The purpose of Document Perfection is to code and edit (perfect) returns and other documents for input to the Master File (MF) through the Integrated Submission and Remittance Processing System (ISRP) or the Service Center Recognition Image Processing System (SCRIPS). In addition, Document Perfection forwards any other documents or attachments not related to the processing of the returns to the function responsible for handling them.

It is not the purpose of Code and Edit to mathematically verify or to check the validity of the returns and other documents being processed unless otherwise specified in the applicable subsection. The computer and/or Error Correction (Resolution) will perform these functions if the returns and other documents are coded and edited as prescribed in the applicable subsections.

While working assigned cases, Submission Processing (SP) employees will come across some that are blocked on IDRS and is shown by an IDRS security violation message, "Unauthorized Access to This Account". Forward the return to your manager. Managers will notify the local Planning and Analysis (P&A) Staff who will scan the case and send encrypted information to the "≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡" mailbox requesting access to the account. Managers will retain the original case in a file awaiting access (can take up to 5 business days). Once notified access was granted, the case is worked following applicable procedures.

All employees must do their due diligence to protect the privacy of sensitive data for taxpayers, including personally identifiable information (PII), such as Federal Tax Information (FTI, hereafter called tax information), tax return, financial, and employment information regardless of format from unauthorized disclosure.

The Internal Revenue Code of 1986 or more commonly known as the Internal Revenue Code (IRC) is the authority for these procedures. Treasury/IRS rules and regulations interpret the law. The IRC was amended by acts and public laws such as the following:

All Policy Statements for Submission Processing are contained in IRM 1.2.12, Servicewide Policies and Authorities, Policy Statements for Submission Processing Activities.

The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For more information about the TBOR, see https://www.irs.gov/taxpayer-bill-of-rights. The TBOR requires the IRS to protect taxpayer rights to privacy and confidentiality.

The Director of the Submission Processing Campus (SPC) is responsible for monitoring operational performance for that SPC.

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 to follow the instructions contained in this IRM and maintain updated IRM procedures.

All employees are responsible for protecting the privacy and security of our taxpayers sensitive information which is one of IRS's highest priorities.

Ensure documents are coded and edited ready for transcription.

Program Reports - Batch Block Tracking System (BBTS) Report.

Program Effectiveness - is measured by the following:

Annual Review: is done by the Federal Managers Financial Integrity Act (FMFIA) review.

Quality Review conducts a statistically valid sample size review of completed work to ensure IRM guidelines are followed.

The following is a table of interpretation words that need clarification:

There are specific terms used when dealing with estates and trusts. See below:

There are many types of trusts as shown in the following:

There are many types of estates, as shown below:

See Exhibit 3.11.14-10, Acronyms and Abbreviations, for a list of common acronyms.

Here are other websites used in accomplishing the work:

The following schedules are found within Form 1041:

Listed below are other schedules and forms which will be filed with Form 1041:

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

Topics for BMF Consistency have been shown and developed as a coordinated effort between Ogden, Kansas City, and Return Processing Branch BMF C&E / Error Resolution Systems (ERS).

BMF Consistency subsections are shown by a ♦ (diamond) in front of and after the title.

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

IRM deviations must be submitted in writing following instructions from IRM 1.11.2.2.3, When Procedures Deviate from the IRM, and elevated through proper channels for executive approval.

The Taxpayer Advocate Service (TAS) is an independent organization within the Internal Revenue Service (IRS), led by the National Taxpayer Advocate. Its job is to protect taxpayers’ rights by striving to ensure that every taxpayer is treated fairly and knows and understands their rights under the Taxpayer Bill of Rights (TBOR). TAS offers free help to taxpayers, including when taxpayers face financial difficulties due to an IRS problem, when they are unable to resolve tax problems, they haven’t been able to resolve on their own, or when they need assistance to address an IRS system, process, or procedure that is not functioning as it must. 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 Division, to affect the resolution of the taxpayer’s problem. For more information, refer to IRM 13.1.19, Taxpayer Advocate Service, Taxpayer Advocate Case Procedures, Advocating with Operations Assistance Requests (OARs).

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

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

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

IRM 13.1.7, Taxpayer Advocate Service (TAS) Case Criteria, for more information.

