SECTION 10. RESPONSIBILITIES

OF A REPORTING AGENT

.01 To ensure that complete returns are accurately and efficiently filed, an Agent must comply with the applicable Publication(s) for the Mag Tape Program(s) in which the Agent is participating. See Publication 1264 (Form 941), 1314 (Form 940), or 1833 (Form 945). .02 The Agent must retain the following material for 4 years after the due date of the return (or if the return is filed late, for a period of 4 years from the filing date), unless otherwise notified by the Service:

(1) a complete copy of the magnetic tape portion of the return;

(2) a copy of the signed Form 4996; (3) a copy of the Service’s notification of receipt of Form 4996; and

before the Service acts on the request for consolidation, the Agent must send the request to the service center where the Agent requests to consolidate. The request must include a list of all the service centers with which returns have been or will be filed.

.03 An Agent must file magnetic tape returns according to the following instructions:

(1) the first box of the magnetic tape shipment to the service center must contain a Form 4996 with one duplicate, and a list of taxpayers’ names and addresses (address is optional) in EIN sequence whose returns are on the magnetic tape being submitted (Control List). These taxpayers must only be those on the Validated Agent’s List returned to the Agent. Detailed packaging, shipping, and mailing instructions will be provided in the letter granting approval to file on magnetic tape;

(2) if the Form 4996 is missing, incomplete, or unsigned, the magnetic tape filing does not constitute a tax return. Failure to complete this form accurately will delay the magnetic tape processing; and

(3) in the case of the Form 941 mag tape program, if an employee’s wages and tips are exempt from tax on social security or medicare, an Agent must inform the Service by following specific instructions in Publication 1264. .04 A violation of the following restrictions will cause a Processing Interruption:

(1) in no case may one magnetic tape include returns with more than one due date; or

(2) the magnetic tape must include only data for one form of return ( e.g., Form 941). Data for another form of return ( e.g., Form 940 or Form 945) must be submitted on a separate magnetic tape.

.05 The service center will send notification to the Agent of receipt of the magnetic tape submission. Unless otherwise advised within 10 business days of the Service’s receipt of the Form 4996, an Agent may consider the returns included in that submission timely filed if the postmark date is on or before the due date of the returns. If the Agent does not receive notification of receipt of Form 4996 within 15 days from the date it was sent, the Agent should contact the appropriate Coordinator listed in section 22 of this revenue procedure.

.06 A magnetic tape submission made on or before the due date that causes a Processing Interruption or that has an Error Rate exceeding 5 percent will not be accepted, and the Agent will be asked to submit a replacement magnetic tape, an accompanying Form 4996, and paper returns within 30 days of the Coordinator’s request. If the Agent submits the replacement magnetic tape, Form 4996, and paper returns within 30 days, the returns will be considered timely filed. For the penalty for failure to file a timely return, see section 19 of this revenue procedure.

.07 If the replacement magnetic tape is unacceptable, the Coordinator will process the paper returns and notify the Agent. In such circumstances, an Agent is required to submit an acceptable test tape for the next filing date by the test tape due dates set forth in section 6.02 of this revenue procedure.