Form Number is to be entered by the Examiner.

Enter the Form Number of the return being closed with this Form 5650.

CC TSCLS is to be completed by the Examiner to release the AIMS Freeze on Investor Closures.

Not a valid item for EP BMF Form 5330's.

PICF, Partnership Information Control File, Code 5 or 6 will prevent premature closing of the investor return unless the Examiner responsible for final case closure has considered any necessary flow-through adjustments from the key case(s) to the investor return.

If a partial assessment is appropriate, entries will not be made in this item. CC TSCLS is only used as part of the final closing action. Do not complete this item when a return is transferred to the service center or closed to Appeals.

When entered, CC TSCLS will automatically check all of the investor’s linkages to see if they have been closed. If all linkages are closed, then CC TSCLS will set the indicator on the partner record and the PICF-CD to a closed status on the Partnership Control System, PCS, and AIMS data bases. When the "REQUEST COMPLETED" message is transmitted to the screen, the Terminal Operator can proceed to enter the CC AMCLSO.

If the terminal rejects the input of CC TSCLS, the closing error message "CANNOT CLOSE, PCS CONTROL." The Terminal Operator will return the case to ESS with a CC TSUMY (one line summary display for the line 1 Partnership/Partner record and each of its linked Partner/Partnership accounts) print attached.

Partial Agreement (Item B) is to be completed by ESS to indicate that a partial agreement is being made.

Partial closures of AIMS will allow an adjustment to be made to the tax module without closing the AIMS database. Placing a check in the box marked "Partial=F" instructs the Terminal Operator to input the account as a partial and not a final closure on AIMS. Enter the letter F in P1-6 CC AMCLS. Form 3198 should be prepared and attached to the case file by the Examiner providing instructions as to return the case file and copies of assessment documents (i.e., Form 5599 or Form 2859) once the partial has posted.

The only valid item numbers on a partial closures on Form 5599 are 02, 03, 04, 05, 6a, 6b, 6c, 07, 08, 09, 11, 12, 13, 14, 15, 36, 38 and 43.

When a partial assessment is being processed, even though a Hold Code 1 is automatically generated to prevent the release of an advance payment pending the processing of the final adjustment action, TC 570 must be posted to the account. The TC 570 is necessary if a payment has been posted and the TC 30X transaction has or will have a 23C Date that is later than the transaction date of the TC 640. A subsequent posting of a TC 29X/30X will release the TC 570, or when the module balance becomes zero or debit.

For partial assessments with open TEFRA linkages, an original and copy of Form 5599 must be included in the case file. The copy of the closing document will remain with the case file and will be forwarded to the Campus, Examination Suspense Unit. The original closing document will be forwarded to the Campus Center Files Function as a source document after terminal input.

For closures to Appeals where the tax adjustment is processed as a partial and is quick assessed, after processing the quick assessment via Form 2859, Request for Quick or Prompt Assessment, prepare Form 3177, Notice of Action for Entry on Master File, to input TC 570. TC 570 will prevent the erroneous refund of a credit balance or advance/subsequent payment that may be on the tax module. Where the partial closure to Appeals is not quick assessed, Hold Code 1 is entered on Form 5599 to prevent erroneous refunds.

The following special rules apply when processing a partial assessment:

Final disposition of the case will require use of another Form 5599 and will follow normal procedures, with the following exceptions:

CC AMCLS with a definer code "O" is to be entered by ESS to indicate a final closing on AIMS.

The upper left corner of Form 5599 must be completed with the definer code to CC AMCLSO. The definer will be entered in the space immediately following CC AMCLS. Depending upon the type of closure, the valid Form 5599 definer codes are:

The TIN is to be entered by the Examiner.

The Taxpayer Identification Number (TIN) identifies the specific taxpayer's account being adjusted. The first digit of the TIN will be entered in the left most position of P7-18. The File Source designates which specific Master File they represent. There are different formats to the TIN, according to the type of return being adjusted. Section 2 of Document 6209, ADP and IDRS Information, lists the different types of returns and their respective File Source. The File Source designates which specific Master File they represent. The following are examples of the various TIN formats.

