Section 1. Addresses — Internal Revenue Bulletin 1996-27

Section 2. Phone Numbers for Contacting IRS/MCC Magnetic Media Reporting Program/ Information Returns Branch Section 3. Preparation Instructions for External Label Section 4. Related Forms for Filing Information Returns Magnetically/Electronically

Part A. General

Revenue procedures are generally revised annually to reflect legislative and form changes. Comments concerning this revenue procedure, or suggestions for making it more helpful, can be addressed to:

Internal Revenue Service Martinsburg Computing Center Attn: IRB, Information Support Section P. O. Box 1359, MS–360 Martinsburg, WV 25401

Sec. 1. Purpose

.01 The purpose of this revenue procedure is to provide the specifications for filing Forms 1098, 1099 series, 5498, and W–2G electronically or on magnetic media, which includes 1⁄2-inch magnetic tape; IBM 3480, 3490 or AS400 compatible tape cartridges; or 5 ¹ ⁄4- and 3 ¹ ⁄2-inch diskettes with IRS. IRS/MCC has discontinued processing 8-inch diskettes . This revenue procedure must be used for the preparation of Tax Year 1996 information returns and information returns for years prior to 1996 that are required to be filed. This revenue procedure must be used to prepare current and prior year information returns filed between January 1, 1997, and December 31, 1997 . Specifications for filing the following forms are contained in this revenue procedure.

(a) Form 1098, Mortgage Interest Statement. (b) Form 1099–A, Acquisition or Abandonment of Secured Property. (c) Form 1099–B, Proceeds from Broker and Barter Exchange Transactions. (d) Form 1099–C, Cancellation of Debt. (e) Form 1099–DIV, Dividends and Distributions. (f) Form 1099–G, Certain Government Payments. (g) Form 1099–INT, Interest Income. (h) Form 1099–MISC, Miscellaneous Income. (i) Form 1099-OID, Original Issue Discount. (j) Form 1099–PATR, Taxable Distributions Received from Cooperatives. (k) Form 1099–R, Distributions from Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.

(l) Form 1099–S, Proceeds from Real Estate Transactions. (m) Form 5498, Individual Retire

(a) 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W– 2G’’ provides specific instructions on completing and submitting information returns to IRS. (b) Rev. Proc. 84–33, 1984–1 C.B. 502, regarding the optional method for agents to report and deposit backup withholding. (c) Publication 1179, Rules and Specifications for Private Printing of Substitute Forms 1096, 1098, 1099 Series, 5498, and W–2G. (d) Publication 1239, Specifications for Filing Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips, on Magnetic Tape and 5 ¹ ⁄4- or 3 ¹ ⁄2inch Diskettes.

m e n t A r r a n g e m e n t Information. (n) Form W–2G, Certain Gambling Winnings. .02 Specifications for filing Forms W–2 on magnetic media are available from the Social Security Administration (SSA) only . Filers can call 1-800SSA-1213 to obtain the phone number of the SSA Magnetic Media Coordinator for their area.

.03 The Internal Revenue Service, Martinsburg Computing Center (IRS/ MCC) has the responsibility for processing Forms 1098, 1099 series, 5498, and W–2G filed magnetically or electronically. IRS/MCC does not process Forms W–2. Paper and/or magnetic media for Forms W–2 must be sent to SSA. IRS/MCC does, however, process waiver requests (Form 8508) and extension of time requests (Form 8809) for filing Forms W–2.

.04 In most cases, the box numbers on the paper forms correspond with the amount codes used to file magnetically/ electronically; however, if discrepancies occur, the instructions in this revenue procedure govern.

.05 This revenue procedure also provides the requirements and specifications for magnetic media or electronic filing under the Combined Federal/State Filing Program.

.06 The following revenue procedures and publications provide more detailed filing procedures for certain other information returns.

(e) Publication 1187, Specifications for Filing Form 1042–S, Foreign Person’s U.S. Source Income Subject to Withholding, Electronically or on Magnetic Tape, and 5 ¹ ⁄4- or 3 ¹ ⁄2-inch Magnetic Diskettes. (f) Publication 1245, Specifications for Filing Form W–4, Employee’s Withholding Allowance Certificate, on Magnetic Tape, and 5 ¹ ⁄4- or 3 ¹ ⁄2inch Magnetic Diskette. .07 This revenue procedure supersedes Rev. Proc. 95–29 and 95–29A published as Publication 1220 (Rev. 6– 95 ), Specifications for Filing Forms 1098, 1099, 5498, and W–2G Magnetically or Electronically.

.08 Refer to Part A, Sec. 17, for definitions of terms used in this publication.

Sec. 2. Nature of Changes—Current Year (Tax Year 1996)

.01 In this publication, all pertinent changes for Tax Year 1996 have been emphasized by the use of italics . This has been done for the convenience of the filers in identifying new information. Filers are still advised to read the publication in its entirety.

.02 Programming Changes a . Payer/Transmitter ‘‘A’’ Record Changes:

(1) For all forms, Payment Year, Field Positions 2–3 must be incremented by one (from 95 to 96 ) unless reporting prior year data.

b . Payer/Transmitter ‘‘B’’ Record Changes:

(1) For all forms, Payment Year, Field Positions 2–3 must be incremented by one (from 95 to 96 ) unless reporting prior year data.

(2) Part B, Sec. 8: For Form 1099–R Distribution Codes, Field Positions 4–5, acceptable combinations of numeric distribution codes now include codes 8 and 4.

(3) Part B, Sec. 8: For Form 5498, a SEP Indicator has been added in Field Position 44.

.03 Editorial Changes—General (a) Eight inch diskette processing has been eliminated by IRS/MCC. All references to 8-inch diskette processing have been deleted from this publication.

(b) Part A, Sec. 4.04 was included to inform payers of electronic filing

methods; i.e., Mainframe and Information Reporting Program Bulletin Board System (IRP–BBS) electronic filing, and a brief overview of options available on the IRP–BBS.

(c) Part A, Sec. 5.14: Instructions have been added for obtaining an automatic waiver for filing Form 5498 for participants of Operation Joint Endeavor (Bosnia Region).

(d) Part A, Sec. 7.01: A chart has been added to clarify the guidelines for applications for a transmitter control code (TCC).

(e) Part A, Sec. 12.02 and 12.03: Information has been added regarding the Media Tracking Slip (Form 9267) which accompanies media returned to filers due to processing problems.

(f) Part A, Sec. 17: The Definition of Terms section has been expanded.

(g) Part B, Sec. 3.01(a): Tape cartridge specifications have been expanded to include IBM 3490E as acceptable media.

(h) Part F: Information in this part has been provided as a quick reference point for addresses and telephone numbers for IRS/MCC.

(i) Numerous statements have been added and bolded throughout the publication instructing filers not to report duplicate data which may result in erroneous penalty notices being generated.

.04 Editorial Changes—Magnetic Media Specifications

(a) Part B, Sec. 4: 8mm (.315-inch) tape cartridge specifications have been added. This is a pilot program for transmitters with AS400 operating systems only.

(b) Part B, Sec. 6: Instructions have been included for reporting IRA contributions for Operation Joint Endeavor (Bosnia Region) participants.

(c) Part B, Sec. 6, Payer/Transmitter ‘‘A’’ Record—General Field Descriptions—Field Positions 23–31, Form 5498: A note was added directing the filer to enter ‘‘1’’ in the IRA/SEP Indicator Field (position 44 of the Payee ‘‘B’’ Record) for a simplified employee pension (SEP).

(d) Part B, Sec. 8: A separate Payee ‘‘B’’ Record Layout Position 322–420, has been created for Form 1099–R.