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

Effective January 1, 2017, Computer Condition Code "E" will be edited on Form 1041 , (only), for any year after the SP BMF ID Theft Liaison finds a potential identity theft filing.

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

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

Criminal Investigation (CI) investigates potential criminal violations of the Internal Revenue Code (IRC) and related financial crimes. Criminal violations of the IRC are willful attempts to evade or defeat the income tax. Flagrant criminal activity is, but is not limited to, the failure to pay taxes due and/or taxes collected or withheld and false claims for refunds based on bogus return information.

For returns with refund claims of ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ or more, do the following:

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

If a suspicious return is found, do the following:

If the return fits other criteria (e.g., Frivolous Argument), edit the return properly.

The primary objective in identifying tax returns for examination is to promote the highest degree of voluntary compliance. Examination will give support and assist Submission Processing (SP) with any questionable return shown during processing. Exam has a vast multitude of programs and tolerance criteria already shown in various IRM sections. Exam doesn't restrict SP with the flexibility to refer questionable returns other than what is currently shown in various IRMs.

Some returns will need special care. If the withholding is≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, attach Form 4227 and place in the locally designated basket for Examination, Frivolous Return Program (FRP) for review. Pay particular attention to returns with Form 1099-OID attached.

All attachments to the return being processed will be examined and edited as required by the attachment.

When an attachment influences the document being processed, it will remain attached unless a specific instruction requires that it be detached.

If the document to be detached has any information that is pertinent to the return being processed, photocopy or transfer the data to a blank piece of paper and attach it to the return.

Forward any attachment requesting an adjustment or correspondence to Accounts Management Branch via Form 4227.

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

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

Do not obliterate, alter, or erase the original entry on a return when deleting or correcting an entry. Always exercise care to ensure that the original entry remains legible. Perfected entries give a legible "edit trail" for anyone who will 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. Do not edit (or write) over another area's edit marks.

Photocopied Returns - Re-edit or underline any valid, black edit marks. See IRM 3.11.14.6.3.3, Correspondence Imaging Inventory (CII) Returns and IRM 3.11.14.10.6, Re-Entry Document Procedures.

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

Document Perfection is responsible for arranging Form 1041 in the following order when transcription line entries are present:

Below are more instructions:

Taxpayers must give documentation to support claims for most gains, losses, debits, and credits ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡

Form 1041 - Edit forms and schedules as dollars only, except for the following lines which are dollars and cents:

Form 1041-QFT - Edit forms and schedules as dollars only, except for the following lines which are dollars and cents:

Form 1041-N - Edit forms and schedules as dollars only, except for the following lines which are dollars and cents:

Reference is made throughout this IRM to "significant entries." A significant entry is defined as any amount other than zero.

A return must have specific items before it is considered processable. Perfect all documents to the extent possible from schedules and other attachments. The specific items needed are:

Conditions which make a return unprocessable are:

If a return has no entity data, or the signature on the return is illegible and the alpha letter of the last name cannot be decided, and the only entries are money amounts, then give the return to the manager.

Use the following guidelines for disposition of returns that cannot be perfected from schedules and other attachments and necessary data was not gotten through research. If you cannot correspond or send the return back to the taxpayer because of illegible entity data, consider the return unprocessable:

If a Form 1041 is received with a second Form 1041 attached and the second return has the same EIN, Tax Period, and money amounts:

Perfect all documents if possible. Examine schedules and other attachments for the information necessary to make the document processable.

If liability for two or more Form 1041 forms for the same tax class have been reported on one numbered return and the information necessary for the preparation of the individual returns is present:

If liability for two or more Form 1041 forms for the same tax class have been reported on one unnumbered return and the information necessary for the preparation of the individual returns is present:

Reject all non-remittance Form 1041 forms showing taxable income but no tax computation and the taxpayer notates that the return is for an exempt organization (e.g., EXEMPT, NONTAXABLE, NONPROFIT, etc.):

For all other conditions, start correspondence action when the document cannot be perfected from attachments or schedules. The only exceptions are when the Name and Address are missing or are so illegible that correspondence is impossible, and when a document is being re-input after correspondence has already been conducted but the document still is unprocessable.

