Document Perfection perfects 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 sends any other documents or attachments not related to the processing of the returns to the function responsible for handling them.

Code and Edit does not mathematically verify or 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 of this section.

Authority for these procedures is found in the following sections of the Internal Revenue Code and their corresponding Treasury regulations:

The Campus Director monitors operational performance for their campus.

The Operations Manager monitors operational performance for their operation.

The Team Manager/Lead monitors performance monitoring and ensuring employees have the tools to perform their duties.

The Team Employees are responsible to follow the instructions in this IRM and maintain updated IRM procedures.

Program Reports: The Batch/Block Tracking System (BBTS) stores a vast amount of data which can be used in performance monitoring and production projections.

Program Effectiveness: The program goals are measured using the following methods:

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

For Terms, Definitions and Acronyms, see Exhibit 3.11.16-22, Terms/Definitions/Acronyms.

The following is a list of related resources:

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

All IRS employees who communicate by telephone, face-to-face, or any other method of correspondence with taxpayers or their personal representatives on tax-related matters must give (at a minimum) the following information:

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

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

It is not necessary to repeat the badge identification (ID Card) number on a later 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 purpose of this initiative is to achieve consistency in the Business Master File (BMF) Code and Edit processing IRMs.

Ogden, Kansas City, and Paper 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 process for BMF tax returns. The text in BOLD print is form specific and applies to this IRM only.

Submit IRM deviations in writing following instructions from IRM 1.11.2.2.4, When Procedures Deviate from the IRM, and elevate 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 should. 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 Wage and Investment (W&I) 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 (see IRM 13.1.7), 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.

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 in accordance with local procedures.

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

Edit marks are edited on the tax return for transcription to the Automatic Data Processing (ADP) System through Integrated Submission and Remittance Processing (ISRP). 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 3.11.16.3.4.3, Correspondence Imaging Inventory (CII) Returns, and IRM 3.11.16.3.8 Re-Entry Document Procedures.

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

Businesses use frivolous arguments for expressing dissatisfaction with the substance, form or administration of the tax laws by trying to illegally avoid or reduce tax liabilities. See IRM 25.25.10, Frivolous Return Program, shown in Exhibit 3.11.16-15, Frivolous Return Program for Examination Review.

Review the tax return to decide whether it appears to be a frivolous return.

Do not consider the following returns as frivolous, unless there is other evidence of a frivolous argument:

For tax returns completed in other than United States (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 Claims," "Protective Claim for Refund," or similar statement from the batch and route to Accounts Management (AM). Notate "Protective Claim" in the remarks box of Form 4227, Intra-SC Reject or Routing Slip.

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

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 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.

The instructions in this subsection only apply to tax periods 201712 through 202012.

Section 965, as amended by the Tax Cuts and Jobs Act (TCJA) of 2017, requires certain taxpayers to pay a transition tax on the untaxed foreign earnings of certain specified foreign corporations as if those earnings had been repatriated to the United States.

Identify a corporate Section 965 return when any of the following are present and the corporation’s Tax Period is 201712 through 202012:

When a return has been identified as a Section 965 return, edit as follows:

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

For tax periods 202201 to 202212, identify an "Elective or Deemed Payment Election" when the taxpayer writes "IRA22DPE" on Form 3800 or on an attachment or on any of the following lines (2022 and prior revisions):

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

Identify a "Credit Transfer" when the taxpayer writes "IRA22TRE" at the top of the return or on an attachment. When found, 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 3.11.16.11.15, Schedule J, Line 5c - General Business Credit.

Action Codes are used to show 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. Action Codes are valid on:

Edit the Action Code in the bottom left margin of the tax return.

Assign Action Codes in the following priority:

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

See Figure 3.11.16-1.

Figure 3.11.16-1

Action CodesThis example is of a Form 1120, (Page 1 only) with a completed Form 4227, attached.The taxpayer signature is missing. Action Code 225 is edited in the bottom left corner. The processing date is more than 20 days after the received date and Line 36 shows a $25,000 refund amount. Form 4227, Accounting, BMF, and Action Code boxes are marked. Action Code 341 is edited in the Action Code box and 45 day jeopardy Manual refund is shown in the Other box.

Please click here for the text description of the image.

Edit the following Action Codes when a return can’t 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.

A tax return is an "Ogden Submission Processing Center (OSPC) only" return if at least one of the following conditions exists:

If the tax return is an Ogden Submission Processing Center (OSPC) "only" return, discontinue perfection of the return. Prepare Letter 86C, Referring Taxpayer Inquiry/Forms to Another Office, to inform the taxpayer the return has been sent to Ogden Submission Processing Campus.

If the tax return is other than an OSPC "only" return, perfect the return if possible:

Action to secure perfection:

There are two types of correspondence that C&E may encounter:

Listed below are letters provided by Headquarters for Submission Processing Center use in corresponding for items listed in this IRM. Tax examiners or their supervisors (or delegates) will have access to and be familiar with the Submission Processing Center Correspondex Handbook for selection of right letters.

Compliance notates:

Any tax return with a received date that is two years and nine months or more after the Return Due Date is a potential statute control return.

Route statute returns to the Statute Control Unit daily or more often if needed.

If any of the conditions listed below are present, 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 Exhibit 3.11.16-17, Routing Guide for Attachments, for more information.

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

Statute returns are unprocessable until cleared by Statute Control.

Edit CCC "W" if the Statute Control Unit stamps or shows clearance on the front of the return.

Follow the chart below to determine if CCC "W" is needed.

A tax 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 may have originally been filed electronically (E-File). These returns may be identified 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 tax return must have a Form 3893, Re-Entry Document Control or Form 13596, Reprocessing Returns, attached.

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

Examine Form 3893 or Form 13596 to determine the action needed to make the return processable.

A return is considered Amended based on the following:

Examine the return for attachments:

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

The following data must be edited on all amended returns:

The instructions in this subsection only apply to tax periods 201812 and prior. For tax periods 201901 and later, no action is needed.

If Special Estimated Tax Payments (SETP) is claimed for tax periods 201812 and prior, follow the instructions in the paragraphs below.

The SETP payment (or application of prior SETP payment) was reported on the following lines:

If SETP are claimed, edit Action Code "342" and enter CCC "6" on the return. Give the return to the lead.

C&E Lead or another assigned individual will do the following:

A "Prompt Assessment," Section 6501 is requested, either in the form of a letter or on Form 4810, Request for prompt Assessment Under Internal Revenue Code 6501(d). A "Prompt Determination," is requested under 11 U.S.A. 505(b) of the U.S. Bankruptcy Code.

All prior year returns must be reformatted to current year format. See prior year conversion exhibits and the Job Aids for specific year coding.

If the return is on other than current form format (may be either a prior year or non-standard form) and the transcription lines cannot be numbered to agree with the current year return:

If a taxpayer filed Form 1120-S and the Entity Control Unpostable Unit has determined the Taxpayer does not have a valid Small Business Election on file (Form 2553), Rejects will convert Form 1120-S to a Form 1120. No action is required for Document Perfection. Do not detach Form 1120-S.

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

When the return serves only as a transmittal for statements, schedules, and other attachments, or is otherwise incomplete, analyze the supporting documents and edit the missing entries on the form itself.

Examine attachments and edit the information to correct transcription lines of both the income and deduction sections. This does not apply to Consolidated - Mixed Component returns.

Secured Delinquent Returns are returns secured by compliance personnel. If information is missing from one of these returns, correspond using an approved Correspondence Action Sheet.

If Form 1120 does not require Balance Sheet inspection (see IRM 3.11.16.11.36, Schedule L, Balance Sheet, instructions), perform the least time-consuming edit on the income section and the deductions section through Total Deductions.

Initiate correspondence using Letter 118C, Corporate Return Incomplete for Processing: Form 1120, Form 1120 Series, Form 1120-S if Form 1120, (Form 1120 Only), is filed by a large corporation (defined as a corporation with $10 million or more of assets in Box D), and "see attached" is notated in the Income Section and the Deduction Section.

Document Perfection is not required to edit a vertical line, 00, dash, or decimal point to indicate dollars and cents.

Edit negative entries as follows:

If any of the Form 1120 series forms 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 area of the form ("Employer Identification Number" box).

Determine the EIN as follows:

The Name Control consists of four characters or less.

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

If Box E(3) "Name Change," Form 1120 is checked, route the return to Entity Control following local procedures using Form 13934, Entity Document/C&E Merge Transmittal.

Edit the Name Control as follows:

Figure 3.11.16-2

Entity Perfection - Name ControlThis is an example of Form 1120, entity Section (Page 1, entity section only).Form 1120 entity area is hand written.The Name Control is underlined.

Please click here for the text description of the image.

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

Ensure the "in-care-of" name is in the proper location.

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

Perfect the address 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 physical location of the business.

Perfect the address as follows:

Figure 3.11.16-3

Entity Perfection - Domestic AddressThis is an example of Form 1120, entity section (Page 1, entity section only). The address line has a street address and a P.O. Box.The Name Control is underlined.Action trail TC 014 is edited in top left margin.

Please click here for the text description of the image.

The U.S. Postal Service established new address requirements for APO/DPO/FPO addresses. If the old address appears, convert to the new state code abbreviation based on the ZIP Code (e.g., APO New York, New York 091XX would be converted to APO AE 091XX). APO/DPO/FPO addresses are considered domestic addresses. Refer to Conversion Chart below:

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

Consider returns with APO, DPO, and FPO addresses as considered domestic addresses, see IRM 3.11.16.6.5, Entity Perfection - Domestic Addresses.

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

All returns must have a tax period.

Edit the tax period to the right of the form title in YYMM format.

A tax period must end on the last day of a month. (Ignore a minor discrepancy such as October 30 instead of October 31.) The exceptions are a 52/53 week filer, and final and/or short period returns. Correspond using Letter 319C, Return Covers Other Than 12-Month Accounting Period, if the exceptions do not apply. The table below shows examples of tax periods.

Tax periods reported under the 52-53 week rule may end not more than six days before, and not more than three days after, the end of a month. In the edit format, use the numeric designation of the month, the last day of which is closest to the actual ending date.

If the tax period is for more than 12 months or 53 weeks, correspond.

A "Final" short period return ends on the date the taxpayer went out of business. This may be any day of the month. Use the numeric designation of the calendar month in which it ends. If the taxpayer has not shown in which month the business ended, edit the tax period to be one month before the received date.

Edit the Tax Period Beginning on a "Final" return in MMDDYY format, see IRM 3.11.16.7.2, Tax Period Beginning - Initial, Final, or Short Period.

On a "Final" return if the tax periods month and year is equal to or later than the received dates month and year (future return), edit the tax period to be one month before the received date, see Figure 3.11.16-4.

Figure 3.11.16-4

Tax Period - EndingThis is an example of a completed Form 1120 (Page 1 through Line 29c only). Box E(2), Final return is checked. The tax return indicates final tax period month and year ending August 31, 2024. The IRS received date is July 15, 2024.Tax period 2307 is edited. (Return tax period month and year is later than the IRS received date.)The Name Control is underlined.Computer Condition Code F is edited.Tax Period Beginning is edited.

Please click here for the text description of the image.

On a "Final" return, if the received date is after the short period due date but on or before the regular full tax period due date ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡, edit CCCs "R" and "F."

The separate short period return of a subsidiary which became affiliated with a "consolidated" group may end on the day preceding such affiliation. As a practical matter, do not question the ending date on any change-of-accounting period return.

Check all tax periods for the Statute of Limitation (two years and nine months from the normal due date of the return), see IRM 3.11.16.3.7, Statute Returns.

