SEC. 16. MAJOR PROBLEMS — Internal Revenue Bulletin 1996-2

PLEASE READ THE FOLLOWING LIST OF MAJOR PROBLEMS ENCOUNTERED. BEFORE SUBMITTING FILES, REVIEW THE CONTENT AND FORMAT CAREFULLY TO ENSURE THE SPECIFICATIONS IN THIS PUBLICATION HAVE BEEN CORRECTLY FOLLOWED. CHECK TO BE SURE THE CONTENT OF EACH TYPE OF RECORD IS ACCURATE. THIS MAY ELIMINATE THE NEED FOR IRS/MCC TO RETURN THE FILE FOR REPLACEMENT, AND THEREFORE REDUCE THE LIKELIHOOD OF A PENALTY ASSESSMENT FOR INCORRECT SUBMISSIONS. If due to unavoidable circumstances the data would be unacceptable to IRS/MCC, ( e.g., math or tax rate errors), include a letter of explanation with each submission.

Listed below are some of the most common problems:

Records formatted incorrectly.

Failure to format records correctly will result in files being returned for replacement.

Incorrect or missing Transmitter Control Code.

Filers MUST use the unique Transmitter Control Code (TCC) assigned for Form 1042–S reporting (Beginning numbers

‘‘22’’). Application procedures are provided in Part A. Sec. 7 of this revenue procedure.

Missing Form 4804

Form 4804, Transmittal of Information Returns Reported Magnetically/Electronically, must accompany each magnetic media shipment or electronic transmission. Forms 1042–S filed magnetically or electronically are not considered complete until a signed Form 4804 is received by IRS/MCC.

Incorrect format of the Recipient Name Line.

The recipient’s surname should be reported first, followed by given names. However, if the recipient’s surname is not

entered in position 139, the filer MUST enter an asterisk that immediately precedes the recipient’s surname. If the surname

is reported first, the asterisk MUST be omitted, since an asterisk is not valid in the first position of Recipient Name Line One.

Incorrect record sequence.

To be acceptable, records must be in a specific sequence. If this sequence is not followed, the file will be returned for replacement. (Refer to Part B. Sec. 5)

6. Incorrect block size.

Some of the files received at IRS/MCC are blocked incorrectly causing media to be returned. Refer to Part B. Magnetic Media Specifications, Sec. 2. Tape Specifications for the correct block size for submitting Form 1042–S magnetically. A block may not exceed 15,000 characters, although, shorter blocks may be used.

7. Incorrect Country Code in positions 137–138 of the Recipient ‘‘Q’’ Record and rate of tax withheld.

If the letters OC (which should be used ONLY when absolutely necessary) are used, the rate of tax withheld MUST be the maximum applicable rate.

8. Incorrect Country Name in positions 335–354 of the Recipient ‘‘Q’’ Record. This is a Required field; please read the Description and Remarks portion carefully. This may or may not be the same country as indicated in Country Code, field position 137–138. Do not use Other Country; USA; US; outside of USA; United States.

9. Incorrect Tax Rate, Field position 372–373 of the Recipient ‘‘Q’’ Record.

This is a Required field with very specific acceptable codes. Please ensure the accuracy of the correct tax rate depending on the proper country code and/or exemption code.

10. Incorrect Exemption Code in field position 370.

This is a Required field which causes many processing errors. Please read carefully the description and remarks portion, along with the note at the bottom to eliminate the possibility of errors.

11. Incorrect Recipient Address Fields.

Be sure to use specific breakdown of the address in the following positions:

244—283 Street Address 333—334 U.S. State Code 284—308 City 335—354 Country Name 309—323 Province Name 324—332 Postal Code

PART B. MAGNETIC MEDIA SPECIFICATIONS