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Part 2. Information Technology

Chapter 7. Modernization and Information Technology Services (MITS) Operations

Section 7. ITS Operations Support - Information Reporting Program (IRP) — ECC-MTB (Cont. 1)

2.7.7  ITS Operations Support - Information Reporting Program (IRP) — ECC-MTB (Cont. 1)

2.7.7.10  (01-01-2009)
Form 1042-S Foreign Person's U.S. Source Income Subject to Withholding

  1. This segment describes the requirements for the receipt and processing of the Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding electronically.

  2. IRB receives electronically filed Form 1042-S information returns from withholding agents/transmitters via the FIRE System. All files received from the withholding agents/transmitters are controlled by the Special Projects area of QCS. See IRM 2.7.7.3., Application for Filing Information Returns Electronically.

  3. A QCS IT Specialist or Computer Assistant will access FIRE Administrative Reports to print FIRE tracking slips of all files received on a daily basis.

2.7.7.10.1  (01-01-2009)
Form 1042-S Data Verification Procedures

  1. A Computer Assistant will verify the transmitter information on FIRE tracking slips prior to posting the information to the database.

  2. If the information is an amended file, it must be verified by reviewing the uploaded file.

2.7.7.10.1.1  (01-01-2009)
Cartridge, Electronic Amended File Verification

  1. Log on to the Time Sharing Option J (TSOJ) system, type 3.4, and press enter.

  2. Return down to the DSName Level and enter PDMAG.IMAG1042.F001.*. Enter again for a complete listing. Locate the file by file type indicator, TCC, and file sequence number. File type indicator is as follows:

    • A=Amended

    • P=Original

    • R=Replacement to Original

    • M=Replacement to Amended

  3. Tab down and place a 'B' to browse the file.

  4. Check position 2 of the 'W' and 'Q' record to determine if a Code 1 representing an Amended file is present. If a 1 is present, process as amended. See IRM 2.7.7.9.2. If the 1 is not present, contact the transmitter to determine if the file should have been submitted, an original submission or if a replacement amended file is needed.

2.7.7.10.2  (01-01-2008)
Form 1042-S Posting Procedures

  1. Log on to the Special Projects (SP) database and choose Option 2, IRB. Choose Option 1, (IQCS), then Option 1 (Special Projects), then Option 1 (Current processing year database).

    1. Press 'Q' for query. Enter the TCC code and then press Escape (ESC) key to query.

    2. Check the following fields on the Entity (Master) Record:

      • TIN

      • Transmitter/Filer Name

      • Address

      • City

      • State

      • ZIP Code

      • Contact Person

      • Telephone Number

        Note:

        The only fields that should always be the same are the TIN and Transmitter/Filer Name. If the company name or TIN has changed, contact the company to ensure the information. An Information Change Letter should be requested for an Entity Change Update.

    3. Press 'D' to get to Detail screen.

2.7.7.10.2.1  (01-01-2009)
Adding Original, Amended, or Test File Records

  1. To add current data for an Original, Amended, Replacement or Test file, press 'A' and verify the name, address, etc. on the FIRE tracking slip.

    1. Scroll to postmark and enter as YYYYMMDD

    2. Enter an "X" for prior year data

    3. Enter the filename into field Current File Name

      Note:

      The file name comes from the FIRE tracking slip. For example, Filename: PDMAG.IMAG1042.F001.P2212321 would be entered into the File Name field as P2201421.

    4. Enter the media type in field Media Type:

      • A = Amended

      • P = Original

      • R = Replacement to Original

      • M = Replacement to Amended

      • T = Test

      See IRM 2.7.7.10.2.2., Adding Replacement File Records

    5. Enter the record count in the field Record Count

      • Update the database if the processed count is valid

      • Request replacement file from transmitter if processed count is invalid

  2. After all steps are completed, press the Escape (ESC) key .

  3. Enter the alpha after the TCC number on the FIRE tracking slip.

  4. For FIRE tracking slips with the same TCC number, press the 'A' to enter the next one. If not, press 'M' to go back to the master record screen to start a new query.

2.7.7.10.2.2  (01-01-2009)
Adding Replacement File Records

  1. Locate the file that is being replaced on the database as follows:

    1. Go to the master screen by pressing 'M'

    2. Press 'Q' to query

    3. Type in the TCC number being replaced to retrieve the master record

    4. Press 'D' for the detail screen

    5. Scroll forward 'N' or backwards 'P' to find the alpha that is being replaced

  2. When the correct alpha is located, press 'U' to update the following fields:

    • Current File Name: Enter the electronic file name

    • Orig. File Name: Enter the original file name

    • Change the Data Type field to an 'R'

    • The Record Count should be the same as the original file, if not, verify count

    • Enter the date of replacement in the Replacement Date field

    • Blank out the Cycle, Status, and Bliss Unload fields

    • If replacement is for an amended file, the alpha character for the current file name must be changed to an "M" .

  3. After all steps are completed, press the Escape (ESC) key.

  4. Enter the alpha after the TCC number on the FIRE tracking slip.

  5. For all replacements, retrieve the return paperwork from the Special Projects cabinet and attach it to the new FIRE tracking slip.

  6. Keep all paperwork associated with the return until there is a good completion. At that point, discard all return paperwork.

  7. After posting to the SP Database, the files are posted to the ATLAS database on a weekly basis by an EDMS IT Specialist by choosing Option 29 (unload records for BLISS) on the Special Projects Menu.

  8. After posting to the SP Database, FIRE tracking slips are filed numerically by TCC/alpha in the Special Projects file cabinet.

2.7.7.10.3  (01-01-2009)
Form 1042-S Processing

  1. After all posting is completed, submit the Form 1042-S to begin processing of the files. Choose either (Option 8) 1042S - ALL or (Option 9) 1042S - ORIG FIRE, to submit files for processing.

    1. System prompts for number of jobs to be submitted

    2. Type number of jobs to be processed at the prompt (Respond with the number of jobs you wish to submit), press Enter

    3. System will then prompt for the processing cycle

    4. Type cycle number yyyycc (prior year, current cycle week) at the prompt, press Enter

    5. The Batch Control Sheet will print a listing of all the 1042-S files to be processed

  2. Create an Informational note using the Service Center Information Technology Asset Management System (ITAMS) Application.

    1. Double click on the Internet Explorer icon on your computer desktop. Type in the address box: (http://t2apps.mcc.irs.gov/TIES/ties.asp) . Click on Service Center icon from desktop.

      1. Select 'Service and Incident Management' (red phone).

      2. Select Info Note, followed by 'Create Informational note'

      3. Fill in all the following fields as listed below:

        • Assignment: EOPS-ECC-OSSVB-USS

        • Info Note Title: CTW01 TYXXXXXX BATCH=XX (Will start with 1 and increase by 1 every new batch)

        • Problem Location: OSC (Ogden)

        • System Name: 7800 - MTB PROD - DORADO 2800

        • Project: CTW (CUS REQ)

        • Info Details: There are XX files submitted for processing

        • Project - IAW-YYYYCC-Z

        • Select 'Save''

    2. There will be a new Informational Journal Note number that will need to be written on the top of the Batch Control Log along with the batch number.

    3. Batch all paperwork together and place on the top shelf of the Special Projects cabinet.

2.7.7.10.4  (01-01-2008)
Form 1042-S Processing Reports

  1. After processing has completed, you will receive (on the 67AOE117 printer) the printouts (CTW0107/CTW0106 error reports) of the batch that was submitted from the day.

    1. Get the batch from the Special Projects cabinet and the completed CTW0107/CTW0106 reports.

2.7.7.10.4.1  (01-01-2009)
Form 1042-S Report Validation

  1. Review each CTW0106 report to verify the recipient count.

  2. Take all of the CTW0107 reports and match them with the corresponding FIRE tracking slips.

  3. Look at each CTW0107 report to see if any fatal errors were listed.

  4. If errors were annotated on the report, then you must follow these steps:

    1. Mark a 'B' for bad beside the TCC number on the Batch Control log sheet.

    2. One copy will be filed in the Special Projects cabinet, which should include the Form 1042-S Error Code Listing, copy of the CTW0106, CTW0107, and copy of any prints.