(e) Part B, Sec. 8, Payee ‘‘B’’ Field Positions 4–5, Document Specific Code/Distribution Code for the Tax Year of Refund for 1099–G: A statement has been added to instruct filers

to report the distribution code that reflects the tax year for which the REFUND was made, not 1996. Refund Years have been added to identify the valid corresponding code.

(f) Part B, Sec. 8, Payee ‘‘B’’ Record General Field Descriptions and Record Layout—IRA/SEP Indicator, Field Position 44: Text was added to the Description and Remarks to enter ‘‘1’’ for Form 5498 if reporting a contribution to a simplified employee pension (SEP). A note was also added to reflect the change.

(g) Part C, Sec. 6: IBM 3780 Bisynchronous communication has been expanded to include the specifications and circuit number of 304-264-7045 for Hayes OPTIMA 288 V.FC Smartmodem for 14400 bps transmissions.

(h) Part C, Sec. 7: A Type of File Indicator has been added in Field Position 44 for Extension File in the Bisynchronous Electronic Filing Record Specifications.

(i) Part E, Sec. 3, RECORD LAYOUT, Field Positions 6–14: Reference to the Foreign Entity Indicator has been corrected to read, Field Position 176, must be set to ‘‘X.’’

Sec. 3. Where to File and How to Contact the IRS, Martinsburg Computing Center (MCC)

.01 All information returns filed magnetically or electronically are processed at IRS/MCC. Files containing information returns, requests for IRS magnetic media and electronic filing information, undue hardship waivers, and requests for extensions of time to file returns or to furnish the statements to recipients are to be sent to the following addresses:

IRS-Martinsburg Computing Center Information Reporting Program Route 9 and Needy Road, MS-360 Martinsburg, WV 25401 .02 Send a magnetically filed extension of time request to one of the following addresses:

If by Postal Service: u

IRS-Martinsburg Computing Center Attn: Extension of Time Coordinator P. O. Box 879, MS-360 Kearneysville, WV 25430 If by truck or air freight: v

u If by Postal Service:

IRS-Martinsburg Computing Center P. O. Box 1359, MS-360 Martinsburg, WV 25401-1359

IRS-Martinsburg Computing Center Attn: Extension of Time Coordinator Route 9 and Needy Road, MS-360 Martinsburg, WV 25401 .03 Inquiries may be made between 8:30 a.m. and 4:30 p.m. Eastern time. The telephone numbers for magnetic media inquiries or electronic submissions are:

304-263-8700—Call Site—PART A,

Sec 3.19

304-264-7070—IRP–BBS (Informa- tion Reporting Program Bulletin Board System)—PART D

304-264-7080—4.8 Modems— PART C

304-264-7040—9.6 Modems— PART C

304-264-7045—14.4 Modems— PART C

304-267-3367—TDD (Telecom- munication Device for the Deaf)

304-264-5602—FAX MACHINE (These are not toll-free telephone numbers.)

TO OBTAIN FORMS, CALL: 1 - 8 0 0 - T A X - F O R M ( 1 - 8 0 0 - 829-3676) .04 The 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G’’ have been included in the Publication 1220 for transmitter convenience. The Form 1096 is used only to transmit Copy A of paper Forms 1099, 1098, 5498, and W–2G. If filing paper returns, follow the mailing instructions on the Form 1096 and submit the paper returns to the appropriate IRS Service Center.

.05 Requests for paper Forms 1096, 1098, 1099 and W–2G, and publications unrelated to magnetic media/ electronic filing should be requested by calling the ‘‘Forms Only Number’’ listed in your local telephone directory or by calling the IRS toll-free number 1-800-TAX-FORM (1-800-829-3676) . .06 Questions pertaining to magnetic media filing of Forms W–2 must be

or v If by truck or air freight:

directed to the Social Security Administration (SSA). Filers can call 1-800SSA-1213 to obtain the phone number of the SSA Magnetic Media Coordinator for their area.

.07 Payers should not contact IRS/ MCC if they have received a penalty notice and need additional information, or are requesting an abatement of the penalty. Penalty notices contain an IRS representative’s name and/or phone number for contact purposes; or, the payer may be instructed to respond in writing to the address provided. IRS/ MCC does not issue penalty notices and does not have the authority to abate penalties. For penalty information, refer to the Penalty section of 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G.’’ .08 A taxpayer or authorized representative may request a copy of a tax return or a Form W–2 filed with a return by submitting Form 4506, Request for Copy or Transcript of Tax Form, to IRS. This form may be obtained by calling 1-800-TAX-FORM (1-800-829-3676) .

.09 The IRS Centralized Call Site answers both magnetic media and tax law questions relating to the filing of information returns (Forms 1096, 1098, 1099, 5498, 8027, W–2, W–2G, W–3, Questionable W–4’s, and 1042S). The IRS/MCC Call Site also handles inquiries dealing with backup withholding due to missing and incorrect taxpayer identification numbers. The Call Site is located at IRS/MCC and operates in conjunction with the Information Reporting Program. The Call Site provides service to the payer community (financial institutions, employers, and other transmitters of information returns). Recipients of information returns (payees) should continue to contact 1-800-829-1040 or other numbers specified in the tax return instructions with any questions on how to report information returns.

The Call Site accepts calls from all areas of the country. The number to call is 304-263-8700 or Telecommunications Device for the Deaf (TDD) 304-267-3367. These are toll calls. Hours of operation for the Call Site are Monday through Friday, 8:30 a.m. to 4:30 p.m. Eastern Time. The Call Site is in operation throughout the year to handle payers’, transmitters’, and employers’ questions. Due to the high demand for assistance at the end of January and February, it is advisable

to call as soon as possible to avoid these peak filing seasons.

Sec. 4. Filing Requirements

.01 Under section 6011(e)(2)(A) of the Internal Revenue Code, any person, including a corporation, partnership, individual, estate, and trust, who is required to file 250 or more information returns must file such returns magnetically/electronically. The 250 or more requirement applies separately for each type of return and also to each type of corrected return. Even though payers may not be required to file magnetically/electronically, IRS encourages them to do so.

.02 All filing requirements that follow apply individually to each reporting entity as defined by its separate Taxpayer Identification Number (TIN)

[Social Security Number (SSN), or Employer Identification Number (EIN)]. For example, if a corporation with several branches or locations uses the same EIN, the corporation must aggregate the total volume of returns to be filed for that EIN and apply the filing requirements to each type of return accordingly.

.03 Payers who are required to submit their information returns on magnetic media may choose to submit their documents by electronic filing. Payers who submit their information returns electronically are considered to have satisfied the magnetic media filing requirements.

.04 IRS/MCC has two methods by which payers may submit their files electronically. Bisynchronous (main- frame) electronic filing, which can be found in Part C of this publication, or Asynchronous (Information Reporting Program Bulletin Board System), which is in Part D. An overview of some features provided on the IRP-BBS are as follows:

Electronic filing of information returns to the IRS using dial-up modems
Return notification of the accept- ability of the data transmitted within 24 to 48 hours
Electronic communication with IRS and Social Security bulletin board systems
Access to information reporting publications
Access to shareware
Access to forms relating to the Information Reporting Program

News about the latest changes and updates that affect the Information Reporting Program at IRS
Answers to messages and ques- tions left on the bulletin board
IRP–BBS is available for public use and can be reached by dialing 304-264-7070
Telephone lines are available 24 hours a day, 7 days a week. Routine maintenance is performed daily, at approximately 7:00 a.m. Eastern Time Zone.
Questions, comments, or sugges- tions can be directed to the Systems Operator (SYSOP) through IRP–BBS. .05 The following requirements apply separately to both originals and corrections filed magnetically/ electronically:

1098 1099–A 1099–B 1099–C 1099–DIV 1099–G 1099–INT 1099–MISC 1099–OID 1099–PATR 1099–R 1099–S 5498 W–2G

250 or more of any of these forms require magnetic media or electronic filing with IRS. These are stand alone documents and are not to be aggregated for purposes of determining the 250 threshold. For example, if you must file 100 Forms 1099–B and 300 Forms 1099–INT, Forms 1099–B need not be filed magnetically or electronically since they do not meet the threshold of 250. However, Forms 1099–INT must be filed magnetically or electronically since they meet the threshold of 250.