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

For Tax Periods 201712 and later returns, CCC "B" is used to identify an Election to defer Net Tax Liability under Section 965(i).

See IRM See IRM 3.11.14.10.9, Section 965 Returns Form 1041 and Form 1041-N (TY 2017 and later) for instructions on when to edit CCC "B" .

CCC "C" is an invalid code which will force the return to error correction.

Edit CCC "C" if Form 8834, Form 8910, and/or Form 8939 has an invalid vehicle year or an invalid in service date.

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

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

Edit CCC "D" on a "Final" , Balance Due return if the Received Date is after the short period due date but on or prior to the regular full tax period due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡. See IRM 3.11.14.8.5, CCC "F" Final Return.

Do not edit CCC "D" when pre-computed penalty is shown on the return.

Edit CCC "D" on a complete Streamline return filing. See IRM 3.11.14.10.14, Streamlined Filing Compliance Process (Ogden Only) (Form 1041).

Effective January 1, 2017, Computer Condition Code "E" will be edited on Form 1041, only, for any year, after the SP BMF ID Theft Liaison verifies a potential identify theft filing.

If a tax examiner in Submission Processing (SP) Code and Edit (C&E) finds a case with attachments or correspondence showing the taxpayer is a victim of ID Theft, give the entire case to your senior/lead. Your senior/lead will expedite the case to the Planning and Analysis (P&A) staff for referral to one of the SP BMF ID Theft liaisons. The taxpayer must show that they are a victim of "ID Theft;" do not send cases that are subject to Funny Box or Fraud review.

If the SP BMF ID Theft Liaison says the return is ID Theft, the tax examiner will edit CCC E.

Edit CCC "F" when the "Final Return" box is checked, or the estate or trust shows it is not liable for future returns. Notations will include (but are not limited to):

See IRM 3.11.14.10.1, Amended Return, for instructions.

Edit CCC "I" when Form 6781 (Gains and Losses from Section 1256 Contracts and Straddles) is attached.

For Tax Periods 201712 and later returns, CCC "J" is used to show a Section 965 return.

See IRM 3.11.14.10.9, Section 965 Returns Form 1041 and Form 1041-N (TY 2017 and later), for instructions when to edit CCC "J" .

Edit CCC "K" , for taxable periods ending in 2009 only, when Form 2210, Underpayment of Estimated Tax by Individuals, Estates, and Trusts, box "E" is checked in Part II.

Edit CCC "M," when tax period is 201712 and later, andForm 8949 (Sales and Other Dispositions of Capital Assets) has a code "Z" or "Y" in any line for column (f) of Part I and Part II.

Edit CCC "N" when Form 8939, Allocation of Increase in Basis for Property Received from a Decedent, is attached to Form 1041.

CCC "O" is edited when a Manual Refund will be issued, and a Form 3753 or Form 5792 is attached. Verify that the Name Control, EIN, and Tax Period on the return are the same as the information on the attached form.

When editing CCC "O" , research to decide if TC 840 (Manual Refund Transaction) has posted:

Edit CCC "P" on the return when "Streamlined" is written on the top of the return.

Do not edit CCC "R" when a reason is given by the taxpayer for a delay in filing a return. Issue Letter 1382C, Penalty Removal Request Incomplete, and continue editing the return.

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

Edit CCC R on final short-period if the received date is on or prior to the normal due date for a full-period return. See IRM 3.11.14.12.2 (2), Final Returns for possible editing of CCC R on short period.

Edit CCC "R" on a complete Streamline return filing. See IRM 3.11.14.10.14, Streamlined Filing Compliance Process (Ogden Only) (Form 1041).

Edit CCC "T" when Form 8886, Reportable Transaction Disclosure Statement is attached to a return.

Edit CCC "V" when Form 3800, Part III, Lines 1a and/or 4a has a significant entry and Form 3468, Part II, Line 8 has an entry.

CCC "W" is used when the return was cleared by Statute Control. See IRM 3.11.14.10.11, Statute Returns.

