3.21.3. Individual Income Tax Returns

(1) This section of the Internal Revenue Manual (IRM) provides instructions for coding and editing individual income tax returns for transcription and validation. Special codes are used to perform specific functions. Editing is necessary because many returns are incomplete, contain invalid or misplaced entries, or are computed incorrectly.

(2) This IRM contains instructions for processing international returns using the following form types:

• Form 1040, U.S. Individual Income Tax Return

• Form 1040 (sp), Declaración de Impuestos de los Estados Unidos Sobre los Ingresos Personales

• Form 1040-SR, U.S. Tax Return for Seniors

• Form 1040-SR (sp), Declaración de Impuestos de los Estados Unidos para Personas de 65 Años de Edad o Más

• Form 1040A, U.S. Individual Income Tax Return (TY17 and prior)

• Form 1040-EZ, Income Tax Return for Single and Joint Filers with No Dependents (TY17 and prior)

• Form 1040-NR, U.S. Nonresident Alien Income Tax Return

• Form 1040-NR (sp), Declaración de Impuestos sobre los Ingresos de Extranjeros No Residentes de los Estados Unidos

• Form 1040-NR-EZ, U.S. Income Tax Return for Certain Nonresident Aliens With No Dependents (TY19 and prior)

• Form 1040-SS, U.S. Self-Employment Tax Return (Including the Additional Child Tax Credit for Bona Fide Residents of Puerto Rico)

• Form 1040-SS (sp), Declaración de Impuestos Federal sobre el Trabajo por Cuenta Propia (Incluyendo el Crédito Tributario Adicional por Hijos para Residentes Bona Fide de Puerto Rico)

• Form 1040-PR, Declaración de Impuestos Federal sobre el Trabajo por Cuenta Propia (Incluyendo el Crédito Tributario Adicional por Hijos para Residentes Bona Fide de Puerto Rico) (TY22 and prior)

• Supporting forms and schedules for the forms listed above

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

• IRC 6201(a)

• IRC 6213(b)

• IRC 6402(a)

• IRC 6511

(2) Policy Statements for Submission Processing are contained in IRM 1.2.1, Servicewide Policy Statements.

(1) The Submission Processing Director is responsible for monitoring operational performance for the Service Center.

(2) The Document Perfection Operations Manager is responsible for monitoring operational performance for the Code and Edit operation.

(3) The Code & Edit Team Managers and Leads are responsible for performance monitoring and ensuring tax technicians have the tools to perform their duties.

(4) The tax technicians are responsible for following the instructions contained in this IRM, including all IRM procedural updates (IPU) posted to the SERP (Servicewide Electronic Research Program) website.

(1) Program Reports: The Monitoring Section under Submission Processing Program Management/Process Assurance monitors the Code & Edit reports.

(2) Program Effectiveness: The program goals are measured by the following reviews:

• Embedded Quality Submission Processing (EQSP)

• Balanced Measures

• Managerial Reviews

(3) Annual Review: The processes included in this manual are reviewed annually to ensure accuracy and promote consistent tax administration.

(1) See Exhibit 3.21.3-20 for the glossary of frequently used terms.

(1) International Job Aid 2513-701, Coding and Editing International Income Tax Returns, was developed as a reference guide for this manual. This manual refers the tax examiner to clarifying information or exhibits in the Job Aid, where appropriate. When conflict between any referenced material and the IRM instructions occurs, the IRM instructions take precedence.

(1) Form 1042 Annual Withholding Tax Return for U.S. Source Income of Foreign Persons and Form 1042-S Foreign Person’s U.S. Source Income Subject to Withholding are used by withholding agents to report tax withheld at the source on certain income paid to foreign persons (nonresident alien individuals, foreign partnerships, foreign corporations or foreign trusts and estates) that is not effectively connected with the conduct of a trade or business in the United States. Form 1042-S is a withholding document that identifies, by type, income that is subject to U.S. tax withholding and that is paid to nonresident aliens by U.S. payers.

(2) See Exhibit 3.21.3-2, Form 1042-S Income Codes, to determine where the provided Income Code is to be reported on Form 1040-NR.

(3) If Form 1042-S is attached to Form 1040:

(1) Individuals may be expected to file international returns for a variety of conditions. More than one condition may be met by a single taxpayer. Generally:

• Taxpayers who are treated as resident aliens file Form 1040.

• Taxpayers who are treated as nonresident aliens file Form 1040-NR.

  Note: Special filing requirements often apply to U.S. territories.

(2) U.S. citizens living/traveling outside of the United States: They are generally required to file U.S. income tax returns on which they must report their worldwide income.

(3) Resident Alien: A foreign individual who meets either the green card test or the substantial presence test for the calendar year.

(4) Nonresident Alien: A foreign individual who does not meet either the green card test or the substantial presence test for the calendar year, unless:

1. They choose to be treated as a resident alien for part of the calendar year by making the First-Year Choice (see IRM 3.21.3.3.2 (12), or

2. They are a nonresident married to a U.S. citizen or resident alien. They and their spouse may be able to make a joint election under IRC 6013(g) or (h) to treat the individual as a resident alien for the entire calendar year. See IRM 3.21.3.3.2 (12) and IRM 3.21.3.3.2 (13) below.

(5) Green Card Test: The individual is a resident alien once they are issued a Permanent Resident Card, also known as a green card as a lawful permanent resident of the U.S. Lawful permanent residency continues unless revoked or determined to be abandoned. A lawful permanent resident may be treated as a nonresident alien for U.S. income tax purposes if they are both a U.S. resident alien and a resident of a foreign country under its laws. In this situation, the taxpayer would claim treatment as a resident of the foreign country under the tie-breaker rules of an income tax treaty.

(6) Substantial Presence Test: The individual is treated as a resident alien for the calendar year if they are physically present for at least:

1. 31 days during the current calendar year; and

2. 183 days during the 3 - year period that includes the current calendar year and 2 calendar years immediately before that, counting:
   1) All the days of physical presence in the calendar year,
   2) 1/3 of days of physical presence in the first year prior to the current calendar year, and
   3) 1/6 of the number of days of physical presence in the second year prior to the current calendar year.

(7) Exceptions to the Substantial Presence Test: The following days of presence in the United States do not count for the substantial presence test:

• Days commuting to work in the United States from a residence in Canada or Mexico if they "commute regularly." They "commute regularly" if they commute to work in the United States on more than 75% of the workdays during a working period in the current year.

• Days in the United States for less than 24 hours when in transit between two places outside the United States.

• Days in the United States as a crew member of a foreign vessel engaged in transportation between the United States and a foreign country or a U.S. territory.

  Note: This exception doesn't apply if otherwise engaged in any trade or business in the United States on those days.