    3. Annotate on the FIRE tracking slip the appropriate three-digit FIRE Processing Code.

  5. If no errors were listed on the CTW0107 report, mark a 'G' for good beside the TCC number on the Batch Control Log for the file you are working.

  6. Files in question may need to be resubmitted. If so, update the shipment record by blanking out the cycle and the print indicator.

2.7.7.10.4.2  (01-01-2008)
Form 1042-S Process Troubleshooting

  1. If you receive an error on all the CTW0107 reports that states there is an invalid/missing TCC number, there may be a program problem.

2.7.7.10.5  (01-01-2009)
Form 1042-S Database Shipment Record Processing Updates

  1. Access and update the SP database with the information from the Batch Control Log.

    1. Go into Option 1 (Access current processing year Database)

    2. Press 'Q' for query; enter the TCC code; press Escape (ESC) key to query

    3. Press 'D' to get to the detail screen

    4. Scroll forward by pressing 'N' or backward by pressing 'P' to get to the alpha you are working on

    5. Press 'U' to update the status of this record

      1. If the file is good:

        • Return down to the Status field and press 'G'

        • This will automatically take you to the Balance Date field, which will be filled in with the current date

        • Press 'Escape (ESC) key' to save changes

      2. If the file is bad:

        • Return down to the Status field and press 'B'

        • Return down until you get to the Problem Code fields

        • Enter the corresponding error codes from the 1042-S Error Code Listing

        • Return down to Times Returned and update accordingly

        • Press 'Escape (ESC) key' twice to save changes

    6. Continue with this process until you have completed all of the jobs on the Batch Control Log. Press 'E' to exit back to the Special Projects Menu.

    7. Press Option 6 to update bad files on the database and product a Denied letter.

  2. FIRE is automatically updated by CTW-17 Program.

2.7.7.10.6  (01-01-2009)
Form 1042-S Correspondence and Reports

  1. An IT Specialist or team leader will run the No Replacement Received Letters beginning the first Tuesday of May and continuing every Tuesday on a weekly basis until the end of August. These letters are used as a reminder to the transmitter that they have an outstanding file to be replaced.

    1. The first time the letters are printed, Option 31 (First No Replacement Letters) is selected

    2. Thereafter, Option 19 (No Replacement Letters) is selected

  2. An IT Specialist or team leader will run the No TCC Letters once a year on the first Monday of August. These letters are used to inform the transmitter that they have not used their TCC in over two years and the number will be reassigned if not used.

    1. Choose Option 20 (No TCC Letters)

  3. To process and print the Special Project Status Reports, select Option 96 (Reports Menu) from the Special Projects Menu.

    1. Option 1 (Overdue Shipments) will give a report listing files not replaced timely

    2. Option 2 (Late Filers) will give a report listing fields received after the due date

    3. Option 3 (Filer Report - Monday Morning Report) will give a report listing the number of shipments, documents, times returned, and type of media filed. Two copies will need to be printed. One copy goes to the Branch Chief (IRB) and one goes in the Monday Morning report notebook.

    4. Option 4 (Cycle with No Status) will give a report listing all shipments put into a cycle, but the status field is blank

    5. Option 5 (Replacement Returns Report) will give a report listing all shipments returned to the filer and no replacement has been received

2.7.7.10.7  (01-01-2008)
ECC-MTB Form 1042-S Processing Summary

  1. QCS submits the 1042-S jobs each morning. SCSS will process the jobs by releasing the PCICTW run, which starts the CTW01 process. Once the jobs have completed, all the good jobs get transferred via FTP to Ogden Submission Processing Center.

2.7.7.11  (01-01-2009)
Form 8027 Employer's Annual Information Return of Tip Income and Allocated Tips

  1. Information Returns Branch (IRB) receives electronically filed returns via the FIRE (Filing Information Returns Electronically) System, from employers/transmitters for use in the Information Reporting Program (IRP). All files received from the employer/transmitter are controlled by the Special Projects database on the Enterprise Computing Center-Memphis/SUN (ECC-MEM/SUN) system by a Transmitter Control Code (TCC). Posting of all Special projects are handled by a computer assistant in the Quality Control Section of IRB. FIRE tracking slips for electronically transmitted files are printed on a daily basis. The FIRE tracking slips are used for posting into the Special Projects database.

  2. The computer assistant must verify the transmitter information on the FIRE tracking slip prior to posting the information to the databases.

  3. If the format of the data needs to be verified, use the following steps for electronic files.

    1. Log on to the TSOJ System and type 3.4, press enter

    2. Tab down to Dsname Level and enter PDMAG.IATM01.F001.PXXXXXX for electronic (enter the filename you need)

    3. Tab down and enter a 'B' to browse the file

    4. Look at the data to verify the format

  4. Log on to the ECC-MEM/SUN and choose Option 2 (IRB). Next choose Option 1 (IQCS) and then choose Option 1 (Special Projects), and Option 1 again representing current year. Continue with the following steps:

    1. Press 'Q' for query. Enter the TCC code and then press Escape (ESC) key

    2. Check the following fields on the Entity (Master) Record

    3. TIN

    4. Transmitter/Filer Name

    5. Address, City, State, Zip Code

    6. Contact Person

    7. Telephone Number

      Note:

      The only fields that should always be the same are the TIN and Transmitter/Filer Name. If the company name or TIN has changed, contact the company to ensure the information is correct. If so, ask for an Information Change Letter. Upon receipt of the letter, press 'U' to update the information in the Entity record as provided on the Information Change Letter. Press the Escape (ESC) key to save changes. The information on the Entity record will be carried forward to all alpha records; therefore, each shipment record will not have to be changed if the information in the detail screen is the same as the master.

    8. Press 'D' to get to the detail screen.

  5. To add current data for the Original, Correction or Test data, press 'A' and verify name, address, etc. Update any fields that have changed on the FIRE tracking slip.

    1. Scroll to postmark and enter as YYYYMMDD

  6. Enter the media type into field Media Type: '1' = Electronic

  7. For electronic files, enter the file name into field Current File Name. This file name comes from the FIRE tracking slip, enter the last 8 positions of the file name. Example: Filename: PDMAG.IATM01.F001.P2112301 would be entered into the File Name: as P2112301

    1. Enter the type of data into the field Data Type

    2. 'O' = Original

    3. 'C' = Correction

    4. 'T' = Test

    5. 'R' = Replacement

    6. Enter the record count in the field Record Count

  8. To add data for replacement files:

    1. First locate the file that is being replaced.

    2. Go to the master screen by pressing 'M'

    3. Press 'Q' to query

    4. Enter the TCC number being replaced to retrieve the master record. Press the Escape (ESC) key.

    5. Press 'D' for the detail screen

    6. Scroll forward 'N' or backwards 'P' to find the alpha that is being replaced

    7. When the correct alpha is located, press 'U' to update the following fields:

      • Current File Name

      • Date Type: Change to an 'R'

      • Original File Name: Place original file name

      • If not, contact the filer to verify

      • Replacement date: enter the date of replacement

      • Blank out Cycle, Status and Bliss

      • After all steps are completed, press the Escape (ESC) key

  9. Enter the alpha after the TCC number on the FIRE tracking slip

    1. For multiple FIRE tracking slips with the same TCC number, press 'A' to enter the next one.

    2. If not, press 'M' to go back to the master record screen to start a new query.

    .

  10. For all replacements, retrieve the return paperwork from the Special Projects cabinet and attach it to the new FIRE tracking slip.

    1. Keep all paperwork associated with the return until there is a good completion. At that point, discard copies of return paperwork.

  11. After posting to the ECC-MEM/SUN, the files are posted to the ATLAS database on a weekly basis by Electronic Data Management Section (EDMS) IT Specialist by choosing Option 29 (Unload records for BLISS) on the Special Projects 200X (Year will change to reflect current tax year) Menu.

  12. After posting to the ECC-MEM/SUN, and FIRE tracking slips are filed numerically by TCC/alpha in the Special Projects file cabinet.

2.7.7.11.1  (01-01-2009)
Submission for Processing

  1. Select Option 10 from the ECC-MEM/SUN Special Projects 200X Menu. You will be prompted as follows:

    1. Enter the number of Allocated Tops Monthly (ATM) to be submitted for processing.

    2. Enter the cycle of processing (2007XX)

    3. Is this correct (Y or N)

    4. System prompts for processing cycle again

    5. Retype the cycle number and press enter

  2. A Batch Control Log is printed to the printer 67AOE117

    1. Take the Batch Control Log to the Special Projects cabinet and pull all paperwork listed. Verify the information against the FIRE tracking slips.