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

Figure 3.11.14-2

Editing suppression of credit interestFigure 3.11.14-2 is an example of editing CCC X to suppress credit interest when the filer requests part of the refund be applied to another account. Shown is a folded section of a completed Form 1041. A note is attached requesting to apply the refund to a previous tax year. Computer Condition Code X is edited in the middle of the dotted part of Line 1 (Interest Income). The bottom section of Form 1041 shows an overpayment of 50 dollars. A text box in the bottom middle of Form 1041 reads: 1. Edit CCC X. 2. Photocopy pages 1 - 3 of Form 1041 (page 1 of Form 1041-QFT/1041N). 3. Prepare Form 3465, attach to the photocopy and forward to Accounts Management. 4. Notate Form 3465 PREPARED on the original Form 1041.

Please click here for the text description of the image.

CCC "Y" is edited for a Change of Accounting Period. Enter only for short period returns due to change of accounting period not due to initial or final filing:

If a prepaid credit is claimed on a short-period Final return, see IRM 3.11.14.12.9, Short Period Returns - with Prepaid Credits.

Don’t edit CCC "Y" for "Initial" or "Final" returns.

Edit CCC "1" when Form 8824, Like-Kind Exchanges, is attached.

For Tax Year 2020 and later, Form 8938, Statement of Foreign Financial Assets, will be input into the General Purpose Programming (GPP) database. If attached process a TY 2020 Form 8938 and later, per the instructions below:

Process Form 8938 with the following criteria:

If Form 8938 is attached, but doesn't meet the above criteria, then continue normal processing of Form 1041. Edit CCC 2, do not sequence the form to the back of the return, or place the form in the designated basket.

If the return meets the criteria in paragraph (2), process Form 8938 per the instructions below:

Form 1041 with Form 8938 attached must be batched separately.

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

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

Edit CCC "8" when any of the following conditions are present:

Edit CCC "8" on a complete Streamline return filing. See IRM 3.11.14.10.14, Streamlined Filing Compliance Process (Ogden Only) (Form 1041).

Figure 3.11.14-3

Edit of CCC 8 when the date entity created is within two years of the tax period ending and return is for a decedent estate or testamentary trust.Figure 3.11.14-3 shows two examples of editing CCC 8 Waiver of estimated tax penalty as described above. The first graphic shows the completed top part of Tax Year 2024 Form 1041 from Line 2a (Total ordinary dividends) up.Section A (Type of Entity) shows the Decedent's estate box checked and Fiduciary Code 1 is edited to the right of the Simple Trust box. An arrow is pointing to the Decedent estate box.The entity section shows George C Warbler Estate and the Name Control Para is underlined.The taxpayer has shown a fiscal year beginning 03 17 2023 and a fiscal year ending March 16, 2023. An arrow is pointing to 03 16 2024. The edited tax period 2203 is written above the tax period ending date. Block D, Date entity created shows 03172023. An arrow is pointing to this date.The Final Return box is checked.CCC 8 and F is shown in the center of the dotted part of Line 1 (Interest Income).The second example shows the completed top part of a calendar year 2024 Form 1041 from Line 2a (Total ordinary dividends) up.Section A (Type of Entity) shows the Simple Trust box checked and Fiduciary Code 2 is edited to the right of the Simple Trust box. An arrow is pointing to the Simple Trust box.The entity section shows Cardinal T / U / W Franklin C Cardinal and the Name Control Card is underlined.Block D, Date entity created shows 06 21 2023. An arrow is pointing to this date.CCC 8 is shown in the center of the dotted part of Line 1 (Interest Income).

Please click here for the text description of the image.

Figure 3.11.14-4

Bankruptcy EstateThis is an example of editing CCC 8 when the Bankruptcy Estate box is checked. An arrow is pointing to the marked box Bankruptcy Estate Ch 7 and CCC 8 is shown in the center of the dotted part of Line 1 (Interest Income).

Please click here for the text description of the image.

Figure 3.11.14-5

Edit of Waiver of ES PenaltyFigure 3.11.14-5 shows an example of a Waiver of Estimated Tax Penalty when Form 2210 is attached. The graphic represents a folded Form 2210 showing the top part and Part II (Reasons for filing). A text box that reads: Any of the boxes checked in Part II, Edit CCC 8. and has an arrow pointing to Part II.

Please click here for the text description of the image.