• Days they intended to leave, but couldn't leave the United States because of a medical condition or medical problem that arose while in the United States. Whether they intended to leave the United States on a particular day is determined based on all the facts and circumstances.

  Note: See IRM 3.21.3.41.5 for information on determining physical presence.

• Days the individual is an "exempt individual."

(8) Exempt Individuals for the Substantial Presence Test: An individual is an "exempt individual" if any of the following are true:

• An individual is temporarily present in the United States as a foreign government-related individual under an A or G visa.

  Exception: Excludes household staff of a foreign government-related individual present in the United States under an A-3 or G-5 visa.

• A teacher or trainee temporarily present in the United States under a J or Q visa. See IRM 3.21.3.3.2 (9) and IRM 3.21.3.3.2 (10) for additional information.

• A professional athlete temporarily present in the United States to compete in a charitable sports event.

(9) An individual is not an exempt individual as a teacher or trainee if they were exempt as a teacher, trainee, or student for any part of 2 of the 6 preceding calendar years, unless all are true:

• The individual was exempt as a teacher, trainee, or student for any part of 3 (or fewer) of the 6 preceding calendar years

• A foreign employer paid all compensation during the current year

• They were present in the United States as a teacher or trainee in any of the prior 6 years

• A foreign employer paid all compensation during each of the preceding 6 years the individual was present in the United States as a teacher or trainee.

(10) A student temporarily present in the United States under an F, J, M, or Q visa is not an exempt individual as a student in the current year if they have been exempt as a teacher, trainee, or student for any part of more than 5 calendar years unless both are true:

• The individual establishes that they do not intend to reside permanently in the United States.

• They substantially complied with the requirements of their visa.

(11) Closer Connection Exception: Individuals who meet the substantial presence test may still be treated as nonresident aliens if all of the following are true:

1. They are present in the United States for fewer than 183 days during the current calendar year

2. They maintain a tax home in a foreign country during the year

3. They have a closer connection to that country than to the United States

4. They timely file Form 8840, Closer Connection Exception Statement for Aliens, claiming to have a closer connection to a foreign country or countries.

   Note: An individual may not claim a closer connection to a foreign country if they have applied for status as a lawful permanent resident of the United States or have an application pending for adjustment of status. Some tax treaties provide special rules for determining residency.

(12) First-Year Choice: A foreign individual who does not meet the green card test or the substantial presence test may be treated as a resident alien for part of a calendar year by making the First-Year Choice.

(13) Married to a U.S. citizen or resident alien: A foreign individual who does not meet the green card test or substantial presence test may be able to choose to be treated as a resident alien if the individual is a nonresident alien married to a U.S. citizen or resident alien, the individual and their spouse may be able to make a joint election under IRC 6013(g) or (h).

(14) Individuals from a U.S. Territory:

1. American Samoa, see IRM 3.21.3.76.

2. Guam, see IRM 3.21.3.77.

3. Commonwealth of Northern Mariana Islands, see IRM 3.21.3.78.

4. U.S. Virgin Islands, see IRM 3.21.3.79.

5. Puerto Rico, see IRM 3.21.3.80.

(15) Effectively Connected Income: Nonresident aliens are taxed on both:

1. U.S. source income if the U.S. tax due has not been fully withheld

2. Income effectively connected with a U.S. trade or business.

(16) Tax Treaties: The U.S. has income tax treaties with a number of countries. Under these treaties, nonresident aliens who are residents of the foreign country may be taxed at a reduced rate or exempt from U.S. income taxes on certain types of income from sources in the United States. An individual is a resident of a foreign country under an income tax treaty if they are treated as a resident under the domestic laws of that country for income tax purposes. Some treaties include requirements beyond citizenship to establish residency for treaty purposes, such as physical presence within the purported residence country. See IRM 3.21.3.83.7 for more information about tax treaties.

(17) Dual-Status Taxpayers: An individual who is both a resident alien and nonresident alien in the United States within the same tax year. This usually occurs in the year the taxpayer arrived in or departed from the United States. The taxpayer will submit both Form 1040 and Form 1040-NR with Dual-Status Return written across the top of the return for the tax year. The form filed as the return is based on the taxpayer's residence on the last day of the year.

1. If the individual is a resident of the U.S. on the last day of the tax year, they will file Form 1040 with a statement attached (such as a Form 1040-NR) for the portion of the year that they were a nonresident alien.

2. If the individual is not a resident of the U.S. on the last day of the tax year, they will file Form 1040-NR with a statement attached (such as a Form 1040) for the portion of the year they were a resident alien.

(18) U.S. Citizens and U.S. Resident Aliens Living Abroad Who Qualify for the IRC 911 Foreign Earned Income Exclusion: A taxpayer who meets the specific requirements of IRC 911(b)(2)(D) may claim an exclusion of foreign earned income up to the maximum allowed for the tax year and either the housing exclusion or the housing deduction if the taxpayer has a tax home in a foreign country or countries and the taxpayer is one or more of the following:

1. A U.S. citizen who has been a bona fide resident of a foreign country or countries for an uninterrupted period (regardless of physical presence) that includes an entire taxable year

2. A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty with an applicable nondiscrimination clause, and who is a bona fide resident of a foreign country for an uninterrupted period that includes an entire year

3. A U.S. resident alien who has been physically present in a foreign country or countries for 330 days during a period of 12 consecutive months

(1) A U.S. visa allows a foreigner to live permanently in the United States (immigrant visa) or travel to the United States on a temporary basis for specific purposes and periods of time (non immigrant visa). See Exhibit 3.21.3-8 for a list of non immigrant visa types.

(2) Most, but not all, non immigrant visa holders are taxed as nonresident aliens.

1. A nonresident alien is taxed on all United States source income and on all income that is effectively connected with the conduct of a trade or business in the United States. Unlike U.S. citizens, nonresident aliens are not taxed on non-effectively connected foreign source income.

2. Resident aliens are generally taxed on worldwide income, like U.S. citizens.

(1) United States citizens and resident aliens: They are generally required to file Form 1040 and must report 100% of their worldwide income. Worldwide income is income from ALL sources, including foreign and U.S. income reported on Form 1040, lines 1a through 7 and Schedule 1, lines 1 through 9. For information on identifying resident aliens, see IRM 3.21.3.3.2, International Filers Overview.

(2) Nonresident Aliens: They are generally required to file Form 1040-NR to report only:

• U.S. source income, if the amount of tax withheld didn't satisfy the tax due

• Income effectively connected with a U.S. trade or business

(3) A nonresident alien not otherwise engaged in a U.S. trade or business is not required to report U.S. source income that was withheld properly at the source or any foreign source income that is not effectively connected with a U.S. trade or business, but may file to claim a refund for overpaid taxes. Generally, income received from U.S. payers constitutes U.S. source income. Income received from foreign payers may also constitute U.S. source income in certain circumstances, such as income received for services performed in the U.S. or income received for the use of intangibles in the U.S.