.06 The above requirements do not apply if the payer establishes undue hardship (see Part A, Sec. 5).

Sec. 5. Form 8508, Request for Waiver from Filing Information Returns on Magnetic Media

.01 If a payer is required to file on magnetic media but fails to do so (or fails to file electronically, in lieu of magnetic media filing) and does not have an approved waiver on record, the payer will be subject to a penalty of $50 per return. (For penalty information, refer to the Penalty section of the 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G.’’)

.02 If payers are required to file original or corrected returns on magnetic media, but such filing would create an undue hardship, they may request a waiver from these filing requirements by submitting Form 8508, Request for Waiver From Filing Information Returns on Magnetic Media, to IRS/MCC.

.03 Even though a payer may submit up to 249 corrections on paper, IRS/ MCC encourages magnetically or electronically submitted corrections. Once the 250 threshold has been met, filers are required to submit any returns of 250 or more magnetically or electronically. However, if a waiver for original documents is approved, any corrections for the same type of returns will be covered under this waiver.

.04 Generally, only the payer may sign the Form 8508. A transmitter may sign if given power of attorney; however, a letter signed by the payer stating this fact must be attached to the Form 8508.

.05 A transmitter must submit a separate Form 8508 for each payer. Do not submit a list of payers.

.06 All information requested on the Form 8508 must be provided to IRS for the request to be processed.

.07 The waiver, if approved, will provide exemption from magnetic media filing for the current tax year only. Payers may not apply for a waiver for more than one tax year at a time; application must be made each year a waiver is necessary.

.08 Form 8508 may be photocopied or computer-generated as long as it contains all the information requested on the original form.

.09 Filers are encouraged to submit Form 8508 to IRS/MCC at least 45 days before the due date of the returns. However, new brokers and new barter exchanges may request an undue hardship waiver by the end of the second month following the month in which they became a broker or barter exchange.

.10 File Form 8508 for Forms W–2 with IRS/MCC, not SSA.

.11 Waivers are evaluated on a caseby-case basis and are approved or

denied based on criteria set forth under section 6011(e) of the Internal Revenue Code. The transmitter must allow a minimum of 30 days for IRS/MCC to respond to a waiver request.

.12 If a waiver request is approved, the transmitter should keep the approval letter on file. The transmitter should not send a copy of the ap- proved waiver to the service center where the paper returns are filed.

.13 An approved waiver from fil- ing information returns on magnetic media does not provide exemption from all filing . The payer must timely file information returns on acceptable paper forms with the appropriate submission processing site.

.14 Desert Storm/ Operation Joint E n d e a v o r ( B o s n i a R e g i o n ) Contributions —If a payer is required to file a Form 5498 magnetically/ electronically, the payer may request an automatic waiver to file Forms 5498 on paper for participants of Desert Storm or Operations Joint Endeavor . The payer should clearly mark Desert Storm or Operations Joint Endeavor on the waiver request form.

Sec. 6. Vendor List

.01 IRS/MCC prepares a list of vendors who support magnetic media or electronic filing. The Vendor List (Pub. 1582) contains the names of service bureaus that will produce files on the prescribed types of magnetic media or via electronic filing. It also contains the names of vendors who provide software packages for payers who wish to produce magnetic media or electronic files on their own computer systems. This list is provided, upon request, as a courtesy and in no way implies IRS/MCC approval or endorsement. Note: If filers meet the filing

requirements and engage a service bureau to prepare media on their behalf, the filers should be careful not to report duplicate data, which may cause penalty notices to be generated . .02 A payer may request a Vendor

List (Pub. 1582) by contacting IRS/ MCC at 304-263-8700 or by way of letter (see Part A, Sec. 3). This information is also available from the Information Reporting Program Bulletin Board System (refer to Part D). Vendor names will not be provided over the telephone.

.03 A vendor, who offers a software package, has the ability to produce magnetic media for customers, or has the capability to electronically file information returns, and would like to be included on the list, must submit a written request to IRS/MCC. The request should be submitted by August 15 and must include: (a) Company name (b) Address (include city, state, and ZIP code) (c) Telephone number (include area code) (d) Contact person (e) Type(s) of service provided ( e.g., service bureau and/or software) (f) Type(s) of media offered ( e.g., magnetic tape or tape cartridge, 5 ¹ ⁄4- or 3 ¹ ⁄2-inch diskettes, or electronic filing) (g) Type of return .04 The vendor list is updated annually. Therefore, any changes to information already on the vendor list must also be received by IRS/MCC no later than August 15 to be included on the most current vendor list.

Sec. 7. Form 4419, Application for Filing Information Returns Magnetically/Electronically

.01 Transmitters are required to submit Form 4419, Application for Filing Information Returns Magnetically/ Electronically, to request authorization to file information returns with IRS/ MCC. A single Form 4419 should be filed no matter how many types of returns the transmitter will be submitting magnetically/electronically. For example, if a transmitter plans to file Forms 1099–INT, one Form 4419 should be submitted. If, at a later date, another type of form is to be filed, the transmitter does not need to submit a new Form 4419.

EXCEPTIONS An additional Form 4419 is required for filing each of the following types of returns: Forms 1042–S, 8027, and Questionable W–4.

FORM TITLE EXPLANATION

1042–S Foreign Person’s U.S. Source Income Subject to Withholding

8027 Employer’s Annual Information Return of Tip Income and Allocated Tips

Questionable W–4 (See Note )

Employee’s Withholding Al- lowance Certificate

Payments subject to withholding under Chapter 3 of the Code, including interest, dividends, royalties, pensions and annuities, gambling winnings and compensation for personal services.

Receipts from food or beverage operations, tips reported by employees, and allocated tips.

Forms received during the quarter from employees still employed at the end of the quarter who claim the following: (a) More than 10 withholding allowances or (b) Exempt status and wages normally would be more than

$200 a week.

Note: Employers are not required to send other Forms W–4 unless notified to do so by the IRS .

If filers wish to report both electronically and magnetically, only one Form 4419 needs to be submitted.

.02 Magnetic tape, tape cartridge, diskette, and electronically-filed returns may not be submitted to IRS/MCC until the application has been approved. Please read the instructions on the back of Form 4419 carefully. A Form 4419 is included in the Publication 1220 for the filer’s use. This form may be photocopied. Additional forms may be obtained by calling 1-800-TAX-FORM (1-800-829-3676).

.03 Upon approval, a five-character alpha/numeric Transmitter Control Code (TCC) will be assigned and included in an approval letter. The TCC must be coded in the Payer ‘‘A’’ Record. If a transmitter uses more than one TCC to file, each TCC must be reported on separate media or in separate transmissions if filing electronically.

.04 A magnetic media reporting package containing the current revenue procedure, forms, and instructions will be sent to the attention of the contact person indicated on Form 4419. This package will be sent annually.

.05 If any of the information on the Form 4419 changes, please notify IRS/ MCC in writing so that the IRS/MCC database can be updated. The transmitter should include the TCC in all correspondence.