An adjustment can be made against a temporary SSN. The Campus Entity Control Function will attempt to secure the correct SSN from the taxpayer and perform the "merge" of the correct number to the account after the SSN is secured. In situations where a taxpayer does not have an EIN or refuses to file Form SS-4, Application for Employer Tax Identification Number, the Examining Officer is required to secure a permanent EIN from the Campus Center Entity Control Function. The Examining Officer will have the return controlled NMF until the permanent number is received.

If an asterisk (*) is present, indicating an invalid SSN, correction may have been made during the examination. Research both the correct number and the invalid number to determine where the original return posted. It may have posted to the invalid number. Carefully study transcripts of all accounts involved before making adjustments. These cases may also involve a duplicate filing condition caused by returns of two different taxpayers trying to post the same account.

CC BNCHG will be used to process merge transactions (TC 011) and fiscal year end changes (TC 05X). THIS COMMAND CODE IS RESTRICTED TO THE ENTITY CONTROL FUNCTION IN THE CAMPUS CENTERS. Cases meeting criteria for CC BNCHG should be identified and sent to Entity Control with the proper research attached.

When it is definitely determined that a return has posted to a different taxpayer’s account, perform the following actions:

MFT is to be entered by the Examiner.

The Master File Tax Code (MFT) or Non-Master File Tax Code (NMFT) must be entered. The MFT designates the numerous types of tax returns as a two-digit code. MFT Codes help to identify the specific tax module in which the adjustment is to post. MFT 76 is the valid entry for Form 5330. Refer to Document 6209, ADP and IDRS Information, Section 2, for a complete listing of MFTs.

Tax Period is to be entered by the Examiner.

For TEB, enter the bond issue date in this item.

The tax period is the measure of time for which a return is required to be file. The format for tax period is YYYYMM. The first four-digits represents the year, the next two digits represents the month. For Form 11C and Form 730, the beginning of the tax period must be entered. The most common types of filing periods are:

The Name Control/Check Digit is to be entered by the Examiner.

The name control must appear completely and legibly. The name control is the first four characters of the name, the last name of an individual, or the first partner for partnership returns. No spaces are used except at the end of the name control. If the last name is less than four letters, the remaining positions will be blank.

A check digit is two alpha characters printed on the examination label following the tax period on the first line. If a check digit or name control does not appear on the first print line of the examination label, underline the name control on line two. If the check digit was used to establish the account, the check digit must be used at closing. Enter the check digit in Positions 33 and 34.

CC AMDISA also shows the check digit on line one after NM-CTRL is established on AIMS with the check digit.

Although IRS can apply no sure rule to determine whether a taxpayer is using his or her mother’s maiden name as part of their last name, rather than a middle name, inspection of the return may help. Consider the taxpayer’s use of initials and spacing, and whether they enter a double name in the last name block. From all the information available, select the name control as accurately as possible.

The Name is to be entered by the Examiner.

The name must appear completely and legibly. On IMF (or BMF with a SSN), the last name will appear first, followed by a comma, then the first name and middle initial, if any. On BMF, the portion of the name in the prime sort field will print first.

The total number of characters in a taxpayer’s name cannot exceed thirty-five. If it does, edit the name to reduce the length.

The Batch Position Indicator is to be entered by ESS.

Not a valid item for EP BMF Form 5330's.

Only NMF accounts require a batch position indicator. This item is used to show whether the record being processed is the first, last, continuation, addition to a block, or single closing of a block.

It must be one of the following:

The Block Number is to be completed by ESS.

All closures require a blocking series number. The block number identifies the type of return being adjusted and whether or not the return is an original. The Block Number is incorporated into the Document Locator Number (DLN) as the ninth, tenth and eleventh digits. See Exhibit 4.5.2-1. for MF Sorting and Blocking Series for Document Code 47 Adjustments. The Terminal Operator will assign a Blocking Series for NMF accounts.