(4) U.S. source income is reported on Form 1042-S, Form W-2, Form SSA-1042S, Form RRB-1042S, Form 1099 series, Form 8805, Form 8288-A, or a statement of income.

(5) U.S. source income which is not effectively connected with a U.S. trade or business is generally taxed at 30% unless a tax treaty exists between the U.S. and the taxpayer's foreign country of residence that either reduces the rate or exempts the income.

(6) When Scholarship/Fellowship grant income is paid to a nonresident alien from a country that does not have a tax treaty with the United States:

• It is not exempted.

• It is reported on Form 1042-S and attached to the return, if paid by a U.S. payor.

• It must be reported on Schedule 1, line 8r.

• If the individual is a "degree candidate," amounts paid to a qualified educational institution for tuition and education related expenses (such as fees, books, supplies, and equipment) may be omitted from Schedule 1, line 8r, so that only part of the scholarship is reported.

• If the individual is not a "degree candidate," the full amount of the scholarship or fellowship is generally taxable.

(7) When Scholarship/Fellowship grant income is paid to a resident alien (because of the substantial presence test) or nonresident alien who was a resident of a tax treaty country immediately before coming to the U.S. to study:

• It may be fully or partly excluded under a tax treaty.

• It is reported on Form 1042-S and attached to the return, if paid by a U.S. payor.

• It must be reported on Schedule 1, line 8r, if taxable, or on Form 1040-NR, line 1k, if exempt by treaty.

• Schedule OI, Question "L," must be answered.

• The validity of the tax treaty benefit claimed must be verified.

(1) For processing instructions, see IRM 3.21.3.41.

(2) Form 2555 is valid for all tax years. Form 2555-EZ is valid for TY18 and prior.

(3) Form 2555 must be attached if any of the following indicators are on Form 1040 or Schedule 1:

• IRC 911 exclusion

• Notation of Form 2555 or Form 2555-EZ

• Foreign Housing Exclusion on Schedule 1, line 8d

• Foreign Earned Income Exclusion on Schedule 1, line 8d

• Foreign Housing Deduction on Schedule 1, line 24j

(4) A taxpayer with foreign earned income is entitled to claim the following on Form 2555:

• Foreign Earned Income Exclusion (Part VII and VIII), and/or

• Housing Deduction, if housing is paid for with earnings from self-employment (Parts VI and IX), or

• Housing Exclusion, if housing is paid for with employer-provided amounts, such as wages, housing allowance, etc.(Parts VI and VIII).

(5) A U.S. citizen or U.S. resident alien living and working in a foreign country may use Form 2555 to:

1. Exclude a limited amount of their foreign earned income. For TY 2024, this amount is $126,500. See IRM 3.21.3.86.10 (1) for prior year amounts.

2. Claim a housing exclusion or deduction.

(6) For TY18 and prior, a U.S. citizen or U.S. resident alien living and working in a foreign country may use Form 2555-EZ if:

1. They have earned wages/salaries in a foreign country below the maximum allowable for the year. See IRM 3.21.3.86.11.1 (1) for prior year amounts.

2. They did not have any income from self-employment.

3. They did not have any business or moving expenses for the year.

4. They are not claiming the housing exclusion or deduction.

5. They are filing a calendar-year return that covers a 12 month period.

(7) Foreign earned income is any income earned for personal services performed in a foreign country or countries. For this purpose, a foreign country is any territory under the sovereignty of a government other than the United States.

(8) Unearned income may not be excluded on Form 2555 or Form 2555-EZ. To avoid double taxation, foreign taxes paid on the unearned foreign income can be:

1. Claimed as a credit on Form 1116, or

2. Reported as a deduction on Schedule A, line 6.

(9) U.S. citizens and resident aliens living and working outside the United States are generally required to file a U.S. income tax return to report worldwide income.

(10) In general, to qualify for the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction under IRC 911, taxpayers must be:

1. A U.S. citizen who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes both an entire tax year and part of the year of the return.

2. A U.S. resident alien who is a citizen or national of a country with which the United States has an income tax treaty in effect and who is a bona fide resident of a foreign country or countries for an uninterrupted period that includes both an entire tax year and a part of the year of the return, or

3. A U.S. citizen or resident alien who is physically present in a foreign country or countries for at least 330 full days during any period of 12 consecutive months that includes part of the year of the return.

(11) Wages paid by the U.S. government to its employees are not foreign earned income, and an individual cannot claim the foreign earned income exclusion, the foreign housing exclusion, or the foreign housing deduction on those wages.

(1) The following are the five key U.S. Territories:

1. American Samoa (AS)

2. Commonwealth of Northern Mariana Islands (CNMI)

3. Guam (GU)

4. Puerto Rico (PR)

5. United States Virgin Islands (USVI)

(2) Special tax rules apply to bona fide residents of these five key territories. The taxpayer must be a United States citizen or resident alien and a bona fide resident of one of AS, CNMI, GU, PR, or the USVI. A bona fide resident of one of these territories is an individual taxpayer who:

• Does not have a tax home outside the relevant territory.

• Does not have a closer connection to the United States or to a foreign country.

• Meets the presence test. To satisfy the presence test for the entire year, the taxpayer must meet ONE of the conditions in the table below.

(3) Taxpayers who reside in any U.S. territory are generally not entitled to claim Earned Income Credit (EIC). See IRM 3.21.3.15.1.30.

(4) U.S. Service Members / Military Personnel: A service member's "state of legal residence" generally determines their residency for tax purposes. For non-tax purposes, U.S. service members have two types of "residency": "home of record" and "state of legal residence."

• A service member's "home of record" is the state where they joined the military and it is used to determine certain military benefits (for example, travel allowance back to the state when leaving the military).

• A service member's "state of legal residence" is their permanent home, the state where they intend to live after leaving the military. All service members declare their state of legal residence with the Department of Defense or equivalent.

(5) Under the Service members Civil Relief Act of 2003 (SCRA), if a service member qualifies as a bona fide resident of a U.S. Territory in an earlier tax year, their absence from that territory during the current tax year in compliance with military orders will not affect their status as a bona fide resident. Similarly, being in a territory solely in compliance with military orders will not qualify a service member for bona fide residency status in that territory.