.06 Form 4419 can be submitted at any time during the year; however, it must be submitted to IRS/MCC at least 30 days before the due date of the return(s). For documents to be filed

electronically using IBM 3780 bi- synchronous protocols, Form 4419 must be submitted at least 45 days prior to the due date of the returns (See Part C, Sec. 2). This will allow IRS/MCC the minimum amount of time necessary to process and respond to applications. In the event that computer equipment or software is not compatible with IRS/MCC, a waiver may be requested to file returns on paper documents.

.07 IRS/MCC encourages transmitters who file for multiple payers to submit one application and to use the assigned TCC for all payers. Include a list of all payers and TINs with the Form 4419. Transmitters are encouraged to provide an updated list to IRS/MCC annually.

.08 If a payer’s files are prepared by a service bureau, the payer may not need to submit an application to obtain a TCC. Some service bureaus will produce files, code their own TCC on the media, and send it to IRS/MCC for the payer. Other service bureaus will prepare magnetic media and return the media to the payer for submission to IRS/MCC. These service bureaus may require the payer to obtain a TCC to be coded in the ‘‘A’’ Record. Payers should contact their service bureaus for further information.

.09 Once a transmitter is approved to file magnetically or electronically, it is not necessary to reapply each year unless :

(a) The payer has discontinued filing magnetically or electronically for three years; the payer’s TCC may have been reassigned by IRS/MCC.

(b) The payer’s magnetic media files were transmitted in the past by a service bureau using the service bureau’s TCC, but now the payer has computer equipment compatible with that of IRS/MCC and wishes to prepare his or her own files. The payer must request a TCC by filing Form 4419. .10 One Form 4419 may be submitted regardless of how many types of media or methods used to file the return. A payer may apply for more than one TCC, but must code only one TCC per media. Notify IRS/MCC of any TCCs that will not be used so these numbers may be reassigned.

.11 In accordance with Regulations section 1.6041–7(b), payments by separate departments of a health care carrier to providers of medical and health care services may be reported on separate returns on magnetic media. In this case, the headquarters will be considered the transmitter, and the individual departments of the company filing reports will be considered payers. A single Form 4419 covering all departments filing on magnetic media should be submitted. One TCC may be used for all departments.

.12 Approval to file does not imply endorsement by IRS/MCC of the computer software or of the quality of tax preparation services provided.

Sec. 8. Test Files

.01 IRS/MCC does not require test files, except for filers wishing to

diskette as long as each filing entity or type of return is separated by an ‘‘A’’ Record. Only one ‘‘F’’ Record may be used at the end of a transmission. Multiple tapes or diskettes can be sent in one package. Filers must include Form 4804, 4802, or computergenerated substitute with their shipment.

.04 Multiple types of media may be submitted in a shipment. However, submit a separate Form 4804 for each type of media.

.05 Current and prior year data may be submitted in the same shipment; however, each tax year must be on separate media, and a separate Form 4804 must be prepared to clearly indicate each tax year.

.06 Filers who have prepared their information returns in advance of the due date are encouraged to submit this information to IRS/MCC no earlier than January 1 of the year the return is due.

.07 Do not report duplicate infor- mation. If a filer submits returns magnetically/electronically, identical paper documents must not be filed. This may result in erroneous penalty notices.

.08 Form 4804 may be signed by the payer or the transmitter, service bureau, paying agent, or disbursing agent (all hereafter referred to as agent), on behalf of the payer. An agent may sign the Form 4804 if the agent has the authority to sign the affidavit under an agency agreement (either oral, written, or implied) that is valid under state law and adds the caption ‘‘FOR: (name of payer).’’ Note: Failure to sign the affidavit

on Form 4804 may delay processing or could result in the files being returned unprocessed. .09 Although an authorized agent may sign the affidavit, the payer is responsible for the accuracy of the Form 4804 and the returns filed. The payer will be liable for penalties for failure to comply with filing requirements.

.10 An external media label, must be affixed to each tape and diskette. If diskettes are used, and the operating system is not MS–DOS compatible, the operating system and hardware information must be provided. Failure to provide this information may result in the diskettes being returned to the filer. For instructions on how to prepare an

participate in the Combined Federal/ State Filing Program (see Part A, Sec. 16, for further information concerning the Combined Federal/State Filing Program).

.02 IRS/MCC encourages first-time magnetic media or electronic filers to submit a test. The test file should consist of a sample of each type of record:

(a) Payer ‘‘A’’ Record (must not be fictitious data) (b) Multiple Payee ‘‘B’’ Records (at least 11 ‘‘B’’ Records per each ‘‘A’’ Record) (c) End of Payer ‘‘C’’ Record (d) State Totals ‘‘K’’ Record, if participating in the Combined Federal/State Filing Program (e) End of Transmission ‘‘F’’ Record See PART B for record formats. .03 Use the Test Indicator in the ‘‘A’’ Record to show that this is a test file.

.04 IRS/MCC will check the file to ensure it meets the specifications of this revenue procedure. For current filers, sending a test file will provide the opportunity to ensure that their software reflects any programming changes.

If unable to submit a magnetic or electronic test file, a hardcopy printout that shows a sample of each record type (A, B, C, and F) may be submitted. The hard copy print test is not acceptable for Combined Federal/ State Filing approval.

.05 Tests should be sent to IRS/ MCC between November 1 and December 31. The test file must be received at MCC by December 31 in order to be processed. Filers may begin submitting test tapes and diskettes after October 1; however, the data will not be processed until on or after November 1.

.06 For tests filed electronically, the transmitter must send the signed Form 4804, Transmittal of Information Returns Reported Magnetically/Electronically, the same day the transmission is made. For tests filed on magnetic tape, tape cartridge, 5 ¹ ⁄4- and 3 ¹ ⁄2-inch diskette, the transmitter must include the signed Form 4804 in the same package with the corresponding magnetic media. Mark the ‘‘TEST’’ box in block 1 on the form. Also, check ‘‘TEST’’ on the external media label.

If submitting a hard copy printout, mark the printout as ‘‘TEST’’ and

include name, telephone number, and address of a person who can be contacted to discuss its acceptability.

.07 IRS/MCC will send a letter of acknowledgment to indicate the test results. Unacceptable magnetic media files, along with documentation identifying the errors, will be returned. Resubmission of test files must be received by IRS/MCC no later than December 31.

.08 Successfully processed media will not be returned to filers.

Sec. 9. Filing of Information Returns Magnetically/Electronically and Retention Requirements

.01 Form 4804, Transmittal of Information Returns Reported Magnetically/ Electronically, Form 4802, Transmittal of Information Returns Reported Magnetically/Electronically (Continuation), or computer-generated substitute, must accompany all magnetic media shipments. For electronic transmissions, the Form 4804 and Form 4802, if applicable, must be sent the same day as the electronic transmission. Form 4802, Transmittal of Information Returns Reported Magnetically/Electronically (Continuation), is a continuation of Form 4804 and should only be used if the filer is reporting more than four types of returns and/or more than four payers. Form 4802 is not a stand-alone form; it can only accompany Form 4804. .02 IRS/MCC encourages the use of computer-generated substitutes for Form 4804/4802 (See Note ). The substitutes must contain all information requested on the original forms including the affidavit and signature line. Photocopies are acceptable but an original signature is required. Note: When using computer-

generated forms, be sure to very clearly mark which tax year is being reported. This will eliminate a phone communication from IRS/ MCC to question the tax year. .03 A transmitter may report for any combination of payers and/or documents in a submission. For example, if reporting Forms 1099–INT for Bank A, Forms 1099–DIV for Bank B, and Forms 1098 for Bank C, three separate tapes or diskettes need not be created. All three banks and all types of documents can be coded on one tape or

external media label, refer to PART F ‘‘Miscellaneous Information.’’