An original Block Number signals to the computer system that there are no other documents that will need to be associated when filing the Form 5599, original return and audit package. Use an original return blocking series for electronically filed returns, and cases in which the TC 150 is a Dummy TC 150. The original return blocking series is necessary, since a paper original return for either of these cases is not available.

A copy Block Number signals to the computer system that there is an original document filed in another location. If the copy blocking series is used, a CP notice will be generated, instructing Files Function in the Campus Center to pull the original return and associate it with the examined closing documents being filed.

The Serial Number is to be entered by ESS.

The Terminal Operator, for each case, will enter the sequential number assigned by the terminal within the block on the input document.

The Unpostable Indicator is to be entered by ESS.

This is a required entry for CC AMCLSU and is used to input adjustments that have unposted or were deleted using CCs TERUP or QRACN. It also identifies the type of unpostable being corrected. The case must be in Status Code 8X or 90 or a partial assessment must have been made. The TC 300 Indicator must be "5." The TC 300 Indicator can be changed with CC AMAXU. A two-digit alpha character is entered and must be one of the following: "LO," "LA," "PO," or "PA."

The Plan/Report Number is to be completed by the Examiner.

This is a required entry for MFT 46 (GE-TEB Form 8038 returns series). For MFT 46, enter the Report Number for Tax Exempt Bond Returns (Form 8038 return series). For MFT 76, enter the Plan Number of the annual related return.

For MFT 76, valid Plan Numbers are 000-999

For MFT 46, valid Report Numbers are as follows:

The Penalty Reason Code is to be completed by Examiner.

If applicable, complete this item for all EO, FSLG or ITG returns in which abatements of penalties or a penalty is considered but not asserted.

This item is not applicable for TEB returns.

The penalty reason code is a required input for abatements of penalties, TC 161, 171, 181, 201, 235, 271, 281, 311, 321, 351 and 241 with Reference Numbers (negative amounts only) 680, 681, 685, and 686. For EP Form 5330 returns the abatement of penalties will be for TC 161, 271, 281, 321, 351 and 241 with Reference Numbers (negative amounts only) 680, 681, 685 and 686.

The reason code can also be input (but not required) with TC 300, 304, and 308. This processing will allow the capture of data when a penalty is considered but not asserted, and when a penalty is considered for abatement, but not abated.

The case file should be returned to the originator if a penalty is being abated and the reason code is not entered. See Exhibit 4.5.2-2. for valid Penalty Reason Codes.

Letter Date and Letter Amount are to be completed by the Examiner.

If the Form 5330 is not for a "C" corporation, these items should remain blank.

If applicable, complete this item for all EO, FSLG or ITG returns.

This item is not applicable for TEB returns.

A 2% increased rate of interest is imposed on large corporate underpayments. A "C" corporation defines a large corporate underpayment as any underpayment of tax for any taxable period, if the amount of the underpayment exceeds $100,000. "C" corporations are any corporations other than Subchapter S (Small Business) Corporations. Thus, Section 6621(c) applies to Form 990's, Form 990PF, Form 990EZ, Form 1120-POL and Form 5330's. However, it applies only to corporations, not trusts or associations. A "C" corporation indicator is set in the entity section of corporations defined as "C" corporations. These fields are completed to allow MF to calculate 2% interest when warranted.

The 2% Interest Date is to be completed by ESS.

This item is not applicable for TEB returns.

This item is completed when interest is manually computed and input with TC 340 and 2% is applicable. The date that the 2% interest begins will be entered.

The date to use will be the LATER OF: The trigger date plus thirty days or January 1,1991. A terminal reject will occur if:

The 2% Interest Date field is not to be used with the Letter Date and Letter Amount fields. Enter this field when 2% applies and interest is manually computed and input with TC 340.

The Interest to Date is to be completed by the ESS.

This item is not applicable for TEB returns.

Enter the Interest to Date field as an information item for personnel making updates to the account. Providing this information will help toward eliminating the need for retrieving the source document to determine how a restricted interest calculation was done.