(6) Service Members Civilian Spouses / Military Spouses: In accordance with Military Spouses Residency Relief Act of 2009 (MSRRA), civilian spouses of active duty U.S. Service Members can choose to keep their prior residence or domicile for tax purposes. Under the MSRRA, if civilian spouses qualify as bona fide residents of a U.S. territory in an earlier tax year, their absence from that territory during the current year when accompanying the service member spouse who is relocating under military orders will not affect the civilian spouse's status as a bona fide resident. Similarly, being in a territory solely to accompany the service member in compliance with military orders will not qualify the civilian spouse for bona fide resident status in that territory. For additional guidance on when and how MSRRA applies to civilian spouses who are working in or claiming tax residency in a U.S. territory, see Notice 2010-30, Notice 2011-16 and Notice 2012-41.

(1) All returns in a batch of work must belong in the international program in which they are batched. A misblocked return is a return found in a batch of work of a program in which it does not belong.

(2) For unnumbered misblocked returns, remove for rebatching. This includes when an unnumbered return is found in a numbered batch.

(3) For numbered misblocked returns, do not remove from a batch. Edit Action Code "610", and attach Form 4227 indicating the action needed.

(1) An uncomputed return is one filed by a taxpayer who expects the IRS to compute their tax. Do not confuse an uncomputed return with a return where the taxpayer has computed no tax due.

(2) An uncomputed return can be identified when:

1. Form 1040, Form 1040-SR, or Form 1040-NR has no entries on Lines 16, 17, 18, 22, 24, 34, 35a, 36, and 37.

2. Form 1040-PR or Form 1040-SS has no entries on lines 7, 13, 14a, 15, and 16.

(1) For complete instructions, see IRM 3.11.3.3.1.

(1) For all international returns, see IRM 3.11.3.3.5 and Job Aid 2513-701 for complete instructions.

(1) Examine all attachments to the return. Leave the attachments with the return unless specifically instructed otherwise. Refer to the Attachment Guide in Exhibit 3.21.3-1 for specific attachment-by-attachment instructions. Research either an attachment or a notation on the return, as appropriate.

(2) For additional instructions, see IRM 3.11.3.3.6.

(1) Always leave an Action Trail on the return when an attachment is removed.

(2) An Action Trail must also be written on the detached document (unless it is an original document).

(3) The following must always be edited on all detached items:

• Tax period of the return in "YYMM" format

• Form from which detached

(4) All of the following must be present or edited on all detached items:

• Received Date

• Taxpayer Name(s)

• Primary/Secondary taxpayer’s identification number(s)

• Taxpayer’s address

(1) Signature Issues: A valid signature is an original signature that appears below a jurat statement.

(2) When the first correspondence condition is identified, correspond for all missing required forms, schedules, and/or withholding documentation, regardless of correspondence tolerances identified in the line-by-line instructions.

(3) Route secured returns with a missing or invalid signature to Collections. Do not correspond.

(4) Returns missing a valid signature(s) will be sent back to the taxpayer via the following:

(5) Sending other returns back to the taxpayer: The following table provides situations when the return should be sent back to the taxpayer:

(6) When sending the return back to the taxpayer for correspondence:

1. Line through your TE number

2. Remove Form 3471-E and any other internal documents, if attached.

   Note: If second correspondence is required, remove the original Form 9143 or Form 13557.

3. Do not detach attachments.

4. Delete any IRS Received Date.

5. If the address is missing, illegible or incomplete, perfect from an attached envelope or from a TY18 Schedule 6. If unable to perfect, research.

6. If an international address and domestic address are both present, circle out International address and perfect the domestic address.

7. When sending the return back for a missing or invalid signature, or for a missing or invalid signature plus additional items, edit an Action Trail indicating, Returned for Signature, the correspondence form used, and the boxes or items requested (e.g., Returned for Signature, F9143 - 1, 4, 13, MMDDYY). Do not edit an Action Trail if only a misfiled return is being sent back to the taxpayer.

   Note: The date may be edited or stamped following local procedures.

8. Stop editing the return.

9. Complete Form 9143 or Form 13557.

10. Attach the correspondence sheet face up to the return immediately below the caption area.

    Caution: When stapling the correspondence sheet to the return, ensure you are attaching only one return. Staple in the left margin through only the first one or two pages.

11. Remove the return from the batch and place it in the designated area.

(7) When preparing Form 9143 or Form 13557:

1. Write legibly to ensure that the taxpayer understands what information is being requested.

2. Check the appropriate box(es).

3. Complete all information required for each paragraph (e.g., forms, lines, amounts, etc.).

4. Edit money amounts in dollars and cents. Bracket negative amounts.

(1) Complete all possible editing and identify all correspondence issues, when you are not sending the return back to the taxpayer.

(2) When the first correspondence condition is identified, correspond for all missing required forms, schedules, and/or withholding documentation, regardless of correspondence tolerances identified in the line-by-line instructions.

(3) If the address is missing, illegible, or incomplete:

1. Perfect from an attached envelope.

2. If unable to perfect from an attached envelope, research.

3. If an address cannot be found through research, see paragraph 4.

(4) When an address cannot be found through research:

• Do not correspond.

• Underline or edit the name control

• Follow No Reply instructions. See IRM 3.21.3.6.4.

(5) A correspondence action sheet (CAS) is a form used to generate a letter requesting information from a taxpayer. A CAS is used with a return that is not sent back to the taxpayer. The following CAS forms are used:

1. Form 13900 is used to generate Letter 4087C (International and Streamlined Filing Compliance Procedures returns). See Exhibit 3.21.3-15.

2. Form 13975 is used to generate Letter 2894C for Form 1040-SS and Letter 2894C-SP for Form 1040-SS (sp) and Form 1040-PR (TY22 and prior) (International returns). See Exhibit 3.21.3-16.

3. Form 3696-A is used to generate miscellaneous Correspondex (C) letters (e.g., Letter 369C used to deny reasonable cause).

(6) Prepare Form 13900 (Letter 4087C) or Form 13975 (Letter 2894C/Letter 2894C-SP) using the following steps:

1. Write legibly.

2. Check all appropriate boxes.

3. Complete all information required for each paragraph selected (e.g., forms, lines, amounts, etc.)

4. Edit money amounts in dollars and cents. Bracket negative amounts.

5. On prior year returns only, edit the tax year in YYYY format in field (04).

6. Always select the fax number paragraph applicable to your campus for paper returns.

(7) Prepare the CAS, and attach to the tax return face-up below the caption area.

(8) Edit Action Code "215" on all returns requiring correspondence if the return is not being mailed back to the taxpayer, unless Action Code "300" can be edited.

(9) If a received date is not present on the return, edit the received date before corresponding and see IRM 3.21.3.8 for received date editing instructions.

(1) Move all correspondence sheets to the back of the return. If second correspondence is required, remove Form 9143 or Form 13557.

