner: Director, Exam Field and Campus Policy.

Program Owner: BMF Doc Matching, under Exam Field and Campus Policy is responsible for the content of this IRM and providing guidance.

The Federal Unemployment Tax Act (FUTA) provides for cooperation between the federal and state governments in the establishment and administration of unemployment insurance programs. Under this dual system, the employer is subject to a payroll tax levied by the federal and state governments. The taxpayer may be allowed a maximum credit of 5.4% against the FUTA tax of 6.0% for payments made to the state. Employers whose payments are received by the state after the due date of the federal return plus extensions are allowed 90% of the credit that would have been allowed had the payments been made on time. In addition, an employer's credit will be reduced if the employer paid wages that are subject to the unemployment tax laws of a credit reduction state.

As a result of the FUTA, IRS is responsible for receiving and processing the Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return, and Schedule H (Form 1040), Household Employment Taxes, on which FUTA tax is reported, and for collecting FUTA tax. All FUTA tax paid and reported on these tax returns is deposited in the Unemployment Trust Fund, from which funds are dispensed to the states for administration of their unemployment compensation programs. Department of Labor (DOL) is charged with monitoring the Unemployment Compensation Systems for each state and can withhold funds from a state if the state does not comply with Federal standards.

The FUTA Certification program is the method IRS uses to verify with the states that the payment claimed on the Form 940 and/or Schedule H were actually paid into the states unemployment funds. There are currently 53 participating agencies which encompass the 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

The FCP system is used for the reconciliation of FUTA tax cases. The IRM provides instructions to the technical staff for using the FCP system which consists of various screens and windows. Cases selected for the FUTA program are worked by tax examiners who perform an in-depth analysis of each case to resolve tax cases.

The authority for the FUTA Program originates from the Federal Unemployment Tax Act (FUTA) which is contained in Title 26 of the Internal Revenue Code.

The Director, Small Business/Self Employed (SB/SE), Exam Field and Campus Policy, is responsible for the FUTA program.

Management officials are responsible for:

Providing internal controls relating to the program, process and activity.

Ensuring the instructions are communicated to and carried out by the proper officers and employees.

The FUTA program is monitored through the FCP system. The FCP system generates several different system reports for tracking cases and inventory delivery.

The following acronyms apply to this IRM.

Acronyms

Definitions

6020

Closed 6020B

AADJ

Closed Agreed Adjustment

AP

Audit Potential

ASED

Assessment Statute Expiration Date

BANK

Closed Bankruptcy

CADJ

Closed Unagreed

CAFE

Closed Cafeteria Plan

CATRS

CAWR Annual Tax Reporting System

CAUE

Closed California Unity of Enterprise

CAWR

Combined Annual Wage Reporting

CCA

Case Control Activity

CDUP

Closed Duplicate Record

CMUL

Closed Multi-State Filer

CNOC

Closed No Change

COMM

Closed Common Paymaster

CSYS

Headquarters Systemic Closure

CTOL

Closed Under Tolerance

DFNT

Closed Defunct Corporation

DLN

Document Locator Number

EIN

Employer Identification Number

FCP

FUTA Case Processing

FUTA

Federal Unemployment Tax Act

IDRS

Integrated Data Retrieval System

LEAS

Closed Leasing Company

LTWR

Closed Late Reply Worked

MFT

Masterfile Transaction

NRPY

Closed No Reply

REIM

Closed Reimbursable Account

RSED

Refund Statute Expiration Date

SSN

Social Security Number

STEX

Closed Statute Expired

SB/SE

Small Business/Self Employed

TRAN

Closed Transfer

UNDL

Closed Undeliverable

This IRM is to be used by employees in the SB/SE Document Matching FUTA operations in conjunction with the following IRMs:

IRM 4.19.5,Certification of State Federal Unemployment Tax Act (FUTA) Credits

IRM 4.19.23,FUTA Controls

IRM 1.4.23,FUTA Managers and Coordinator Guide

Additional resources can be found on the CAWR/FUTA website at http://wc.web.irs.gov and the CAWR FUTA Research Portal found at http://serp.enterprise.irs.gov/databases/portals.dr/compliance.dr/crc.dr/cawr_futa/cawr_futa_default.htm

This section is designed to assist employees in SB/SE Document Matching FUTA Operation in accessing and navigating the FUTA Case Processing (FCP) System.