This field is always completed when interest is manually computed and input with TC 340 or 341. For debit interest, this date will be the date that the interest calculation stopped. This date can be the waiver plus 30-Days, a payment date, or 23C assessment date. The date that the final interest calculation stopped on is to be used. For example, partial payment is made on an account before the waiver date. The calculation continues to the waiver date, since the tax is not full paid. The "Interest to Date" will be the waiver date plus 30-days. For credit interest calculations, enter the refund schedule date or the last date that the interest calculation stopped.

If TC 340 for a zero amount is entered, enter the current date in Item 6a. For Offer in Compromise cases, where the adjustment may not be calculated based on an actual "FROM" and "TO" date, enter the date to which the Offer in Compromise was agreed. For bankruptcy cases, which involves an abatement of interest, enter the bankruptcy discharge date.

If TC 340/341 is used and Item 6a is not completed, a terminal reject will occur. The reject will occur to CC AMCLS and CC ADJ54. The Interest to Date cannot be later than the 23C Date or an unpostable condition will occur (Unpostable Code 291, Reason Code 05).

When a quick assessment is warranted, enter the Interest to Date in Item 17 of Form 2859, Request for Quick or Prompt Assessment.

The Credit Interest to Date is to be completed by the ESS.

This item is not applicable for TEB returns.

The Credit Interest to Date is input for IMF and BMF. Enter the "TO" date used to manually compute credit interest. This is a required entry when a TC 770 is input for an amount other than zero. This entry is not required for TC 770 with a zero amount. Items 6a and 6b may both be entered when processing TC 770 and TC 340.

Compute Interest Amount is to be completed by the ESS.

This item is not applicable for TEB returns.

The Compute Interest Amount is input for both IMF and BMF. Enter the amount, which will include the manually computed interest (TC 340 amounts and any TC 772 netted interest), module balance, accrued and assessed interest, and assessed failure to pay. If the taxpayer does not pay the bill within ten days from the 23C Date, this entry allows the computer to update the interest systemically.

The Hold Code is to be entered by ESS.

The Hold Code is a single digit code that is used to restrict certain MF actions. Hold Codes are used when it is necessary to prevent or delay the issuance of a refund and/or notice. Hold Codes should not be used indiscriminately. If the DC is 07 or 11 and a TC 640 is present on MF, then a Hold Code is required. Refer to Document 6209, ADP and IDRS Information Handbook, Section 8. Valid Hold Codes are as follows:

Examples of Situations requiring a Hold Code:

The Agreement Date is to be entered by ESS.

An agreement date is required on the following types of returns when the DC used in Item 13 is 03.

For agreed deficiency cases, enter the date (in MMDDYYYY format) an agreement was received. An entry is not required for overassessment cases or surveyed claims.

Determining the Agreement Date - The agreement date is the received date in the IRS office or the date the Examiner received the agreement from the taxpayer. This should be a date stamp or a handwritten date initialed by the person receiving the document. The following guidelines should be followed in determining the agreement date:

Situations Not Requiring an Agreement Date

Do not make an entry for cases that have no signed agreement, e.g., default cases and United States Tax Court decision cases.

If a second signed agreement is obtained because of an additional assessment, enter the most recent agreement date. A manual computation of interest may be required. Manually compute and restrict interest ONLY when the tax, penalties, and interest are not paid, since interest must be computed to more than one interest stop date. For example: interest on the tax, penalties, and interest from the first agreement will stop on the respective waiver pIus 30-days and interest on the tax and penalty difference between the two agreements will end on the respective waiver plus 30-days. Manual computation is required since MF cannot compute interest to the separate dates.

If the tax, penalties, and interest are FULL paid on two agreements, do NOT manually compute and restrict interest. Interest on the tax, penalties, and interest due, based on the two agreements, will stop as of the payment date. Computing TWO separate interest "STOP" dates is not necessary.

Manual computation of interest is computed in the following manner:

When a payment is accepted in lieu of a signed agreement, the received date can be entered in Item 8 to close the case. If the agreement was received after a payment, enter the received date of the agreement. MF will use the TC 640 date and the "Form 870 date" to compute interest correctly.

The Priority Code is to be entered by ESS.

