21.7.12. Non-Master File (NMF) Adjustments

(1) This IRM provides procedures for processing Non-Master File accounts. Employees in Accounts Management (AM) respond to taxpayer inquires and phone calls as well as process claims and other taxpayer requests.

(1) Refer to IRM 1.2.1.13, Policy Statements for Customer Account Services Activities, for information.

(2) The following list of Internal Revenue Codes (IRC) provide additional instructions:

• IRC 49.429-1

• IRC 167(g)

• IRC 168(k)

• IRC 460(b)

• IRC 663(b)

• IRC 992(b) and (c)

• IRC 1161

• IRC 1491

• IRC 4981

• IRC 4982

• IRC 5881

• IRC 5891

• IRC 6038(b)

• IRC 6201

• IRC 6305

  Note: Additional IRCs are cited in the IRM where they are applicable to the issue covered.

(1) The Chief, Taxpayer Services has overall responsibility for the policy related to this IRM which is published on a yearly basis.

(2) Additional information is found in IRM 1.1.13.7.3, Accounts Management, and IRM 21.1.1, Accounts Management and Compliance Services Overview

(3) The Taxpayer Bill of Rights (TBOR) lists rights that already existed in the tax code, putting them in simple language and grouping them into 10 fundamental rights. Employees are responsible for being familiar with and acting in accord with taxpayer rights. See IRC 7803(a)(3), Execution of Duties in Accord with Taxpayer Rights. For additional information about the TBOR, see Taxpayer Bill of Rights.

(1) IRM 1.4.16, Accounts Management Guide for Managers, provides guidance for program management and review of programs assigned to Accounts Management.

(1) Program Effectiveness: Program effectiveness is determined by Accounts Management’s employees successfully using IRM guidance to perform necessary account actions and duties.

(2) Program Controls: Goals measures and operating guidelines are listed in the yearly Program Letter. Quality data and guidelines for measurement is referenced in IRM 21.10.1, Embedded Quality (EQ) Program for Accounts Management, Campus Compliance, Field Assistance, Tax Exempt/Government, Return Integrity Verification Operation (RIVO) and Electronic Products and Services Support.

(1) The Acronym Database or ReferenceNet - Legal and Tax Research Services pages provide an Acronym Database to research acronyms found within this IRM.

(1) The following list of IRM references provide additional instructions:

• IRM 1.1.13.7.3, Accounts Management (AM)

• IRM 1.4.16, Accounts Management Guide for Managers

• IRM 3.17.46, Automated Non-Master File Accounting

• IRM 21.2.1.5, Non-Master File

• IRM 21.5.2.4.23.9, Moving Assessments

• IRM 13, Taxpayer Advocate Service

• IRM 20.1, Penalty Handbook

• IRM 20.2, Interest

• IRM 21, Customer Service Account Services

• IRM 21.8.1, IMF International Adjustments

• IRM 21.8.2, BMF International Adjustments

• IRM 25.6, Statute of Limitations

Note: Additional IRMs are cited in the IRM where they are applicable to the issue covered.

(1) The toll-free and non-toll-free numbers for NMF IMF and BMF changed on January 4, 2021.

• The new number for domestic (IMF and BMF) NMF is 1-833-972-8965.

• The new number for international (IMF and BMF) NMF is 267-466-4777 (Outside the United States).

(2) The new telephone numbers will be included in future notices the taxpayer receives.

(3) Calls to these numbers are routed to either the Cincinnati BMF NMF Team or Philadelphia IMF NMF Team based on the type of call. Taxpayers are instructed to leave a message regarding Non-Master File only. Any messages related to Non-Master File will be returned within (3) three business days.

(4) Employees must respond to all questions regarding Accounts Management Non-Master File (AM NMF). If the message is regarding an issue not related to AM NMF or the employee does not have the expertise to answer the NMF questions for the specific case type, prepare Form 4442, Inquiry Referral, with all necessary information and EEFAX it to the appropriate campus. See IRM 21.3.3.4.15, Taxpayer Inquiry Referrals, IRM 21.1.7-17, Forms - Routing Guide, and/or IRM 21.7.12.3, NMF Adjustments Research, for additional information.

(5) If any of the situations below are indicated, see IRM 21.1.1.3.1 , Accounts Management (AM) Customer Service Representative (CSR) Duties Handling Accounts with Balance Due / Missing Returns and IRM 5.19.1.5.1.1, NMF Notice Responses.

1. Inability to pay

2. Additional time to pay is needed

3. Installment agreement requested

4. Bankruptcy

5. Taxpayer is deceased or incarcerated

(6) Whenever an adjustment to an account is required, prepare the proper form and route to the Kansas City Submission Processing Center (KCSPC) NMF Accounting. For routing details, see Exhibit 21.7.12-1, Contact Information.

(7) For specific case information see the following sections of this IRM.

