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

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

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

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

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

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

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

Program Goal: Ensure documents are code and edit ready for transcription.

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

Program Effectiveness:

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The following are procedures for ensuring the return is complete:

A primary consideration is the proper presentation of income and deduction items for subsequent transcription and computer processing. Document Perfection is responsible for arranging the return in the following order:

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

Figure 3.11.213-1

Figure 3.11.213-1 provides an example of an incomplete Form 1066.Name line shows Cardinal Real Estate Trust No. 132.Street address line shows 6741 Pelican Place.City, state and ZIP code line shows San Antonio, TX 78284.Box A shows 00-3245781 for the Employer Identification Number (EIN).Box B Date REMIC started shows 4-20-91.Box C Total Assets shows $2,436,792.00.Line 15 Taxable income shows $1,787,026.00.The example here shows the Total Tax amount of $6,801.92 was brought forward from Part IV, Schedule J, Line 12, and edited to the Total Tax on Section II, Line 1, Page 1.

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If the line items on a prior year form do not agree with line items on the current form, transfer the data to the appropriate line items on a current form. Fold back the entity area of the current form and attach below the entity area of the prior year form or renumber the prior year to comply with current year line items.

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

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

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:

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), take proper action.

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

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

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

Do not obliterate, alter, or erase the original entry on a return when deleting or correcting an entry. Always exercise care to ensure that the original entry remains legible. Perfected entries provide a legible edit trail for anyone who may work with the return later.

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

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

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

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

When necessary, assign a three-digit Action Code .

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

Figure 3.11.213-2

Figure 3.11.213-2 provides an example of editing the Action Code for correspondence request. The Form 1066 has 647G edited in the return entity area to establish the name control for GNMA Trust Number 647.Address line indicates 1426 Duck Lane, Minneapolis, MN 55401Box A indicates EIN 00-3337777.Box B indicates Jan 1988 as date REMIC was started.Box C indicates $493,214.11 in total assets at end of year.Section I line 1, indicates $32,194.10 in taxable interest.Line 4 indicates $4,000.00 in ordinary gain.Line 6 indicates $36,194.10 in total income.Section II line 1 indicates $36,194.10 in total tax.Section II, Line 2 indicates $36,194.10 in tax paid.Form 1066 received date stamp of 03152025 in Ogden, UTError Resolution System (ERS) Action Code 225 (for correspondence) is edited in the bottom left margin.

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Assign Action Codes in the following priority:

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

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

Continue perfecting the return after editing the Action Codes.

Valid Action Codes are listed below:

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

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

The following information pertains to suppression of the delinquency check.

Figure 3.11.213-3

Figure 3.11.213-3 shows a TC 599, CC 17 edited on the upper left margin of the Form 1066. The name line is showing Cardinal, Heron, Quail. CARD is edited for the name control.The address line shows 4121 Bunting. The city, state and zip code line shows Fargo, ND 58102Box A EIN show 00-4769847.Box B Date REMIC started shows 3-1-88Box C Total assets show $4,621,314.00.TC 599 17 is edited in the upper left margin of the return.The Form 1066 is has received date stamp of 03152025 in Ogden, UT.

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

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

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

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

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

Examine the return for all unprocessable conditions before initiating correspondence.

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

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

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

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

Determine the EIN as follows:

The Name Control consists of four characters or less.

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

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

Figure 3.11.213-4

Figure 3.11.213-4 provides an example of editing the Name Control without using the word The. The name of the taxpayer is The Sparrow Development Trust.The Name Control used here is SPAR.Address line indicates 793 Falcon Towers Salt Lake City, UT 84100Box A shows 00-6704734 for the Employer Identification Number (EIN).Box B shows June 6 1989 for REMIC start date.Box C shows 243,194.00 for total assets at end of tax year.

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

Edit the Name Control as follows:

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

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

The procedures for perfection of addresses are as follows:

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

Figure 3.11.213-5

Figure 3.11.213-5 shows a Form 1066 with an APO New York address. Name line shows Pigeon Development Trust with PIGE as the Name Control.Address shows Army Comm. Station Unit 105 Box 830City, state and zip code line shows APO NEW YORK - The word New York is circled in red.AE is edited immediately to the right of the circle.The Zip code 09132 falls within the range of the European theater.Box A shows 00-1234567 for the Employer Identification Number (EIN).Box B Date REMIC started shows July 15, 1990.Box C Total Assets shows $257,684.00.

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

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

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

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

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

A ZIP Code or state is not required on a foreign address. Foreign addresses use a postal code that is entered before the city or foreign country and is part of the address.

The Paid Preparer Checkbox is located next to the taxpayer signature area. It indicates whether the taxpayer has elected to allow the Paid Preparer to answer questions about the return as it is processed.

No action is required on amended returns.

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

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

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

No action is required on amended returns.

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

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

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

No action is required on amended returns.

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

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

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

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

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

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

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

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

Circle the CCC "G" if present.

Do not edit CCC "G" on amended returns.

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

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

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

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

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

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

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

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

Circle CCC "G" if present.

Do not edit CCC "G" on amended returns.

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

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

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

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

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

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

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

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

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

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

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

See IRM 3.11.213.11, Amended Returns.

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

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

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

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

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

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

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

CCC X - A refund freeze code to be used as the need arises.

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

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

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

The Tax paid with Form 7004 (Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns), must be a Positive amount.

This should be the excess of Line 1 over Line 2. If blank, subtract Line 2 (Tax Paid with Form 7004) from Line 1 (Total Tax).

This amount should be the excess of Line 2 over Line 1. If blank, subtract Line 2 (Tax Paid with Form 7004) from Line 1 (Total Tax).