Access to the FUTA Case Processing (FCP) System is restricted to authorized users. The FUTA Coordinator, appropriate management official and security personnel must authorize individual user access.

A security profile is established and maintained for each user. Users may choose their own password. Each password should:

Password may not be the same as the user name

Password must be at least 8 characters long

Password must not be too common. (the security package will reject common passwords)

Password must contain at least one letter

Password must contain at least one of the following punctuation marks #$_

Password MAY NOT contain other punctuation marks

Password must contain at least one number

User profiles are established to allow access to the specific areas/functions of the system needed to perform your assigned duties. Inform your manager/coordinator if you are prohibited from accessing an area of the system needed to complete an assigned task.

The system produces audit trail information on any updates/changes made to the system. Each user must ensure only authorized accesses are performed. Do not attempt unauthorized system queries.

To ensure the security and integrity of the FCP system:

Protect your password. Do not reveal it to anyone.

Never allow anyone access to the system using your login and password.

If you have reason to believe that your password has been compromised, alert your manager immediately.

Lock your workstation when it is not in use.

Log off the system at the end of your shift.

Never leave sensitive information on the screen and leave your workstation.

Do not eat or drink near computer hardware.

Use computers and software for official purposes only.

Do not copy licensed or copyrighted software for private use. It is a violation of federal law with civil and criminal penalties.

Retrieve your hard copy prints from the printer. Give prints, remaining near or on the printer for an extended period of time, to your manager for disposition.

Access to the FCP system requires a login and password for both Windows XP and the FCP system.

To display the Windows XP logon window depress the keys simultaneously. When the logon screen appears you will be required login using your SEID (standard employee identifier) and Password. The Domain field should already be filled in. Once you have entered the required information use your mouse and click on "OK." Figure 4.19.9-1 Windows Login Screen.

Figure 4.19.9-1

Please click here for the text description of the image.

The first time you logon to the workstation you will use an assigned/temporary password. The system will prompt you to change your password.

Step

Action

1

Enter your old password

2

Choose a new password following the guidelines provided in IRM 4.19.9.3

3

Re-enter your new password

4

Click on the OK button

Figure 4.19.9-2

Please click here for the text description of the image.

Once the required information is entered the workstation desktop applications will appear.

From the desktop double click on the " CATRS" icon. The FCP system allows access to multiple tax years through the use of a single icon.

The CATRS application will continue to run during your entire FCP session.

The "CATRS Launch Screen" will appear. Figure 4.19.9-3

Figure 4.19.9-3

Please click here for the text description of the image.

The CATRS launch will automatically load the FCP system and Warning Banner. Figure 4.19.9-4

A user has the option to agree and continue or exit the program from the warning banner screen.

After agreeing to continue FCP system logon screen will display. Figure 4.19.9-5

Enter your FCP user name

Enter your FCP password

Click on "Login" to gain access to the FCP system

Figure 4.19.9-4

Please click here for the text description of the image.

Figure 4.19.9-5

Please click here for the text description of the image.

The first time you log into FCP you will receive the prompt "Your Password has expired." Click "OK" to create a new one. After clicking "OK" the following window will appear. Figure 4.19.9-6Password Change Screen You will need to input:

Create a new password

Re-enter the new password

Click the "OK" button at the bottom of the screen

This will permanently change your password for any future login’s.

Figure 4.19.9-6

Please click here for the text description of the image.

When you login, the following screen will be displayed. Any of the following can be executed by placing the cursor over the button and clicking the left mouse button. Figure 4.19.9-7First View of FCP

"Program Option" drop down that allows a user to switch programs

The FUTA program is hard coded to allow only access to FUTA.

"User Role" this display is reading your profile based on your login information

Case Query button

SB/SE Website button

Logout button

When the Logout button is selected the user will be prompted to either logoff current user or exit program.

Figure 4.19.9-7

Please click here for the text description of the image.