.11 On the outside of the shipping container, affix or attach a label which reads IRB of reflecting the number of containers in the shipment (See labels in PART F). If there is only one container, mark the outside as Box 1 of 1 . For multiple containers, include the sequence (for example, Box 1 of 3, 2 of 3, 3 of 3). .12 When submitting files include the following:

or electronically (See Note ). Requests for an extension of time for 10 to 50 payers are encouraged to be filed magnetically or electronically via IRP– BBS. (See Part E, Sec. 3, for the record format.) The request may be filed on tape, tape cartridge, 5 ¹ ⁄4- or 3 ¹ ⁄2-inch diskette, or electronically through the IRP–BBS or mainframe. Note: Form 4419, Application for

Filing Information Returns Magnetically/Electronically, must be completed in order to file an extension request magnetically/electronically . .05 A magnetically filed request for an extension of time should be sent using the following addresses: If by Postal Service: u

IRS-Martinsburg Computing Center Attn: Extension of Time Coordinator P. O. Box 879, MS-360 Kearneysville, WV 25430 If by truck or air freight: v

IRS-Martinsburg Computing Center Attn: Extension of Time Coordinator Route 9 and Needy Road, MS-360 Martinsburg, WV 25401 .06 Requests for extensions of time for multiple payers will be responded to with one approval letter, accompanied by a list of payers covered under that approval.

.07 As soon as it is apparent that a 30 day extension of time to file is needed, Form 8809 may be submitted. It will take a minimum of 30 days for IRS/MCC to respond to an extension request. Under certain circumstances a request for an extension of time could be denied. When a denial letter is received, any additional or necessary information may be resubmitted within 20 days. .08 If an additional extension of time is needed, a second Form 8809 must be requested before the end of the initial extension. Line 7 on the form should be checked to indicate that an additional extension is being requested. A second 30-day extension will be approved only in cases of extreme hardship or catastrophic events. When requesting a second 30-day extension of time, do not hold your files waiting for a response.

.09 Form 8809 must be post- marked no later than the due date of

(a) A signed Form 4804; (b) Form 4802, if applicable; (c) External media label affixed to

.02 Information returns filed magnetically/electronically for Forms 1098, 1099, and W–2G must be submitted to IRS/MCC postmarked no later than February 28. If using a delivery service other than postal service, the actual date of receipt by IRS/ MCC will be used as the submission date. This should be considered in meeting filing requirements timely.

.03 The due date for furnishing statements to recipients is January 31. Form 5498 statements are due to the participants by January 31 for the fair market value of the account and by May 31 for contributions made to IRAs for the prior calendar year.

.04 Form 5498 filed magnetically/ electronically must be submitted to IRS/MCC postmarked no later than May 31. Form 5498 is filed for contributions to be applied to 1996 that are made January 1, 1996, through April 15, 1997, and/or to report the fair market value of the IRA/SEP.

.05 If any due date falls on a Saturday, Sunday, or legal holiday, the return or statement is considered timely if filed or furnished on the next day that is not a Saturday, Sunday, or legal holiday.

.06 Use this revenue procedure to prepare information returns filed magnetically or electronically beginning January 1, 1997, and received by IRS/ MCC no later than December 31, 1997 .

Sec. 11. Extensions of Time

.01 An extension of time to file may be requested for Forms 1099, 1098, 5498, W–2G, W–2, and 1042–S. .02 Form 8809, Request for Extension of Time to File Information Returns, should be submitted to IRS/ MCC. This form may be used to request an extension of time to file information returns submitted on paper, magnetically or electronically.

.03 Requesting an extension of time for multiple payers may be done by submitting Form 8809 and attaching a list of the payer names and their TINs (EIN or SSN). The listing must be attached to ensure that the extension is recorded for all payers. Form 8809 may be computer-generated or photocopied. Be sure that all the pertinent information is included.

.04 Requests for an extension of time to file for more than 50 payers are required to be submitted magnetically

magnetic media; (d) IRB of outside label. Note: See Parts C and D for

electronic submission requirements . .13 If returns from different locations (using the same name and TIN) are submitted on the same file, IRS encourages the filer to consolidate each type of information return under one ‘‘A’’ Record. For example, all ‘‘B’’ Records for the same type of return should be together under one ‘‘A’’ Record and followed by the End of Payer ‘‘C’’ Record.

.14 IRS/MCC will not pay for or accept ‘‘Cash-on-Delivery’’ or ‘‘Charge to IRS’’ shipments of tax information that an individual or organization is legally required to submit.

.15 In general, payers should retain a copy of the information returns filed with IRS or have the ability to reconstruct the data for at least 3 years from the reporting due date, with the exception of Form 1099–C. A financial entity must retain a copy of Form 1099–C, Cancellation of Debt, or have the ability to reconstruct the data required to be included on the return, for at least 4 years from the date such return is required to be filed. Whenever backup withholding is imposed, a 4 year retention is required.

Sec. 10. Due Dates

.01 The due dates for filing paper returns with IRS also apply to magnetic media or electronic filing. Filing of information returns is on a calendar year basis, except for Form 5498, which is used to report amounts contributed during, or after (but not later than April 15) of the calendar year.

the return for which an extension is requested. If requesting an extension of time to file several types of forms, use one Form 8809, but the Form 8809 must be postmarked no later than the earliest due date. For example, if requesting an extension of time to file both Forms 1099–INT and 5498, submit Form 8809 post- marked on or before February 28. Complete more than one Form 8809 to avoid this problem.

.10 If an extension request is ap- proved, the approval letter should be kept on file. (The approval letter or copy of the approval letter for exten- sion of time should not be sent to IRS/ MCC with the magnetic media file or to the service center where the paper returns are filed.)

.11 Request an extension for only one tax year.

.12 The extension request must be signed by the payer or a person who is duly authorized to sign a return, statement or other document for the payer.

.13 Failure to properly complete and sign the Form 8809 may cause delays in processing the request or result in a denial. Carefully read and follow the instructions on the back of the Form 8809. .14 Form 8809 may be obtained by calling 1-800-TAX-FORM (1-800829-3676). .15 Request an extension of time to furnish the statements to recipient of Forms 1098, 1099, 5498, W–2G, W–2, and 1042–S by submitting a letter to IRS/MCC or to the payer’s local District Director containing the following information:

(a) Payer Name (b) TIN (c) Address (d) Type of Return (e) Specify that the extension re quest is to provide statements to recipients. (f) Reason for Delay (g) Signature of Payer or Person

the statements must be sent to the recipients timely. The request must be postmarked by the date on which the statements are due to the recipients.

Sec. 12. Processing of Information Returns Magnetically/Electronically

.01 All data received at IRS/MCC for processing will be given the same protection as individual income tax returns (Form 1040). IRS/MCC will process the data and determine if the records are formatted and coded according to this revenue procedure.

.02 If the data is formatted incorrectly, the file will be returned for replacement accompanied with a Media Tracking Slip (Form 9267) . If media is returned, it is because IRS/MCC encountered errors (not limited to format) and was unable to process the media, therefore, requiring a replacement. Open all packages immediately.

.03 Files must be corrected and returned with the Media Tracking Slip (Form 9267) to IRS/MCC within 45 days from the date of the letter IRS/ MCC included with the returned files. A penalty for failure to file correct information returns by the due date will be assessed if the files are not corrected and returned within the 45 days or if the incorrect files are returned by IRS/MCC for replacement more than two times. A penalty for intentional disregard of filing requirements will be assessed if a replacement file is not received. (For penalty information, refer to the Penalty section of the 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G.’’) When possible, IRS/MCC may return only the portion of the file that needs replacement.