Edit CCC "9" when any of the following forms are attached and an entry is present on Line 2b*, Schedule G of Form 1041
*(Line 2c for 2009 and prior):

A return is considered amended based on the following:

If a Form 1041 is received with a second Form 1041 attached and the second return has the same EIN and Tax Period:

Examine the return for attachments:

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

Do not edit CCC "G" on returns filed under Section 443(b)(2). See Exhibit 3.11.14-5, IRC Sections and Actions to be taken on Form 1041.

The following data must be edited on all amended returns:

Detach Schedules K-1 for current year and prior two years. Process accordingly. See IRM 3.0.101, General, Schedule K-1 Processing. Watch for the Amended Box on Schedules K-1.

Amended 1041 returns with "Streamline" written across the top will need special handling. Amended Streamlined 1041 returns will not be processed, give them to the lead. Instead, they will be scanned into CII in Austin and worked by Ogden's AM. If amended 1041 Streamlined returns are received in Ogden, they will be scanned into CIS with a special cover sheet assigned to a special employee number.

This subsection has instructions for processing bankruptcy returns.

The bankruptcy trustee or debtor in possession must file Form 1041 for the estate of an individual involved in bankruptcy proceedings under Chapter 7 or 11 of title 11 of the United States Code if the estate has gross income that exceeds the amount of:

Prompt identification must be made of a bankruptcy related "Request for Prompt Assessment" or a "Quick Determination" of tax liability to ensure that the crucial 60-day and 180-day deadlines is met timely by Compliance. See IRM 3.11.14.10.3, Prompt Assessment/Prompt Determination (Form 4810).

Edit Fiduciary Code "5" on all Chapter 7 Bankruptcy Estate returns or "6" on all Chapter 11 Bankruptcy Estate returns. If no boxes are checked, edit Fiduciary Code "5" if the return shows it is a bankruptcy. See IRM 3.11.14.13.3, Fiduciary and Trust Code Editing.

All bankruptcy returns, except amended bankruptcy returns, must be routed to Entity. Completely edit the return except the name control prior to sending to Entity. See below for more editing instructions.

If Form 6252 is attached to a nontaxable Grantor Trust or Bankruptcy Estate return, do not edit an Installment Sale Indicator Code. Form 6252 information will be added on the individual tax return.

Identification must be made for "Prompt Assessment" or "Prompt Determination" of tax liability to ensure that the crucial 60 and 180 day deadlines are met timely by Compliance.

A Prompt Assessment is requested either in the form of a letter or on Form 4810 Request for Prompt Assessment Under IRC 6501(d):

Figure 3.11.14-7

Request for Prompt Determination (Form 4810)Figure 3.11.14-7 shows an example of a Tax Year 2024 Request for Prompt Determination (Form 4810).Pictured is the top part of a completed Form 1041, a folded Form 4810, Request for Prompt Assessment showing the top and bottom portions and a Form 4227.The Form 1041 shows an edited Audit Code 1-4 and a Working Trail COPY TO EXAM.A Form 4227, Intra-SC Routing or Routing Slip is completed with Examination Audit and BMF check boxes marked.

Please click here for the text description of the image.

If a request for Prompt Determination under Section 505(b) of the U.S. Bankruptcy Code is attached to the return and addressed to the Submission Processing Campus, decide if the request and return was processed through the Centralized Insolvency Operation Rev. Proc. 2006-24:

Figure 3.11.14-8

Request for Prompt Determination (Under Section 505B)Figure 3.11.14-8 shows an example of a Request for Prompt Determination (Under Section 505(b)).Pictured is the top part of a current year Form 1041 and a letter requesting a prompt determination. The letter reads as follows: Dear Sirs, Enclosed please find a copy of Form 1041 for the period ended December 31, 2024, showing a zero balance due.Pursuant to 11 U.S.C, Section 505(b), I hereby request a prompt determination of any unpaid liability for the above return.I, Donald F. Osprey, Trustee for Bankruptcy of the above named Debtor, declare under penalties of perjury the foregoing is true and correct to the best of my knowledge and belief. Sincerely, Donald F. Osprey, Trustee.

Please click here for the text description of the image.

If Form 1041 is received with the notation "SEPARATE SHARE" and there are supporting returns shown as copies for information purposes:

Process Form 1041 as an original return if it is received with all the following:

A return posted to the wrong account or module or attempting to post must be reprocessed to post to the proper account or module.