A priority code is a single digit code that must be used in order to post adjustments to MF when certain conditions exist. Failure to use the priority code when specified will cause the transactions to unpost. A transaction going unpostable may cause erroneous notices, refunds or billings. Valid Priority Codes to close AIMS cases are 1, 2, 3, 4, 5, and 8. Priority Code 2 or 3 is a required entry for all examinations closed without the original return in the file with DC 01 or 02. The definitions for Examination (AIMS) priority codes are not necessarily the same priority codes for Data Processing (DP) adjustments. See Exhibit 4.5.2-3 for the valid Priority Codes. Refer to Document 6209, ADP and IDRS Information, Section 8, for additional information on the definitions for data processing priority codes.

The use of Priority Codes to release amended returns is needed only after it has been considered by the Examiner.

The Settlement Amount is to be entered by ESS.

The Settlement Amount is the amount of the tax liability currently posted on the tax module. An entry is required on all cases closed on a copy of a return, unless the case is being closed to Appeals or closed with a "No Change" DC.

On Form 5599, Item 10, enter the amount of "Tax Shown on Return or as Previously Adjusted" from the examination report. If the tax per return is zero, enter a $1.00.

The tax liability amount of $850.00 in the previous example should match the tax previously adjusted line from the examination report for the specific tax period. Also, $850.00 is the "Settlement Amount" that would be entered in Item 10 on Form 5599.

For DC 03, 04, 08, 09, 10 or 13, if the tax per return is zero, enter $1.00 in Item 10, Settlement Amount.

For DC 01 and 02, do not enter an amount in Item 10. A Priority Code 2 or 3 must be entered in Item 9. Use Priority Code 3 only when Priority Codes 1 and 2 both apply.

Do not make an entry in Item 10 if a Priority Code 2 or 3 is entered in Item 9.

If the settlement amount for an examination case, closed on a copy of a return, does not equal (within $10.00) the original tax liability amount plus any subsequent adjustment transactions, an unpostable condition will result unless Priority Code 2 or 3 is present.

The Interest Computation Date is to be entered by ESS.

This item is not applicable for TEB returns.

If TC 340 is present, this field must be completed. For further information, refer to IRM 20.2, Interest Manual.

For cases closed with TC 304, 305, 308, or 309, enter the date interest begins. For further information refer to IRM 20.2, Interest Manual.

The Tax Liability Adjustment is to be entered by ESS.

Transaction Code (TC) is identified as "Code" on Form 5599. The "Code" must be three digits. The DOC Code for each TC placed on Form 5599 must be 47. Refer to Document 6209, ADP and IDRS Information, for TC’s and DOC Codes. The Increase in Tax Dollars and Decrease in Tax Dollars may be up to 11-digits. The Adjustment Penalty, Penalties and Interest may also be up to 11-digits.

The Adjustment/Penalty and Penalties may be up to 11 digits. The DOC Code to assess or abate a penalty on the Form 5599 must be 47. See Exhibit 4.5.2-4. for valid Transactions Codes.

Determination of the Tax Adjustment - It is very important that the person closing the case accurately identify the tax adjustment. The correct tax adjustment is determined by the following formula: Corrected Tax-Previously Adjusted Tax = Tax on Form 5599.

For MFT 46, if additional tax is being assessed the " Interest Section" should contain a TC 340 -0-, as interest is not applicable.

The Disposal Code is completed by the Examiner.

One DC must be entered that best describes the examination results.

The Statute Extended to Date is completed by Examiner.

For TEB, MFT 46, this Item is not applicable.

The statute date should be determined for all cases. If the statute expiration date has been extended, and it was not previously updated on AIMS, complete Item 14. When the entry in Item 14 is input, it will generate an extended statute date (ASED/TC 560) on the MF. TC 560 will not post at MF if the only return transaction code is an SFR TC 150. If a valid Form 872, Consent to Extend the Time to Assess Tax, is in the file, the extended statute date must be entered in Item 14.

A date must also be entered when Form 872 has not been secured, but only if the statute has extended the expiration date.