When you place the cursor over File option located in the upper left hand corner and left click the mouse button a drop down will open. The functions shown are activated by either scrolling over the listed item and clicking the left mouse button or by pressing the combination of keys on the keyboard simultaneously. Figure 4.19.9-8File Option

New Query or +

Print Screen or +

Logout of FCP or +

Exit FCP or +

Figure 4.19.9-8

Please click here for the text description of the image.

The File drop down can be closed either by placing the cursor over the file option and left click the mouse or by placing the cursor else where in the FCP database and left clicking the mouse.

When you place the cursor over the Edit option and left click the mouse button a drop down will open. The functions shown are activated by scrolling over the listed item and clicking the left mouse button. Figure 4.19.9-9Edit Option

User Profile: This function is used by the site coordinator to grant roles and permission levels to a user.

Replies/Late Replies/Undeliverables Rcvd: This function is used by the clerical staff to input replies, late replies and undeliverable dates to specific cases within the FCP database.

TE Miscellaneous: This function allows access to the loose state certification and Disaster tables.

Coordinator: This function allows the site coordinator to assign batches, mass generate letters and access program settings.

Analyst: This function is used by headquarters staff only.

Figure 4.19.9-9

Please click here for the text description of the image.

When Form 940C (loose state certs) are received in the FUTA unit with no additional correspondence, the FCP system needs to be immediately updated upon receipt to show the Form 940C exists and needs to be considered prior to any taxpayer correspondence. Figure 4.19.9-10Futa Form 940C Table.

Field Number

Field Description

1

Insert New Record

2

Delete Record

3

Post Edit

4

Cancel Edit

5

Refresh Data

6

Search Function

7

Data Search Function

8

Sort Self Inputs

9

First Sort Option

10

Second Sort Option

11

Close Exits the Loose Cert Screen

Figure 4.19.9-10

Please click here for the text description of the image.

Selecting the Search button allows users to search for a specific Form 940C by selecting one of the following fields from the drop down arrow: Figure 4.19.9-10Search FUTA Form 940C Table.

EIN (Employer Identification Number)

Tax Period

Company Name

Created

By

Phone

Site

Remarks

ID Number

To begin a search click the "Search Button."

Select the specific criteria from the search field

Complete search string criteria.

After search field and search string are populated the "Find Button" will become available to begin the search of the loose cert table

The "Close Button" will close the process and return the user to the loose cert table

Refer back to figure Figure 4.19.9-10 for button location.

This responsibility may be assigned to specific users at each site. Check with your manager or lead before inputting any Form 940C.

When adding a new Form 940C record you will be required to complete the following information:

EIN

Tax Period

Company Name

ID number, By, Phone and Site will auto populate from your user profile.

Remarks: This is the only field that is optional

After input the Post edit button will save the entry. Delete record and Cancel edit will void the request.

After inputting a new record write the ID number on the front of the Form 940C. No two ID numbers are the same. This number is used to file the documents in sequence order at each site.

After a new Form 940C record is input, any subsequent case that is loaded to the FCP database will be cross checked with the Form 940C table. Any case that matches a Form 940C record will get a " yellow bar across the screen of the case" to notify the tax examiner that a Form 940C record exists. The yellow bar will display "940C" and the associated " Sequence Number."

The yellow bar will also display when a case has a disaster present, or cases with statute date expiring within 90 days.

When the cursor is placed over the "Help Option" and clicked with the left mouse button you will see a drop down for the CAWR/FUTA web site. The web site can be accessed through FCP during your login session. The site can also be accessed via the internet explorer icon located on your workstation desktop at http://wc.web.irs.gov/. Figure 4.19.9-11Help Option.

Left mouse click "Help Option"

Scroll down to SB/SE home page , left mouse click and web site will open and run as wallpaper in the FCP database

Close web site option

The arrow buttons serve the function of forward and backward while using the web site

This button will refresh the current web page

This button will return you to the SB/SE home page

This button will also access the SB/SE home page

Figure 4.19.9-11

Please click here for the text description of the image.

How and when to use the FUTA Query screen depends on what phase of the program you are working. You can access either your Assigned batches or Individual case files. There are two parts on the FUTA Query screen. They are "Query By" and "Case Fields" . To access the FUTA Query screen left mouse click on the query button.

The FUTA Query screen has five main functions that a user can access.