Some re-entry returns will have originally been filed electronically through Modernized E-file (MeF). These returns will be shown by the presence of Mod E-file printouts in lieu of an 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.

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 decide the editing needed to make the return processable.

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

Figure 3.11.14-9

Refund Return - 45-Day JeopardyFigure 3.11.14-9 shows an example of a return shown as a 45-day Jeopardy refund. This is an example of a completed Form 1041, Page 1 only. Text box at the top reads This return is being edited on May 16, 2025.IRS Received Date stamp shows 04-13-2025.Line 30. Refund entry is $25,300.Action Code 341 is edited in lower left-hand margin.A text box at the bottom of Form 1041 reads Give the completely edited return to the manager.

Please click here for the text description of the image.

Compliance functions, Collection and Examination, secure returns from the taxpayer and also prepare returns if the taxpayer doesn't give them.

Compliance notates:

Section 965 (Repatriation Provision), Treatment of deferred foreign income upon transition to participating exemption systems of taxation for U.S. Shareholders of Specified Foreign Corporations per Tax Cuts Jobs Act (Tax Reform), Provision Section 14103, Public Law 115-97 (H.R.1).

Taxpayers reporting a 965 tax on their return can elect one of the following two elections:

Edit CCC "J" if the return shows a Section 965 as follows:

Edit CCC "B" if the return has a Section 965(i) election listed as follows:

If CCC "J" or "B" (Section 965(i) Election) was edited on a Tax Period 201712 - 201811 return, edit as follows:

The trustee of a Designated or Qualified Settlement Fund (QSF) generally must file Form 1120-SF, U.S. Income Tax Return for Settlement Funds (Under Section 468B), instead of Form 1041.

If a QSF has only one transferrer, the transferrer can elect to treat the QSF as a grantor type trust. To make the grantor trust election, the transferrer must attach an election statement to a timely filed Form 1041. At the top of the election statement, must be the notation "SECTION 1.468B-1(K) ELECTION" and has the transferrer’s:

If the filer notates that Form 1041 is for a "QUALIFIED SETTLEMENT FUND" or "SETTLEMENT FUND" , but lacks all the information listed in the preceding paragraph, decide if the document is numbered or unnumbered:

Figure 3.11.14-10

Settlement Fund Return - Possible filing discrepancyFigure 3.11.14-10 is an example of a Settlement Fund - Possible filing requirement discrepancy. Pictured is the top half of a completed Form 1041 with Form 4227, Intra-SC Reject or Routing Slip attached. Mary Grousse Settlement Fund is written in the name line on Form 1041. Form 4227 is completed with Entity Control, BMF, Review for necessary editing and Other (explain) check boxes marked. Possible Filing Requirement Discrepancy is written as the reason under Other (explain).

Please click here for the text description of the image.

Any return with a Received Date that is 2 years and 9 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, do not route to Statute Control Unit for clearance. Instead, edit CCC "W" , and continue processing:

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

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

Statute returns are unprocessable until cleared by Statute Control.

Edit CCC "W" if the Statue Control Unit stamps or shows clearance on the front of the return. See Figure 3.11.14-11, Statute Return.

Figure 3.11.14-11

Examples of Returns Shown as a Statute ReturnFigure 3.11.14-11 shows three examples of returns shown as a Statute Return.The first example pictured shows the top part of a completed Form 1041, tax year 2021. The edited tax period 2012 is written in the top right corner of the return. The return is stamped (vertically) Statute Cleared 06-20-25 in the left margin next to Section A Type of entity. CCC W is edited in the middle part of Line 1. Also pictured, in Section A, the taxpayer checked the Simple Trust box and Fiduciary Code 2 is edited to the right of the box.The second example pictured shows the top part of a completed Form 1041, tax year 2019. The edited tax period 2012 is written in the top right corner of the return. TC 59X is written vertically in the left margin between Section A Type of entity and B (number of Schedules K-1). CCC W is edited in the middle part of Line 1. Also pictured, in Section A, the taxpayer checked the Simple Trust box and Fiduciary Code 2 was edited to the right of the box.The third example pictured shows the top part of a completed Form 1041, tax year 2019. The edited tax period 1912 is written in the top right corner of the return. I.C.S. is written vertically in the left margin of the return next to Section A Type of entity and B (number of Schedules K-1). CCC W is edited in the middle part of Line 1. Also pictured, in Section A, the taxpayer checked the Simple Trust box and Fiduciary Code 2 was edited to the right of the box.