(2) Ensure that the return has been perfected. See the Correspondence Action Table at IRM 3.21.3.6.5 for instructions to process "no reply", "undeliverable", and "incomplete reply" correspondence.

(3) Edit the received date on returns identified as Returned for Signature; following the instructions in IRM 3.21.3.8.1 (4).

(4) For additional "No Reply" instructions, see IRM 3.11.3.5.3.2.

(1) Move all correspondence sheets to the back of the return. If second correspondence is required, remove Form 9143 or Form 13557.

(2) Use the Correspondence Action Table and continue processing the return if any of the following are true:

• Taxpayer does not provide ALL required information.

• Correspondence is returned by the USPS as "undeliverable."

• One or more correspondence conditions were not included when the first correspondence was sent.

(3) Edit CCC "U" on all no reply returns, except when either:

1. The correspondence was not required, or

2. One or more correspondence conditions were not included when the first correspondence was sent.

(4) When the correspondence sheet (Form 9143 or Form 13557) is not attached, assume all correspondence conditions were included when the correspondence was sent unless there is evidence to the contrary.

(5) If a no reply correspondence condition is not identified in IRM 3.21.3.6.5, Correspondence Action Table, edit CCC "U" unless a valid condition in (3) above applies and take no further action.

(6) If CCC "3" is required, edit it first.

(1) Form 1040:

(2) Schedule 1:

(3) Form 2555 and Form 2555-EZ (TY18 and prior):

(4) Form 2555-EZ Only (TY18 and prior):

(5) Form 4563 or IRC 931:

(6) Form 1040-SS, Form 1040-SS (sp), and Form 1040-PR:

(7) Form 1040-NR, Page 1:

(8) Form 1040-NR, Page 2:

(9) Form 1040-NR, Schedule A (Sequence 7A - Itemized Deductions):

(10) Form 1040-NR, Schedule NEC (Sequence 7B - Tax on Income Not Effectively Connected With a U.S. Trade or Business)

(11) Dual-Status Returns:

(12) Form SSA-1042S and/or Form RRB-1042S:

(13) For additional no reply instructions, see IRM 3.11.3.5.3.2.

(1) For complete instructions, see IRM 3.11.3.3.2.

(1) In the upper-right margin of each form or schedule is a preprinted number called a sequence code. The Integrated Submission and Remittance Processing (ISRP) operators transcribe forms and schedules by their sequence code. ISRP sequence codes range from 01 through 79.

(2) Any form or schedule with a sequence number between 01 and 79 that is not transcribed must be deleted. See the table in IRM 3.21.3.7.2 (11) for a list of the sequence codes for all transcribed schedules and forms.

(3) Delete any document, form, or schedule that will not be transcribed when there is a transcribed form/schedule after it. For a large number of non-transcribed forms, "X" the top page and combine the remaining pages together with a rubber band, staple, or clip. Leave all non-transcribable forms/schedules intact after the last transcribed page.

(4) Delete any form that shares a sequence number with a transcribed form.

(5) "X" a transcribed schedule or form if it is blank or has no significant T-line entries, unless specifically instructed otherwise.

(6) If any schedule or form is attached with "Alt Min Tax", "AMTCR", "AMT" or "Alternative Minimum Tax" or similar statement notated across the top, "X" the form or schedule.

(7) Delete duplicate forms or schedules with identical amounts that are filed for the same taxpayer.

(8) For transcribed forms or schedules with multiple pages, ensure the pages are together and in the proper order (page 1, page 2, etc.).

(9) Arrange Schedules 1 through 3 in sequential order behind Form 1040 or Form 1040-NR. When processing Form 1040-NR, keep Schedule A, Schedule NEC, and Schedule OI together as page 1, page 2, and page 3 of Sequence 07. Arrange Sequence 07 Schedules behind Form 1040-NR and Schedules 1 through 3.

(10) Leave Form W-2, Form 1099, other U.S. withholding documents, Form 1040-V , taxpayer statements, deposit slips, small forms, or other items where they were found, if they do not obstruct T-lines or any part of the caption area.

(11) These are the transcribed forms and schedules, their sequence numbers, and the returns to which they can be attached:

(1) Edit money amounts on Form 3471-E in dollars only for all form types.

(2) Staple Form 3471-E to the last page of the tax return with Form 3471-E facing out.

(1) Allow the taxpayers to round or truncate (drop the cents) amounts.

(2) Use only dollar amounts when computing amounts on forms or schedules.

(3) For TY18 and prior, draw a vertical line between the dollars and cents figures when dollars or cents are in the wrong column:

1. on each line that is to be transcribed, or

2. down the entire front of the form or schedule

(4) Dollars and cents editing is required on certain T-lines if any of the following conditions exist:

1. A substitute form is used with dollars and cents not clearly separated by a decimal point or slash.

   Exception: Do not draw a vertical line to separate dollars and cents when only dollar amounts are present on a dollars and cents T-line.

2. An entry is illegible.

3. When computing and editing an entry as directed by line-by-line instructions.

   Exception: It is not necessary to edit "00" to indicate no cents.

(5) The following line numbers require dollars and cents editing when adjusting or editing:

1. Form 1040 - lines 24 through 38

2. Form 1040-NR - lines 24 through 38

3. Schedule 3 - lines 9 through 14

4. Form 1040-PR - Part I, lines 7 through 16

5. Form 1040-SS/1040-SS (sp) - Part I, lines 6 through 16

6. Form 13900 and Form 13975

7. Form 9143 and Form 13557

(1) An Action Code consists of three numeric characters and is used to reject a document and identify the reason for rejection.

(2) Edit Action Codes on page 1 of the return in the bottom-center margin.

(3) Assign only one Action Code to a document. Edit Action Codes in the following priority:

1. "300"

2. "310"

3. "4XX"

4. "6XX"

5. "2XX"

6. "3XX"

(4) These Action Codes are for international processing:

1. "215" - International correspondence

2. "420" - Verification of Form 8288-A withholding for numbered returns

3. "651" - Transship international returns to AUSC

   Note: When processing returns that were transshipped, delete the Action Code "651" and continue processing.

(5) For a complete list of Action Codes, see Exhibit 3.11.3-2.

(1) An Audit Code is an alpha or numeric character used to identify a questionable condition for Examination.

(2) Edit Audit Codes horizontally on page 1 of the return in the bottom-right margin.

(3) The most commonly used international Audit Codes are:

(4) For a list of additional Audit Codes, see Exhibit 3.11.3-3.

(1) A Computer Condition Code (CCC) is an alpha or numeric character.