Individual Case Query: This is used mainly after the initial screening phase

View Assigned Batches: This is mainly used in the initial screening phase of the program when cases are assigned in batches

Case # Query: This is used to query by control number

SSN (Sched H) Query: This query is used when only the SSN is available

Archive Query: This query option is used to access recon case that no longer exist in FCP.

The first year to be archived is the 2014 program year. Only cases that were started in the program will be archived. Below is a list of the case information available.

General Case Information

Original Business Address

Misc Indicators

Money Screen Tax Return Information

Money Screen State Reporting Information

Adjustment Screen Information

Letters Screen Information

TE Remarks

History Screen Information

To perform a single case query input:

Release

The release can be set to all and FCP will query all records pertaining to the queried EIN.

EIN

Tax Period

The search button executes the query function. Figure 4.19.9-12

Figure 4.19.9-12

Please click here for the text description of the image.

To access assigned batches: select" View Assigned Batches" . This will automatically access the "Select Batch User Inventory Screen" . Batches are assigned to a user by either a manager or coordinator. To open an assigned batch, scroll over the batch you want to open and left click mouse. Figure 4.19.9-13

The select batch user inventory screen displays the following information: Figure 4.19.9-13

User name and total batches assigned

Batch types assigned, by left mouse clicking on the batch type this will expand to show the batches assigned if the volume assigned is greater than 1. Click it again and it will hide the associated batches

Batch number and volume of cases within each batch

Program release of the batch, Site ID and date the batch was assigned to the user

A batch can contain 1 to 26 cases.

Figure 4.19.9-13

Please click here for the text description of the image.

After you select a batch or perform a single case query, FCP will access the information associated to the requested record(s). When a record(s) is accessed it will automatically default to display the Detail screen.

The "Header Section" contains the following information. Figure 4.19.9-14Case Header Section.

The header section is viewable in all case screens.

Shows the EIN of the record you are viewing and the amount of records contained within the batch

Displays the case EIN

Tax Period of case

MFT of case

Program Release (REL)

Name Control of business

Business Name

EIN count: This field displays the amount of cases for the EIN being viewed

Batch Type

Batch number

User name the batch/case is assigned

Exit case button: By selecting this button you can close a query or remove a case from the assigned batch

Assigned Date

Site ID

Case ID number

Close query button: By selecting this button you will close the view of the current case or batch

Case Cycling buttons

Case information bar: This field is used to display various case issues to the user

Figure 4.19.9-14

Please click here for the text description of the image.

The Case Cycling buttons are also part of the Detail screen header section. Each Case Cycling button performs a different function. Figure 4.19.9-15Cycling Button The breakdown of their functions is shown below:

These buttons will allow a user to cycle to the first or the last record within a batch

These buttons will allow a user to cycle one record at a time within the batch

These buttons would not appear when accessing a single record

The Check Mark is called the post edit button. This button is normally grayed out, but once an update is made to a case the post edit button will become available and has to be selected to save any changes made to a case.

The "X" button is also grayed out until an update is made to a case. This button allows the user to delete any changes made to a case prior to selecting the post edit function

Figure 4.19.9-15

Please click here for the text description of the image.

FCP has fourteen open status codes:

OPEN

OPEN_DUP

OPEN_LTR_380C

OPEN_LTR_4010

OPEN_LTR_4011C

OPEN_LTR_INT

OPEN_LTR_INT2

OPEN_LTR_INT_LATE

OPEN_LTR_INT2_LATE

OPEN_NO_RESPONSE

OPEN_REPLY_RECV

OPEN_LATE_REPLY

OPEN_UNDELIVERABLE

REOPEN

The open or closed status of a case cannot be modified unless the case is assigned to your user name.

Below is a list of the possible closing status codes.