.04 Sample records identifying errors encountered will be provided with the returned media. It is the responsibility of the transmitter to check the entire file for similar errors.

.05 The following definitions have been provided to help distinguish between a correction and a replacement:

A correction is an information return submitted by the transmitter to correct an information return that was previously submitted to IRS/MCC, but contained erroneous information.
A replacement is an information return file that IRS/MCC has returned to the transmitter due to errors encountered during processing. After necessary changes have

been made, the file must be re- turned for processing along with the blue and white Media Track- ing Slip (Form 9267) which was included in the shipment from IRS/ MCC.

Filers should never send any- thing to IRS/MCC marked ‘‘RE- PLACEMENT’’ unless IRS/ MCC returned media to them. .06 IRS/MCC will not return media after successful processing. Therefore, if the transmitter wants proof that IRS/ MCC received a shipment, the transmitter should select a service with tracing capabilities or one that will provide proof of delivery.

.07 IRS/MCC will work with filers as much as possible to assist with processing problems. Note: If the filer is contacted by

IRS/MCC, a prompt re- sponse is important. IRS/ MCC may have informa- tion that the filer needs to correct his or her file. .08 IRS/MCC contacts payers who have submitted payee data with missing TINs in an attempt to prevent errors that could result in penalties. Payers who submit data with missing TINs and have taken the required steps to obtain this information are encouraged to attach a letter of explanation to the required Form 4804. This will prevent unnecessary contact from IRS/MCC. This letter, however, will not prevent backup withholding notices (CP2100 or CP2100A Notices) or penalties for missing or incorrect TINs.

.09 Do not use special shipping containers for transmitting data to IRS/ MCC. Shipping containers will not be returned.

Sec. 13. Corrected Returns

.01 The magnetic media filing requirements of 250 information returns applies separately to both original and corrected returns. E If a payer has 100 Forms 1099–A to X be corrected, they can be filed on A paper since they fall under the 250 M threshold. However, if the payer has P 300 Forms 1099–B to be corrected, L they must be filed magnetically or E electronically since they meet the

250 threshold. If for some reason a payer cannot file the 300 corrections on magnetic media, to avoid penalties, a request for a waiver must be submitted before filing on paper. No waiver is required for corrections that fall under the required threshold.

Duly Authorized Requests for an extension of time to furnish the statements of Forms 1098, 1099, 5498, W–2G, W–2, and 1042–S to recipients are not automatically approved; however, if approved, generally an extension will allow a maximum of 30 additional days from the due date to furnish the statements to the recipients. If the request is denied,

.02 Corrections should be filed as soon as possible . Corrections filed after August 1 may be subject to the maximum penalty of $50 per return. Corrections filed prior to August 1 may be subject to a lesser penalty. (For information on penalties, refer to the Penalty Section of the 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G.’’) However, if payers discover errors after August 1, they may still be required to file corrections so that they will not be subject to a penalty for intentional disregard of the filing requirements. Failure to correct information returns may result in penalties for failure to provide correct information. All fields must be completed with the correct information, not just the data fields needing correction. Submit corrections only for the returns filed in error, not the entire file. Furnish corrected statements to recipients as soon as possible.

.03 There are numerous types of errors, and in some cases, more than one transaction may be required to correct the initial error. If the original return was filed as an aggregate, the filers must consider this in filing corrected returns.

.04 Corrected returns may be included on the same medium as original returns; however, separate ‘‘A’’ Records are required. Corrected returns must be identified on the Form 4804 and the external media label by indicating ‘‘Correction.’’ Note: If filers discover that cer-

tain information returns

were omitted on their original file, they must not submit these docu- ments as corrections. They must submit them as originals . .05 If a payer discovers errors for prior years that affect a large number of payees, in addition to sending IRS the corrected returns and notifying the payees, a letter containing the following information should be sent to IRS/ MCC:

(a) Name and address of payer (b) Type of error (please explain

positions 2–3. If filing electronically, a separate transmission must be made for each tax year.

.07 In general, filers should submit corrections for returns to be filed within the last three calendar years (four years if the payment is a reportable payment subject to backup withholding under section 3406 of the Code).

.08 All paper returns, whether original or corrected, must be filed with the appropriate service center.

.09 Form 4804 and Form 4802, must be submitted with corrected files submitted magnetically or electronically.

.10 The ‘‘B’’ Record provides a 20position field for the Payer’s Account Number for the Payee. This number will help identify the appropriate incorrect return if more than one return is filed for a particular payee. Do not enter a TIN in this field. A payer’s account number for the payee may be a checking account number, savings account number, serial number, or any other number assigned to the payee by the payer that will distinguish the specific account. This number should appear on the initial return and on the corrected return in order to identify and process the correction properly.

.11 The record sequence for filing corrections is the same as for original returns.

.12 Review the chart that follows. Errors normally fall under one of the two categories listed. Next to each type of error made is a list of instructions on how to file the corrected return.

clearly) (c) Tax year (d) Payer TIN (e) TCC (f) Type of Return (g) Number of Payees This information will be forwarded to the appropriate office in an attempt to prevent erroneous notices from being sent to the payees. The correction must be submitted on an actual information return document or filed magnetically/ electronically. Provide the correct tax year in Box 2 of the Form 4804 and the external media label.

.06 Prior year data, original and corrected, must be filed according to the requirements of this revenue procedure. If submitting prior year corrections, use the record format for the current year and submit on separate media. However, use the actual year designation of the correction in field

Guidelines for Filing Corrected Returns Magnetically/Electronically

Error Made on the Original Return How To File the Corrected Return

Two (2) separate transactions are required to make the following corrections properly. Following directions for both Transations 1 and 2 (See Note 1 ).

1 . Original return was filed with one or more of the following errors:

Transaction 1: Identify incorrect returns

A . Prepare a new Form 4804/4802 that includes information

related to this file.

Guidelines for Filing Corrected Returns Magnetically/Electronically (Continued)

Error Made on the Original Return How To File the Corrected Return

(a) No Payee TIN (SSN or EIN) (b) Incorrect Payee TIN (c) Incorrect Payee Name (d) Wrong type of return indicator

Make a separate ‘‘A’’ Record for each type of return being reported. The information in the ‘‘A’’ Record will be exactly the same as it was in the original submission. D . The Payee ‘‘B’’ Record must contain exactly the same

information as submitted previously, except, insert a ‘‘G’’ in field position 7 of the ‘‘B’’ Record, and for all payment amounts, enter ‘‘0’’ (zero). E . Corrected returns submitted to IRS/MCC using a ‘‘G’’

coded ‘‘B’’ Record may be on the same tape or diskette as those returns submitted without the ‘‘G’’ code; however, separate ‘‘A’’ Records are required. F . Prepare a ‘‘C’’ Record. Transaction 2: Report the correct information A . Prepare a new file with the correct information in all

records. B . Make a separate ‘‘A’’ Record for each type of return and

each payer being reported. C . The ‘‘B’’ Record must show the correct Information as

well as a ‘‘C’’ in field position 7. D . Corrected returns submitted to IRS/MCC using a ‘‘C’’

B . Mark ‘‘Correction’’ in Block 1 of Form 4804. C . Prepare a new file.

coded ‘‘B’’ Record may be on the same tape or diskette as those returns submitted without the ‘‘C’’ code; however, separate ‘‘A’’ Records are required. E . Prepare a ‘‘C’’ Record. F . Indicate ‘‘Correction’’ on the external media label. Note 1: Payers who can show that they have reasonable cause (defined in the regulations under sections 6721-6724

of the Internal Revenue Code) are not required to make corrections for returns filed with a missing or incorrect name and/or TIN. These payers should change their records in order to submit correct information in the future. Payers who cannot show reasonable cause are encouraged to make corrections for the current processing year by August 1 to reduce applicable penalties. Corrections filed by August 1 will reduce the $50 per return penalty for filing returns with missing or incorrect information to $15 or $30. (For penalty information, refer to the Penalty section of the 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G.’’) Corrections filed after August 1 will not reduce the penalty but will allow IRS to update the payee’s records. The regulations for IRC sections 6721-6724 are available in Publication 1586, Reasonable Cause Regulations and Requirements as They Apply to Missing and Incorrect TINs. The publication may be obtained by calling 1-800-TAX-FORM (1-800-829-3676).

ONE TRANSACTION IS REQUIRED TO MAKE THE FOLLOWING CORRECTIONS PROPERLY (See Note 2 ). 2 . Original return was filed with one or more of the following errors:

(a) Incorrect Payment Amount Codes in the ‘‘A’’

Record (b) Incorrect Payment amounts in the ‘‘B’’ Record (c) Incorrect Code in the Document Specific/ Distribution Code Field in the ‘‘B’’ Record (d) Incorrect Payee Address (e) Direct Sales Indicator

A . Prepare a new Form 4804/4802 that includes information

relating to this new file. B . Mark ‘‘Correction’’ in Block 1 of Form 4804. C . Prepare a new file. Make separate ‘‘A’’ Records for each

type of return being reported. Information in the ‘‘A’’ Record may be the same as it was in the original submission. D . The ‘‘B’’ Record must show the correct information as

well as a ‘‘G’’ in field position 7. E . Corrected returns submitted to IRS/MCC using a ‘‘G’’

coded ‘‘B’’ Record may be on the same tape or diskette as those returns submitted without the ‘‘G’’ code; however, separate ‘‘A’’ Records are required. F . Prepare a ‘‘C’’ Record. G. Mark ‘‘Correction’’ on the external media label.

Guidelines for Filing Corrected Returns Magnetically/Electronically (Continued)

Error Made on the Original Return How To File the Corrected Return

Note 2: If a filer is correcting the name and/or TIN in addition to any errors listed in item 2 of the chart, then

two transactions will be required. If a filer is reporting ‘‘G’’ coded, ‘‘C’’ coded, and/or ‘‘Non-coded’’ (original) returns on the same media, they must be reported under separate ‘‘A’’ Records .

Sec. 14. Taxpayer Identification Number (TIN)

.01 Section 6109 of the Internal Revenue Code requires a person to furnish his/her TIN to the person obligated to file the information return.

.02 The payee’s TIN and name combination is used to associate information returns reported to IRS/MCC with corresponding information on tax returns. It is imperative that correct Social Security and Employer Identification Numbers for payees be provided to IRS/MCC. Do not enter hyphens or alpha characters. Entering all zeros, ones, twos, etc., will have the effect of an incorrect TIN.

.03 The payer and payee names with associated TINs should be consistent with the names and TINs used on other tax returns. Also, the name and TIN provided must belong to the owner of the account. If the account is recorded in more than one name, furnish the name and TIN of one of the owners of the account. The TIN provided must be associated with the name of the payee provided in the first name line of the ‘‘B’’ Record. For individuals, the payee TIN is generally the payee’s Social Security Number. For other entities, the payee TIN is the payee’s Employer Identification Number. For sole proprietors, the payee TIN may be either an SSN or EIN but the sole proprietor’s name (not the business name) must be used .

.04 Failure to provide the correct name and corresponding TIN could result in a penalty and/or backup withholding notice (sometimes referred to as a ‘‘B’’ notice). (For penalty information, refer to the Penalty Section of the 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G.’’ For ‘‘B’’ Notice information, refer to the Backup Withholding Section of the same publication.)

.05 The following charts will help payers determine the TIN to be furnished to IRS/MCC for those persons for whom they are reporting information (payees).

Chart 1. Guidelines for Social Security Numbers

In the First Payee Name Line of the Payee ‘‘B’’ Record, enter the name of

For this type of account

In the Taxpayer Identification Number field of the Payee ‘‘B’’ Record, enter the SSN of

1 . Individual The individual The individual 2 . Joint account (Two or more individ- The actual owner of the account or, if uals, including husband and wife) combined funds, the first individual on

The individual whose SSN is entered

3 . Custodian account of a minor (Uniform Gift, or Transfers, to Minors Act)

4 . The usual revocable savings trust account (grantor is also trustee)

5 . A so-called trust account that is not a legal or valid trust under state law

The actual owner of the account or, if combined funds, the first individual on the account.

The minor The minor

The grantor-trustee The grantor-trustee

The actual owner The actual owner

6 . Sole proprietorship The owner (An SSN or EIN) The owner, not the business name (the filer may enter the business name on the second name line).

Chart 2. Guidelines for Employer Identification Numbers

In the First Payee Name line of the Payee ‘‘B’’ Record, enter the name of

For this type of account

In the Taxpayer Identification Number field of the Payee ‘‘B’’ Record, enter the EIN of

1. A valid trust, estate, or pension trust Legal entity ¹ The legal trust, estate, or pension trust 2. Corporate The corporation The corporation 3. Association, club, religious, chari- The organization The organization table, educational, or other tax-exempt organization

Chart 2. Guidelines for Employer Identification Numbers (Continued)

In the First Payee Name line of the Payee ‘‘B’’ Record, enter the name of

For this type of account 4. Partnership account held in the name of the business

5. A broker or registered nominee/ middleman

6. Account with Department of Agriculture in the name of a public entity (such as a state or local government, school district, or prison), that receives agriculture program payments

In the Taxpayer Identification Number field of the Payee ‘‘B’’ Record, enter the EIN of

The partnership The partnership

The broker or nominee/middleman The broker or nominee/middleman

The public entity The public entity

7. Sole proprietorship The business (An EIN or SSN) The owner, not the business name (the filer may enter the business name on the second name line).

1Do not furnish the identification number of the personal representative or trustee unless the name of the representative or trustee is used in the account title.

the problems. The replacement test file must be returned to IRS/MCC postmarked on or before December 31.

.06 A separate Form 6847 is re- quired for each payer. A transmitter may not combine payers on one Form 6847 even if acting as Attorney-in-Fact for several payers. Form 6847 may be computer-generated as long as it includes all information that is on the original form or it may be photocopied. If the Form 6847 is signed by an Attorney-in-Fact, the written consent from the payer must clearly indicate that the Attorney-in-Fact is empowered to authorize release of the information.

.07 Only code the records for participating states and for those payers who have submitted Form 6847.

.08 Some participating states require separate notification that the payer is filing in this manner. Since IRS/MCC acts as a forwarding agent only, it is the payer’s responsibility to contact the appropriate states for further information.

.09 All corrections properly coded for the Combined Federal/ State Filing Program will be forwarded to the participating states.

.10 Participating states and corresponding valid state codes are listed in Table 1 of this section. The appropriate state code must be entered for those documents that meet the state filing requirements; do not use state abbre- viations.

.11 To simplify filing, some of the participating states have provided their information return reporting requirements (see Table 2 ). Each state filing

Sec. 15. Effect on Paper Returns

.01 Magnetic/electronic reporting of information returns eliminates the need to submit paper documents to the IRS. CAUTION! Do not send Copy A of the paper forms to IRS/MCC in addition to magnetic media and electronic filing. This will result in duplicate filing; therefore, erroneous notices could be generated.