(1) An overassessment (OA) is the portion of the assessment more than the correct tax liability. The method of adjusting OAs varies, depending on whether the amount has been paid, or whether the taxpayer has a balance owed on another module.

(2) Adjust OAs by:

1. Abating the OA

2. Crediting the overpayment if the liability has been paid, but should be applied to another liability of the same taxpayer for some other tax period or type of tax

3. Refunding the OA if the liability has been paid and should not be applied as a credit to another liability

(3) When an overassessment is determined, prioritize the application of the credit as follows:

1. Abatement of the outstanding amounts created from the assessment document.

2. Credit to any other outstanding liabilities for the same taxpayer for any taxable periods. The credit must be applied by the collection statute expiration date (CSED).

   Reminder: The oldest 23C date must be paid first. If the 23C dates are identical apply to the oldest tax period first.

3. Refund of any excess amount not needed for "a" or "b" in (2) above.

(4) Use Form 1331-B, Notice of Adjustment, to adjust the account based on a review of the research information received.

(5) Action required:

• Prepare abatements for entire amounts of OAs.

• Indicate the necessary TCs on the posting copy of Form 1331-B.

• Insert principal and interest in the correct columns, if a payment has been made and a refund is in order.

• Enter the appropriate refund line item number (Section I area on Form 1331-B).

• Prepare Form 3753, Manual Refund Posting Voucher, when the disposition of the OA results in a refund to the taxpayer.

Reminder: All unpaid portions of assessed tax must be abated before any portion of the total OA can be credited or refunded.

Note: Search outstanding MF and NMF accounts when an OA involves a refund ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ before completing the allowance document and scheduling the refund.

• Route to the Kansas City Submission Processing Center (KCSPC) NMF Accounting. For routing details, see Exhibit 21.7.12-1, Contact Information.

(1) Assessments are tax increases that post to NMF taxpayer accounts. Assessments may be the result of:

• Original Returns

• Amended Returns

• Math Errors

• Substitute For Returns (SFR)

• Claims for credit, refund or abatement

• Tax Audits

• Tax Reconsiderations (e.g., after a request from the taxpayer after an audit or from a collection function)

(2) The following are examples of NMF assessments;

• Current Assessments

• Deficiency Assessments

• Quick Assessments

• Prompt Assessments

• Jeopardy Assessments

• Additional Assessments

(3) The ANMF system only accommodates one abstract number per assessment/account.

(1) Analyze the letter to determine proper disposition. Use the table below.

(1) For cases where the taxpayer substantiates unapplied credits by sending in Form 8805, Foreign Partner's Information Statement of Section 1446 Withholding Tax, Form 8288-A, Statement of Withholding on Dispositions by Foreign Persons of U.S. Real Property Interests, or Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, follow guidance provided in IRM sections below:

• IRM 21.8.1.22.1, Claims for FIRPTA Credits

• IRM 21.8.1.23, Withholding Tax on Foreign Partners - Form 8804, 8805 and 8813

• IRM 21.8.2.11.2, Claims for FIRPTA Credits and Section 1466(f) Credits

• IRM 21.8.2.12.2, Form 1042

• IRM 21.8.2.12.2.1, Form 1042-S

• IRM 21.8.2.12.2.3, FATCA - Programming Affecting Certain Forms 1120-F

• IRM 21.8.2.12.2.7, FATCA Form 1042-S Accounts Management Form 1120-F Amended Returns (New Form 1042-S Credits)

(2) Verify and prepare Form 3809, Miscellaneous Adjustment Voucher, for the appropriate amount. The debit portion references the "6550 ACCOUNT" and no TC is needed. Credit the taxpayer's account using TC 800, and identify the source of credit in the "Remarks" section of the Form 3809 (i.e., Form 1042-S, Form 8805 and Form 8288-A) and identify Filing Location code (FLC) 18, 20, 21, 28, 29, 60, 66, 78, or 98, as appropriate.

(3) If the credit transfer results in an overpayment, Form 3753, Manual Refund Posting Voucher, must be prepared for a manual refund, unless the taxpayer requests a credit elect to the next tax year or has an outstanding liability on another MF account or NMF account. See IRM 21.4.4.5.2, Preparation of Form 3753, Manual Refund Posting Voucher, for additional information. When the adjustment results in a refund that will include interest, manually compute interest using CC COMPAC for computing credit interest before January 1, 1999 and COMPA for interest beginning on or after January 1, 1999.

(4) For corporate overpayment interest rules, see IRM 20.2.4.10, Special Overpayment Interest Rules for Corporations. The currently supported interest software is Integrated Data Retrieval System (IDRS) CCs (e.g., COMPA) and Automated Computational Tool (ACT/DMI) InterestNet by Decision Modeling, Inc. See IRM 20.2.1.5, Interest Computation Tools and Reports: Manually and Systemically Calculated Interest.

1. Determine the amount of tax that was withheld. Then determine the correct tax rate and tax taking into account the applicable tax treaty rate in Pub 901, U.S. Tax Treaties.

2. Prepare four-part Form 5205, Information About Your Income Tax Refund.

3. Prepare Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding.

4. Prepare the Forms 3809, the first one must credit the taxpayer's Non-Master File (NMF) account for the amount of interest paid using a TC 770 and debit (TC not necessary) the 6520 account. And the second Form 3809 must debit the taxpayer's NMF account for the amount of interest withheld using a TC 772 and credit the 4610 account using TC 700 transferring tax withheld on interest.

   Note: ≡ ≡ ≡ ≡ ≡≡ ≡ ≡≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡ ≡

5. Follow the chart found in IRM 20.2.1.6.2 , Command Code COMPA.

(5) Prepare the Form 3753, Manual Refund Posting Document.

1. The overpayment amount is the amount of the available credit.

2. The TC 770 amount is the net interest (after the withholding is computed).

3. The TC 840 is the total of these two amounts.

(6) Submit the refund document and related forms, along with the case itself, to the manager for review. After managerial review, forward the forms and a copy of the interest computation (COMPAC) or COMPAD / COMPAG to Accounting :

• Form 1331-B, Notice of Adjustment

• Form 5205, Information About Your Income Tax Refund

• Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding

(1) Form 926 is a return filed to report certain transfers of tangible and intangible property to a foreign corporation when required by IRC 6038B. Form 926 is processed under MFT 81.

(2) Taxpayers making a transfer to a foreign trust, or taxpayers receiving certain large gifts or bequests from certain foreign persons, must file Form 3520, Annual Return to Report Transactions With Foreign Trusts and Receipt of Certain Foreign Gifts.

(3) Taxpayers making a transfer to a foreign partnership may be required to file Form 8865, Return of U.S. Persons With Respect to Certain Foreign Partnerships.

(4) LB&I Exam no longer accepts Form 926 as Category A (CAT-A) classification, continue processing Form 926.

(1) Form 8404 is filed by shareholders of IC-DISCs to figure and report their interest owed on DISC-related deferred tax liability.

(2) Form 8404 is due by the due date of the federal income tax return for the tax year that ends with or includes the Form 1120-IC-DISC's tax year end.

(3) Form 8404 is processed under MFT 23.

(4) Form 8404 for corporations, trusts, decedent estates and Individuals are filed with Kansas City Submission Processing Center.

• Form 8404for corporations, trusts, decedent estates are processed in Cincinnati.

• Form 8404for individuals are processed in Philadelphia.

(5) A DISC shareholder may defer a portion of its income attributable to DISC activities by paying, in the manner described in IRC 992(c)(2)(B). Certain interest is charged based on the amount of tax postponed. The assessment of the interest is made via NMF when Form 8404, Interest Charge on DISC-Related Deferred Tax Liability, is filed.

(6) If the shareholder underpays the interest because of an audit adjustment, amended return, carryback, etc., or because the original amount reported was based on an estimate or any other reason, the shareholder must file an amended Form 8404 to increase the assessment. Prepare Form 5734, Non-Master File Assessment Voucher, and route to Kansas City NMF Accounting for assessment. See Exhibit 21.7.12-1, Contact Information.

(7) If the shareholder overpays the interest, Form 843, Claim For Refund and Request for Abatement, should be filed to claim the overpayment. Action required:

1. Request the original Form 8404.

2. Compute the amount by which interest will be decreased using the information on the Form 843. Refer to IRM 20.2, Interest, for methods of computing interest.

3. Prepare Form 1331-B, Notice of Adjustment, noting the reason for the decrease in interest.

4. Route to Kansas City NMF Accounting. See Exhibit 21.7.12-1, Contact Information.

(1) Form 8697 are processed as BMF or IMF for the following forms; Form 1120, Form 990T and Form 1040 to Master File.

(2) As of July 2005, Form 8697 related to Form 1041 or Form 1065 are processed as BMF on Master File.

(3) A Form 8697 is filed by an individual, corporation, estate, trust or a pass- through entity (partnership or S corporation) that is not closely held. See the Instructions for Form 8697 for additional information on "Who Must File".

(4) Form 8697 is now filed as an attachment to the forms listed above.

(5) If the Form 8697 is not treated as an attachment (by the taxpayer) and is filed separately requesting a refund, it will continue to be processed through NMF only when there is no return (TC 150) posted on Master File.

(6) Refund requested on Form 8697 processes through normal procedures by Accounts Management unless it meets the exception above.

(7) Form 8697 meets CAT-A criteria, see IRM 21.5.3-2, Examination Criteria (CAT-A) – General, for more information.

(8) Taxpayers should not attach Form 8697 to their income tax return when requesting a refund of interest. They must follow instructions and correctly sign the signature section of Form 8697. Both spouses must sign the Form 8697 when filing jointly. For more guidance see IRM 21.7.12.5.8.4, Form 8697 - Processing a Claim for Refund, No TC 150 Posted on Master File (MF).

(9) It should be filed separately with the IRS at one of the addresses below:

(10) Form 8697 is due by the date or extended date of the applicable income tax return.

(11) If the taxpayer owes interest (or no interest is to be refunded), the taxpayer should attach the Form 8697 to the applicable income tax return. In this case, the Form 8697 does not need to be signed. See IRM 21.7.12.5.8.3, Form 8697- With Additional Interest Due or if No Interest is Due to be Refunded, for additional guidance.

(12) BMF only- Loose Form 8697 and correspondence are scanned into CII and controlled to 0244374812 for processing.

(1) Form 8866, Interest Computation Under the Look-Back Method for Property Depreciated Under the Income Forecast Method, is used to figure the interest due or to be refunded under the look-back method of IRC 167(g)(2) for property placed in service after September 13, 1995, that is depreciated under the income forecast method as described in IRC 167(g).

(2) The income forecast method is generally limited to depreciation of:

• Motion Picture Film

• Video Tapes

• Sound Recordings

• Copyrights

• Books

• Patents

(3) Form 8866 is a form similar to Form 8697. It is almost identical to the Part I, Regular Method, on Form 8697.

(4) Prior to January 1, 2005, a Form 8866 claiming look-back interest was processed under Non-Master File with the interest issued using "manual refund" procedures. Effective January 1, 2005, look-back interest adjustments are processed under Master File and posted to the applicable income tax return for the taxpayer required to file Form 8866.

(5) For additional information, see the Instructions for Form 8866.

(1) Occasionally, a MF return is erroneously posted as a NMF return. Input these returns to MF as original or amended returns, depending on the information available.

(2) Action required:

1. Research all related Index Cards if the return was not a balance due.

2. Request a transcript of the ANMF account.

3. Prepare Form 1331-B, Notice of Adjustment, to abate the NMF assessment.

4. Input a credit transfer using Form 3809, Miscellaneous Adjustment Voucher, to transfer any payment to MF.

5. Prepare a corrected return and route to MF as non-remit. Staple the NMF return behind it.

(1) When accounts on Master File exceed their page limitations, they must be moved to the Non-Master File account.

(2) Check If the account is in zero or balance due status. To move an account from MF to the NMF a TC 150 must be present on the MF to generate a TC 400. A CP 96, Account Transfer-Out Transcript Notice, (IMF) or CP 296, Account Transfer-Out Transcript Notice (BMF) is generated on Control D known as the Service Center Recap. Kansas City Special Services Team will code it and forward it on to the Automated Non- Master File (ANMF) Team using Form 514-B, Credit Transfer Voucher for input to the ANMF system.

(3) Check the account for a credit balance:

1. Check CC IMFOL or BMFOL for credit availability (since CC TXMOD could include pending or deleted transactions).

   Note: BMF accounts will generate a TC 400 even if the module is in credit balance.

2. Check for any open unpostables prior to taking any actions. Contact the Unpostable team, as applicable.

3. If the IMF account is in credit balance prepare a Form 3809, Miscellaneous Adjustment Voucher, to move that total (lump sum) credit amount into the NMF 4430 account so that the account will be at a zero balance.

   Note: If there is a TC 388 on the account use CC MFREQ to bring the credit back (TC 389) prior to sending the Form 3809 to the Special Services Team in Kansas City.

4. The transaction date should be the same as the date the Form 3809 is prepared. Since this will post as a TC 820 it doesn’t need to match the transaction date of a payment or anything else.

5. Forward the Form 3809 to Kansas City Special Services Team (Not KC NMF) for processing. See Exhibit 21.7.12-1, Contact Information, for more information.

6. Once the transfer posts (4-6 weeks or longer due to SP being behind), the TC 400 will systemically generate.

7. After the TC 400 posts, the account will systemically generate a CP 96 (IMF) or CP 296 (BMF) which is part of the Service Center Recap, which must be coded and then input by the ANMF Team. (See above)

8. After the account has posted to ANMF, that credit can be moved from the 4430 account to the NMF module. The AM NMF team should prepare the Form 3809 to move the credit.

(1) Follow the procedures below to stop NMF notices:

1. Prepare Form 3177, Notice of Action for Entry on Master File, with TC 470 to notify Kansas City Accounting to stop notices when an adjustment is pending on any NMF account.

2. Include the reason to stop notices and the amount of adjustment using the "Other" line of Form 3177.

3. Include your name and phone number. This information is included in the History section of the NMF account when NMF inputs the TC 470.

(1) Joint civil penalty assessments must be processed on NMF since MF civil penalty modules (MFT 13 or 55) cannot accommodate joint liabilities. These modules appear as MFT 28 on NMF. The reason can be identified by the abstract number. See IRM 3.17.46, Automated Non-Master File Accounting, for more information and procedures.

(1) As of January 1, 2010, Form 1040, U.S. Individual Income Tax Return, with a module balance of $1 billion or greater must be processed on ANMF. To provide this group of taxpayers the same level of service as other customers, a centralized team of contact representatives was established in the Philadelphia campus in November 2006. This team of representatives is considered the liaison for these taxpayers.

(2) If an inquiry is received from taxpayers with taxes or payments of $1 billion or more, provide the taxpayer with the telephone number of the team (see paragraph 3 for domestic taxpayers and 4 for international taxpayers below) and complete Form 4442, Inquiry Referral. Send Form 4442 to the Philadelphia NMF (PAMC). For routing details, see Exhibit 21.7.12-1, Contact Information.

(3) Domestic Taxpayers and/or their authorized representatives can leave a message on 833-972-8965 (toll-free) and an NMF employee must return their call within three (3) business days.

(4) International Taxpayers and/or their authorized representatives can leave a message on 267-466-4777 (non-toll-free) and a NMF employee must return their call within three (3) business days.

(5) Original returns, Form 1040-X, Amended U.S. Income Tax Return, Form 8802, Application for United States Residency Certification, Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, and other related correspondence are received at the address above.

(6) This team conducts the following:

• Locates and applies payments

• Provides IRS communications

• Secures taxpayer income verification

• Secures transcripts of taxpayer accounts

• Provides general guidance

• Resolves account problems, and

• Transfers payments between MF and NMF, etc.

(1) Take the following action on calls received from the POA or taxpayer:

1. Verify POA on IDRS using Command Code CFINK.

2. Review issue/request transcript from ANMF.

3. Review MF for issue and check for TC 594 closing code (cc) 84 on spousal SSN.

4. Check for TC 971 action code (AC) 502 on ENMOD.

5. Complete Form 4442, Inquiry Referral, if needed, to refer to Philadelphia ANMF.

(2) Take the following action on calls to POA and taxpayer:

1. Verify the POA on IDRS using command code (CC) CFINK.

2. Make two (2) attempts to reach caller.

3. Follow the IRM 21.3.10.2, Practitioner Priority Service (PPS) Overview, when returning calls to practitioners.

(1) If NMF Form 1040-NR is processed incorrectly as an Individual Master File (IMF) 1040-NR under an invalid Social Security Number (SSN), transfer the account from Master File (MF) to NMF using the following procedures:

1. Request original return or have the taxpayer provide a copy.

2. Abate the incorrect Master File tax, if necessary. Use hold code 4, source code 1, reason code 99 and the appropriate blocking series (BS) to freeze credits and notices.

3. Code the return for reprocessing by lining through the Document Locator Number (DLN), entering the TIN followed by the letter "N" in brown pencil, and correcting the Entity portion. "X" out multiple stamped received dates, other than the original IRS received date.

   Reminder: Attach prints of the Master File adjustment.

4. Route the return to the Kansas City Submission Processing Center Receipt and Control area for batching and numbering. Indicate on the routing slip that the return was incorrectly processed as Master File, and process as NMF (MFT 20).

5. Monitor for the posting of the NMF return if credits must be transferred from MF to NMF.

   Note: Do not transfer credits until the return posts on NMF. If the account shows payments or credits, transfer them using Form 2424, Account Adjustment Voucher.

(2) Process cases where payments were misapplied, and the taxpayer provided a copy of the front and back of the cancelled check or money order, using payment tracer procedures in IRM 21.5.7, Payment Tracers.

(1) If the Form 1040-NR is being filed by an estate or trust, the fiduciary is responsible for filing the Form 1040-NR on behalf of the estate or trust.

(2) Fiduciary filed Form 1040-NR returns will have some or all of the following characteristics:

• Name Line(s) may consist of numbers or a combination of letters and numbers.

• Account, Trust Grantor or Nominee may be indicated.

• Name line(s) may indicate Estate of.

• No exemptions may be shown.

• The return may have an Employer Identification Number (EIN) instead of a Social Security Number (SSN).

• The box for Estate or Trust at the top of the form is checked.

• The trust may show deductions for distributions made to U.S. or foreign beneficiaries.

• Check IDRS for the filing of Form 3520 or Form 3520-A filed with the trust’s name.

  Note: A Form 3520 will not be filed under the foreign trust’s name but the name of the trust may appear on line 2(a) of the Form.

• Trust may state that it is a grantor trust with a foreign owner

(3) Every nonresident alien having fiduciary income, either effectively or not effectively connected with a trade or business in the United States, must file Form 1040-NR. Forms 1040-NR filed by individuals are processed on Master File. See IRM 21.8.1, IMF International Adjustments, for additional information.

1. Effectively connected income is all income, gain, or loss that is derived in connection with the conduct of a trade or business within the United States. See IRM 21.8.1.12.10, Effectively Connected Income, for additional information.

2. Non-effectively connected income is income not effectively connected with a trade or business in the United States. See IRM 21.8.1.12.11, Treatment of Non-Effectively Connected Income and Certain Other Income, for additional information.

(4) These forms are handled as Business Master File (BMF) NMF.

(5) Fiduciary filed Forms 1040-NR are processed to Non-Master File under Master File Tax (MFT) 20 tax class 2.

1. Returns filed by a nonresident alien estate or trust that does not have an office in the United States are processed with Document Code 72 and have a due date that is 6 1/2 months after the end of the taxable year.

2. Returns filed by a nonresident alien estate or trust that has an office in the United States are processed with Document Code 73 and have a due date that is 4 1/2 months after the end of the taxable year.

Reminder: Notice 2020-23 extended the due date for filing 2019 tax returns and payments, as well as the first two 2020 estimated tax payments to Wednesday, July 15, 2020.

3. The statute of limitations period is 3 years after the due date of the return or 3 years after the IRS received date, whichever is later.

(1) A corporation files Form 4876-A, to elect to be treated as an Interest Charge Domestic International Sales Corporation (IC-DISC). The election must be filed within 90 days after the beginning of the tax year if it is the taxpayer's first tax year or during the 90 days preceding the first day of the tax year if this is not the taxpayer's first tax year. There are no indicators on MF or NMF to indicate that the Form 4876-A is being processed.

(2) The Form 4876-A election determination is made by Kansas City Submission Processing. A "data file" is kept by Code and Edit during the processing of these forms. For additional information see IRM 3.11.16.38, Form 4876-A - Election To Be Treated as an Interest Charge DISC/Scope (KCSPC Only).

(3) When a call is received concerning the status of the Form 4876-A, ask the taxpayer for the date the Form 4876-A was mailed and follow the chart below:

(4) Form 1120-IC DISC must be filed if the corporation elected, by filing Form 4876-Ato be treated as an interest charge domestic international sales corporation (IC-DISC), and such election is in effect for the tax year the corporation is a former IC-DISC or the corporation is a former DISC.

(5) The Form 1120-IC DISC return is due the 15th day of the ninth month after the tax year ends. The first Form 1120-IC-DISC filed by a corporation establishes the taxable year ending.

(6) Penalties and interest associated with Form 1120-IC DISC are processed on NMF (MFT 23). In various instances, Accounts Management can be required to assess penalties and interest, resolve duplicate filing conditions, and process amended returns. Use the following information and procedures when processing this form.

(1) A fiduciary who files a Form 1040-NR may also file a Form 1045, Application for Tentative Refund, (TENT) or an amended Form 1040-NR (RINT) to request a refund resulting from:

• The carryback of a Net Operating Loss (NOL)

• The carryback of a Net Capital Loss (NCL)

• The carryback of an unused general business credit

• The carryback of a net section 1256 contracts loss, or

• An overpayment of tax due to a claim of right adjustment under IRC1341(b)(1)

(2) The processing of a RINT/TENT requires coordination between the Cincinnati BMF Non-Master File (NMF) team and the Cincinnati Carryback team.

(3) When a Carryback for Form 1040-NR filed by a Fiduciary is received in the BMF NMF team, notify the BMF NMF team manager. The BMF NMF team manager will coordinate the processing of the carryback with the Cincinnati Carryback team.

(4) RINT/TENT cases received for Form 1040-NR filed by a Fiduciary will be re-controlled to 0244374812 for NMF assistance. The transcripts necessary to complete the review of the RINT/TENT must be attached to the CII case.

(5) Upon completion of the review of the RINT/TENT by the carryback team, prepare Form 1331-B, Notice of Adjustment, and Form 3753, Manual Refund Posting Voucher, based on the information received from the Carryback team and forward to KCSPC NMF Accounting for processing. Exhibit 21.7.12-1., Contact Information, for additional routing guidance.

(1) Form 8612, Return of Excise Tax on Undistributed Income of Real Estate Investment Trusts (REITs), is used by a REIT to compute and pay the excise tax on undistributed income imposed under IRC 4981.

(2) The Form 8612 is recognized by the follow:

• Tax class 6

• Document code 21

• Blocking series with remittance 400-499; without remittance 000-099

• MFT 89

• Abstract Number 192

(3) Form 8613, Return of Excise Tax on Undistributed Income of Regulated Investment Companies (RICs), is used by a RIC to compute and pay the excise tax on undistributed income under IRC 4982.

(4) The Form 8613 is recognized by the following:

• Tax class 6

• Document code 22

• Blocking series with remittance 500-999; without remittance 300-499

• MFT 14

• Abstract Number 193

(5) REITs and RICs must distribute a certain percentage of their ordinary income (taxable income) and their capital gain net income to their shareholders. The 4 percent excise tax is applied against the excess of the required distributions (line 4) over the actual distributed amounts (line 8).

(6) Taxpayers must file Form 8612 and Form 8613 . Both forms are due by March 15 following the calendar year to which the excise tax liability applies.

(7) Taxpayers can request an extension of time to file by filing Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, by the return due date.

(8) Route all Form 7004, NMF extension requests to KCSPC. See Exhibit 21.7.12-1 for more information.

(9) REITs and RICs are subject to late filing and payment penalties. Refer to IRM 20.1.2, Failure to File/Failure to Pay Penalties.

(10) Both forms are processed on ANMF. Follow normal ANMF procedures for any adjustments required.

(11) If an amended Form 8612 or Form 8613 is received, accept the forms as filed and process the request using established guidance.

(1) Form 8725, Excise Tax on Greenmail, is used to report and pay the 50 percent excise tax imposed under IRC 5881. The term "greenmail" means any amount a corporation (or any person acting in concert with a corporation) pays directly or indirectly to acquire its stock from any shareholder if:

1. The transferring shareholder held the stock for less than two years before entering into the agreement to make the transfer of stock.

2. The shareholder, any person acting in concert with the shareholder, or any such persons made or threatened to make a public tender offer for stock of the corporation at some time during the two-year period ending on the date of acquisition.

3. The acquisition was made under an offer that was not made on the same terms to all shareholders.

(2) Form 8725 is due by the 90th day following receipt of any portion of the greenmail. (A separate Form 8725 must be filed for each agreement to transfer stock.) It is subject to late filing and payment penalties. Refer to IRM 20.1.2, Failure to File/Failure to Pay Penalties.

(3) Taxpayers can request an extension of time to file by filing Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns, by the return due date.

(4) Form 8725 is subject to late filing and payment penalties. Refer to IRM 20.1.2, Failure to File/Failure to Pay Penalties, for more information.

(5) The amount of (excise) tax (line 6) is a flat 50 percent of the total gain or other income (line 5).

(6) The tax period is the "Date of initial receipt of greenmail" listed at the top of Form 8725. For example, if the taxpayer enters November 2019, the tax period is 201911.

(7) Form 8725 can be filed under either an Employer Identification Number (EIN) or Social Security Number (SSN), depending on the type of entity filing the return.

(8) Returns are processed to ANMF located in KCSPC ANMF.

(9) The Form 8725 is recognized by the following:

• Tax class 6

• Document code 21

• Blocking series 000–099 without remittance; 400–499 with remittance

• MFT 27

• Abstract Number 216

(10) For resolution of taxpayer questions and issues on Form 8725, forward an encrypted e-mail with complete details of the taxpayer's question, tax period, form, etc., to the Cincinnati NMF Planning and Analysis (P&A) Analyst, and carbon copy the BMF NMF Team manager. The P&A Analyst will forward the case to the NMF HQ analyst who will contact the Form 8725 Technical Specialist for assistance with resolving the issue.

(11) Follow normal ANMF procedures for any adjustments required.

(1) Form 8831, Excise Taxes on Excess Inclusions of REMIC Residual Interests, is used to report and pay excise taxes on any transfer of a residual interest in a REMIC to a disqualified organization, or any transfer of a residual interest to a pass-through entity.

(2) Due to the small number anticipated nationwide, these returns are processed at KCSPC on ANMF.

(3) The due date of the return is based on the section of the return required to be completed by the taxpayer.

(4) An extension of time to file can be requested by filing Form 7004, Application for Automatic Extension of Time to File Certain Business Income Tax, Information, and Other Returns.

(5) Form 8831 is processed to ANMF as:

• Tax class 6

• Document code 21

• Blocking Series 000 - 099 without remittance; 400 - 499 with remittance

• MFT 89

• Abstract number 221

(6) Form 8831 is subject to late filing and late payment penalties. Refer to IRM 20.1.2, Failure to File/Failure to Pay Penalties.

(7) The Estimated Tax penalty does not apply to Form 8831.

(8) All refund claims, amended returns, or claims requiring penalty computations are routed to the BMF NMF Team in Accounts Management.

(9) When correspondence or a telephone call from the taxpayer is received on Form 8831, which have "RTC Receivership", written across of the form, (Resolution Trust Corporation Receivership)cases, be certain the first notice was generated to the taxpayer (either the original first notice, if no amended return, or the first notice after an amended return was processed)When correspondence or a telephone call from the taxpayer is received on

(10) Prepare Form 3177, Notice of Action for Entry on Master File, and forward for input of TC 530 Closing Code (cc) 15 to the Kansas City Accounting NMF Unit. (Per an inter-agency agreement between IRS and the Federal Depositing Insurance Corporation (FDIC), no annual reminder notice is required.)

(11) For resolution of taxpayer questions and issues on Form 8831, forward an encrypted e-mail with complete details of the taxpayer's question, tax period, form, etc., to the Cincinnati NMF Planning and Analysis (P&A) analyst and carbon copy the BMF NMF Team manager. The P&A Analyst will forward the case to the NMF HQ analyst who will contact the Form 8831 Technical Specialist for assistance with resolving the issue.

(12) Follow normal ANMF procedures for any adjustments required.

(1) Form 8924, Excise Tax on Certain Transfers of Qualifying Geothermal or Mineral Interests, is used to report and pay the excise tax on certain transfers of qualifying geothermal or mineral interests. This form was created because of a tax provision in the Tax Relief and Health Care Act of 2006, PL 109–432, section 403(c)(2)(c).

(2) The Form 8924 is applicable only for specific, eligible federal lands as described in IRC Section 403(a) of Public Law 109-432. The eligible federal lands subject to the filing of a Form 8924 are located in Montana.

(3) The return is due by the 90th day following the taxable transfer. See IRM 3.17.46.6.32, Form 8924, Excise Tax on Certain Transfers of Qualifying Geothermal or Mineral Interests, for additional information.

(4) Forms 8924 are subject to late filing and late payment penalties. Refer to IRM 20.1.2.2, Failure to File a Tax Return or to Pay Tax - IRC 6651, for more information. An extension of time to file can be requested by filing Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns.

(5) Forms 8924 are processed to NMF as:

• Tax class 6

• Document code 40

• Blocking Series (BS) 300 - 399 without remittance; BS 400 - 499 with remittance

• MFT 41

• Abstract number 012

(6) Route all amended returns, claims and correspondence the NMF team in Accounts Management.

(7) For resolution of taxpayer questions and issues on Form 8924, forward an encrypted e-mail with complete details of the taxpayer's question, tax period, form, etc., to the Cincinnati NMF Planning and Analysis (P&A) Analyst and carbon copy the BMF NMF team manager. The P&A Analyst will forward the case to the NMF HQ analyst who will contact the Form 8924 Technical Specialist for assistance with resolving the issue.

(8) Normal ANMF procedures must be followed for any adjustments required.

(1) Form 8928, Return of Certain Excise Taxes Under Chapter 43 of the Internal Revenue Code, is used to report and pay the excise tax on certain failures by group health plans or employers. The due date of the return is dependent on the Section as follows:

(2) Forms 8928 are subject to late filing and late payment penalties. Refer to IRM 20.1.2.3, Failure to File a Tax Return or to Pay Tax - IRC 6651, for more information. An extension of time to file can be requested by filing Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns.

(3) Forms 8928 are processed to NMF as:

• Tax class 6

• Document code 39

• Blocking Series (BS) 000–099 without remittance; BS 400-499 with remittance

• MFT 41

• Appropriate abstract numbers:

Abstract Number	Section
126	4980B
127	4980D
128	4980E
137	4980G

(4) All amended returns, claims and correspondence are routed to the NMF team in Accounts Management.

(5) A Form 8928 filed to claim a refund or credit must include a detailed statement of the reason(s) for the refund claimed. The statement must include the reason(s) for filing the claim and provide supporting documentation. Review the claim to determine if the required statement has been included.

(6) For resolution of taxpayer questions and issues on Form 8928, forward an encrypted e-mail with complete details of the taxpayer's question, tax period, form, etc., to the Cincinnati NMF Planning and Analysis (P&A) Analyst, and carbon copy the BMF NMF Team manager. The P&A Analyst will forward the case to the NMF HQ analyst who will contact the Form 8928 Technical Specialist for assistance with resolving the issue.

(7) Normal ANMF procedures must be followed for any adjustments required.

(1) Form 8876, Excise Tax on Structured Settlement Factoring Transactions, is used to report and pay 40 percent excise tax imposed under IRC 5891. The Excise tax is equal to 40 percent of the undiscounted amount of the payments being acquired, over the total amount actually paid to acquire them. The return is due by the 90th day following the receipt of structured settlement payment rights in a structured settlement factoring transaction. (A separate Form 8876 must be filed for each date on which you received structured settlement payment rights in one or more structured settlement factoring transactions.)

(2) An extension of time to file can be requested by filing Form 7004, Application for Automatic Extension of Time To File Certain Business Income Tax, Information, and Other Returns.

(3) Forms 8876 are subject to late filing and late payment penalties. Refer to IRM 20.1.2.2, Failure to File a Tax Return or to Pay Tax - IRC 6651, for more information.

(4) Forms 8876 can be filed under either an EIN or SSN, depending on the type of entity filing the return. Returns are processed to NMF as follows:

• Abstract number 234

• Blocking Series (BS) 000-099 without remittance; BS 400-499 with remittance

• Document code 21

• MFT 27

• Tax Class 6

(5) For resolution of taxpayer questions and issues on Form 8725, forward an encrypted e-mail with details of the taxpayer's question, tax period, form, etc., to the Cincinnati NMF Planning and Analysis (P&A) Analyst and carbon copy the BMF NMF Team manager. The P&A Analyst will contact the Form 8876 Technical Specialist for assistance with resolving the issue.

(6) Request all applicable NMF transcripts that will be included when forwarding the case to the Form 8725 Technical Specialist for review.