If the AIMS database contains an alpha character in the statute date, that date must be updated to a numeric date before closing, if an assessment is input. (For example, AA = Claim Update, refer to IRM 25.6, Statute of Limitations, for a list of alpha statute codes.) Updating the alpha date is not required on "No Change" cases. Failure to input a numeric date will cause an unpostable condition, if the MF statute date has expired and an assessment attempts to post. Since AIMS does not send an alpha statute update to MF, the original statute date is still present. If " 872-A" is reflected on the AIMS data base, Item 14 must be updated to a valid date unless the case is closed to Appeals. Timely filed examined claims that result in a refund will post to MF even when the ASED has expired.

When preparing Form 872-A, use the most current form available. Form 872-A for fully agreed deficiencies and overassessment or for no change and unagreed overassessment cases, extend the period of limitations 90-days after the date the Service mails a written notification (Form 872-T, Notice of Termination of Special Consent to Extend the Time to Assess Tax) to the taxpayer; or 90-days after the date the Service receives an executed Form 872-T from the taxpayer. In the above situations, Form 872-T is always required to terminate the Form 872-A. For unagreed overassessment cases closed from Appeals, the statute extended to date will be entered on Form 5403, Appeals Closing Record. Forms 872-A for fully agreed deficiencies and overassessment extends the period of limitations until the assessment/overassessment is made. Form 872-T would not be required. In this situation, enter a statute extended to date of 120-days from the date the case is expected to close on AIMS at the terminal. Form 872-A for unagreed deficiencies may involve the issue of a notice of deficiency to the taxpayer. See Exhibit 4.5.2-5. Computation of Statute Dates, for computing the statute date.

Form 872-T must be prepared for all "No Change" cases regardless of the Form 872-A revision date. If a Form 872-T, executed by the Director of EP, EO or GE (FSLG or ITG) Examination or their designee is in the case file, it will be mailed to the taxpayer upon closing the case.

Attach copies of executed Forms 872-T, mailed to the taxpayer, to the tax return on which it applies. Copies of Form 872-T should be made for other tax years, if they are present on Form 872-T.

If the case involved Fraud, the period of limitations is not a factor; however, a statute extended to date entry may be applicable. Enter a statute date of 120-days from the date it is expected to close at the terminal. An entry is not necessary if Item 38 (Fraud Condition) on Form 5599 has an entry.

If the examination resulted, from a written request by the taxpayer for prompt assessment under IRC 6501(d), the statute expiration date is 18 months from the date the written request is received, but not to exceed the normal three-year statute. Enter the requested date in Item 14.

The minimum ASED on a bankruptcy case is 60-days after the bankruptcy stay on assessment is lifted plus the number of days remaining on the normal statute before the stay went into effect. Alpha code KK is used to control bankruptcy cases until the case is ready to be closed from the AIMS system. Consult the Special Procedures Staff in Collection Division for further information.

The Credit and Tax Computation Adjustment item is completed by ESS.

A Credit/Item Reference Number is a three-digit code used to adjust taxpayer information according to the type of return being audited.

When making any entry in Item 15 of Form 5599 you must ensure that the (+) or (-) is identified in the last column. The (+) or (-) must be circled to ensure that the correct Reference Information or Credit Adjustment is made to the taxpayer's account. The IMF Adjusted Gross Income (AGI) amount may be a positive or a negative amount on the transcript (IMFOLR or TXMODA). Therefore, an adjustment to IMF AGI may bring the amount to below zero. This would be shown as a negative figure on the transcript. The IMF Taxable Income (TI) will only reflect a positive amount, or zero. The IMF TI may not be adjusted to below zero.

Entries in this item are used to:

An entry identified with a (+) in Item 15 reflects an increased adjustment amount. Therefore, if there is an increase in TI, AGI or Exemptions, that amount is entered in Item 15 with the (+) circled in the last column

An entry identified with a (-) in Item 15 reflects a decreased adjustment amount. Therefore, if there is a decrease in TI< AGI or Exemptions, that amount is entered in Item 15 with the (-) circled in the last column.

Follow the guidelines listed below when processing adjustments to AGI and TI for IMF returns:

IMF Credit/Item Reference Numbers: