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Part 3. Submission Processing

Chapter 13. Campus Document Services

Section 12. Exempt Organization Account Numbers (Cont. 3)

3.13.12  Exempt Organization Account Numbers (Cont. 3)

3.13.12.9 
EO Unprocessable Returns and Documents

3.13.12.9.18  (01-01-2009)
Form 4720

  1. Form 4720 is titled Return of Certain Excise Taxes on Charities and Other Persons Under Chapters 41 and 42 of the IRC. This return is filed by an organization exempt under IRC Code 501(c)(3), 4947(a)(1), or 4947(a)(2). The 4720 is a BMF and NMF return in which multiple taxes can be assessed. IRC 170(f)(1), 4911(a), 4912(a), 4942(a), 4943(a), 4944(a)(1), 4945(a)(1) and 4955(a)(1) 4965, 4966 and 664(c) is BMF. IRC 4912(b), 4941(a), 4944(a)(2), 4945(a)(2), 4955(a)(2) and 4958(a) 4967 is processed as NMF.

  2. Use entity subsection code 03, 50, 60, 70, or 90-92.

  3. This return is only filed as needed as a related return to primary 990 series filer; the FRC on the BMF is established by the posting of the return.

    Note:

    If required to file, Form 4720 is due 4.5 months after the fiscal year end.

  4. Refer to the table below for Form 4720 posting and filing

  5. Beginning with tax year 2006, 501(c) organizations (all subsections), 501(d) organizations, state or local governmental units or their political subdivisions, and Indian tribal governments may file a Form 4720 to pay excise tax with respect to prohibited tax shelter transactions under IRC section 4965.

3.13.12.9.19  (01-01-2009)
Form 5227

  1. Form 5227, Split-Interest Trust Information Return, is filed by Non-exempt Charitable Trusts under Section 4947(a)(2).

  2. The entity Subsection Code must be 90 with a Status of 12.

  3. This return is filed by trusts which are created for the following reasons:

    • Charitable lead trust is a trust that pays a fixed annuity or unitrust amount to a charitable organization for a fixed number of years. Upon termination of the payments, the remainder interest is transferred to a noncharitable beneficiary.

    • Charitable remainder annuity trust is a trust under section 664(d)(1) that pays a fixed dollar amount, at least annually, to one or more beneficiaries, at least one of which is not a charitable organization, for life, or for a specified number of years.

    • Charitable remainder unitrust is a trust under section 664(d)(2) similar to a charitable remainder annuity trust, except it pays, at least annually, a fixed percentage of the net fair market value of the trust's assets.

    • Pooled income fund is a common trust fund under section 642(c)(5) created and maintained by a charitable organization described in section 170(b)(1)(A). Donors to the fund receive a lifetime income interest and the charitable organization receives the remainder interest.

  4. The FYM for Form 5227 must be a 12, unless filing a final return.

3.13.12.9.19.1  (01-01-2009)
Form 5227 - Other Filing Requirements

  1. If the trust is other than a section 664 trust, Form 1041 is filed separately and is required to be filed.

  2. Generally Section 664 trust organizations are not required to file Form 1041. Check Form 5227, Question F, "Did the split interest trust have any unrelated business income?"

    1. If the organization answered "yes" to Question F, add the 1041 FR if necessary.

    2. If the organization answered "no" to Question F, check CC BMFOLI to see if the organization filed a Form 1041 for the prior year, or if there is an extension to file (TC 460) on Form 1041 for the current year. If no Form 1041 was filed for the prior year, nor an extension for the current year, remove the Form 1041 FR if it appears on master file.

  3. A Form 1041-A must be filed for these organizations, unless the income is required to be distributed currently (income in and goes right back out).

  4. A Form 1041 never takes the place of Form 5227.

    • A Form 1041 is filed by regular taxable trusts.

    • A Form 1041-A may be filed by Form 1041 filers, whenever a charitable deduction is claimed on the return (Form 1041).

    • A Form 1041-A never takes the place of a Form 1041.

    • A Form 5227 is never filed by regular taxable trusts.

  5. Refer to the table below for Form 5227 posting and filing requirements:

    Transaction Code Tax Class Doc Code MFT Status Code
    150 4 83 37 Entity subsection code must be 90 with a status of 12

  6. See the table below for updating IDRS for Form 5227 processing:

    Type of Trusts Required Returns FRC

    • Charitable Remainder Annuity Trust under Section 664(d)(1)

    • Charitable Remainder Unitrust under Section 664(d)(2)

    		 5227 1. Form 5227 required to be filed. (Does not have unrelated business income.
    2. Forms 5227 and 1041 required to be filed. (Has unrelated business income)

    • Charitable Lead Trust

    • Pooled Income Funds under Section 642(c)

    • All other Section 4947(a)(2) Trusts

    		 1041 and 5227 1. Forms 5227 and 1041 required to be filed.

  7. The following is a list of compatible income tax returns for Form 5227:

    • 1041-A

    • 4720

    • 1041

  8. For additional information about trusts, see Revenue Procedure 83–32.

3.13.12.9.20  (01-01-2009)
Form 5578

  1. Form 5578, Annual Certification of Racial Nondiscrimination for a Private School Exempt for Federal Income Tax, is filed by schools which are exempt under IRC Section 501(c)(3), and are not required to file a Form 990.

  2. The entity Subsection Code must be 03 with a Foundation Code of 10 or 11 when the EO Entity Status is 01-02, otherwise the EO Entity Status must be 07, 10 or 11.

    Note:

    Place self-supporting organizations in Status 40 for which you cannot locate an exemption.

  3. Very often, filers of Form 5578 reverse the entries on lines 1 and 2. When this occurs, edit the proper name control on line 1(a) and the proper EIN on line 1(b).

  4. The entity is filing the Form 5578 is on line 1(a) and the EIN for the entity is on line 1(b).

  5. Under Rev. Proc. 75-50, a certification of racial nondiscrimination must be filled annually by the 15th day of the 5th month following the end of the organization’s fiscal year end. Always use the FYM indicated on IDRS.

  6. Refer to the table below for Form 5578 posting and filing requirements:

    Transaction Code Tax Class Doc Code MFT FRC
    157 9 84 67 990 must equal "01" , "02" or "06" with a Type of Foundation Code of "10" or "11"

  7. Refer to the table below for updating IDRS for Form 5578 processing for church controlled schools:

    Type of Form 5578 Assign EIN MFI "0" if an EIN is not found EOREQ TC 016 Status 11 EOREQ TC 016 Status 01 EOREQ TC 016 Status 40
    EIN not on the BMF no exemption X X    
    EIN on the BMF no exemption   X    

  8. Refer to the table below for updating IDRS for Form 5578 processing for self controlled schools:

    Type of Form 5578 Assign EIN MFI "0" if an EIN is not found EOREQ TC 016 Status 11 EOREQ TC 016 Status 01 EOREQ TC 016 Status 40
    EIN not on the BMF no exemption X     X
    EIN on the BMF unable to locate exemption       X
    EIN on the BMF IF able to locate GEN     Pilot Voucher  

    Note:

    If research indicated the EIN on the return is correct and not on the BMF, input TC 000 with applicable status instead of TC 016.

3.13.12.9.21  (01-01-2009)
Form 5768

  1. Form 5768, Election/Revocation of Election by an Eligible Section 501(c)(3) Organizations to Make Expenditures to Influence Legislation, is filed by an organization which is exempt under IRC Section 501(c)(3) and files a Form 990.

  2. The transaction posts to the entity module with the year the election is effective or revoked (the election year is shown with a TC 023 or 024) when CCs BMFOL, INOLE, or MFTRD is used for an Entity module request.

  3. Refer to the table below for Form 5768 posting and filing requirements:

    Generated Transaction Code Tax Class Doc Code MFT FRC
    024 (election)
    023 (revocation)     		9 77 00 Form 990 FRC must be present

  4. Refer to the table below for Form 5768 processing:

    Type of Form 5768 Processing
    No exemption, EIN not on the BMF Research Master File. If no EIN is found, return the Form 5768 to the organization using Letter 1224C or 3064C. Explain we must have an EIN to process Form 5768. Send SS-4s with the letter. Also explain the organization must be exempt to file Form 5768.
    EIN on the BMF Research EDS as applicable to determine if the organization has an application pending. If an EIN is found on Master File and the EO Section has SS 03, or an application pending, edit the EIN on Form 5768 and forward to Code & Edit for processing. If the account does not have an EO Section or the SS is not 03, return the Form 5768 to the organization using Letter 1224C or 3064C. Explain we do not have a record of the exemption and cannot process the form. Send Forms 1023/1024 as applicable.

3.13.12.9.22  (01-01-2009)
Form W- 3 from Social Security Administration

  1. Review Form W-3 and/or correspondence for an EIN:

    1. If EIN is present, perform IDRS research using all available tools. Compare this data to the data found via CC's NAMEB, NAMEE.

    2. If EIN is not present, you must rely on the research.

  2. Review Form W-3 and/or correspondence to determine if an Entity issue is present.

    • If yes, continue with IDRS research and resolve the taxpayer's entity issue.

    • If no, forward to the proper area for resolution.

  3. If two EINs are found and taxpayer was assigned two numbers in error, consolidate EINs using CC TC011.

  4. If the Form W-3 and/or correspondence indicates the taxpayer is no longer in business take the following actions:

    • If the taxpayer has filed a final return but the filing requirement is still on the EIN, input a TC 591/20 for the first module the taxpayer will no longer be liable. Destroy the Form W-3 per local procedures.

    • If the taxpayer has filed a final return and filing requirements are not present, take no action and destroy the Form W-3 per local procedures.

    • If the taxpayer has not filed a final return, correspond using 696C letter and request final returns.

    • When requesting a final return using 696C, include the following information in an open paragraph; "We received information from the Social Security Administration (SSA) indicating you no longer have employees or are no longer in business. So we can remove your name from our mailing list for Form(s) X, please file the last return(s) for your employees. Show the last date wages were paid and mark each return final."

  5. If Form W-3 is undeliverable, research for a better address. If found mail the Form W-3 to the new address. If unable to locate, input a TC 593/82 to change the exempt organization status to 21.

3.13.12.9.23  (01-01-2009)
Canadian Charities

  1. As described in Notice 99–47, Guidance Relating to Article XXI of the United States-Canada Income Tax Convention, and Publication 597, Information on the United States-Canada Income Tax Treaty, certain types of Canadian charities will be able to file Form 990-PF with the IRS if their U.S. sourced income is $25,000 or more for the tax year.

  2. The Canada Customs and Revenue Agency (CCRA) will provide and update for additions and deletions on a recurring basis to the IRS a listing of the Notice 99–47 charities. This list will be entered into the Exempt Organizations Determination System (EDS). A case record will be established for each charity. Personnel in Ohio and the Area Offices as well as Ogden can access the case record of each of these charities by:

    1. Selecting from the Inventory Control System Menu, option 01, Query/Update KDO Master Record and Status, and

    2. Selecting from the Update KDO Master Record, option 1, Research Only, and entering in the Search Criteria section, the Name Control or Employer Identification Number (EIN) of the charity.

      Note:

      The Status Code in the case record is 90.

  3. Canadian charities will be considered automatically exempt and do not have to apply for exemption. Although exempt, a qualifying charity will not have a favorable exempt status on master file until it provides financial data to establish its foundation classification. Even if the charity does not request foundation classification, it must file a Form 990-PF. After they submit their financial data, they may be considered public charities; they would be required to file a Form 990.

  4. A Notice 99–47 charity providing financial data to establish its foundation classification will provide to Cincinnati:

    • Page 1 of Form 1023, completed and signed

    • Completed Part IV, Foundation Classification, of Form 1023

    • The charity's registration letter (Notification of Registration) from the CCRA

    • Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b)

  5. Cincinnati (or an Area Office) which receives and processes the request will:

    1. Establish the case on EDS as an "A" case and enter the notation "Form 8833" in the DBA line of the address.

    2. Process the foundation classification issue in the normal manner.

      Note:

      Since exempt status is automatic, Cincinnati will only process the foundation classification issue.

    3. Issue a composed letter (either favorable or adverse) on the foundation issue.

    4. Close the case on EDS.

  6. If the charity does not submit financial data to establish its foundation classification, the initial return submitted by the charity will unpost since no EO section is present. Process as follows:

    1. Check for Form 8833. If the form is not present, correspond with the organization using Letter 3064C requesting the form.

    2. If the Form 8833 is attached to the return, check the top of page 1 of the return for the notation "Notice 99–47" . This notation helps identify the intent of the filer.

    3. Check EDS for a favorable case record (Status Code 90).

    4. If there is a determination case record, post the return by establishing an EO section with TC 016, Doc. Code 80, Definer Code B, and Status 40. Post the Form 990-PF and then remove the EO section with a TC 022.

    5. If there is no determination case record and no Status Code 90 record but the filer requests in the return or in an attachment to the return, a determination of foundation classification, forward a copy of the request to the EO Determination Processing Office (DPO). Post the return by establishing an EO section with Status 40, post the Form 990-PF and then remove the EO section.

    6. If there is no determination case record, no Status Code 90, and the filer does not request in the return or attachment to the return a determination, but the Form 8833 clearly identifies the charity as a Notice 99–47 charity, post the return by establishing an EO section with Status 40, post the Form 990-PF and then remove the EO section.

    7. If the Status Code 90 record shows the charity as revoked, do not post the return. Send the return to IRS, 1750 Pennsylvania Ave., Washington, D.C. 20006, Attn: Michael Seto, Cubicle 3Q3.

    8. If the organization files a Form 990 but erroneously files a Form 990, notify the charity of the error and request the correct return using Letter 3064C. If the charity provides the correct return, process as above. If the charity does not provide the correct return, send the return to Michael Seto as the address in g. above.

  7. If the charity submits its financial data and has its foundation classification as a private foundation, process as follows:

    1. If the EO section is established on master file, the return will post to master file.

    2. If the EO section has not been established and a Form 990-PF unposts, research EDS for an "A" case. If the "A" case was established and a letter issued, research the Letter Generation System to determine the foundation classification and the type of return that must be filed.

3.13.12.10  (01-01-2009)
EO Miscellaneous Procedures

  1. This section covers procedures for Form 3499, EO Information Transmittal and the Status 40 Register.

3.13.12.10.1  (01-01-2009)
Form 3499, EO Information Transmittal

  1. Form 3499 is to be used whenever EO correspondence is referred to an area outside the service; e.g., the EO Area Office in Dallas, Cincinnati, or National Office.

3.13.12.10.1.1  (01-01-2009)
Preparation of Form 3499

  1. Form 3499 is used to route documents. Three types are prepared in advance.

    1. If you are sending cases to Cincinnati which are out of business, mergers, or amendments, use the Form 3499 that has IRS TEGE, PO BOX 2508, CINCINNATI, OHIO, 45201 in the "TO" section at the top of the form. At the bottom of the form, circle action codes if necessary, check the appropriate type of case in "Remarks" , your name in the "From" section, and indicate your location, phone and date.

    2. If you are sending name changes or the taxpayer is requesting a determination letter, use the Form 3499 that has IRS TEGE, 550 MAIN ST, RM 4024, ATTN: RECORDS UNIT, CINCINNATI, OHIO, 45201 in the "TO" section at the top of the form. At the bottom of the form, circle action codes if necessary, check the appropriate type of case in "Remarks" , your name in the "From" section, and indicate your location, phone and date.

    3. If you are forwarding a Form 1023, Form 1024, Form 8718, or Form 8734, route to IRS 201 W Rivercenter Blvd TEGE Stop 31 - Team 31404, Covington, KY 41011. At the bottom of the form, circle action codes if necessary, check the appropriate type of case in "Remarks" , your name in the "From" section, and indicate your location, phone and date.

    4. The Lead will review all correspondence routed to the EO Area Office, Cincinnati, or National Office. Additional procedures are necessary for Name Changes routed to Cincinnati. The Lead will complete an EP/EO Records Unit router with the following information: State where the organization is located, Organization Name as shown on master file, and EIN. The Lead will also indicate the attached information is to be added to microfiche and the name on the microfiche is to be changed. The router is to be attached between the name change documentation and the Form 3499.

3.13.12.10.2  (01-01-2009)
Status 40 Processing

  1. The Status 40 information is downloaded from master file to the EO Entity Status 40 system in Ogden monthly (except February). The EO Entity Status 40 System generates a history sheet for each new organization in Status 40. The history sheets are worked by EO Entity at the Ogden Submission Processing Center.

  2. To process the history sheet, attempt to determine the exempt status of the organization by researching the following command codes:

    • INOLE/ENMOD to verify the name of the organization

    • NAMEE/NAMEB to verify the employer identification number

    • EOGEN to identify a potential group ruling covering the organization

    • EDS to determine the status of a possible application for exemption

  3. Annotate research information and all actions taken on the history sheet.

  4. If unable to resolve the case through research, ESTAB for the return to verify the taxpayer’s intent. Review the return for contact names and telephone numbers. Contact the taxpayer or representative for the needed information. If the case can be resolved with the information received, update the BMF accordingly. If the case can not be resolved with the information given, continue processing.

    Note:

    If the return indicates the organization is part of a group exemption, research the SGRI file to determine if the organization is part of the GEN. Research CC BMFOLE to determine if a TC 022 was done recently. If a TC 022 was done, notify the organization the parent organization must verify they are part of the group exemption.

    Note:

    Returns filed electronically through the Modernized e-File (MeF) system (Forms 990, 990-EZ, 990-N, 990-PF, 1120-POL and 8868) cannot be secured via CC ESTAB. MeF returns are identified by File Location Codes of 93, 92 or 88 (first two digits of the DLN) These returns can be viewed and printed through the Return Request and Display (RRD) System which is accessed via the Employee User Portal (EUP). See IRM 3.42.4 for procedures on accessing the EUP and RRD systems.

  5. If an application is pending on EDS, annotate on the history sheet the case is closed.

  6. If BMFOLT indicates a TC 460 is in Status 40, update the Status to 42 and close the case.

  7. If no application is pending or no exempt status is found, process as follows:

    1. A 3566A letter is automatically sent by the EO Entity Status 40 System asking for additional information, proof of exemption, a copy of their determination letter, or a taxable return. Suspend the case for 45 days.

    2. If the taxpayer submits proof of exemption or a determination letter, update the BMF with Status 01 and the appropriate filing requirements with a TC 016 Doc. Code 80 Definer Code ABC.

    3. If the taxpayer calls and verbally communicates the organization is applying for exempt status. Suspend the case for 45 days, research EDS to verify application was received. If received EDS will reflect status 50-55 or Status 01, Entity will close their case. If EDS does not indicate receipt of application, put the case in Status 41 and close the case. When Cincinnati receives application and exemption is granted, IDRS will be updated to Status 01.

    4. If the taxpayer corresponds or calls asking for additional time to complete the request, notate on the history sheet an extension of time was granted. Inform the taxpayer of their extension via telephone or by sending a 3064C Letter using the CES paragraph.

    5. If the taxpayer submits a taxable return, determine if the correct return was sent. If the organization is a corporation, a Form 1120 is appropriate. If the organization is a trust, they should file a Form 1041. If the correct return was sent, update the BMF with a Status 41 and Form 1120/Form 1041 filing requirement. Forward the return to batching and numbering for processing. If an incorrect return was sent by the taxpayer, inform the organization with a 3064C letter of the proper return to be filed and include the incorrect return.

    6. If any of the above appropriate responses are received from the organization and EO Entity closes the case. The clerical staff will remove the case from the EO Entity Status 40 system.

    7. If no response is received from the first 3566A letter, the EO Entity Status 40 System will automatically send a second 3566A letter, suspend the case for 45 days.

    8. If a response is received from the taxpayer to the second 3566A letter, process as above.

    9. If no response is received from the taxpayer to the second 3566A letter, research again for a pending application. If no additional information is found, suspend for an additional 45 days. If no response is received within the additional 45 day period and the organization filed a Form 990, have the Lead or EO Management Assistant review the return to determine the subsection code and classification code. If the Form 990 is a subsection 03, 09, or 17, update the EO Status to 41 and close the case. If the Form 990 is not a subsection 03, 09, or 17, update the EO Status to 36 and close the case. If no response is received and the organization filed a Form 990-PF, update the EO Status to 41.

    10. If a response is received from the taxpayer stating they are a church, update to EO Status Code 30, add a "W" Code and remove 940 filing requirements when applicable.

3.13.12.11  (01-01-2009)
Correspondence

  1. Correspondence received from the taxpayer related to Exempt Organization accounts should be processed per instructions in this section.

  2. Your response should read, "This is a response to your correspondence dated....." If the letter is not dated, use the postmark date. If the postmark date is unknown, use the date which is three days prior to the IRS received date.

  3. A CP 576 is issued when an EIN is assigned from a return. CP 576 requests a Form SS-4 from the taxpayer. When the SS-4 is received, input any missing additional data from the SS-4 to IDRS, use CC ESIGN modifier "U" to update the Notice Information Code. Dispose of the SS-4 per IRM 21.7.13, Assigning Employer Identification Numbers.

3.13.12.11.1  (01-01-2009)
Going Out of Business or No Longer Liable

  1. Going Out of Business or No Longer Liable

    1. An EO/BMF account may inform the IRS it is no longer liable for a particular return.

    2. Use CC BMFOL or CC INOLE to get the entity and the filing requirement for the return the organization states it is no longer liable for.

    3. If the research shows the EO Status is 20 or greater, process as follows:

      If Then
      There are no EO filing requirements, Take no further action.
      There are EO filing requirements, Use CCs ENREQ/BNCHG with TC 016 to delete the EO FRC.

    4. If research shows the EO Status is less than 20, check the current and prior year to see if the organization has filed this particular return.

      If Then
      The organization is filing the return, Send a 696C letter using paragraph M to the organization to file a final return.
      The organization has not been filing that return, Send a 696C letter using paragraph M to the organization to file a final return.
      The organization states the business never opened, Close the FR via TC 591 cc 20 and send a 696C letter using paragraph E.

    5. If the organization claims it is not liable to file a Form 990 because it has gross receipts of $25,000 or less and, if it has a Form 990 FRC of 01, input TC 590 cc 20 and TC 016 to update the Form 990 FRC to 02.

3.13.12.11.2  (01-01-2009)
Going into Business After Being Inactive or Change from Non-Employing to Employer

  1. Research IDRS.

    If Then
    A previously assigned EIN is located,

    1. Reactivate or update the account, as necessary.

    2. Send FTDs, as applicable.

    3. Correspond with the organization about the requirement for one EIN via Letter 3910C.
    A previously assigned EIN is not located, Initiate correspondence via Letter 3910C, requesting a completed Form SS-4 or a copy of the EIN assignment notification.

3.13.12.11.3  (01-01-2009)
Terminations

  1. Exempt Organization Termination: If an organization notifies the campus it is terminating its exemption, see IRM 3.13.12.6.18.9 for EO Status 20 instructions.

  2. If an organization notifies the campus it is terminating or dissolving, and Articles of Dissolution are attached, determine the EO Status Code on CC INOLE/ENMOD/BMFOLO.

    1. If the EO Status Code is 01/02, determine if a final return has posted by researching CC BMFOLL for a Return Condition Code F or a TC 591 cc 20. If a final return or a TC 591 cc 20 has not posted, send a 696C to notify the organization they need to file a final return. Route the Articles of Dissolution to Cincinnati to establish a "T" case.

    2. If the EO Status Code is other than 01/02, route the Articles of Dissolution to Cincinnati to establish a "T" case.

3.13.12.11.4  (01-01-2009)
Name Changes

  1. Change in Name on an Exempt Organization Account

    1. Any request to change a name of an EO account must be accompanied by appropriate documentation in order to be considered.

      Exception:

      If the requested name change is the same as the name on EDS and the organization is incorporated, check the state web site. If the requested name change matches the name on the state web site, no documentation is required.

    2. If the type of organization is a 1 on EDS or on BMFOLO, the organization is incorporated with the state. A State approved amendment to the articles of incorporation is required. In addition, the Certificate of Amendment must reflect both the old and the new name of the organization.

    3. If the type of organization is an 2 on EDS or on BMFOLO, the organization is a trust. An amendment to the trust agreement is required along with the trustee(s) signature.

    4. If the type of organization is a 5 on EDS or on BMFOLO, the organization is an unincorporated association. An amendment to the articles of association, constitution, by-laws or other organizing document is required along with signatures of at least two officers/members.

    5. If the correspondence has the appropriate documentation, input a TC 013, Doc. 80 or 63. Send FTDs if applicable, and a 252C letter.

      Note:

      Research current year taxable filing requirement on CC BMFOLT to determine if a TC 650 has posted. If a TC 650 has posted, send FTDs, and Letter 252C to the organization acknowledging the change to its name. If no TC 650 has posted, do not send FTDs.

    6. If the correct documentation is not provided, inform the organization the name change cannot be made until the required information is provided. Tell them what information is required, based on their type of organization

    7. If necessary, change the name on the P tape.

    8. After the name change is input, route the correspondence and documentation to Cincinnati for their administrative files.

3.13.12.11.5  (01-01-2009)
Change in Address

  1. Correspondence indicating address changes may be directed to EO Entity for necessary action. Input TC 014 and Doc. Code 80 or Doc. Code 63.

3.13.12.11.6  (01-01-2009)
Change in Fiscal Year End

  1. Correspondence may be received from the organization indicating their fiscal year end was erroneously changed to 12 during Form SS–4 processing. If this is the case, update the fiscal year end to the month stated by the organization.

  2. Correspondence may be received from exempt organizations requesting their FYM be changed. If the organization has not changed their FY in the past 10 years, make the requested change. If the organization has changed their FY in the past 10 years, they are required to file Form 1128. See IRM 3.13.12.18 for Form 1128 procedural instructions.

  3. If the organization is corresponding on a trust account, be sure the trust is a Section 501(a) type trust or a charitable trust described in Code Section 4947(a)(1) before updating to a fiscal year. These are the only types of trust eligible to be on a fiscal year end.

3.13.12.11.7  (01-01-2009)
Mergers

  1. There are three types of Exempt Organization mergers:

    • Group mergers

    • Subordinate mergers

    • Private rule mergers

3.13.12.11.7.1  (01-01-2009)
Group Mergers

  1. Correspondence received for a merge of two group rulings or two groups merging and forming a new group, should be forwarded to Cincinnati. Once Cincinnati has approved the merger, they will notify EO Entity at the Ogden Submission Processing Center to input the appropriate actions.

  2. Research EDS to determine if there is an open case. If there is an open case:

    1. Forward the correspondence to the agent assigned the case.

    2. Notify the organization of the transfer of the correspondence with a 86C Letter.

  3. If there is no open case on EDS:

    1. Send the correspondence to the Cincinnati Determinations Processing Office (DPO) with a Form 3499 attached indicating to "Establish T (Termination) or A (Amendment) case" .

    2. Notify the organization of the transfer of the correspondence with a 86C letter. Also, if necessary, notify the organization amended organization documents are required to merge groups rulings; indicate the organization should send the amended organizing documents to Cincinnati campus (include Cincinnati's address).

3.13.12.11.7.2  (01-01-2009)
Subordinate Mergers

  1. To merge subordinates:

    1. Determine from appropriate research if the entity data for the surviving corporation is correct. If not, correct the entity as required.

    2. Update the non-surviving account to Status 26. This will prevent future merging to consolidation to the non-surviving account. Use CC EOREQ/CC EOCHG with Doc. Code 80 TC 016 Definer Code B to update the EO Status Code to 26. The status code date should be the date of the merger if known; if not known, use the current year and month. Always input the x-reference EIN.

3.13.12.11.7.3  (01-01-2009)
Private Ruling Mergers

  1. If two organizations are merging and are not covered under a group ruling, then perform research.

    1. Determine if the entity data for the surviving corporation is correct. If not, correct the entity as required.

    2. Notify the taxpayer, using Letter 3008C, to continue to use the established taxpayer's identification number for the surviving organization, and the discontinued business should file its last returns marked "final" .

    3. If not required to file, i.e., if the FR is Form 990>02, close out the non-surviving organization's filing requirements with TC 591 cc 20

    4. Notify Cincinnati of the merger.

3.13.12.11.8  (01-01-2009)
SGRIs

  1. Supplemental Listings Under a Group Ruling: See IRM 3.13.12.12.

3.13.12.11.9  (01-01-2009)
Publication 78

  1. Inquiries Concerning Publication 78 (Cumulative List):

    1. The correspondence may contain the following type of inquiry: organization was omitted from the Publication 78; organization's name was misspelled; organization would like to be known under another name; or alphabetization of Publication 78 placed them in the wrong location.

    2. Refer these inquires to Cincinnati, Customer Service Division, by preparing Form 3499. Explain the reason for the referral and attach the correspondence.

    3. If the taxpayer would like a copy of Publication 78, they may request it by calling 202-512-1800, searching online at www.irs.gov or by writing to:

      Superintendent of Documents
      Government Printing Office
      Washington, D.C. 20402

3.13.12.11.10  (01-01-2009)
Employee Identification Number (EIN) Corrections

  1. This section contains correspondence procedures to be used when a corrected Employee Identification Number (EIN) is different from the EIN provided on the return.

  2. Perform all the necessary research to determine if the EIN on the return is correct using CC NAMEB or CC NAMEE.

  3. If the EIN is correct, continue processing.

  4. If the EIN on the return is not correct, correspond using Letter 3910C to notify the filer of their correct EIN. Use the most current address on the filer's module.

  5. The 3910C Letter does not need to be sent if the following conditions apply:

    1. Filer is using an SSN.

    2. The EIN is missing digits, the digits are transposed, or only one digit is incorrect excluding transposed digits.

    3. The EIN has merged with another number.

    4. The EIN was recently established with a TC 000.

    5. A 3910C Letter was previously sent to the filer.

3.13.12.11.11  (01-01-2009)
Requests for EIN

  1. Perform all necessary research to determine if an EIN was previously assigned.

    If Then
    An EIN is located:

    1. Notify the organization of the previously assigned EIN with the 3910C letter.

    2. Update the organization's account, if necessary.

    3. Send FTDs, if applicable.

    4. If requested, forward any tax forms required for current filing to the organization. Or, refer the organization to the Forms and Publications toll free phone number (1-800-829-3676) or the internet site http://www.irs.gov.

    No EIN is located, Correspond with the organization using Letter 45C and request the completion of the enclosed Form SS–4.

3.13.12.11.12  (01-01-2009)
No Reply to Previous EIN Application

  1. If the organization indicates they had previously applied for an EIN and received no reply, search IDRS for a previously assigned EIN.

    If Then
    Previously assigned EIN is located:

    1. Compare the address on the correspondence with address shown as a result of research.

    2. Update the account if a change in address is indicated on the correspondence.

    3. Send FTDs, if applicable.

    4. Notify the organization of the EIN assigned using Letter 3910C.
    No previously assigned EIN is located, Send Letter 45C.

3.13.12.11.13  (01-01-2009)
Retaining Old EIN

  1. If an organization indicates they had a previous EIN and is requesting retention of this number:

    1. Follow research guidelines to determine if the organization can retain the "old" EIN; i.e., it has the same FR.

    2. Update the organization's account per correspondence.

    3. Send FTDs, if applicable.

    4. Send the appropriate tax forms for immediate filing within 30 days, if necessary.

    5. Send a 3910C Letter if verification is requested by the organization.

  2. If the organization is notified of the assignment of a new EIN but insists on retaining the "old" EIN, process as follows:

    1. Research other EINs thoroughly on IDRS.

    2. Determine from the information if the organization can retain the "old" EIN.

    3. Update the account, if needed.

    4. Consolidate the accounts (TC 011), if necessary. A CP 209 is generated notifying the organization of the actions taken. If the consolidation is not a full consolidation, send a 139C letter.

    5. If the organization cannot retain the EIN requested, correspond informing the organization the reasons why the new EIN must be used.

3.13.12.11.14  (01-01-2009)
Verifying EINs for TIN Penalty/Backup Withholding Purposes

  1. Correspondence will be received requesting assistance because the organization received a notice from a bank, financial institution, or payer. This notice is sent to entities which are currently not posted or incorrectly posted to the BMF or EIN/Name Control file. These entities are creating problems for the TIN Penalty Program and if they are not added to the BMF, backup withholding may be erroneously imposed on these accounts.

  2. The majority of these cases will be accounts established on the NMF prior to 1985. Therefore, researching the EIN provided by the organization will result in no account found for that organization.

  3. If research shows nothing, do not tell the organization the number is valid just because it is in the valid range. Establish the taxpayer's account on the BMF with no filing requirements via CC ESIGN. Suppress the notice of EIN assignment.

  4. Correspond with the organization with a 3910C Letter informing them their EIN is correct and we have corrected our record.

  5. If the notice is for an EIN assigned to another organization, assign a new EIN to that organization. Suppress the notice of EIN assignment.

  6. Correspond with the organization with a 3910C Letter informing them of their new EIN. Be sure to remind them to inform their bank or financial institution of this change.

3.13.12.11.15  (01-01-2009)
Railroad Retirement Board

  1. Correspondence from National Office concerning the Railroad Retirement Board (RRB) will be forwarded to the Entity Control function.

  2. This correspondence provides documentation of the approval by the RRB of the employer status of the applicant.

  3. Entity Control should verify the organization is, in fact, established on master file as a Form CT-1 and Form 941 filer.

  4. Research to determine if the organization is on master file with a Form CT-1 filing requirement:

    1. If the organization is on the BMF with a CT-1 FR, no further action is required. Dispose of the documentation according security guidelines.

    2. If the organization is on the BMF without a Form CT-1 FR, correspond with the organization to determine the correct filing requirement. Update the account according the organization’s response using CC BNCHG, TC 016 and CC FTDRQ as applicable.

    3. If the organization is not on the BMF, establish the organization using CC ESIGN, NID, with a Form CT-1 filing requirement. Notate in REMARKS>ENTITY ESTABLISHED FROM RRB DOCUMENTATION. Notify the organization of the EIN assigned using Letter 3910C. Input CC FTDRQ as applicable.

3.13.12.11.16  (01-01-2009)
Mortgage Credit Certificate (MCC) Notification, Notice of Defeasance, and Student Loan Bond Notification Overview

  1. This section contains procedures for processing MCC notifications, Notice of Defeasance, and Student Loan Bonds.

3.13.12.11.16.1  (01-01-2009)
General

  1. This section provides general background information about the following notifications:

    • Mortgage Credit Certificate (MCC) notification (correspondence)

    • Notice of Defeasance (correspondence)

    • Student Loan Bond notification (correspondence)

  2. The nature of work which service center personnel are expected to perform on these returns, documents and correspondence are also described in this section.

3.13.12.11.16.1.1  (01-01-2009)
Background

  1. Mortgage Credit Certificate notifications are written statements to notify the IRS that the Issuer is issuing Mortgage Credit Certificates in lieu of qualified mortgage revenue bonds. (In general, a program is a qualified mortgage credit certificate program if an Issuer elects not to issue a specified amount of qualified mortgage revenue bonds that it may otherwise issue during a calendar year.) The election should be entitled Mortgage Credit Certificate Election and must include the information specified in Temporary Regulations section 1.25-4T(c)(2).

    • A separate Mortgage Credit Certificate is filed for each program.

  2. Notice of Defeasance are written statements of an irrevocable defeasance escrow established to redeem tax-exempt bonds on their earliest call date.

    • A separate Notice of Defeasance is filed for each escrow.

  3. Student Loan Bond notifications are written statements to notify the IRS that the Issuer is electing to issue a taxable bond.

  4. Entity will receive MCCs, Notice of Defeasance, and Student Loan Bond notifications from Batching. Entity will perform research, perfection and correspondence procedures. Once perfected, Entity establishes a fact of filing on Master File. The transaction will be established on CC ENMOD as a TC 971, Action Code 34X, or 314. Once complete, Entity will forward the return to files.

3.13.12.11.16.1.2  (01-01-2009)
Amended Returns

  1. If the taxpayer files an amended return using the same EIN, process as an original.

    Note:

    At this time, these returns are processed for fact of filing purposes only. Therefore, there can be multiple Transaction Codes 971 Action Code 344/345/314 on CC ENMOD.

  2. If the lender files an amended return, correcting the EIN, Entity will input a TC 972 Action Code 34X/314 to reverse the incorrect posting. A fact of filing will then be input using the correct EIN.

  3. A Transaction Code of 972 Action Code 344/345/314 on CC ENMOD indicates the fact of filing has been reversed.

3.13.12.11.16.1.3  (01-01-2009)
Due Dates

  1. Mortgage Election Credit Certificates are due December 31st of the year in which the election is made.

  2. Notice of Defeasance are due within 90 days of the date of the establishment of the defeasance escrow.

  3. Student Loan Bond Notifications are due prior to the issuance of the taxable bond. For additional information, see temporary Regulations 301.9100-6T(c).

3.13.12.11.16.1.4  (01-01-2009)
Remittance for MCC, Notice of Defeasance, and Student Loan Bonds

  1. MCCs, Notice of Defeasance, and Student Loan Bonds are non-remit. On occasion, remittance may be received for penalty payment. If remittance is received for a penalty payment, apply to the 20-2325 "Miscellaneous Forfeiture Receipts Account."

3.13.12.11.16.1.5  (01-01-2009)
Signature

  1. Currently, a signature is not required.

3.13.12.11.16.2  (01-01-2009)
Entity - MCC notifications (correspondence), Notice of Defeasance, and Student Loan Bonds

  1. The following will be performed by Entity.
    Entity will:

    1. Receive documents from Batching,

    2. Perform research and perfection, and

    3. Input a fact of filing on CC ENMOD.

    Note:

    As of October 1, 2003, these instructions do not pertain to MMC Forms 8329, 8330 or 8703. Please refer to the IRM 3.13.2.35

    .

  2. A fact of filing is established by inputting the following transaction on CC ENMOD:

    • Mortgage Credit Certificate, TC 971 Action Code 344

    • Notice of Defeasance, TC 971 Action Code 345

    • Student Loan Bonds, TC 971 Action Code 314

  3. To establish a fact of filing, input a TC 971, Action Code 34X/314, using the following procedures:

    • Access CC ENMOD

    • Access CC REQ77 with the EIN on the return, MFT 00 and Tax Period 000000 on the second line, and Name Control and Entry Code on the third line

    • Input TC>971 (on the FRM77 screen)

    • Input TRANS-DT> MMDDYYYY

      Note:

      TRANS-DT is the return received date or the return processable date, whichever is later.

    • Input TC 971/151-CD>34X or 314

    • Input Remarks: MCC, Notice of Defeasance, or Student Loan Bond (whichever is applicable)

  4. Input the following to the FRM77 screen:

    • TC>971

    • TRANS-DT>MMDDYYYY

    • TC971/151-CD>34X or 314

    • Remarks: MCC, Notice of Defeasance, or Student Loan Bond(whichever is applicable)

  5. If the lender files an amended return using the same EIN as original omission, process as an original.

    Note:

    At this time, these returns are processed for fact of filing purposes only. Therefore, there can be multiple Transaction Codes 971 Action Codes 344/345/314 on CC ENMOD.

  6. If the lender files an amended return, correcting the EIN, reverse any TC 971 Action Codes 344/345/314 on the incorrect account with a TC 972 Action Code 344/345/314 with CC REQ77/FRM77. Input TC 971 with Action Codes 344/345/314 using the correct EIN on CC ENMOD. See (2)-(5) above for fact of filing input procedures.

  7. Maintain source document (MCC and Notice of Defeasance) in input order, place in an IDRS gusset folder and send to files.

  8. The same Entity perfection criteria that applies to Tax-Exempt Bonds apply to MCC and Notice of Defeasance. NO CHANGES of any kind will be made to entity data on the Master File. See IRM 3.11.26.5 for Entity perfection procedures.

3.13.12.12  (01-01-2009)
Group Rulings

  1. This section covers GEN file processing, assignment of GEN numbers, new group exemption letters, processing of new groups, updates to group rulings, processing SGRIs, and state-charter credit unions.

3.13.12.12.1  (01-01-2009)
GEN File Processing

  1. The GEN file at MCC is issued to control the parent and subordinates for each Group Exemption Number. It ensures each group has only one parent.

  2. The GEN file, an internal control file at MCC of all GENs, contains the following information:

    Parent Subordinate
    EIN EIN
    Affiliation Code 6 or 8 Affiliation Code 7 or 9
    GEN GEN
    Name Control Name Control
    Cycle Posted Cycle Posted
    Organization Name  

  3. Every entity change transaction which contains a NEW GEN or a FROM GEN will be passed against the GEN file.

  4. When the input Affiliation Code is 7 (state) or 9 (subordinate), the parent must be on the GEN file or it will unpost with UPC 370.

  5. When the input Affiliation Code is 6 (parent) or 8 (parent of a church), it will unpost with a UPC 370 if the input NEW GEN matches a GEN on the GEN file.

3.13.12.12.1.1  (01-01-2009)
Doc. Code 80 Transactions

  1. Document Code 80 transactions containing a GEN are passed against the GEN file for GEN verification.

  2. An update record is generated to add the account to the GEN file when the transaction posts to the BMF. This update record posts to the GEN file one cycle after the TC 016 has posted to the BMF.

  3. When the GEN file updates, it posts any delete records prior to any add or change records. It is important to cycle any TC 016 transactions appropriately to allow for the GEN file to update.

3.13.12.12.1.2  (01-01-2009)
Doc. Code 81 Transactions

  1. Document Code 81, TC 000 will update the GEN file and then post to the BMF.

  2. When a Doc. Code 81 with TC 016 and Definer Code A, B, C, or blank passes against the GEN file, every subordinate for that GEN will have a TC 016 generated for posting to the BMF.

  3. Definer Code D indicates every subordinate added with a TC 000, Doc. Code 81 for that GEN will have a transaction generated for posting to the BMF.

3.13.12.12.2  (01-01-2009)
New Group Exemption Letter

  1. When an organization applies for a group exemption, Cincinnati will establish a case control on EDS for the "parent" organization. When a determination is made and the GEN assigned, the case control is closed on EDS and a Form 2363A marked "New Group Exemption Letter" is forwarded to the OSPC to create the pilot voucher. The pilot voucher will be used to establish the subordinates with complete entity data, including the EO section.

    Note:

    If the list of subordinates is not attached and it is not a church, reject the Form 2363A back to the originator.

  2. Cincinnati will forward the Form 2363A and a list of all subordinates to the campus for the updating of the parent and the subordinates. Form 2363A is used to create the pilot voucher.

  3. The pilot voucher will contain all the common data for the group ruling.

    Note:

    If the pilot voucher is incomplete, reject the Form 2363A back to Cincinnati for revision.

  4. All 501(c)(3) organizations must have an entry in item 36, NTEE, on the Form 2363A. If there is no entry, return the Form 2363A to the originator, informing them the new GEN cannot be established until the NTEE is given.

  5. New groups must be completed and on the BMF 60 days after receipt. See IRM 3.30.123, Processing Timeliness.

3.13.12.12.3  (01-01-2009)
Assigning of Group Exemption Number (GEN)

  1. The GEN number will be assigned by Cincinnati and marked on the 2363A.

  2. Ogden will retain the GEN numbers 8277-8999 in case a GEN needs to assigned by the EO Entity Unit.

  3. Prepare the pilot voucher for adding subordinates from the Form 2363A received Cincinnati by doing the following:

    1. Always enter Affiliation Code 9 on the pilot voucher, regardless of the type of organization.

    2. Do not enter any address.

    3. Input a new GEN to the parent organization. See IRM 3.13.12.12.4. Establish an IDRS control base in monitor status.

    4. Three cycles after assignment of the GEN, research to ensure the GEN has posted to the master file. If the GEN has gone unpostable,refer to IRM 3.12.278, taking necessary action to resolve.

    5. Once the GEN has successfully posted to the master file, close the control base.

    6. Using the pilot voucher, add the NEW GEN to each of the subordinates. See IRM 3.13.12.12.5.

    7. After processing, create an SGRI file, with the Form 2363A received from Cincinnati and the list of subordinates.

  4. After all of the above actions are taken, give the pilot voucher to the Lead for imaging the first of each quarter.

  5. After adding subordinates, give the pilot voucher to the Lead to be sent for imaging the first of each quarter.

  6. Notify the central organization (parent) of the GEN assigned via letter 1169O only if the EO Entity Unit at OSPC assigns the GEN.

3.13.12.12.4  (01-01-2009)
Processing New Groups - Parents

  1. When you receive the new group exemption letter from Cincinnati, the parent will be updated on the BMF from EDS. Research of the parent's EIN may be necessary to verify the EDS record has posted. Use CCs ENMOD, INOLE or BMFOL.

  2. To assign, input a TC 016, Doc. Code 80, Definer Code C to the parent's EIN with the following information:

    1. Enter Affiliation Code 6 for all parents which are not a church or exempt under IRC 501(c)(1).

    2. Enter Affiliation Code 8 for all parents of churches under 501(c)(3), Foundation Code 10 or 501(c)(1) organizations.

    3. RULING-DT

    4. NEW-GRP-EXEMP-NUM

    5. REMARKS

  3. Input the TC 016 immediately. The parent must be established on the BMF and the GEN file before the subordinates can be added. If this transaction is UPC 370, correct immediately.

3.13.12.12.5  (01-01-2009)
Processing New Groups - Subordinates

  1. After the parent is updated on the BMF and the GEN file, the subordinates can be added. For a new group or new subordinates to a group:

    If Then
    The EIN is already on the BMF, Use CC EOREQ/CC EOCHG, Doc. Code 80, TC 016, Definer Codes ABC and the exemption data from the pilot voucher.

    Exception:

    If a potential subordinate is on the BMF but the EO Status Code is 22, do not add the organization to the group. Notify the Lead and s/he will contact the Adjustments Unit in Cincinnati.

    The EIN is not on the BMF, Use CC EOREQ/CC EOCHG with Doc. Code 80, TC 000 and the exemption data from the pilot voucher.
    The subordinates in the group do not have EINs, Perform research to determine if an EIN has already been established.
    The EIN is located, Proceed as above.
    Research fails to locate the EIN:

    1. Correspond with the parent informing them the subordinate organizations cannot be added because the EINs have not been supplied.

    2. Inform the parent Forms SS-4 need to be completed and return so the EINs may be assigned.

    3. Include a blank SS-4 as an attachment to the letter.

  2. Enter the subordinate’s names as follows:

    1. Enter the parent’s name on the subordinate’s primary name line.

    2. If the subordinate’s name is similar to the parent’s name and is distinguished from the parent by a local number, chapter number, unit number or district number, enter the local, chapter, unit or district number on the sort name line.

    3. If the subordinate’s name is clearly different from the parent’s name, enter the subordinate’s name on the sort name line.

    4. Do not set up the following organizations like the parent's name: GEN 0002 Moose International, GEN 3017 Banner Health, GEN 3297 Nami Virginia, GEN 9405 Illinois PTA, and all churches and credit unions.

3.13.12.12.6  (01-01-2009)
Using Definer Code F

  1. There are occasions when the wrong EIN was used for the parent of a group ruling. Once the EO account is on the BMF and the parent is established on the GEN file, there is no way to change the parent EIN on the GEN file except with a TC 011 to a different EIN which is not on the GEN file.

  2. The GEN file prohibits adding another parent. An input with Affiliation Code 6 or 8 passes against the GEN file and if the GEN is already established, the input record will unpost with UPC 370.

  3. Definer Code F is used to correct the GEN file when the parent EIN is really a subordinate or has an independent ruling. For this definer code to make the change, one of the subordinates must be the parent.

3.13.12.12.6.1  (01-01-2009)
Verifying of Parent and Subordinate EINs

  1. Use CCs ENMOD, BMFOL and INOLE and verify the EINs for both the subordinate and the parent have the following information:

    • The GENs must be the same.

    • The Affiliation Code on the parent must be a 6 or 8.

    • The Affiliation Code on the subordinate must be a 7 or 9.

    • The exemption data must be the same.

    • The EO Entity Status must be 01-02.

  2. Always update the BMF, if necessary, before inputting Definer Code F.

3.13.12.12.6.2  (01-01-2009)
Inputting EOREQ/EOCHG Transactions

  1. Input both CC EOREQ/CC EOCHG transactions in the same cycle, if possible. Both TC 016 transactions must post within 3 cycles of each other.

  2. First, use CC EOREQ/CC EOCHG, Doc. Code 80, Definer Code F with TC 016 and the following fields:

    • Parent EIN

    • Parent name control

    • Affiliation Code (always 7 or 9)

    • From GEN

    • Remarks

  3. Next, use CC EOREQ/CC EOCHG, Doc. Code 80, Definer Code F with TC 016 and the following fields:

    • Subordinate EIN

    • Subordinate name control

    • Affiliation Code (always 6 or 8)

    • From GEN

    • Remarks

  4. The above two transactions must both arrive at the GEN file within 3 cycles or the first one will unpost with UPC 370.

  5. If the input transactions unpost, the unpostable will be 370 from the GEN file or 371 from the BMF.

3.13.12.12.7  (01-01-2009)
Dissolving a Group Ruling

  1. There may be a time when a group ruling will be dissolved. Notification of the dissolution must come from the parent of the group. These procedures are for this type of case.

  2. When notified the group is dissolved, use CC EOREQ/CC EOCHG, Doc. Code 81, TC 016 and the following fields:

    • Parent EIN

    • Parent name control

    • From GEN

    • Definer Code B

    • Status 29 with current date (YYYYMM)

    • Remarks

    Caution:

    Supervisory approval is required before input of Status 29. Subordinate units often erroneously use the parent's EIN when communicating with the IRS. The dissolution must come from the parent of the group.

  3. When the input transaction passes against the GEN file, it will unpost with UPC 370 if the EIN does not match the parent or the From GEN, or if a second transaction is input for the same status.

  4. When the input transaction attempts to post to the BMF, the EO section must have Affiliation Code 6, 7, 8 or 9 and the EO Entity Status must be 01-03, 20 or 21. Otherwise, it will unpost with UPC 370.

  5. When the transaction posts to the BMF for the parent, the GEN file will then generate a transaction for all the subordinates and delete the GEN from the GEN file after the BMF has posted all the transactions for the subordinates.

  6. Update the pilot voucher and give the pilot voucher to the Lead to be sent for imaging the first of each quarter.

3.13.12.12.8  (01-01-2009)
Parent Affiliation Code Change

  1. There are cases where the affiliation code established for the parent was wrong. This happens when a church is input with Affiliation Code of 6 and it should be an 8, or a non-church is input with an 8 and the Affiliation Code should be a 6.

  2. When a parent account is found on the BMF with an incorrect affiliation code, it must be corrected because parents with an affiliation code of 8 do not receive a Parent/Subordinate List.

  3. To change the affiliation code, the input must be as follows and no other changes can be made:

    • Doc. Code 80

    • TC 016

    • Definer Code C

    • From GEN

    • Affiliation Code 6 or 8

    • Remarks

  4. If the transaction unposts from the GEN file, it will unpost with UPC 370; if it unposts from the BMF, it will unpost with UPC 371.

3.13.12.12.9  (01-01-2009)
Updating Group Rulings

  1. When Cincinnati or National Office amends the exempt data for a group ruling, they will forward a new Form 2363A to Ogden. Give the corrected pilot voucher to the Lead to be sent for imaging the first of each quarter.

  2. Group related correspondence must be completed 30 days after receipt. See IRM 3.13.123.

3.13.12.12.9.1  (01-01-2009)
Name Change

  1. When the campus receives correspondence from the parent organization for a name change, a copy of the amendment of the name must be included with the correspondence. If missing, correspond with the organization using Letter 1224C. Give the corrected pilot voucher to the Lead to be sent to imaging the first of each quarter.

  2. If a copy of the amendment is attached, proceed as follows:

    1. Use CC EOREQ/CC EOCHG with Doc. Code 80 or CC ENREQ/CC BNCHG with Doc. Code 63 and TC 013 for the parent's EIN and to correct the name. Send FTDs if applicable, and send a 252C Letter to the organization acknowledging the change to its name.

    2. Do not change the names of the subordinates unless instructed to do so by the parent or updated pilot voucher. If a change to all the subordinates is indicated by the parent, use CC EOREQ/CC EOCHG with Doc. Code 80 or CC ENREQ/CC BNCHG with Doc. Code 63 and TC 013 for each subordinate and to correct the name.

      Note:

      See IRM 3.13.12.12.4.1 before changing subordinate's names.

    3. Prepare a new pilot voucher for the GEN with the changed name and the unchanged data. It should be a complete pilot voucher. See IRM 3.13.12.12.3. Give the corrected pilot voucher to the Lead to be sent for imaging the first of each quarter.

    4. Destroy the original amendment per local campus procedures.

    5. See IRM 3.13.12.6.2.2 for more information.

3.13.12.12.9.2  (01-01-2009)
Merging of Two Groups

  1. Correspondence received for a merger of two group rulings or two groups merging and forming a new group, should be forwarded to Cincinnati. Once Cincinnati has approved the merger, they will notify EO Entity at the Ogden Submission Processing Center to input the appropriate action.

  2. Research EDS to determine if there is an open case. If there is an open case:

    1. Forward the correspondence to the agent assigned to the case.

    2. Notify the organization of the transfer of the correspondence with a 86C Letter.

  3. If there is no open case:

    1. Send the correspondence to the Cincinnati campus with a Form 3499 attached indicating to "Establish T (Termination) or A (Amendment) case" .

    2. Notify the organization of the transfer of the correspondence with a 86 C Letter. Also, if necessary, notify the organization amended organization documents are required to merge group rulings; indicate the organization should send the amended organizing documents to the Cincinnati campus (include Cincinnati's address).

  4. See IRM 3.13.12.12.12.4.10 for more information.

3.13.12.12.9.3  (01-01-2009)
Other Updates

  1. For correspondence received which amends the original exempt data, other than the name, address, or FYM, forward the correspondence to Cincinnati.

  2. When a group return is filed or correspondence is received stating "All the subordinates are changing their filing month to agree with the parent" , input an update to the BMF with the following required fields:

    • Doc. Code 81

    • TC 016

    • Definer Code D

    • Parent's EIN

    • Parent's name control

    • From GEN

    • FYM as indicated on the return or correspondence

    Note:

    Add Employment Code W if it is not present, but only on accounts which have a Form 941 or 944 filing requirements.

    Reminder:

    When updating a subordinate, always input the information exactly as shown on the pilot voucher.

3.13.12.12.10  (01-01-2009)
List of Parent and Subsidiary Accounts

  1. A "List of Parent and Subsidiary Accounts" will be generated monthly, six months prior to the end of the parent's accounting period. This list will be used for mailing information, etc., to the organization.

  2. The list contains the EIN, name, address, group exemption number and filing requirement of the parent, and the EIN, name, address, filing requirement and status (active or inactive) of each subordinate. The subordinates are sorted by EIN within GEN.


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