Please click here for the text description of the image.

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

Ogden Submission Processing Campus (OSPC) will process all foreign address returns.

A foreign address is any address other than the 50 states and the District of Columbia.

An Army Post Office (APO), Diplomatic Post Office (DPO) or Fleet Post Office (FPO) is not considered a foreign address. See IRM 3.11.14.14.5, Entity Perfection - Domestic Addresses.

The determination of an International foreign address is based only on the address of the estate or trust found on Page 1 of the return. Don’t consider a Form 1041 or Form 1041-QFT that has schedules or attachments showing that the beneficiary, trustee or shareholder has a foreign address.

U.S. Possessions/Territories - The following U.S. Possessions/Territories are considered foreign addresses and must be shipped to OSPC for processing:

Consider a Form 1041 with any of the following attachments or indications to be an international return:

Route all returns with a foreign address to OSPC for processing. Prepare Letter 86C to inform the fiduciary or trustee that the return was sent.

Taxpayers who are presidential appointees are permitted to file their individual tax returns through a trustee of a blind trust.

If there is any indication on the return or attachment, a General Power of Attorney, or Form 2848 attached that shows "Blind Trust" , see IRM 3.28.3, Individual Income Tax Returns.

The POA, Form 2848 must be processed to the CAF to reflect the Blind Trust Indicator on Master File to ensure that no correspondence is generated to the taxpayer.

Effective July 1, 2014, the IRS started a new enhanced Streamlined Program for individual taxpayers who are voluntarily disclosing offshore accounts. Returns postmarked on or after July 1, 2014, will follow these Streamlined processing instructions.

To be considered for the Streamlined Program, the package of returns must have any or all the following characteristics:

If the items below are not submitted, correspond using the 177C letter:

The completed certification (Form 14653, Form 14654, or substitute certification) must have the following:

If the items are not submitted with a Streamlined package, correspond using Form 13459, Correspondence Action Sheet:

If one return needs to be cleared by Statute, send all Streamline returns received from the taxpayer, do not separate.

Follow normal coding instructions and normal Attachment Guide procedures.

If correspondence is necessary for any return submitted as part of the “Streamlined” process, it is important to ensure that all returns submitted by each taxpayer be kept together. This means that if one return needs correspondence, that all returns in the submission must be kept with the suspended return and held together in the Suspense area.

Once it was decided that a Streamlined Package is complete, the package is separated.

When a completed Streamlined filing is received, edit the following Computer Condition Codes (CCC) and edit an audit trail on the return showing that the package was complete:

Amended Streamlined Form 1041 returns will not be processed. Instead, they will be scanned into CII in Austin and worked by Ogden's AM. If amended 1041 Streamlined returns are received in Ogden, they will be scanned into CII with a special cover sheet assigned to a special employee number.

This subsection has instructions for coding other entries to Form 1041, Form 1041-QFT, and Form 1041-N.

These entries are edited in the left margin next to:

Each entry will be preceded by the numeric for the applicable line.

Edit entries in numeric order, such as "1 - 4" , "6 - 2" , and "7 - 3" .

Under the Inflation Reduction Act (IRA) of 2022 and CHIPS and Science Act of 2022, the taxpayer can elect to:

For Tax Periods 202212 - 202311 - Identify an Elective or Deemed Payment Election when the taxpayer writes "IRA22DPE" on Form 3800, an attachment or on any of the following lines:

When a return is identified with an "Elective or Deemed Payment Election," do the following:

For Tax Periods 202212 - 202311 - Identify a "Credit Transfer" when the taxpayer writes "IRA22TRE" on Form 3800, an attachment, or at the top of the return or on an attachment. Do the following:

Treat taxpayers who claim the credit on Form 3800 with no other indication of claiming the "Elective or Deemed Payment Election" or "Credit Transfer" as normal. See IRM 3.11.14.22.2.2, Schedule G, Line 2b - General Business Credit Form 3800).