Filers send paper unemployment forms to the Internal Revenue Service (IRS) to fulfill their requirement to file an annual unemployment tax return and provide their taxpayer identification number (TIN). The IRS must convert the information present on the paper filings to an electronic data record. Employees input and validate the data present and the IRS systems for these records during conversion to electronic data records.

Authority for these procedures is found in Title 26 of the United States Code (USC) commonly known as the Internal Revenue Code (IRC). The IRC is amended by acts, public laws, treasury determinations, rules, and regulations such as the following:

All policy statements for Submission Processing are found in IRM 1.2.1.4, Servicewide Policies and Authorities, Policy Statements for Submission Processing Activities:

The Director, Submission Processing approves and authorizes issuance of this IRM.

The Planning and Analysis staff provides feedback and supports local management to monitor and achieve scheduled goals.

The Operation Manager secures, assigns, and provides training for the staff needed to perform the duties presented in this IRM.

The Team Manager assigns, monitors, and controls the workflow to complete the work timely.

The Employee applies the instruction for the duties presented in this IRM on the SCRIPS system to accurately convert paper data to an electronic data record for proper posting for use by the IRS.

Program Reports: These reports listed below show work schedules, receipts, production and inventory for conversion of paper returns to electronic data. Management uses these reports to monitor the daily and weekly status of the program through completion.

Program Effectiveness: Management measures weekly goals using the above reports for each function compared to the established completion schedule. Each function must complete the inventory on or before the program completion, and retain or exceed schedule prior to the program completion date stated in IRM 3.30.123, Work Planning and Control Processing Timeliness: Cycles, Criteria, and Critical Dates. Local management conducts and monitors quality reviews and takes corrective action to ensure quality products. A managerial or product review in the Data Validation function is performed each week on every employee and entered into the Embedded Quality for Submission Processing System (EQSP). Managerial and product reviews supplement the quality review process.

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

Management can use local reports to establish additional information for maintaining daily program control. Local reports never replace the established official reports.

The following are terms or acronyms used throughout this instruction.

The following table lists the IRM primary sources of guidance on the processing of paper filed Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Return.

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

IRM’s present on the Servicewide Electronic Research Program (SERP) at the following site: http://serp.enterprise.irs.gov/homepage.html. Specific instructional links are available on the BMF Data Conversion Research Portal located at: http://serp.enterprise.irs.gov/databases/portals/sp/bmf/data-conversion/data-conversion.html.

IRM 3.13.62, Campus Document Services, Media Transport and Control, or IRM 10.5.1, Privacy and Information Protection - Privacy Policy, provides information on shipping Personally Identifiable Information (PII). This document is located at: http://publish.no.irs.gov/mailtran/pii.html, titled Postal and Transport Policy. Prepare Form 3210, Document Transmittal, and include with ship documents.

The instructions in this section apply only to the form types listed below for tax years 2006 and later:

Use the program codes listed below when entering Form 940 through SCRIPS:

Keystroke Combinations

Glossary: IRM 3.41.277.1.6, Terms and Definitions, Exhibit 3.41.277-12, Consolidated List of Acronyms and Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Returns, has a glossary of terms related directly and indirectly to Form 940 SCRIPS processing.

QUICK START - Each function (Original Entry (OE) From Paper, Data Validation (DV) From Image, Original Entry (OE) From Image, etc.) begins with QUICK START instructions intended to speed access to a unit-of-work (UW). For detailed data entry and validation instructions, see IRM 3.41.277.11, General Correction Procedures, Form 940, Employer's Annual Federal Unemployment (FUTA) Tax Returns and the tables and transcription sheet exhibits in the back of the IRM. More general instructions may be found in IRM 3.41.274, Optical Character Recognition Scanning Operations-General Instructions for Processing via Service Center Recognition/Image Processing System.

Tables

Transcription Sheets provide most of the information needed to process Form 940 on SCRIPS. The following Exhibits contain the transcription sheets for use in the OE and DV functions.

When preparing returns for scanning, send only the following items for scanning and organize the pages in the order listed below:

If the Form 940 Schedule R(s) attached to the Form 940 is a nonconforming document (i.e., a spreadsheet, list, or similar format) pull the return from the block and route to Code and Edit for perfection.

When preparing Form 940 for the scanner, the most critical area for repair is the right side of the 940. If preprinted information is present in the upper right corner (where the DLN prints), do not cover (band-aid) that information. The scanner prints the DLN to the left of the information.

The Pre-Doc Prep function must perform the following actions on all Form 940:

The Pre-Doc Prep function must perform the following actions when processing "Perfect" batches of Form 940:

The Pre-Doc Prep function must perform the following actions when processing "Imperfect" batches of Form 940.

During scanning, certain documents may reject because the submissions are invalid. The scanning function routes these submissions (documents) to the Pre-Doc Prep function for disposition. The Pre-Doc Prep function must re-batch the documents for scanning. When a return is missing pages (940 Page 1 or 940 Page 2), route to Code and Edit for correspondence.

The system automatically re-prioritizes the work every time the cycle on the system changes.

The system automatically sets the Unit Task Prioritization using the following criteria:

From the Workstation Main Menu, select Original Entry (OE).

From the Original Entry (OE) Selection Menu, select Forms Identification Selection Menu.

From the Forms Identification Selection Menu, select 940 Forms Identification.

The first group of images, from a unit-of-work (UW), requiring identification opens.

If an incorrect option is selected from the Forms Identification Selection Menu., press the <Ctrl>-P key combination to set post-to-close, followed by <F9> to suspend the block and return to the Forms Identification Selection Menu.

If you need to stop processing FI:

The system returns you to the Forms Identification Selection Menu when you complete the last image identification in the UW.

The system assigns a six-digit sequence number instead of a DLN to the documents it cannot identify. This number assists in locating the documents within a UW when researching the documents. Once the tax year/page type identification occurs, the system assigns a DLN to the submission.

To identify the image, make the correct letter or number selection from the template in the Form Identification Menu The table below appears on the SCRIPS workstation.

Always press the <Enter> key to complete a selection.

Documents scanned backwards need research to determine the document type. If you cannot identify the image,

Some unprocessable conditions include:

To end a session, press <Ctrl>-P key combination to set post-to-close. The system returns you to the Original Entry (OE) Selection Menu when you complete the last image in the UW.

From the Workstation Main Menu, select Original Entry (OE) Selection Menu.

From the Original Entry (OE) Selection Menu, select OE Image Selection Menu.

From the OE Image Selection Menu, select 940 OE Image Selection Menu.

From the 940 OE Image Selection Menu, select one of the following:

After the selection is entered press <Enter> as prompted or press <Alt>-X to exit to the previous menu.

The first whole unit-of-work (UW), or first individual document (because an entire UW may not require OE Image) requiring OE opens. See Exhibit 3.41.277-1, Transcription Sheets - Form 940 Entity and Code and Edit Fields.

If an incorrect option is selected, press the <Ctrl>-P key combination followed by <F9> to suspend this UW.

If the last data entered is not the last field of the page and there is no other data present on the page, press the <F6> key to release a document and display the next template.

Press the <Ctrl>-P key combination to end OE Image.

The system returns you to the Original Entry (OE) Selection Menu when you complete the last document in the current UW.

The Status Line at the bottom of the screen displays the following information:

In OE Image, you manually enter information into the template using a scanned image of the return as a source.

From the Workstation Main Menu, select Original Entry (OE) Selection Menu.

From the Original Entry (OE) Selection Menu, select OE Paper Selection Menu.

From the OE Paper Selection Menu, select 940 OE Paper Selection Menu.

From the 940 OE Paper Selection Menu, select the form type:

If the wrong program is selected and the first page of the first document has not been completed, press the <Esc> key to cancel the entry. A window displays asking, "Are you sure you want to cancel the inserted document?" Answer "YES" to go back to the 940 OE Paper Selection Menu.

In OE Paper, the workstation operator manually enters the information into the system which eliminates all transport processing. The operators need the paper Form 940 unit-of-work to perform OE Paper.

The reason a document is processed using OE Paper is because it cannot be scanned (oversized pages, tissue paper, writing too light, substitute forms, or half pages, etc.).

These documents come batched separately and the BBTS Transmittal clearly marked as "OE Paper" .

Once the workstation operator has successfully completed steps 1 through 4 in IRM 3.41.277.9.3, OE Paper QUICK START, input the following information:

A blank Form 940 template displays for the first document in the block. Input the information from the document starting with the DLN taken from the first document in the block. The DLN must have 14 digits (for example: LC840102790000). When all fields have been input, press <F6> to get the next template.

For Tax Years 2011 and later once you have input the Schedule A or pressed <F6>, a window appears to select your next process. The window is titled "Next Page Selection" and the options include:

If Form 940 is selected, the system prompts for the next sequence number (located in the 12th and 13th position of the DLN) for each document input (01, 02, 03, etc.). You cannot skip or repeat a sequence number.

The system returns you to the 940 OE Paper Selection Menu when you release the last document in the UW.

The Status Line at the bottom of the monitor screen displays the following information:

For OE Image, when you release the last document in a UW, a question appears asking if you want to release the UW.

For OE Paper, to end a block for Tax Years 2011 or prior, once the last document is input, press <F8> and answer the question "Do you want to release this UW?" .

For OE Paper, to end a block for Tax Year 2012 and later:

You can select a specific Form 940 UW for OE by following these steps:

From the Workstation Main Menu, select Data Validation (DV).

From the Data Validation (DV) Selection Menu, select DV Selection Menu.

From the DV Selection Menu, select 940 DV Selection Menu.

From the 940 DV Selection Menu, select one of the following:

The first UW opens, and the cursor stops at the first highlighted field when AUTO is on. Use the exhibits in this IRM and the general correction procedures to make necessary corrections.

If an incorrect option is selected from the DV Selection Menu before entering any data, press <Ctrl>-P, followed by <F9> to suspend and return to the DV Selection Menu.

Press the <Ctrl>-P key combination to end the current UW upon completion of DV Image.

The system returns you to the Data Validation (DV) Selection Menu when you release the last document.

The Status Line at the bottom of the screen displays the following information:

You can select a specific UW of Form 940, for DV by following these steps:

For DV Image, when you release the last document in a UW, a question appears asking if you want to release the UW.

When the Name Control is illegible, enter four hyphens "- - - -" , if the EIN is present. If EIN is not present, delete the document as "Unprocessable 940" .

When the EIN is illegible, press <F3> to clear the field, if Name Control is present. If the Name Control is not present, delete the document as "Unprocessable 940" .

If the EIN is unaltered on a pre-printed label and the Check Digit is presented, enter the Check Digit, if legible. Otherwise, enter the Name Control. If Name Control is presented instead of a Check Digit, always use the Name Control.

The presence of a "%" (percent sign) or "C/O" followed by a name identifies an "In Care of Name" .

Search the Name Line, Trade Name Line and Street Address for an "In Care of Name" .

Enter "%" , space, and then the name immediately following the "%" or "C/O" indicator.

Returns identified by a solid black line above and to the left of the entity area or pound (#) signs to the left of the entity area, represent an IRS label under the National Change of Address (NCOA) program. These labels do not have a Check Digit and are not considered an IRS pre-printed label. The "In Care of Name" information REQUIRES ENTRY if present.

Valid characters include alpha, numeric, "-" hyphen, "&" ampersand, and "%" percent sign. The field length is 35 positions long. You must spell out any other symbols (e.g., "$" input as Dollar).

If the In Care of Name is illegible, enter "%-" (percent hyphen without a space between) this sends the document to Error Resolution System (ERS) for more research.

If the document has an IRS pre-printed label without changes to the In Care of Name line, leave blank.

Edit marks and their descriptions:

Code and Edit fields listed and described in Exhibit 3.41.277-1, Transcription Sheets - Form 940 Entity and Code and Edit Fields.

Code and Edit fields along with 940 Page 1 of the Image presents to the operator.

Press the <Ctrl>-S key combination to get out of the Code and Edit fields (during OE and DV).

Code and Edit writes the Computer Conditions Codes (CCC) either to the right of "You MUST fill out both pages of the form and SIGN IT," in the center of the return below Line 15 or in the "bottom middle margin" of the return. It is the responsibility of the operators to input all CCC edited, stamped, or underlined on the return.

The following Computer Conditions Codes (CCC) automatically generate:

Both CCC "F" and "G" require sight verification by the operator. If CCC "G" is input, the system prompts ONLY for the following fields if they are flagged for OE:

The IRS Received Date, often referred to as "Received Date," is the date a document is first received by the IRS. It is stamped or edited on Page 1 of the 940 return.

An "Official Received Date Stamp" may consist of no less than:

The Received Date is input in MMDDYY format. For Example:

The "Received Date" must be an "Official" stamp or edited on the return. If two or more Received Dates are stamped on the return and neither has been edited, pick up the earliest date.

If the return has a "Post Mark Date" and a "Received Date," enter the Received Date.

If the return has a "Post Mark Date" and a "Received Date," and the Received Date is circled or edited out, leave the field blank.

If the "Post Mark Date" is the only date on the document, enter 090999.

If the "Received Date" is incomplete, illegible, an invalid day of the month, or a future date, enter 090999. If unsure if the received date requires input, enter 090999.

The EIN on the Form 940 Page 1 must contain nine numeric digits or blank.

If the EIN is more than or less than nine digits, illegible, missing, or there is more than one EIN present, press <F3> to clear the field and <Enter>.

For 940 Schedule R EIN instructions, see Exhibit 3.41.277-5, Transcription Sheets - Form 940 Schedule R and Schedule R Continuation Sheet (All Revisions).

With the implementation of the Enhanced Entity Index File (EEIF) a window may appear asking "Is Address changed?" This message includes the In Care of Name Line (%), Street Address, City, State and ZIP Code. If the document has an IRS pre-printed address with no changes, you should answer "NO." You should answer "YES" if the IRS pre-printed address has changes (including % name line).

If the return has an IRS pre-printed label without changes to the Street Address, City, State or ZIP Code, all these fields must be left blank during OE and/or DV. If any of the fields display information, press <F3> and <Enter> to remove the information from the field.

If the return has an IRS pre-printed label without changes to the In Care of Name Line but has a change to the Address, leave the In Care of Name Line blank and enter the Street Address, City, State and ZIP.

Returns identified by a solid black line above and to the left of the entity area or pound (#) signs to the left of the address, represent an IRS label under the National Change of Address (NCOA) program. These returns do not have Check Digits and are not considered an IRS pre-printed label, therefore all In Care of Name Line and Address information require entry.

Enter the Street Address information exactly as shown on the document except as instructed below. See Exhibit 3.41.277-11, Valid Characters.

Enter street abbreviations as shown in Exhibit 3.41.277-6, Street Abbreviations.

If the Street Address and/or City is illegible, suspend the UW as "Poor Quality Image." If unable to correct the Street Address and/or City from the paper document, leave the Street Address, City, State and ZIP fields blank. If necessary, press <F3> and <Enter> to remove any information present in the fields.

If the Street Address and/or City are missing, leave the Street Address, City, State and ZIP fields blank. If necessary, press <F3> and <Enter> to remove any information that may be in the fields.

If return has a US Possession or other foreign address, delete the document as "Unprocessable 940" .

If an address is input during OE or DV, all elements (Street Address, City, State and ZIP) must be entered.

If two street addresses are present with the same City, State and ZIP Code, enter the first street address.

If two addresses are present with different cities, states, and ZIP Codes, enter the first address.

If there is a street address and a PO Box, enter only the PO Box. Treat both "POB" and "PO Drawer" as if they read PO Box.

If a document has PO BOX, POB, PO Drawer or Post Office Box, you can enter an asterisk (*) followed by a space in the first two positions of the Street Address instead of "PO BOX." It is not necessary to change "PO BOX" to an asterisk if "PO BOX" is scanned.

Omit C/O or % (In Care Of) if shown with an address.

Always enter "AND" if an ampersand (&) is shown in the Address Line.

If @ is shown in the Street Address, enter "AT" .

Major City Codes listed in Exhibit 3.41.277-7 may be used. The system generates a valid five-digit ZIP Code if a Major City Code is used, and a ZIP is not present.

If North, South, East, or West is shown as part of the city name, use the standard abbreviation (i.e., North = N, South = S, etc.). Do Not use a Major City Code in this instance unless found in Exhibit 3.41.277-7, Alphabetical Listing of Major Cities with Major City Codes and Zone Improvement Plan (ZIP) Codes. Example: East Lansing, Mi = ET and South Bend, IN = SB.

If a city has numerics, enter as alphas.

Enter standard abbreviations for states.

If the system presents all nine digits of the ZIP Code correctly, accept them. If the ZIP Code requires correction, only enter the first five digits of the ZIP Code. If less than five digits use the system default ZIP Code.

If there is no State, but a ZIP Code is present, press the <Enter> key in the ZIP field. This generates the State Code for this ZIP Code in the Status Line. Follow the screen prompts to accept this State Code or to enter a different State Code.

If there is no ZIP Code but a State is present, press the <Enter> key in the ZIP field. The system generates the default ZIP Code for that State.

If the State does not match the ZIP Code presented, delete the ZIP, and generate the default ZIP Code for this State.