(2) Edit CCCs horizontally in the following locations:

• Form 1040: page 1 in the blank space to the right of the sentence, Spouse itemizes on a separate return or you were a dual-status alien

• Form 1040-NR: page 1 above Dependent’s identifying number

• Form 1040-SS, Form 1040-SS (sp), and Form 1040-PR: page 1 centered to the right of Part I Total Tax and Credits

(3) Edit Computer Condition Code "C" when Form 8833, Treaty-Based Return Position Disclosure Under Section 6114 or 7701(b), is attached to Form 1040-NR. CCC "C" is unique to international processing.

(4) When CCC "3" is edited, it must appear first (to the left of any other CCC).

(5) Always edit an Action Trail when CCC "Y" is edited.

(6) For a list of additional Computer Condition Codes (CCCs), see Exhibit 3.11.3-4.

(1) A Form Processing Code (FPC) is an alpha or numeric character that indicates when a specific form or schedule is attached to a return.

(2) Edit FPCs vertically in the following locations:

• Form 1040 and Form 1040-NR: page 1 to the right of Line 7

• Form 1040-SR: page 1 to the right of Line 4b

• Form 1040-SS, Form 1040-SS (sp), and Form 1040-PR: page 1 in the margin to the right of Line 7

(3) For TY16 and later, edit FPC "D" if there is a federally declared disaster loss claimed on Schedule A and Form 4684.

(4) For Form 1040-NR only, edit FPC "S" if Schedule SE is attached or there is an entry on Schedule 2, line 4.

(5) For a list of other Form Processing Codes (FPCs), see IRM 3.11.3.

(1) A Return Processing Code (RPC) is an alpha or numeric character used to alert the computer to a special condition or computation.

(2) Edit RPCs horizontally on page 1 of the return in the bottom-left margin.

(3) For a complete list of Return Processing Codes (RPCs), see Exhibit 3.21.3-3 and Exhibit 3.11.3-5.

(1) A Special Processing Code (SPC) is an alpha or numeric character used to flag a condition or trigger a computation. SPCs are used for computer processing and do not post to the Master File. SPCs supplement the Return Processing Codes.

(2) Edit SPCs vertically in the following locations:

• Form 1040: page 1 to the right of the Spouse’s social security number

• Form 1040-NR: page 1 to the right of Your identifying number

• Form 1040-SS, Form 1040-SS (sp), and Form 1040-PR: page 1 to the right of Spouse's social security number

(3) Edit SPC "P" on all Streamlined Filing Compliance returns. Special Processing Code "P" is unique to international processing.

(4) For a list of additional Special Processing Codes (SPCs), see Exhibit 3.11.3-6.

(1) Determine the received date in the following priority when there is no valid date stamp or written received date:

1. Latest postmark on the envelope or latest date from a designated private delivery service or private metered postmark.

   Note: When the envelope or air-bill is not attached, use the postmark date stamped or handwritten on the return to determine the received date.

2. Service Center Automated Mail Processing System (SCAMPS) digital dates stamped on the envelope.

3. Latest date by the taxpayer's signature.

   Exception: Use the signature date on prior year returns only when it is within the current year. Also, do not use the signature date to determine the received date for replies to correspondence.

4. Julian date in the DLN minus 10 days.

5. Today's date minus 10 days.

(2) For all returns: Edit the determined date as the received date when there is no valid date stamp or written received date.

(3) If the stamped received date is three months or more prior to the current date, search the return for an indication the received date is incorrect (such as a postmark or signature date after the received date). If the received date is determined to be incorrect, delete it and edit a new received date following instructions in IRM 3.21.3.8.1 (1).

(4) ALWAYS review each return for the words, "Returned for Signature" or similar statement and a date present in the lower-left corner of the return. These are returns that were originally received missing a signature and were mailed back to the taxpayer. If a date and the notation "Returned for Signature" or similar statement is present, refer to the following instructions for editing the received date:

1. If the return is Balance Due and a received date is present showing a date within 30 days after the date present in the lower-left corner, use the date sent back for signature as the received date. Delete any other received date(s) that may be present.

2. If the return is Balance Due and a received date is present showing a date MORE than 30 days after the date present in the lower-left corner, honor the latest received date. Delete any earlier received date(s) that may be present.

3. If the return is a Refund, Credit Elect or Zero-balance return, honor the latest received date. Delete any earlier received date(s) that may be present.

(1) In 2025, a current year return is a return filed for tax year 2024. A current calendar-year return (2412) is considered timely filed when it is received on or before the due date:

1. April 15, 2025 for Form 1040, Form 1040-SS, Form 1040-SS (sp)

2. April 15, 2025 for Form 1040-NR (programs 46120 and 46160)

3. April 15, 2025 for Dual-Status Form 1040 (program 46115), Dual-Status Form 1040-NR (program 46129)

4. June 16, 2025 for Form 1040-NR (programs 46140 and 46180)

5. June 16, 2025 for Dual-Status Form 1040-NR (programs 46145 and 46185)

(2) All returns require a received date.

(1) By law, a timely-mailed return is a timely-filed return. This applies to both United States Postal Service (USPS) and designated Private Delivery Service (PDS) mail.

(2) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡

(3) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(4) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(5) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(1) A return is delinquent when it is filed after the due date without an approved extension.

(2) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(3) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(4) Edit CCC "N" on a return that qualifies the taxpayer for a special extension when the received date is ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ and there is an indication (on the return or an attachment) of any of the following:

1. The taxpayer lived outside the United States and Puerto Rico on the due date of the return.

2. Caption address outside United States and Puerto Rico.

3. The taxpayer is in the military or naval service on duty outside the United States and Puerto Rico.

4. The taxpayer has a APO/DPO/FPO address.

5. Form 2555 dates indicate still there or continuing.

6. Form 2555 has an ending date later than the tax year of the return (e.g., 2025, 2026, etc.).

7. Return indicates Treasury Regulation 1.6081-5(a).

(5) When the taxpayer's reasonable cause statement is not acceptable:

1. Edit CCC "7"

2. Route for correspondence. Letter 854C (Penalty Waiver or Abatement Disallowed Appeals Procedure Explained) must be issued.

(6) On a late-filed return when reasonable cause is established, take the following action:

(7) Edit CCC "R" on a late filed return when the taxpayer has a Form 4868 or Form 6401 attached to the return and an ITIN or IRSN is present in the primary SSN field. Both ITINs and IRSNs begin with a 9.

(8) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(9) ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡"≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

(1) Treat as Streamlined Filing Compliance Procedures if any are present:

• Notation of "Streamlined Foreign Offshore"

• Notation of "Streamlined Domestic Offshore"

• Package of returns addressed to Mail Stop 6063 AUSC

• Taxpayer mentions the "Streamlined" procedures in an attached letter

(2) Returns postmarked on or after July 1, 2014 will follow the Streamlined Filing Compliance Procedures processing instructions as outlined at IRM 3.21.3.9.1.1.

(3) Submissions consisting only of Form 1040-NR are not processed using Streamlined Filing Compliance Procedures. Form 1040-NR must have been reviewed by LB&I per IRM 3.21.3.9.1.1 LB&I will indicate this by leaving an action trail in the left margin.

(4) Streamlined packages may contain a mixture of Form 1040, Form 1040-NR, and Dual Status returns.

• Fully code all returns.

• Tag Form 1040-NR for rebatch with a purple rebatch tag. Mark the Streamlined 1040-NR box.

• Edit action trail "Streamlined Package Complete" in the left margin on each return in the package.

(5) Unless otherwise instructed, it is important that all returns submitted by a taxpayer be kept together. Streamlined packages tagged for rebatching will require special handling. Form 1040-NR will be rebatched into appropriate programs. All program transmittals and returns must stay together through the remainder of the pipeline process.

(6) If Letter 4087C and/or an explanation stating that the taxpayer is responding to a 4087C is attached, or if there is an envelope addressed to MS 6126, treat as a "reply to Streamlined correspondence." Route the uncoded package to Rejects using the yellow Streamlined tag.

(7) All returns submitted under the Streamlined Filing Compliance Procedures must have a valid Taxpayer Identification Number (TIN). If a return submitted to the Streamlined Procedures is received without a Taxpayer Identification Number (TIN), search the package for a valid TIN. If no TIN is found, route the uncoded package to Entity Control for an IRSN using yellow Streamlined tag.

(8) Any Streamlined package that contains any return marked amended/duplicate/copy or indication of Copy to ICT submitted under this procedure should be routed uncoded to LB&I at MS 4305 AUSC using yellow Streamlined tag.

(9) If a return in the package requires Statute Clearance, route the entire uncoded package to LB&I, STOP 4305 AUSC.

(10) When the Attachment Guide requires routing the actual return to another department (e.g., Collections, Exam), route to LB&I MS 4305 AUSC by attaching the yellow Streamlined tag to the uncoded package, checking the "other" box, and writing the reason for routing to LB&I.

(11) When the Attachment Guide requires research, route to LB&I MS 4305 AUSC by attaching the yellow Streamlined tag to the uncoded package, check the "TC 150 research" box if TC 150 research is required, or check the "other" box for all other research. Also, write the reason for routing to LB&I.

(12) When attachments are received separated from returns (FBARs, certifications, correspondence, etc.), attach them to corresponding tax years. If the attachment does not correspond to a tax year, attach to the latest Streamlined tax year.

(13) Follow local procedures for completing and routing Form 1040-X with an Accounts Management cover sheet.

(1) If taxpayers are married and are subject to the community property laws of a foreign country, a United States state, or a United States Territory, they generally must follow those laws to determine their income for United States tax purposes unless:

1. Both taxpayers are nonresident aliens.

2. One taxpayer is a nonresident alien and the other is a United States citizen or resident and they do not both choose to be treated as United States residents.

(2) If one taxpayer is a nonresident alien, the following rules apply to community income.

1. Earned income of a spouse, other than trade or business income and a partner’s distributive share of partnership income, is treated as the income of the taxpayer whose services produced the income. That taxpayer must report all of it on a separate tax return.

2. Trade or business income, other than a partner distributive share of partnership income, is treated as the income of the person who exercises substantially all of the management and control over the trade or business. That taxpayer must report all of it on a separate return.

3. Partnership income (or loss). A partner distributive share of partnership income is treated as the income (or loss) of the partner. The partner must report all of it on a separate return.

(3) Income derived from the separate property of one taxpayer (and which is not earned income, trade or business income, or partnership distributive share income) is treated as the income of that taxpayer. That taxpayer must report all of it on a separate return. Use the appropriate community property law to determine what is separate property.

(4) All other community income is treated as provided by the applicable community property laws.

(1) Required Caption Information Includes:

1. Primary Taxpayer Identification Number (P-TIN)

2. Secondary Taxpayer Identification Number (S-TIN), if applicable

3. Name(s)

4. Additional Information Line (which may be present to further identify the taxpayer's location or representative)

5. Mailing Address

6. City/State

7. Foreign Province/State or Territory/Foreign Mail Routing Code/Postal Code

8. Country (if applicable)

9. ZIP Code when available

(2) Do not change the name control when it has been edited in red by: Entity Unit, ITIN Operation, or RPS employee. Use the Entity/ITIN/RPS editing to perfect the:

1. Name Control for the caption.

2. TIN on attachments - Schedule C, Schedule EIC, Schedule H, Schedule SE, Form 2441, Form 4137, Form 5405Form 8839, Form 8853, Form 8863, Form 8919, Form 8941, and Form 8958.

(3) Search the return and attachments for any missing caption information and perfect the caption if all missing information is found. For TY18, edit international address information from Schedule 6 to the caption if not already present when a complete address cannot be found elsewhere on the return.

(4) For additional instructions, see IRM 3.11.3.9.1 and 3.11.3.9.2. In addition to these instructions, form specific instructions must be followed for Form 1040-NR and Form 1040-NR-EZ. See IRM 3.21.3.84.3 through IRM 3.21.3.84.5.

(1) For complete instructions see IRM 3.11.3.9.2.1.

(1) Each return processed must have a legible last name. Research following local procedures when the name is illegible and cannot be perfected.

(2) There are two lines available for taxpayer identification:

1. The name line is for the first name, middle initial and last name(s) of the primary and secondary (if present) taxpayer(s). This includes any suffix.

2. The additional information line (AIL) is used to further identify the taxpayer or contain a foreign street address.

   Example: Additional name, address or representative information may be shown.

3.21.3.12.3.2 (01-01-2024)

Additional Information Line

(1) An AIL can contain the following information:

1. A fiduciary, taxpayer representative, or in-care-of (c/o or %) information

2. A parent signing for a minor child (see Figure 3.21.3-1)

3. A location other than a street address (e.g., building, college, company) (see IRM 3.11.3.9.2.2.2)

4. Mailing address of a foreign country

   Note: A P.O. Box can be an AIL.

5. Private Mail Box (PMB)

6. For a Puerto Rico address, see IRM 3.21.3.12.3.3

(2) If any of the above items listed in IRM 3.21.3.12.3.2 (1) are present, edit and/or underline the AIL.

Exception: Do not underline the foreign mailing address if no province, city, or postal code is present.