    2. Prepare a fax cover sheet to accompany the Batch Control Log and fax to Master File Scheduling Section (MFSS), ext. 7052.

      Note:

      Make a courtesy call to MFSS to alert them of the faxed Control log.

  3. Create an Informational Note using the Service Center (ITAMS) Application.

    1. Select 'Service and Incident Management' (Red Phone Icon)

    2. Select 'Info Note' at the tab on top right.

    3. Select 'Create Informational note' enter the following fields as listed.

    4. Assignment - EOPS-ECC-OSSVB-MFS

    5. Info Note Title - ATM01

    6. System Name - MBI2

    7. Location - MTB-MCC

    8. Job Run - ATM01

    9. Reported by - Your name

    10. Project - BAW

    11. Details - There are _X_ Production/Test files submitted for processing. X = the number of jobs being submitted for processing

    12. Select 'Save' the Blue Diskette on top toolbar

  4. Log the Informational Note Number of Assignment at the top of your ATM Batch Control Log prior to faxing to MFSS (Master File Scheduling Section).

  5. Update the fax cover sheet designed specifically for Allocated Tips (AT) with the number of pages to be faxed along with the number of jobs being submitted for that cycle.

  6. MFSS will setup and release jobs for processing, and update the informational note when processing of jobs have been completed. If any problems are encountered during processing, the area encountering the problem will update the informational note, and direct to the appropriate area for investigation and resolution.

  7. After the processing of the jobs has completed, follow these steps:

    1. Retrieve the batch of AT jobs from the Special Projects cabinet.

    2. Log on to TSOJ System

    3. Enter LARS.3

    4. On the Joblog DSN search string enter: PLOG.BAW(YYYY) current year C (CC) current cycle Z (Z is the sub-cycle and remains a constant). This locates the requested batch jobs. Example: BAW2008.C03Z

    5. Place an 'S' next to the pass to be selected. Press enter. This will bring up the Production Joblog Summary. Check the field Abend/Stepname to verify message (No Abends).

    6. If No Abends, continue to next step. If Abend, refer to informational note associated with the batch number to determine the problem encountered during processing.

    7. The input to this pass will be specified in the DATASET NAME on the first input line. Example: PDMAG.IATM01.F001.P2112301 (electronic)

    8. Write the PASS ID on the Job Control Log next to the corresponding TCC/alpha.

    9. The output filename for this pass is specified on the same screen on the output line. All output is on disk. Example: PDBAW.BATM01.F011.P2112301

    10. If the job is good, write the output filename on the Batch Control Log.

    11. Press the F3 key on the keyboard to the PRIMARY OPTION MENU.

2.7.7.11.2  (01-01-2009)
Verifying the Job Output

  1. At the Interactive System Productivity Facility (ISPF) Primary Options Menu, enter: DS

    1. Select option 1 for Run DISPATCH

    2. Select 1 - Select all reports to view

    3. Enter on the COMMAND line: 1 oatm0140 to locate the requested report

    4. Locate the current date and pass ID

    5. Place an 'S' next to the selected pass ID and press enter. This will bring up the ATM01 Counts Report

    6. Verify the Total Input (A) record count against the record count on the FIRE tracking slip. These counts should match.

    7. If counts do not match, contact the filer to verify the correct record count.

    8. If the count on the report is correct, update the database to reflect the correct count and request a new Form 4804.

    9. If the count is incorrect, code the file for return to the filer for a replacement.

  2. Compare (C) VALID RECORDS count against the count on the FIRE tracking slip.

    1. If the count is the same or within 90% of the Total - Input, the file is GOOD. Put a 'G' next to the TCC/alpha on the Batch Control Log. No additional reports need to be printed.

    2. If the (B) ERROR RECORDS count is greater than 10% of the (A) TOTAL INPUT, the file is BAD and must be coded for replacement.

    3. Put a 'B' next to the TCC/alpha on the Batch Control Log

    4. Enter on the Command line: 1 oatm0142. This will bring up the 'Tip Income Form 8027 Error Register'. Print 1 copy of 10 pages of the report. This report lists the Element Number (field containing the error) and the Error Data (data in the field).

    5. Enter on the Command line: 1 oatm0143. This will bring up the 'Form 8027 Tape Error' report. Print 2 copies of 10 pages of the report. This report is 'Transcript of Employers Return of Tip Income for TY 2000X (tax year)'

  3. Get an ATM Error Code Listing and fill it in as follows:

    1. TCC #

    2. Media Number or File Name

    3. Check the appropriate Error Codes

    4. Annotate on the FIRE tracking slip the appropriate three-digit FIRE Code

    5. A copy will be filed in the Special Projects cabinet, which should include the AT Error Code Listing, copy of the ATM0140, ATM0142, ATM0143 and any prints.

  4. Access the ECC-MEM/SUN system and update the database with the information from the Batch Control Log.

    1. Go into Option 1 (Access current processing year database)

    2. Press 'Q' for query, enter the TCC code, press Escape (ESC) key to query.

    3. Press 'D' to get to the detail screen

    4. Scroll forward by pressing 'N' or backward by pressing 'P' to get to the alpha you are working on.

    5. Press 'U' to update the status of this record.

    6. If the file is good, tab down to the status field and press 'G'

    7. This will automatically take you to the balance: date field, which will be filled in with the current date.

    8. Press 'Escape (ESC) key' to save changes

    9. If the file is bad, tab down to the status field and press 'B'

    10. Tab down until you get to the problem code fields

    11. Enter the corresponding error codes from the AT Error Code Listing.

    12. Tab down to Times Returned and update accordingly

    13. Press 'Escape (ESC) key' to save changes

    14. Continue with this process until you have completed all of the jobs on the Batch Control Log.

  5. Press 'E' to exit back to the Special Projects Menu to print the letters for the bad jobs that were just entered.

  6. Returns have to be run on the day the database was coded. The following instructions apply to cartridge submissions only.

    1. Choose Option 6 (denied letters)

    2. Remove letters from the high speed printer

    3. Put Media Tracking Slip paper in 67AOE107 and then choose Option 7 (Media Tracking Slip)

    4. Take the letters, tracking slips and match them to the paperwork that needs to be returned.

    5. Take the paperwork and insert into a window envelope (E44C) and seal, keeping the IRS copy separate.

    6. All return envelopes are taken to the shipping desk, keeping foreign addresses separate, and placed in the appropriate mail bin.

    7. Take paperwork and file in TCC order in the Special Projects file cabinet.

    8. The remaining paperwork will be sent to EDMS

    9. All Forms 4804 and Media Tracking Slips for media with a good completion will be sent to EDMS for imaging.

    10. For replacement files, remove all return copies of paperwork before sending to be imaged.

  7. If the FIRE Tracking Slip has a good completion, code '700' for good, initial, date and update the FIRE System.

  8. The FIRE tracking slips with a bad completion will be updated on the FIRE system only after it has been verified that the appropriate FIRE code was annotated and the slip has been initialed and dated. It is the responsibility of the filer to verify file status.

  9. Update ITAM/INFO indicating good file names, and close ticket.

2.7.7.11.3  (01-01-2009)
Reports and Letters

  1. There are two types of test letters running during testing season.

    1. Option 13 (approved test letters) on the Special Projects menu will be run only for tests with a good completion.

    2. Option 17 (denied test letters) on the Special Projects menu will be run only for tests with a bad completion.

  2. An IT Specialist or team leader will run the No Replacement Received Letters starting the first Tuesday of May and continuing every Tuesday until the end of August on a weekly basis. These letters are used as a reminder to the transmitter that they have an outstanding file to be replaced.

    1. Option 19 (no replacement letters) on a weekly basis.

  3. An IT Specialist or team leader will run the No TCC letters once a year on the first Monday of August. These letters are used to inform the transmitter that they have not used their TCC in over two years and will be reassigned if not used.

    1. Choose Option 20 (no TCC letters)

  4. Reports - from the Special Projects 2007 (year will change to reflect current tax year) menu, choose Option 96 (Reports Menu)

    1. Option 1 (Overdue Shipments) will give a report listing files not replaced timely.

    2. Option 2 (Late Filers) will give a report listing files received after due date.

    3. Option 3 (Filer Report/Monday Morning Report) will give a report listing the number of shipments, documents, times returned and type of media filed. Two copies will need to be printed. One copy goes to the IRB Branch Chief and one goes in the Monday Morning report notebook.

    4. Option 4 (Cycle with No Status) will give a report listing all shipments put into a cycle, but the status field is blank.

    5. Option 5 (Replacement Returns Report) will give a report listing all shipments returned to the filer and we have not received a replacement.

2.7.7.12  (01-01-2008)
IRP Penalty Research Requests

  1. QCS receives Penalty Research Requests from the various Service Center Campuses. These requests are faxed to QCS and contain the following payer information for penalty disputes related to magnetic media or electronic filing:

    • Payer name

    • Payer city, state, ZIP

    • Payer TIN

    • Tax year

    • TCC

    • Document Locator Number (DLN)

    • Type of returns

    • Number of payee records

    • Date received

    • Reason for request

    • Database screen print attached

  2. An IT Specialist assigns a request number and forwards the assignment to an QCS Computer Assistant. The assignment is documented on the Penalty Research Log with the following information:

    • Request Number

    • Date received

    • Service Center and contact name

    • Assigned Computer Assistant

    • Date completed

    • Date faxed to service center

    • Any special comments related to the research

  3. Various programs along with the TCB can be used by the Computer Assistant to obtain the supporting documentation for the penalty.

    1. The Computer Assistant searches PMF to locate the DLN and TCC that pertains to the penalty. PMF provides a late date that should be identical to the date on the Request Form and the TCB postmark date. PMF also provides the number of documents filed and the number of documents subject to penalty. If the return was not required to be filed because the dollar threshold was not met, the return will not be subject to penalty.

    2. A History File Search may also be done under the IR.MAG menu to obtain file information for penalty documentation. This is done by selecting the appropriate History Search Tax Year option and entering the appropriate TIN or TCC. If entering the TCC, the appropriate alpha file identifier must be entered to obtain the correct file information.

  4. Once the TCC and file identifier have been located, verify the information on the TCB and print the screen with the postmark date and any corresponding screens that have ship dates, etc., if needed to validate the penalty. Also check the Image Viewer and print any related correspondence if needed.

  5. Late filing penalties may result from filing past the due date of the return or not returning information return files within the prescribed time frames, normally 45 days for magnetic media and 60 days from the time an electronic file was received.

  6. The Computer Assistant will make copies of all necessary documentation and complete the Penalty Research Form with the following information:

    • Payer TIN

    • TCC

    • Payer name

    • Date of receipt

    • Check Box Portion for magnetic media or electronic files:

      • Late Filed Original

      • Payer Control Report

      • Late Filed Replacement

      • Postmark (magnetic media only)

      • File replaced more than two times (magnetic media only)

      • File replaced more than four times (electronic only)

      • TCB screen print

      • Comment with a brief explanation of file history

      • Number of times returned

      • Database screen print attached

2.7.7.13  (06-10-2008)
Waiver Request Processing

  1. This segment describes the steps for processing waiver requests from the filers of information returns. The object is to promote consistency within the IRP in the approval and denial of waiver requests and for the disposition of the pertinent correspondence.

  2. The requirements in this segment apply to the processing of waiver requests in IRB at ECC-MTB.

  3. It is the responsibility of IRB to receive, process, and store information regarding waiver requests for information returns. It is also the responsibility of IRB to determine whether a request is approved or denied, update the waiver database, and notify the filer of the decision.

  4. IRC 6011(e)(2)(A) states all information returns may be filed on the prescribed paper form if fewer than 250 returns are filed. Regulations require that filers who issue 250 or more information returns must file such returns magnetically/electronically. The 250 or more requirement applies for each type of form filed.

2.7.7.13.1  (01-01-2009)
Waiver Appeals

  1. The requirement for filing electronically may be appealed by a filer on the basis of undue hardship. The filer may submit Form 8508, "Request for Waiver from Filing Information Returns Electronically," requesting a waiver for a period of one year. The filer must reapply for each year a waiver is desired. Based on the information provided, a determination to approve or deny the request will be made on a case-by-case basis. If the filer is required to submit information returns electronically and fails to do so, and there is not an approved waiver on record, the filer may be subject to a penalty for failure-to-file electronically.

    • IRS requests Form 8508 be submitted to ECC-MTB at least 45 days before the due date of the return(s) for which they are requesting the waiver. The form must be received by the due date of the return(s). Special consideration is given to those filers whose data was rejected by Social Security Administration (SSA) and/or IRS/ECC-MTB that cannot send replacement electronic files. These filers may submit a waiver request after the due date of the return.

    • The requests for undue hardship waivers will be mailed to:

      IRS-Enterprise Computing Center-Martinsburg

      Information Reporting Program

      240 Murall Drive MS 1360

      Kearneysville, WV 25430

2.7.7.13.2  (01-01-2008)
Processing Requests for Waivers

  1. When waivers for filing information returns electronically are received in IRB, a Computer Clerk removes the request from the envelope, staples it to the envelope, and delivers it to the Extension of Time (EOT) Coordinator.

  2. The EOT Coordinator verifies each Form 8508 contains the required information needed to process the waiver request. All boxes must be completed. If the tax year is blank, it is assumed to be the current tax year. The Computer Assistant/IT Specialist also queries the waiver database to review the filer's waiver history. If the filer has received waivers in the past, cost estimates or any documentation of extenuating situations must be attached.

  3. If some of the required information is omitted, further investigation is required.

    • If there is a contact person and telephone number listed on the Form 8508, call to obtain the missing information.

    • If unable to obtain the information, issue a denial letter to the requestor stating the reason for the denial. Also send a copy of form 8508 highlighting areas where information is missing. The requestor may then submit a new Form 8508 containing all the required information for reconsideration.

  4. Information is entered on the Waiver database. After logging on to a terminal, select the Powerterm icon on Windows and the appropriate options from the menu for entering waivers. This system requires the Computer Assistant to enter a password (preassigned by ECC-MEM) to gain access to the IRB Main Menu. Follow the instructions below:

    • Select Extension and Waivers Menu from the list of options.

      Note:

      Before adding a waiver request to the database, first "Query" the TIN to establish the requestor's waiver history.

    • If a record appears with the same information for the same tax year, the request is a duplicate. Place the duplicate document in a shred container for proper disposal.

    • If the "Query" does not produce a record, select "Add" to enter the request on the database and enter the information from Form 8508 in all the fields on the screen.

    • After all the data is input, press "ESC." A control number and action code will appear on the screen. This information is written on the upper-right corner of the request. The action code indicates whether the waiver is approved or denied.

    • If a keystroke error is made after adding the request, make corrections to the record. Select "Query" and key in either the TIN or the control number. Press "ESC" to find the record in error. Select "Update" and change the incorrect information; then press "ESC." Information may be changed at any time prior to pressing the "ESC" key when first entering the data.

    • For a reconsideration of a denied waiver, select "Query, " enter the TIN or control number, and press "ESC." When the record appears, select "Update" ; enter "R" for reconsideration, the new information, and "ESC." A new action code is generated that is written on the request.

      Note:

      The comment field can be used to document the reason the response was changed.

    • Attach the reconsideration to the original and file.

  5. After the waiver requests have been entered and verified on the database, the data is updated to the letter file.

    Note:

    Since the program sorts entries by type of return and action code, the denial and approval letter file is separated.

    • IT Specialists in EDMS access the system and select the Extension & Waiver Generation Menu. When the menu appears, select "Waiver Database," then "Generate and Print Letters." "Generate and Print Letters" builds a print file and sends output to be printed. "Generate and Print Letters" may be run at any time after a record has been verified.

    • Approval letters are automatically printed first followed by denied letters. The letter sent date and print indicators are then automatically updated in the database.

    • Letters are then reviewed for accuracy by the Computer Assistants and mailed out.

    • Selecting the specific option on the menu generates a statistical report listing waiver requests processed.

  6. Waiver requests are filed by control number and kept on file in EDMS until they are imaged. When all waivers have been imaged, they are placed in shred containers for destruction.

  7. Approved waivers are posted to the Payer Master File (PMF) by an IT Specialist. After logging on to a terminal, select the Powerterm icon on Windows. This system requires a User ID and password to gain access to the IRB Menu.

    1. From the Main Menu, Select 6 Data Unload Menu

    2. From the Unload Menu, Select 3 Approved Waivers

    3. Enter Begin Date (YYYY/MM/DD)

    4. Enter End Date (YYYY/MM/DD)

    A file is generated (appv-waivers. YYYYMMDD). This file is then renamed to 'B102N1.F001PB.WYYYYCC' (YYYY=year; CC=cycle) and sent to the mainframe using FTP. At the prompt, type 'ftp rjftp'. The User ID and password for the Mainframe TEST or J system must be entered. See IRM 2.7.7.14., Extension Request Processing.

2.7.7.14  (01-01-2009)
Extension Request Processing

  1. This segment provides instructions and guidelines regarding the processing of extension requests received from filers of information returns via paper, electronically, or completed online via the FIRE system. The objective is to promote consistency within the IRP in the processing of extension requests and for the disposition of the pertinent correspondence.

  2. It is the responsibility of IRB to receive, process, and store information regarding extension requests for information returns. It is also the responsibility of IRB to determine whether a request is approved or denied, update the extension database, and notify the filer of the decision.

2.7.7.14.1  (01-01-2009)
Reporting Requirements

  1. If an organization fails to comply with specified information reporting requirements on or before the time prescribed, such organization could be penalized for each failure (up to $50 for each document filed late).

  2. The table below shows the due date for filing a Form W-2 with SSA and other information returns with IRS. The chart also delineates when information returns are due to the recipient.

    FORMS Magnetically/Paper Due to IRS/SSA Electronically Due to IRS/SSA Due to Recipient
    Form 1042–S March 15 March 15 March 15
    Form 1098 February 28 March 31 January 31
    Form 1099 February 28 March 31 January 31
    Form 5498 May 31 May 31 Jan 31/May 31*
    Form 5498-SA May 31 May 31 May 31
    Form 5498- ESA May 31 May 31 April 30
    Form 8027 Last day of Feb March 31 January 31 (Shown on W-2)
    Form W-2G February 28 March 31 January 31
    Form W-2 (mailed to SSA) Last day of Feb March 31 January 31


    * January 31 - for value of account/May 31 - for contributions

  3. If a due date falls on a weekend or holiday, the filing date will be the next business day.

  4. If a filer of information returns files electronically, or on paper forms and is unable to submit their data by the filing date, the filer may submit a paper Form 8809, Application for Extension of Time to File Information Returns; fill-out online via FIRE; or submit an electronic extension file.

2.7.7.14.2  (01-01-2009)
Requesting Extensions

  1. Form 8809 must be postmarked, completed online, or /sent electronically no later than the due date of the returns. If a filer files for multiple payers/employers, the request must include a list of all payers/employers and their TINs (Social Security Numbers [SSN] or Employer Identification numbers (EIN) except for electronic/magnetic extensions. See IRM 2.7.7.14.6. Extensions entered online must be completed for each payer See IRM 2.7.7.14.7.

  2. The requests for extension made by letter or Form 8809 are sent to:

    IRS – Enterprise Computing Center-Martinsburg

    Information Reporting Program

    Attn: Extension of Time Coordinator

    240 Murall Drive

    Kearneysville, WV 25430

  3. An approved extension does not provide additional time for supplying a copy of the information return to the recipient. If additional time is needed for the recipient's copy, a separate letter must be sent to ECC-MTB.

  4. Requests for more than 10 payers must be filed electronically or online via the FIRE system. A filer must have a TCC or submit a Form 4419 to obtain a TCC.

  5. Requests for extensions may be filed electronically using the FIRE System. This system can be accessed by using the Internet-based system with the address of http://fire.irs.gov. Form 8809 must be faxed or mailed the same day the file is transmitted.

  6. Requests for extensions may also be completed online using the FIRE system.

2.7.7.14.3  (01-01-2009)
Processing Paper Extension Requests

  1. When paper extension requests (Form 8809 or Recipient) are received in IRB, Computer Clerks remove the requests from the envelopes, staple them to the envelopes, and place them in a container for review.

  2. The Computer Assistant/IT Specialist verifies that each letter or Form 8809 contains the required information needed to process the extension request.

    Note:

    Recipient extension requests require a reason for the request and a signature.

  3. If required information is omitted, further investigation is conducted. The following steps are taken at the discretion of the reviewer as time allows.

    • If tax year is blank, assume the EOT is for the current year.

    • If a TCC is provided, search the TCB for needed information.

    • If the required information cannot be located on the TCB, call the contact person listed on the request to obtain the information.

    • If the first two methods above fail, issue a denial letter to the requestor stating the reason for the denial. The requestor may then submit a new letter or Form 8809 containing all the pertinent information for reconsideration.

  4. Sort the extension requests that contain all the required information into batches of approximately 50 TINs. Assign a batch number and record each batch on a log sheet. When batches are pulled for data entry and verification, initial and date the log sheet.

  5. Computer Assistants enter the data on the extension database. After logging on to the terminal, select IRP Home Page Shortcut http://t2apps.mcc.irs.gov/irp/irphomepage.aspx. .

    1. Select the Extension Main Menu from the menu. Before adding an extension request to the database, search the TIN on the request to check for a duplicate submission. If a record appears with the exact same information for the same tax year, the request is a duplicate. Write the control number and "duplicate" on the request, and place it back in the batch. If the request contains new information, such as an additional form or TIN, update the record with the new information. Change or add the new information, then click "Add" or "Update" . The control number remains the same. Write the control number on the request and indicate the changes/updates. A new letter will be generated reflecting the changes.

    2. If the information on Form 8809 contains a different address and contact but all other information is the same, follow the instructions above for "duplicate" requests.

    3. If the "Search" does not produce a record, enter the information from Form 8809 or letter in the fields on the screen and click "Add."

    4. A control number and action code will appear on the screen. Write this information on the upper-right corner of the request. The action code indicates whether the request is approved or denied.

    5. When an extension contains a list of additional payer requests, check the "Multiple Payer" box and then "Multiple Payer Table" in upper-right corner. Enter the additional name and TIN, and click "Add." Continue to "Add" until all the additional names and TINs are input. Then select "View Master Record" to return to the main entity record where the next request can be input.

    6. If a keystroke error is made after adding the request, but before the batch goes to verification, the Computer Assistant can make corrections to a record. Key in the TIN and click "Search TIN" to find the record in error. Change the incorrect information, then click "Update." Information may be changed at any time prior to pressing the "Add" key when first entering the data.

    7. For reconsideration of denied requests or requests for additional time, pull the original request from the files. On the database, enter the TIN, and click "Search TIN." When the record appears, enter "R" for reconsideration or "A" for additional time, enter the new information, and click "Update." A new action code is generated that is written on the request. The request is then filed with the original.

  6. After entering the batch on the Extension database, place them in the verification container. Batches are then distributed for key verification of TINs, name, address, and type of return information. To correct any errors, take the following actions:

    • Search the TIN on the request. When the record appears, verify all of the information. If the information is correct, click "Record Verified."

    • If no record appears when the TIN is searched, this indicates an error. Search on the control number. When the record appears, select "Update," change the TIN and any other incorrect information, and click on "record verified."

    • When the entire batch has been verified, initial and date the log sheet and place it in the container to be printed.

2.7.7.14.4  (01-01-2009)
Verified Extension Requests

  1. Paper extension requests, that have been entered and verified, receive a letter of approval or denial. Extensions are filed by control number and stored in locked filing cabinets located in the EDMS of IRB.

  2. Most extensions are granted for a maximum of 30 days. In cases involving catastrophic events, an additional 30 days may be approved. Extension requests for Real Estate Mortgage Investment Conduits (REMIC) filed on paper receive an automatic 60-day extension of time to file. Only designated IT Specialists or IRB managers may approve requests beyond the original 30-day period. Requests are entered on the database and are approved or denied based on the determination made by the authorized persons. If the request is received and postmarked after the due date of the return, it is considered late. The request is entered on the database and a denial letter is generated and sent to the filer. Requests for additional time to file must be postmarked by the extended due date to be considered.

  3. Extension requests are kept on file in EDMS until they are imaged. After the extensions have been imaged, they are placed in shred containers for destruction.

2.7.7.14.5  (01-01-2009)
Printing/Uploading Extension Requests

  1. When the batches of extension requests have been entered and verified, the data is updated to the letter print file. Since the program sorts entries by type of return and action code, the denial or approval letter file is separated.

    • IT Specialists in EDMS access the system, select Letters and Reports under the computer Specialist Options, select Approval/Denial Letters and print.

    • Letters are printed by type, that is, denied, approved, recipients, or multiple listings. This may be run at any time. The sequence is not critical.

    • Daily reports are generated by selecting specific options on the menu. Listings can be generated showing the number of extensions processed and statistics pertaining to them.

    • Multiple payer listings are matched to the appropriate denial or approval letters by control number. Letters, that should have listings attached, are coded with an asterisk after the control number.

    • Letters are given to Computer Clerks to be mailed using the automatic letter stuffer/sealer machine. Letters with multiple listings are manually prepared for mailing.

  2. Approved paper extensions are posted to PMF by an IT Specialist. After logging on to a terminal, select the Powerterm icon on Windows. This system requires a User ID and password to gain access to the IRB Menu.

    1. From the Main Menu, Select 6 Data Unload Menu

    2. From the Unload Menu, Select 4 Approved Extensions

    3. Enter Begin Date (YYYY/MM/DD)

    4. Enter End Date (YYYY/MM/DD)

    A file is generated (appv-exten.YYYYMMDD). This file is then renamed to 'B102N1.F001PA.WYYYYCC' and sent to the mainframe using FTP. At the prompt, type 'ftp rjftp'. The User ID and password for the Mainframe TEST or J system must be entered. See IRM 2.7.7.14.8. for processing.

2.7.7.14.6  (01-01-2009)
Processing Electronic Extension Requests

  1. Extension files received via the FIRE system that have been uploaded to the mainframe must be verified with the information on Form 8809. When an original file is transmitted electronically, the filename begins with EXTO. If a filer is transmitting a request for a second extension (filename EXTS), the approval/denial information is entered on the AWAX Database (ADB) by EDMS according to information on Form 8809.

  2. Each extension file received is posted to the mainframe with the TCC and sequence number (i.e., 44444A1). EDMS updates each shipment record on the ADB, approving or denying each document type the filer indicated on Form 8809. The following fields are updated on the Extension Log from the information on the Form 8809:

    • Fields 030, 035, 040, 050, 051, 052, 060, and 070 should be compared to Form 8809 and changes made as necessary.

    • Field 090 = M (paper); E (electronic) - indicates how the information return records will be filed. Based on the original due date of the return(s), the extended due date(s) will be determined by the filing type indicated in field 090.

    • Fields 160-166 = document approval/denial per Form 8809. Update these fields as A130 (indicating approved first 30 days) or A230 (a request for second 30 days). A denied document is updated as D130. Update Field 164 as A160 or D160 (REMIC filed on paper receives a 60-day extension). Field 400 = X (indicates Form 8809 was received).

  3. Automated Magnetic Media Processing System (AWAX) processing is scheduled once a week as follows:

    AWX-10 Schedule all available shipment/files for processing
    AWX-20 Validation of jobs (errors for count mismatch, multiple TCCs, etc.)
    AWX-26 Approval/denial files and payer listings

  4. Upon completion of AWX-20, any shipment files with errors must be researched. This research may result in canceling a shipment or coding the shipment to be replaced with a good file. Research of count mismatches or document types may result in ADB field updates and reprocessing the file. AWX-26 is processed on Thursdays and the following lists are produced:

    AWX26–40 Approved Extension of Time
    AWX26–41 Denied Extension of Time
    AWX26–42 Shipment Summary-Page

  5. When a shipment is complete, a listing of approved multiple payers and/or a denied listing of multiple payers is generated. A letter granting approval or denial is generated from data entered on the Extension database. The letter and corresponding listing is mailed to the transmitter. Field 262 of the ADB is updated with the shipment date. The shipment summary is attached to Form 8809 and is filed in TCC order in EDMS.

  6. If a complete shipment has been denied, a letter is generated informing the transmitter they have 20 days to send a corrected file. A courtesy call is made to the filer to notify them of the problem. The shipment record on the ADB is updated in field 261 with an "X" indicating a return has been requested; field 262 is updated with the date of the returned documentation. If a replacement file is not received timely, the transmitter is called concerning the status of the file. When the replacement file is received, the shipment is logged on the ADB as a new shipment. Field 264 on the original shipment record is updated with the replacement TCC.

  7. Reports are generated daily and weekly for shipment tracking and problem resolution as follows:

    AWX23–40 Daily Report of Electronic Files
    AWX23–41 Daily Report of Unprocessed Electronic Files
    AWX28–40 AWX-20 Error Report
    AWX28–41 Cannot Schedule Shipment Report
    AWX28–42 Cancelled/Returned Shipment Report

  8. Any Form 8809 requesting extensions electronically are filed in EDMS until they are imaged; then they are placed in shred containers for destruction.

  9. All electronic media extension files are processed on the mainframe.

2.7.7.14.7  (01-01-2009)
Processing Online Extension Requests

  1. Form 8809 may be completed online via the FIRE system at http://fire.irs.gov. If the user already has an established account, they just click on 'Log On' and follow the menu; otherwise, they would click on 'Create New Account' and establish their User ID, password and PIN.

  2. At the Main Menu, click 'Extension of Time Request', click 'Fill-in Extension Form' and follow the menu.

  3. This option is only used to request an automatic 30-day extension. Approvals are displayed online if all required information is filled in.

  4. There is no limit to how many online extensions may be entered; however, filers must complete an online Form 8809 by the due date of the return. See IRM 2.7.7.14.1.

  5. If a filer files for multiple payers/employers, an entry must be made for each payer.

  6. This option becomes available the first week of January for the current tax year.

  7. Requests for additional time or recipient extensions must be submitted using a paper Form 8809. See IRM 2.7.7.14.3. for the tax year selected.

  8. Research can be done on these requests through FIRE CSR by an IT Specialist. At the Main Menu, click 'Fill-In Extension', click 'Fill-In Extensions Search'. The online extension may be searched by User ID, TIN or Payer Name and then click on Search button.

  9. Due dates can be updated by an IT Specialist only using the 'Update Extended Due Dates' option through FIRE CSR. At the Main Menu, click 'Fill-In Extensions', and then click 'Update Extended Due Dates'. After a new due date is entered, click on 'Submit' button.

  10. Extension Reports can be generated through FIRE CSR. At the Main Menu, click 'Fill-In Extension', and then click 'Fill-In Extension Reports'. Four report options are available:

    1. 8027 reports (Current & Prior Year)

    2. Approved Fill-In Extensions

      1. Daily - select the day from the calendar and click 'Generate'.

      2. Yearly - select the ending day from the calendar and click 'Generate'.

    3. Submitted Fill-In Extensions - produces the total User ID Count report for the tax year selected.

    4. Extensions not yet uploaded.

  11. When the N run programs are ready to process extension requests and post them to the Payer Master File (PMF), an IT Specialist will create the file to send extension information to the mainframe. At the Main Menu, click 'Fill-In Extension', and then click 'Create File for Upload'. Enter the cycle for the mainframe processing. Acceptable values are 01 through 52. Select the start date and end date from the calendar and click on the 'Submit' button. This will send the extension information to the mainframe in order to process and post. The file name for online extensions is 'PDMAG.B102N1.F001PC.WYYYYCC'. See IRM 2.7.7.14.8. for processing.

2.7.7.14.8  (01-01-2009)
N Run Processing/Unpostables

  1. BAW-102N1 runs will process valid extension/waiver approved dates in order to post to PMF. A transmittal memo is prepared on the mainframe to include all dataset files for approved extensions/waivers and for approved online extensions.

  2. To create an ENDEVOR package:

    1. Log on to mainframe J system and at main menu enter 'EN'.

    2. Enter 2 for DEVS then 2 for FOREGROUND.

    3. Enter 2 for Add/Update

    4. Enter A for Add an Element and enter new element name and transmittal memo name.

    5. Enter S for Submit

    6. Exit (PF3) to Primary Option Panel and enter 4

    7. Enter 2 for Create/Modify and enter package ID

    8. Enter B for Build Package Actions

    9. Enter 5 for move.

    10. Enter O for Move element and enter element name.

    11. After message SCL generated, exit (PF3) until Package foreground Options Menu appears. Enter 3 for Cast.

    12. Enter C for Cast Package and exit (PF3)

    13. An e-mail is then sent to Management to Approve package and to Systems Control Point (SCP) to Schedule job.

  3. Any records that do not post to PMF will be output to BAW-102N2. In addition, a BMF/IMF transcript (160-13-13) will also be produced for viewing under CA Dispatch. Log on to the mainframe J system and enter DS at Main menu. Enter 1 for Run Dispatch and 2 Select All Records to View. Enter O1601313 after Report and press enter.

  4. The 102N2 listing will print on IRB1. EDMS will research and attempt to correct the records that do not post. Discrepancies may be resolved by viewing the transcript, submitting PMF searches and/or contacting the payer.

  5. To correct an unpostable, log on to the mainframe J system and enter IR.MAG.6.3. Enter key number (TIN followed by a sequence number 001, 002, etc.) and press enter. Enter U (Update) beside Option. Beside Name Control, enter new 4 character name control and enter 'C' in the Corrected Unpostable Ind field. Press enter.

  6. All corrected unpostable records are sent back through BAW-102N3 for posting to PMF. An e-mail is sent to SCP to schedule an N3 run.

  7. Logs are maintained to document each cycle and number of records posted, number of unpostable records, and number of corrected records. PMF is also checked to ensure the N runs processed successfully.

2.7.7.15  (01-01-2008)
Backup Withholding Program

  1. The Backup Withholding Program (BWH), Treasury Regulation 31.3406(d) - 5(c), provides notices to payers (a financial institution, business, or person) who file information returns with missing or incorrect name/TIN combinations.

  2. The Notice CP2100/CP2100A advises payers that Backup Withholding could be necessary if payees (recipients of Forms 1099) fail to certify their TIN(s).

  3. The Notice CP2100/CP2100A also lists accounts with Missing and/or Incorrect Payee Name/TIN combinations. Payers with missing TIN accounts must begin backup withholding immediately under Internal Revenue Code Section 3406(a)(1)(A).

  4. Large payers (those who have 250 or more error documents) receive Notice CP2100 and CD/DVD. Mid-size filers (those with fewer than 250 error documents but greater than 50) receive a Notice CP2100 and a paper listing. Small filers (those with fewer than 50 error documents) receive a Notice CP2100A and a paper listing.

  5. The BWH program includes Forms 1099-B, DIV, G, INT, MISC, OID, PATR and W-2G information returns.

  6. Under the present program, there are two mailings for each tax year. A staggered one in September/October and another in April of the following year.

2.7.7.15.1  (01-01-2008)
Mail Procedures

  1. Prior to the mailing, the Small Business/Self-Employed (SB/SE) Program Analyst will provide to ECC-MTB a Tax Year (TY) Production Schedule, volumes of Notice CP2100A/CP2100 and CD/DVD's.

  2. For the September/October mailing, the CSS Manager will provide the National Office Program Analyst with a schedule for the staggered mailing of the CP2100/CP2100A Notice. This schedule will be determined by the Chief, CSS, along with the National Office Program Analyst.

  3. The IT Specialist, QCS and/or Computer Assistant will check the inventory and order any necessary supplies. Supplies are then forwarded to the Lead Project Coordinator, SOD/MMS for mailing.

  4. The Lead Computer Assistant, SOD/MMS will contact the QCS Team Leader and/or IT Specialist upon completion of the printing of mail labels for validation of names and addresses. The Lead Computer Assistant, SOD/MMS will also print the first and last CD/DVD's of each pass to ensure that the information matches the labels and that the cartridges contain valid data.

2.7.7.15.2  (01-01-2009)
Backup Withholding Undeliverable Notification

  1. The Lead Project Coordinator, Mainframe Operations Section, will provide, via e-mail, a list of returned CD/DVD’s and the reason for the returns.

  2. The IT Specialist, QCS and/or Computer Assistant will research the undeliverable CD/DVD's to obtain the new address.

  3. The original date on the undeliverable notice should not be changed. Filers will have 15 business days from the date of receipt to complete all required mailings to the recipient.

  4. If no new address is found, the undeliverable notice is filed by MMS. The listing and original envelope with the printed file copy will be destroyed 90 days after the notice date.

2.7.7.15.3  (01-01-2009)
Backup Withholding Recreate Notification Request

  1. Payers contact the IRB to request recreates of Notice CP2100 or CP2100A. These requests must be received no earlier than two weeks after the date of the last notice mailing unless the paper listing was missing or the CD/DVD was damaged, in which case the recreate is requested immediately.

  2. The retention period for Notice CP2100 or CP2100A is four years from the original notice date.

  3. An e-case will be created in the EHSS system for taxpayers requesting a recreate. The e-case will be assigned to an IT Specialist of Computer Assistant in QCS.

  4. The IT Specialist, QCS and/or Computer Assistant will determine how to handle the recreate based on the number of payees on the listing.

    1. If the listing is 250 or more (CD/DVD), the request will be handled as follows:

      1. For a change of address, the payer must send the original signed Form 8822 to the appropriate IRS center and fax a copy to QCS. After the Form 8822 is received by QCS, the Computer Specialist or Computer Assistant, can update the print screen on the TCB and submit the request.

      2. The QCS Specialist will notify SOD/MMS via e-mail of a recreate. The e-mail will contain the TIN Diskette #, Taxpayer name, Tax year, and Type of Notice. The QCS Specialist will follow up with a copy of the notice, database screen and mailing label and send to SOD/MMS for mailing. SOD/MMS will respond via e-mail when the CD/DVD was shipped.

      3. QCS will add the recreate information to an Excel spreadsheet that is located in the IRB folders.

    2. If the listing is 249 or less (paper), address changes will be handled as follows:

      1. For a change of address, the payer must send the original signed Form 8822 to the appropriate IRS center and fax a copy to QCS. After the Form 8822 is received by QCS, the Computer Specialist or Computer Assistant, can update the print screen on the TCB and submit the request.

      2. When the screen is updated, the information will be placed in an inventory file that is scheduled to be sent bi-weekly to the campuses. An e-mail will be generated to the IT Specialist at the campus informing them that a recreate request was sent over the print queue.

      3. Upon receipt of the file, the campuses will mail the recreates. After mailing the recreated notices from the print job, the campuses will notify the QCS IT Specialist about the status.

      4. QCS will update the Excel spreadsheet with information from the campus e-mail.

      5. By reviewing the data screen, the IT Specialist, QCS can track the history of recreate requests for a unique TIN.

      6. In addition to reviewing the data screen for historical information, three reports will be created for use by the IT Specialist, QCS:

        • Call Site Workload Report

        • Notice Frequency Report

        • Payer Frequency Report

2.7.7.16  (01-01-2006)
Incorrect Information Penalty Program

  1. Notice 972CG, Notice of Proposed Civil Penalty, is mailed to give payers an opportunity to establish Reasonable Cause for Waiver of Penalties Prior to Assessment.

  2. The notice may include Proposed Penalties for Late Filing, Failure to File on Magnetic Media and Missing and/or Incorrect Payee Name/TIN combination.

  3. Notice 972CG will be assigned a reference code that corresponds to the penalty proposed, e.g., reference number 500 is for the late filing penalty.

  4. Payers are allowed 45 days to respond to the notice and to provide a written explanation as to why the penalty should not be assessed. The payers may also submit a payment if they fully or partially agree, or sign a consent statement to allow the service to send them a bill for the balance due.

2.7.7.16.1  (01-01-2009)
Documentation Procedures

  1. The IT Specialist, QCS, receives a listing from the SB/SE IT Specialist, which identifies electronic and magnetic files that were not filed timely.

  2. Validation of the penalties requires that the IT Specialist and/or Computer Assistant, QCS, research various programs, such as Payer Master File (PMF), Form 4804, and the History File on the Transmitter Control Database (TCB).

    1. Upon completion of this research, a Penalty Research Form is completed and mailed to the designated Hub Site

    2. A listing of Denied Extensions and Waivers for Forms W-2 and Forms 1099 is also mailed to the Hub Site.

  3. The designated Hub Site produces a sample of Notices 972CG for review. The notices include proposed penalties for late filing, missing and incorrect Names/TINs, and failure to file electronically.

  4. The Hub Site review includes a comparison of Notice 972CG to taxpayer documents, PMF transcripts, and other reference materials to validate the accuracy of the notice programs.

  5. The IT Specialist, QCS, will contact the IT Specialist, MFSS, and the Computer Assistant, Production Control, to provide an additional listing of all approved Extensions and Waivers for Forms W-2 and Forms 1099.

  6. The National Office Program Analyst sends ECC-MTB IT Specialist, MFSS, the JCL to execute the listing. After the job is set up in JCL, Production Control and/or the Command Center executes the job to print the listing.

  7. After the HUB Test Review, the National Office Program Analyst will provide a TY Incorrect Information Penalty Program memorandum to ECC-MTB. This memorandum provides information on the mailing schedule, notice dates, and the file numbers for Notice 972CG. The memorandum also provides instructions on what information is needed from ECC-MTB. It provides the following instructions for the designated Hub Site to mail copies of the Notice 972CG to ECC-MTB:

    1. One copy is shipped express to IRS/Enterprise Computing Center, Attn: Designated IT Specialist, Mail Stop 1360, 250 Murall Drive, Kearneysville, WV 25430

    2. One copy is shipped express to IRS/Enterprise Computing Center, Attn: Designated MMS Lead Coordinator, Mail Stop 1122, 250 Murall Drive, Kearneysville, WV 25430

  8. The IT Specialist, QCS and/or Computer Assistant will check the inventory and order any necessary supplies and forward them to the Lead Project Coordinator, MMS.

  9. The Lead Project Coordinator, MMS, will contact the QCS Team Leader and IT Specialist and/or Computer Assistant upon completion of the printing of mailing labels for validation of names and addresses. The Lead Computer Assistant, MMS, will also print the first and last reel of each pass to ensure the information matches the label and the CD/DVD contain valid data.

2.7.7.16.2  (01-01-2009)
Notice 972CG Undeliverable Notification

  1. The Lead Project Coordinator, MMS, will provide, via e-mail, a list of returned CD/DVD's and the reason for the returns.

  2. The IT Specialist, QCS/Computer Assistant will research for a new address. If a new address is found, it will be e-mailed to the Lead Project Coordinator, MMS.

  3. The Coordinator will stamp the current date on the notice and re-mail. The IT Specialist, QCS, will change the date on the file copy to ensure that the payer is allowed 45 days to respond before the assessment of the penalty.

  4. If a new address is not found, the undeliverable notice is filed with the original envelope and the file copy of the Notice 972CG. The copies will be destroyed 90 days after the notice date.

2.7.7.16.3  (01-01-2009)
Notice 972CG Recreate Notification Request

  1. Payers contact the IRB to request recreates of Notice 972CG. These requests must be received no earlier than two weeks after the date on Notice 972CG unless information is missing from the penalty notice in which case a recreate is requested immediately.

  2. The retention period for Notice 972CG is four years from the original notice date.

  3. An e-case will be created in the EHSS system for taxpayers requesting a recreate. The e-case will be assigned to an IT Specialist or Computer Assistant in QCS.

  4. For paper notice recreate requests:

    1. For a change of address, the payer must send an original copy of Form 8822 to the appropriate IRS center and fax a copy to QCS. Once the Form 8822 is received by QCS, the Computer Specialist or Computer Assistant, can update the print screen on the TCB and submit the request.

    2. The IT Specialist, QCS, and/or Computer Assistant will take the recreate request for both paper and CD/DVDs.

      • For CD/DVD recreates, QCS will notify SOD/MMS via e-mail of a recreate. The e-mail will contain the TIN, UD#, taxpayer name, tax year, type of notice. QCS Specialist will follow up with a copy of the notice, database screen and mailing label and send to SOD/MMS for mailing. SOD/MMS will respond via e-mail when the CD/DVD is shipped.

      • For paper recreates, QCS will submit an endeavor package weekly. The job will be processed through MFSS. After the job is completed, output will go to Control D. A QCS Specialist will then release the notices from Control D for printing and mail the notice to the customer.

      • QCS will add the recreate information to an Excel spreadsheet that is located in the IRB folders.

    3. One hundred and eighty (180) days from the issue of the notice, the IT Specialist, QCS and/or Computer Assistant will fax requests to the Program Analyst, National Office.

  5. For CD/DVD recreate requests:

    1. For a change of address, the payer must send the original signed Form 8822 to the appropriate IRS center and fax a copy to QCS. Once the Form 8822 is received by QCS, the Computer Specialist or Computer Assistant, QCS, can update the print screen on the TCB and submit the request.

    2. The IT Specialist, QCS and/or Computer Assistant will fill out the Log for Recreates and Recreate form from information taken from the Data Screen. Original copies are forwarded to the IT Specialist, MFSS to process. Copies are maintained for the file in QCS.

2.7.7.17  (01-01-2006)
Bad Payer Procedures

  1. This segment provides requirements for the processing of bad payer information received at ECC-MTB/IRB from companies whose customers have or have the potential to receive Underreporter Notices (Notice CP2000) from the Internal Revenue Service (IRS). At times, the campus working Underreporter cases will also call IRB for special research and guidance.

2.7.7.17.1  (01-01-2009)
Underreporter Inquiries

  1. Upon receipt of the Underreporter inquiries, the IT Specialists in QCS control, research, and verify bad payer information. This could involve researching the database files, accessing the PMF and the Information Returns Master File (IRMF), contacting the payer, and utilizing other resource documents and files.

  2. Most Underreporter inquiries are received in IRB by phone calls or letters from payers or transmitters. Generally, customers who receive Underreporter Notices (CP2000 Notices) proposing increases in their tax liability alert the payers/transmitters to possible problems.

  3. The Underreporter Payer/Agent List is an accumulated list of payers identified as having information returns erroneously filed or incorrectly formatted or processed, by ECC-MTB/IRB. The list is maintained and updated by the Underreporter areas of each campus. It is used by Tax Examiners to suppress erroneous Underreporter Notices that link to specific payers with problems identified on the list.

2.7.7.17.2  (01-01-2009)
Bad Payer Transmissions

  1. Form 8647, Underreporter Bad Payer Data Transmittal Sheet, identifying the payer, payer's TIN, type and volume of documents, contact name and phone number, and details of the problem is completed by the IT Specialist in QCS to document the error(s).

  2. The Underreporter cases at the campus are worked in batches. Customers receiving notices from the early batches generally alert the payer/transmitter to filing or processing problems. The role of the IT Specialist in QCS is to work with the payer/transmitter to identify and confirm the problem(s) and to notify the Underreporter Coordinators so additional erroneous notices are suppressed by the Tax Examiners.

2.7.7.17.3  (01-01-2009)
Processing Underreporter Inquiries

  1. When Underreporter inquiries are received at ECC-MTB/IRB, the IT Specialist in QCS will:

    • Have the payer complete Form 13460, Employer/Payer Information, to ensure there is written documentation outlining the problem.

    • Investigate the circumstance of the notice identified on Form 13460 by accessing the appropriate master files or the IRB database in order to identify or confirm the error.

    • Complete Form 8647 to document the error.

    • e-mail (with secure-messaging) Form 8647 to the Underreporter Coordinators at the Atlanta and Ogden Campus using the contact names noted in the front of the IRB control book.

    • Log Form 8647 information in the IRB control log (online spreadsheet) indicating the e-mail date.

    • Call to advise the payer/transmitter to send letters of explanation of the problem to customers who have received notices. These letters must include the payer/transmitter's name and contact information, the customer's name, TIN, type of form, the correct money amount, and a brief explanation of the problem. A copy of the original or corrected Form 1099 may also be included. Customers should be instructed to send copies of the letter and the notice to the campus address on the notice.

    • File all documentation associated with the call with a hard copy of Form 8647 in the Branch files.

    • Research occasional inquiries from Tax Examiners at the campuses using resources available in IRB. The IT Specialist in QCS can access processing information not available at the campuses that may help explain or resolve a problem.


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