If both the State and ZIP are blank, leave the Street Address, City, State and ZIP blank. If necessary, press <F3> and <Enter> to remove any information that present in the fields.

Transcribe Army Post Office (APO), Diplomatic Post Office (DPO) and Fleet Post Office (FPO) addresses with the proper two-character State Code followed by the corresponding unique five-digit ZIP Code.

All money fields consist of dollars and cents.

Enter money amounts as follows:

Enter negative amounts (identified with a minus "-" before the amount or the amount is within brackets), where allowed, by leading the amount with a hyphen.

If a negative money amount appears in a positive only field, enter amount as positive.

If two or more money amounts appear on the same line, press <F3> to clear the field, and then press <Enter>, unless otherwise instructed.

If a money amount without a decimal displays with leading zeros (for example: amount on document is 01 and system captured as 001), press <F3> to clear the field and enter the amount as shown on the document.

If the money amount is illegible, suspend the UW as "Poor Quality Image" (<F9>; press "S" ; select "Poor Quality Image" ).

If after suspending for "Poor Quality Image" you still cannot determine the correct money amount from the physical document, press <F3> to clear the field and then press <Enter>.

If a code or other non-monetary entry appears in a money field press <F3> to clear the field and then press <Enter>.

Occasionally the Image of the return presented to the OE or DV operator is unreadable. Some reasons for this include:

When working in OE Image or DV Image, if you cannot determine the data for ANY field including the Street Address, City, State and ZIP Code, suspend the UW as "Poor Quality Image" (<F9>; press "S" ; select "Poor Quality Image" ).

The Team Lead or designated employee reviews the Work Status Report for suspended "Poor Quality Image" items and pulls the original return/document from the block and gives to the employee that suspended the UW.

The employee resumes the suspended block, corrects the data using the paper return and then gives the paper return back to the Team Lead or designated employee.

The Team Lead or designated employee re-files the return in its original block.

Currently some returns cannot process through SCRIPS or require processing as OE Paper.

Delete all returns determined as unprocessable by selecting "Unprocessable 940" for the Pull-Doc Report. (<Ctrl>-<Shift>-<Delete/Del>; select "Unprocessable 940" ).

Some unprocessable conditions:

The title of the report is 940 DLN Output Report (IPS10640).

The report reflects the entire production for the site for a given time frame.

The report shows the following:

The title of the report is 940 Assigned DLN Report (IPS03339).

The report reflects production for the individual scanner for a given time frame.

The report shows the following:

The title of the report is 940 DLN Assignment Report (IPS10620).

The report reflects the total number of DLN assignments by program number for a given time frame.

The report shows the following:

The title of the report is 940 Actual Output Report (IPS10650).

The report reflects the entire production for the site for a given time frame.

The report shows the following:

The title of the report is Workflow Status (IPS0698).

This report lists the task/sub-task number, the sub-task description, blocks at the sub-task, total documents for the block, and documents ready for the sub-task. This report also shows percentages for system capacity used under the following three categories: General, IRP, and IRP/ACA/K1/941/940/Stand-Alone.

This report is used to monitor documents and system capacity throughout each workday.

The title of the report is Inventory Report (IPS03350).

The report reflects inventory for a given time frame reflecting the carry over form volume on the SCRIPS system.

The report shows the following:

The title of the report is 940 Production Report (IPS10660).

The report reflects the following scanned volumes and year to date output totals.

The report shows the following:

The title of the report is 940 Run Balancing Report (IPS10610).

The report reflects the entire production for the site for a given date.

The report shows the following:

The title of the report is Reimage/Pull Document Report (IPS00812).

The report lists submissions and documents required to pull (or counted as deleted) for a date range.

The report shows the following:

The title of the report is Throughput Statistics Report (IPS06440).

The report reflects processing function productions for a given date range.

The report rows reflect the following process functions: Scandriver, Transport/Sync, OE Crossover, Form Identification, Block Verification, OE Image, OE Paper, Program Validation, Data Validation, QR Summarization, Block Output, Image Archive, Backup Image Archive and Block Purge.

The report shows the following:

The title of the report is Workstation Operator Statistics Program and Function Summary Report (IPS00803).

The report displays the number of documents processed in each function for a given date range.

The report rows reflect the following process functions: 460, 470, 480, 47X, and 48X.

The report shows the following:

The title of the report is 940 FI/DLN Cross Reference Pull Report (IPS10670).

The report lists submissions and documents that require renumbering within each batch of work for a given Output File ID.

The report shows the following: