IRS Guidelines for Ordering Returns

4.1.3.4  (10-24-2006)
Guidelines for Ordering Returns

  1. The PSP Territory Manager is responsible for submitting orders so that returns are received ratably during the fiscal year. Ratable is defined as a manner of ordering so that all returns with similar DIF scores, regardless of the filing date, have an equal chance of being delivered to Classification.

  2. Current file year individual DIF returns (Activity Codes 530 through 543) will be ordered so that deliveries for total individual returns, when measured as a percent of the total Individual Examination Return Plan, will not exceed the following:

    1. 30 percent before Cycle 52.

    2. 55 percent before Cycle 13.

    3. 108 percent Cycle 26.

  3. There is an exception to the guidelines set in (2). Any orders in excess of these guidelines must be approved by the PSP Territory Manager. The order may be increased if any of the following conditions are met:

    1. The Area has a high dependence on DIF work for general program expectations;

    2. The Area has low select rates which makes it impossible to maintain an appropriate tax compliance officer workload.

  4. Due to numerous fiscal year corporate and other (Business Master File) BMF filings, high potential BMF returns are added to inventory throughout the entire file year. To ensure equal treatment of BMF taxpayers, BMF returns must be ordered in a ratable manner.

  5. As a guideline, DIF BMF returns, when measured as a percent of the Examination Plan, should not exceed 200 percent of the total Examination Plan for any DIF formula. This limitation applies separately to each BMF category.

  6. Each Campus will provide a schedule for ordering and classifying to the PSP Territory Manager.

  7. All return orders will be submitted to the designated Exam Planning and Delivery HQ Analyst for review and approval prior to sending the order to the Campus.

4.1.3.4.1  (10-24-2006)
Ordering Individual DIF Returns

  1. Form 6356, Individual DIF Returns Order, will be used to order individual DIF returns. Instructions for completing Form 6356 are found on the back of the form. Returns may be ordered from any cycle for orders from regular DIF inventory and only from odd cycles for orders from DIF CORR inventory.

  2. Areas are expected to order returns for the entire Area. However, the capability for ordering or excluding returns for a specific post-of-duty is also available. These orders should be kept to a minimum since it deviates from working the highest DIF returns first. These types of orders are:

    1. POD Exclusion Order—Where there is an excess workload at one or more posts-of-duty, the POD(s) may be excluded from any order cycle. A maximum of 17 PODs may be excluded each cycle. If an Area-wide (general) order is placed subsequent to a POD exclusion order, returns previously excluded may fall out.

    2. POD Supplement Order—Where there is a workload shortage at a specific POD, a supplemental order may be submitted.

  3. See Exhibit 4.1.3-1., Inventory and Delivery Report 1040–1 shows the number of DIF returns available for ordering and the number of returns delivered for screening by examination class and DIF score range for each file year. High DIF Fast Track returns are also included in the return counts on this report. This report also provides the number of Minimum Tax and Alternative Minimum Tax returns (combined under TXPREFRET). This is a cumulative report which is generated every even cycle for each file year.

  4. See Exhibit 4.1.3-2., Inventory and Delivery Analysis Report 1040–2provides statistical data on individual returns processed and on returns delivered, including specials. This report is generated every cycle for the first 40 cycles and every even cycle thereafter.

  5. Individual returns cannot be ordered from the current file year until cycle 10. For orders prior to cycle 26,Override Code "1" will be entered in Column 87 of Form 6356to override the computer block.

  6. Caution: Any 1040 DIF or High DIF Fast Track returns ordered or received prior to March 31 that are electronically filed (e-filed) will not generate a TRPRT return to classification (CF & S). If these e-filed returns are to be classified from paper, they will need to be generated and printed through IDRS command code TRPRT after March 31.

  7. Although it is not intended to be the standard practice for filling DIF return orders, previous file year returns can still be ordered after cycle 9 using the current ordering process. Previous file year individual returns cannot be ordered after cycle 26 of the current file year. Override Code "9" will be entered in Column 80 of Form 6356 to override the computer block. Approval is needed from the PSP Territory Manager to utilize this override code.

  8. Alternative Minimum Tax returns may be ordered using Form 6356 with Indicator Code "W" entered on the order form.

  9. See Exhibit 4.1.3-5, Inventory and Delivery Report 1040–6 reflects DIF CORR inventory by score range and deliveries to the campus or Area. Orders must be made in odd cycles.

  10. The Amended Returns inventory contains Category B (paid) claims as defined in the LEM. Form 8199, Amended Returns Order, is used to place orders. See Exhibit 4.1.3-4., Table 1040–5 is the Inventory and Delivery Report for Amended Returns. These claims are ordered by the year in which the claims were filed, not by the tax year of the returns for which the claim applies. The highest dollar claims will be delivered first. The following categories of amended returns may be ordered:

    1. Adjustments to Income

    2. Filing Status and Exemptions

    3. Tax Computations

    4. Credits

    5. Itemized Deductions

    6. Schedule C or F

    7. Schedule D and Form 4797

    8. Schedule E

    9. Other Taxes

    10. Multiples—any combination of the above categories

    11. Other—reasons not covered in above categories

4.1.3.4.2  (10-24-2006)
Ordering Corporation Returns

  1. Form 6897, Corporation Returns Order, will be used to order corporation returns. This form is separated into two sections, Corporation DIF Returns Order and Miscellaneous Corporation Returns Order. Instructions for completing Form 6897are found on the back of the form. Returns may be ordered from odd numbered cycles only.