(3) If a foreign address is present on Form 1040, Form 1040A, or Form 1040EZ and a name is present or has been edited as a second AIL, underline both. Then take the following actions for REFUND returns:

1. For Decedent Returns, do not edit CCC "L" or CCC "W".

2. Edit CCC "Y" and an action trail of "Manual Refund".

   Exception: Do not edit CCC "Y", if CCC "3" has been edited. If the taxpayer has elected to use Direct Deposit or has been issued an IRSN, do not edit CCC "Y".(An IRSN begins with a 9 and the middle two digits are other than 50-65, 70-88, 90-92 and 94-99. The middle two digits identify the Campus location where it was issued from. The fourth and fifth digits for the Austin Campus are 06, 18 and 66.)

(4) For additional instructions, refer to IRM 3.11.3.9.2.2.2.

(1) There are two types of international mailing addresses:

1. U.S. Territory address

2. Foreign Country address (address not within the 50 United States, District of Columbia, or any U.S. Territory)

(2) For domestic addresses, refer to IRM 3.11.3.9.2.3.

3.21.3.12.4.1 (10-30-2024)

International Mailing Address

(1) A U.S. Territory Address includes:

1. Street Address - if the street address is missing or incomplete, underline the name control.

   Caution: Do not delete any reference of Urbanization or URB for Puerto Rico.

   Note: For Puerto Rico address AIL editing, see IRM 3.21.3.12.3.3.

   Note: Multiple Addresses or no Mailing Address, see IRM 3.11.3

   .

2. City

3. U.S. Territory - must be abbreviated with a valid two (2) character state abbreviation. Circle out the U.S. Territory, and edit the abbreviation listed below. See Figure 3.21.3-2:
   • AS - American Samoa
   • GU - Guam
   • MP - Commonwealth of the Northern Mariana Islands
   • PR - Puerto Rico
   • VI - Virgin Islands

4. ZIP Code - Edit the ZIP code, if missing. See Exhibit 3.21.3-6 and Figure 3.21.3-3 if unable to edit the ZIP code.

(2) Federated States of Micronesia, Marshall Islands, and Palau are not territories, but they use the same addressing method as U.S. territories:

1. Street Address

2. City

3. Country name abbreviated with a valid two (2) character state abbreviation. Circle out the country name, and edit the abbreviation listed below:
   FM - Federated States of Micronesia
   MH - Marshall Islands
   PW - Palau

4. ZIP Code - edit the ZIP code if missing. See Exhibit 3.21.3-6 if unable to edit the ZIP code.

(3) A Foreign Country Address includes:

1. Street Address - underline the street address or location as the additional information line

   Caution: When an address is short (if any of the following are missing: city, state, province, or postal code ), such as those from Hong Kong, the use of an AIL is not needed - Do Not Underline the AIL, but do /country/$. See Figure 3.21.3-4.

   Note: If a P.O. Box and street address are present, underline both as the AIL.

   Note: If the street address is missing or incomplete, refer to IRM 3.11.3.9.2.3.

2. City

3. Foreign Province/State/County and Foreign mail routing code/postal code

4. Foreign Country Name in a /country name/$ format (see Figure 3.21.3-5)

(4) If a domestic and foreign address are both present, circle out the foreign address.

Note: If the deleted address is the only foreign aspect of the return, rebatch the coded return to a domestic program.

3.21.3.12.4.4 (01-01-2015)

Province/State/County of Foreign Addresses

(1) States/provinces/counties for the countries listed below must be abbreviated. Circle out the state/province/county, and edit the abbreviation in its place. See Exhibit 3.21.3-5 for a list of abbreviations.

• Australia

• Brazil

• Canada

• Cuba

• Italy

• Mexico

• Netherlands

Caution: Many cities share names with states/provinces. Do not delete or abbreviate a city name.

Note: See Figure 3.21.3-6 for coding examples.

3.21.3.12.4.5 (10-30-2024)

ZIP Code and Foreign Postal Code (International Mail Routing)

(1) U.S. territories must have a ZIP Code; edit if missing. See Exhibit 3.21.3-6.

(2) A mail routing code/postal code for foreign addresses can contain alpha and/or numeric characters. If missing, edit the mail routing code following the state or province if it can be readily determined. See Figure 3.21.3-7.

Note: If the foreign postal code is 00000, take no action.

(3) For domestic addresses, see IRM 3.11.3.9.2.6.

(1) APO/FPO/DPO addresses are military mail addresses. APO/FPO/DPO addresses are considered domestic addresses.

(2) APO, FPO or DPO serves as the city name in the mailing address and AA, AE or AP serves as the state code.

(3) Military mail is first mailed to a central processing center in a U.S. city and then transferred to the military mail system. If the taxpayer provides the U.S. city name, circle the city, and edit the appropriate state code using the table below:

(4) If the taxpayer provides the name of a foreign city or country, circle the foreign city or country name, and edit the appropriate state code using the table below:

(5) For additional instructions, see IRM 3.11.3.

(1) The name of the country in a foreign address must be edited using "/Country/$."

(2) If a domestic and foreign address are both present, circle out the foreign address.

(3) When an address is short (no city, state, province, or postal code), such as those from Hong Kong, the use of an AIL is not needed - Do Not Underline the AIL, but edit /Country/$. See Figure 3.21.3-4.

(4) If the country is missing and it can be readily determined, edit the country. See Exhibit 3.21.3-7.

(5) The country name in a foreign address must be spelled out. See examples below and Figure 3.21.3-8:

• UAE - circle and edit /United Arab Emirates/$

• UK - circle and edit /United Kingdom/$

• ROC - circle and edit /Taiwan/$

• SAR - circle and edit /Hong Kong/$ or /Macau/$, as appropriate

• PRC or PROC - circle and edit /China/$

(6) Hong Kong and China are considered separate countries for tax purposes. If the taxpayer puts "Hong Kong China" as the country in the caption area, circle out China.

(7) Macau (or Macao) and China are considered separate countries for tax purposes. If the taxpayer puts "Macau (or Macao) China" as the country in the caption area, circle out China.

(8) If the country name contains, "Republic of," or "Kingdom of," edit to leave the country name.

(9) If any of the countries that are part of the United Kingdom (Great Britain, England, Northern Ireland, Scotland, and Wales) are present in the caption, circle and edit the country as "/United Kingdom/$."

(10) Accept Palestine, Palestinian Territories, or similar as the country name when no other country is present in the caption area.

(1) For complete instructions see IRM 3.11.3.12.2 through IRM 3.11.3.12.2.5.

(1) For complete instructions, see IRM 3.11.3.13.1.

(1) For complete instructions, see IRM 3.11.3.13.2.2.

(1) Edit amounts on lines 1a through 23 in dollars only.

(2) Edit amounts on lines 24 through 33 in dollars and cents.