The Tax Period Beginning has been added to Form 1120, Form 1120-F, Form 1120-FSC, Form 1120-H, Form 1120-L, Form 1120-ND, Form 1120-PC, Form 1120-REIT, Form 1120-RIC and Form 1120-SF.

Edit the Tax Period Beginning to the left of the Form 1120 title area in Month Month Day Day Year Year (MMDDYY) format on an Initial, Final, or Short Period return as follows: See Figure 3.11.16-5 below.

Figure 3.11.16-5

Tax Period BeginningThis figure represents two graphics of the top half of Form 1120, page 1. The first graphic has Final return written across the top of the form with the tax period ending edited as 2306 to the right of the form title. The tax period beginning date is edited as 010123 to the left of the form title.The Name Control and CCC “F” edited.The second graphic is for a Short Period return. The tax period beginning date is edited as 071920 to the left of the form title. The Initial Return Code of 2 is edited to the right of Box C (Check applicable boxes).The Name Control has been underlined.

Please click here for the text description of the image.

Never send an early filed return back to the taxpayer.

If the month of the tax period is the same or after the month of the received date, determine how early the return has been filed:

A Short Period Return is one which covers a period of less than 12 months or 52-53 weeks.

Use the table below to find and edit proof of entitlement.

Figure 3.11.16-6

Short Period - Editing Proof of EntitlementThis is an example of a completed short period Form 1120 (Page 1 through Line 27 only). The return tax period is less than 12 months beginning October 1, 2023 and ending December 31, 2023. An attached statement indicates the corporation came out of consolidation.The name control is underlined.Computer condition codes R and Y are edited.Tax Period Beginning 100123 is edited.

Please click here for the text description of the image.

If proof of entitlement is missing or the taxpayer states on the return or an attachment that the corporation has filed an application but has not received a response, research IDRS using Command Code BMFOLE for approval or disapproval information and proceed as follows:

If Form 1128 is disapproved, the return is considered unprocessable:

When a Form 1128 with no indication of approval or disapproval is attached and no proof of entitlement is present, research IDRS using Command Code BMFOLE for approval or disapproval and proceed as follows:

A Form 1128 with neither approval or disapproval, discontinue processing Form 1120. Route Form 1120andForm 1128 to Entity as directed in the paragraphs below.

Figure 3.11.16-8

Short Period Returns - Editing Form 1128 With No Indication of Approval or DisapprovalThis is an example of a completed numbered Form 1120 (Page 1 only). The return tax period is less than 12 months beginning September 1, 2023 and ending December 31, 2023. A completed Form 4227 and Form 1128 are attached.Name Control is underlined.Action Code 320 is edited in lower left hand margin. Form 4227, Entity Control, BMF, and Other (explain) boxes are marked. Research approval of Form 1128 is edited in the Other (explain) field.Form 1128, Received date is edited in the left margin.Tax Period Beginning Date is edited.

Please click here for the text description of the image.

If the taxpayer provides acceptable proof, follow instructions in IRM 3.11.16.7.4, Short Period - Editing Proof of Entitlement.

If the taxpayer fails to reply, or does not provide tax period approval, enter CCC "3."

Route to Accounting for possible adjustment action any return meeting both conditions below.

Take the following action when routing these returns to Accounting, see Figure 3.11.16-9.

Figure 3.11.16-9

Short Period Returns - With Prepaid CreditsThis is an example of a completed Form 1120 (Page 1 only). The return tax period is less than 12 months beginning October 1, 2022 and ending March 31, 2023. Final is written on the top of the return and a pre-paid credit is present. A completed Form 4227 is attached.Tax period 2403 is edited.Name control is underlined.CCC F is edited.Tax Period Beginning is edited. Action code 342 is edited in bottom left margin. Form 4227, Accounting, BMF, and Other (explain) boxes are marked. Short period with ES credits is edited in the Other (explain) field.

Please click here for the text description of the image.

Computer Condition Codes (CCC) identify special conditions or computation for the computer. Computer Condition Codes post to the Master File.

Computer Condition Codes are edited in the center of Lines 1 and 2 of the tax return.