Closing Status Codes

Definitions

CLS_6020 (6020)

6020b case

CLS_AGREED (AADJ)

Agreed adjustment

CLS_BANK (BANK)

Bankruptcy

CLS_NON_AREED (CADJ)

Unagreed adjustment

CLS_CAFETERIA (CAFE)

Cafeteria Plan

CLS_CAUE (CAUE)

California Unity of Enterprise

CLS_CDUP (CDUP)

Duplicate Record

CLS_MULTISTATE (CMUL)

Multi-state Filer

CLS_NO_CHANGE (CNOC)

No Change

CLS_CMN_PAYMSTR (COMM)

Common Paymaster

CLS_HQ (CSYS)

Systemic Closure (cannot be undated by user)

CLS_TOLERANCE (CTOL)

Tolerance

CLS_DEFUNCT (DFNT)

Defunct Corporation

CLS_LEASE_EMPL (LEAS)

Leasing Employees

CLS_LATE_REPLY (LTWR)

Late Reply Worked

CLS_NO_RESPONSE (NRPY)

No Reply

CLS_REIMBURSABLE (REIM)

Reimbursable Account

CLS_STATUTE_EXP (STEX)

Statute Expiration Case

CLS_TRANSFER (TRAN)

Transfer

CLS_UNDELIVERABLE (UNDL)

Undeliverable

Figure 4.19.9-16

Please click here for the text description of the image.

A case can contain five separate screens of information. There are two ways to access a screen: first by clicking the left mouse button on a screen tab, and second sing the shift key and the underlined character listed on the screen tab. Figure 4.19.9-17FCP Screens. Below is a list of the screens and their related underlined characters keys.

Detail screen

Money Amounts screen

Correspondence screen

Entity screen

Import History

The Case Information Section contains both information input by the user and information compiled by (IDRS). The information provided in this section of the detail screen must always be considered in the processing of a case. Figure 4.19.9-18FCP Detail Screen.

CP Indicator of "0" (zero) means 4010C letter case, CP Indicator of "1" means 4011C letter case.

The Money screen provides federal wage and tax information reported to the IRS. It also includes state wages, timely and late contributions, that were processed by the certifying state(s). The FUTA program compares the amounts reported by the certifying state to determine if the proper wages/tax was reported on the Form 940, Form 1040 or Form 1041. Figure 4.19.9-19Money Screen.

Federal Reported line cannot be updated by the user.

State Reported line cannot be updated by the user.

The Adjustment Screen is used to track revenue produced by the FUTA program. Values input to this screen will create an output to the revenue tracking report.

Negative values are input with a hyphen in front of the numbers.

The Correspondence Screen is used for issuing the appropriate correspondence from the FCP system. You can choose the appropriate letter using the drop down arrow. Figure 4.19.9-20 Correspondence Screen.

The "Delete Correspondence button" will only delete the letter history in FCP. If the actual letter needs to be deleted on IDRS use the appropriate IDRS command code.

The Undeliverable, Reply and Late Reply Dates are populated by clerks when input through the Edit option window. IRM 4.19.9.5.2Edit Option for additional information.

The correspondence screen has five different types of letter that can be generated from the FCP system. Because all five letters are classified as "C" letters the user requesting the letter has to be interfaced with the IDRS system at the time of the request. There are five letters and one form available to select from New the drop down. Figure 4.19.9-21Types of Correspondence.

Verify local recertification procedures with FUTA Coordinator prior to requesting Form 940B.

Clicking the left mouse button on the letter next to the selective paragraph will allow the user to preview the paragraph content in the bottom preview window.

The entire 4010C/4011C letters will pre-format except the salutation, return address code and signature code.

The Form 3465 Adjust Request ,is used when a case is within 90 days of ASED (Assessment Statute Expiration Date) expiring. The Form 3465 will be auto populated with the tax, taxpayer and user information from the FCP database. The Form 3465 button is located in the Detail Header section of the case but requires certain conditions to make it accessible to the user. The requirements have to be completed in this order:

The "STAT <90" is calculated by FCP using the ASED date compared to current date Figure 4.19.9-23

The Entity screen stores the business care of, street address, state and zip code. This information is downloaded from IDRS when the case is created. The address, state and zip code should only be modified, if a better address has been secured. When the entity screen tab is selected, the following screen appears: Figure 4.19.9-25

Neither of these screens contain information towards working a FUTA case. These two screens exist with the purpose of tracking upload and download data files. Examples of the types of files it tracks would be CCA uploads and case download.

The History screen gives a line by line account of all actions taken by current and previous user to a specific case.

All actions are displayed in date order.

This section of the history screen will store case information. Once a case note is input and saved any subsequent user that accesses the case can view the case note information.