  2. Areas are expected to order returns for the entire Area. However, the capability for ordering or excluding returns for a specific post-of-duty is available. These orders should be kept to a minimum since it deviates from working the highest DIF returns first. These types of orders are:

    1. POD Exclusion Order—Where there is an excess workload at one or more posts-of-duty, the POD(s) may be excluded from any order cycle. A maximum of 7 PODs may be excluded each cycle.

    2. POD Supplemental Order—Where there is a workload shortage at a specific POD, a supplemental order may be submitted.

  3. See Exhibit 4.1.3-6. , Corporate DIF Inventory and Delivery Report 1120–1 shows the number of DIF returns available to order for screening and the number of DIF returns which have been delivered by DIF score range.

  4. See Exhibit 4.1.3-7. , Corporate DIF Inventory and Delivery Analysis Report 1120–2 provides data on corporations processed and on returns in inventory or delivered, including specials and automatics. BMF returns will not be ordered from the current file year inventory until after processing cycle 26 of the current file year.

  5. See Exhibit 4.1.3-8. , 1120S DIF and 1120F Inventory and Delivery Report 1120–3 provides data on corporate returns processed and on returns in inventory or delivered, including specials and automatics.

  6. Indicator Codes are entered on Form 6897to designate the type of returns ordered as shown in the following figure:

    Figure 4.1.3-2

    Indicator   Explanation
    0 The highest scored returns in inventory will be delivered. Valid for all types of DIF scored returns.
    1 Reserved.
    2 Taxable Inventory Returns. Valid for only the following returns:
     a. 1120L
     b. 1120PC
     c. 1120 PHC (low asset)
    3 Non Taxable Income Inventory Returns. Valid for only the following returns:
     a. 1120L
     b. 1120PC
     c.  Inactive (low asset)
     d. 1120 PHC (low asset)
    5 To be used to order corporation returns of the current file year prior to Cycle 27

  7. Orders of miscellaneous returns in the taxable income category are filled from the top of the " file" (highest income to zero.)

  8. Orders of miscellaneous returns in the non taxable income category are filled from the top of the " file" (greatest loss to zero.)

  9. Only one indicator code may be used for returns in each examination class in the same cycle. However, different indicator codes may be used for different examination classes in the same cycle.

4.1.3.4.3  (10-24-2006)
Ordering Partnership Returns

  1. Form 6162, Partnership Returns Order, will be used to order DIF partnership returns. Instructions for completing Form 6162 are found on the back of the form. Returns may be ordered monthly.

  2. POD orders are not available.

  3. See Exhibit 4.1.3-9., Inventory and Delivery Report 1065–1 shows the number of Partnership returns available for ordering and the number of Partnership returns delivered for classification, by DIF score range, Examination Class and file year.

  4. See Exhibit 4.1.3-10, Inventory and Delivery Report 1065–2 provides analytical data on Partnership returns processed, inventoried and delivered for classification, including Automatics and Specials.

  5. Indicator Codes are entered on Form 6162to designate the type of returns ordered as follows:

    Indicator Code Explanation
    0 Should be entered on all orders for Form 1065.
    5 To be used to order partnership returns of the current file year prior to Cycle 27.

  6. According to IRC §761(a) Partnership Returns, Investment groups that are not required to file partnership returns, selected for examination by the Campus will be forwarded to their respective Areas.

4.1.3.4.4  (10-24-2006)
Ordering Fiduciary Returns

  1. Form 5337, Fiduciary Returns Order, will be used to order fiduciary returns. Instructions for completing Form 5337are found on the back of the form. Returns may be ordered monthly.

  2. POD orders are not available.

  3. See Exhibit 4.1.3-11., Inventory and Delivery Report 1041 shows the number of Fiduciary returns available for ordering and the number of Fiduciary returns delivered for classification during the file year. This report provides the following information:

    1. Table 1 - Nonautomatic Fiduciary Returns. The total number of Fiduciary returns available, the total number of returns delivered for the current cycle and delivered (cumulative) during the file year.

    2. Table 2 - Automatic Fiduciary Returns. The total number of Fiduciary returns delivered for the current cycle and delivered (cumulative) during the file year.

  4. Indicator Codes are entered on Form 5337to designate the type of returns ordered as follows:

    Indicator Code Explanation
    0 Should be entered on all orders for Form 1041.
    5 To be used to order Fiduciary returns of the current file year prior to Cycle 27.

4.1.3.4.5  (10-24-2006)
REMIC

  1. U.S. Real Estate Mortgage Investment Conduit (REMIC) REMIC returns can be ordered using Form 8757 , U.S. Real Estate Mortgage Investment Conduit Income Tax. Returns may be ordered monthly.

  2. See Exhibit 4.1.3-12., Inventory and Delivery Report 1066–1 shows the number of REMIC returns available for ordering and the number of REMIC returns delivered for classification by Examination Class for the file year.


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