.02 Payers are responsible for providing statements to the payees as outlined in the 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G.’’ Refer to these instructions for filing information returns on paper with the IRS and furnishing statements to recipients.

.03 Statements to recipients should be clear and legible. If the official IRS form is not used, the filer must adhere to the specifications and guidelines in Publication 1179, ‘‘Rules and Specifications for Private Printing of Substitute Forms 1096, 1098, 1099 Series, 5498, and W–2G.’’

Sec. 16. Combined Federal/State Filing Program

.01 The Combined Federal/State Filing Program was established to simplify information returns filing for the taxpayer. IRS/MCC will forward this information to participating states free of charge for approved filers. Separate reporting to those states is not necessary.

The following Information Returns may not be filed under this program:

Form 1098—Mortgage Interest Statement

Form 1099–A—Acquisition or Abandonment of Secured Property

Form 1099–B—Proceeds for Broker and Barter Exchange Transactions

Form 1099–C—Cancellation of Debt

Form 1099–S—Proceeds From Real Estate Transactions

and Form W–2G—Certain Gambling Winnings

.02 To request approval to participate, a magnetic media or electronic test file coded for this program must be submitted to IRS/MCC between November l and December 31. Hard copy print tests are not acceptable for Combined Federal/State Filing approval.

.03 Attach a letter to the Form 4804 submitted with the test file to indicate a desire to participate in this program.

.04 A test file is only required for the first year. Each record, both in the test and the actual data file, must conform to this revenue procedure.

.05 If the test file is acceptable, IRS/ MCC will send the filer an approval letter, and a Form 6847, Consent for Internal Revenue Service to Release Tax Information, which the payer must complete, sign, and return to IRS/MCC before any tax information can be released to the state. Filers must write their TCC on Form 6847. If the test file is not acceptable, IRS/MCC will return the media with a letter indicating

regulations are subject to change by the state. It is the payer’s respon- sibility to contact the participating states to verify the criteria provided in this table.

.12 Upon submission of the actual files, the transmitter must be sure of the following:

(a) All records should be coded

exactly as required by this revenue procedure. (b) The ‘‘C’’ Record must be fol lowed by a state total ‘‘K’’ Record for each state being reported. (c) Payment amount totals and the

valid participating state code must be included in the State Totals ‘‘K’’ Record . (d) The last ‘‘K’’ Record must be

followed by an ‘‘A’’ Record or an End of Transmission ‘‘F’’ Record (if this is the last record of the entire file).

Table 1. Participating States And Their Codes

State Code State Code State Code

Alabama 01 Iowa 19 North Carolina 37 Arizona 04 Kansas 20 North Dakota 38 Arkansas 05 Maine 23 Oregon 41 California 06 Massachusetts 25 South Carolina 45 Delaware 10 Minnesota 27 Tennessee 47 District of Columbia 11 Mississippi 28 Wisconsin 55 Georgia 13 Missouri 29 Hawaii 15 Montana 30 Idaho 16 New Jersey 34 Indiana 18 New Mexico 35

Table 2. Dollar Criteria For State Reporting

STATE 1099–DIV 1099–G 1099–INT 1099–MISC 1099–OID 1099–PATR 1099–R 5498

Alabama $1500 $ NR $1500 $1500 $1500 $1500 $1500 NR Arkansas 100 2500 100 2500 2500 2500 2500 a District of Columbia ^b 600 600 600 600 600 600 600 NR Hawaii 10 a 10 600 10 10 600 a Idaho 10 10 10 600 10 10 600 a Iowa 100 1000 1000 1000 1000 1000 1000 NR Minnesota 10 10 10 600 10 10 600 a Mississippi 600 600 600 600 600 600 600 NR Missouri NR NR NR 1200 ^c NR NR NR NR Montana 10 10 10 600 10 10 600 a New Jersey 1000 1000 1000 1000 1000 1000 1000 NR North Carolina 100 100 100 600 100 100 100 a Tennessee 25 NR 25 NR NR NR NR NR Wisconsin NR NR NR 600 NR NR 600 NR

The preceding list is for information purposes only. The state filing requirements are subject to change by the states. For complete information on state filing requirements, contact the appropriate state tax agencies.

Filing requirements for any state in TABLE 1 not shown in TABLE 2 are the same as the federal requirement. NR = No filing requirement. Footnotes: a. All amounts are to be reported. b. Amounts are for aggregates of several types of income from the same payer. c. Missouri would prefer those returns filed with respect to non-Missouri residents to be sent directly to their state agency.

Sec. 17. Definition of Terms

Element Description

Asynchronous Protocols This type of data transmission is most often used by microcomputers, PCs and some minicomputers. Asynchronous transmissions transfer data at arbitrary time intervals using the start-stop method. Each character transmitted has its own start bit and stop bit. b/ Denotes a blank position. Enter blank(s) when this symbol is used (do not enter the letter ‘‘b’’). This appears in numerous areas throughout the record descriptions. Bisynchronous Protocols For purposes of this publication, these are electronic transmissions made using IBM 3780 protocols. These transmissions must be in EBCDIC character code and use the Bell 208B (4800bps) or AT&T 2296A (9600bps) modems. Standard IBM 3780 space compression is acceptable. Correction A correction is an information return submitted by the payer to correct erroneous information previously submitted to IRS/MCC.

Note: A correction should not be confused with a REPLACEMENT. Only media returned to the filer by IRS/

MCC due to processing problems should be marked REPLACEMENT.

CUSIP Number A number developed by the Committee on Uniform Security Identification Procedures to serve as a common denominator in communications among users for security transactions and security information. Employer Identification Number (EIN) Electronic Filing A nine-digit number assigned by IRS for federal tax reporting purposes. Submission of information returns using switched telecommunications network circuits. These transmissions use modems, dial-up phone lines, and asynchronous or bisynchronous protocols. See Parts A, C, and D of this publication for specific information on electronic filing. File For purposes of this revenue procedure, a file consists of all records submitted by a payer or transmitter, either magnetically or electronically. Filer Person responsible for submitting information returns to IRS. Filing Year The year in which the information returns are being submitted to IRS/MCC (if magnetically) or service center (if paper). Golden Parachute Payment A payment made by a corporation to a certain officer, shareholder, or highly compensated individual when a change in the ownership or control of the corporation occurs or when a change in the ownership of a substantial part of the corporate assets occurs. Incorrect Taxpayer Identification Number (Incorrect TIN) A TIN may be incorrect for several reasons: (a) The payee gave a wrong number ( e.g., the payee is listed

as the only owner of an account but provided someone else’s TIN). (b) A processing error ( e.g., the number was typed

incorrectly). (c) The payee’s status changed ( e.g., a payee name change

was not conveyed to the IRS or SSA so that they could enter the change in their records). Information Return The vehicle for submitting required information about another person to IRS. Information returns are filed by financial institutions and by others who make certain types of payments as part of their trade or business.

Element Description

The information required to be reported on an information return includes interest, dividends, pensions, nonemployed compensation for personal services, stock transactions, sales of real estate, mortgage interest, and other types of information. For this revenue procedure, an information return is Form 1098, 1099–A, 1099–B, 1099–C, 1099–DIV, 1099–G, 1099–INT, 1099–MISC, 1099–OID, 1099–PATR, 1099–R, 1099–S, 5498, or W–2G. Magnetic Media For this revenue procedure, the term ‘‘magnetic media’’ refers to ¹ ⁄2-inch magnetic tape; IBM 3480/3490/ 3490E or AS400 compatible tape cartridge; or 5 ¹ ⁄4- and 3 ¹ ⁄2-inch diskette. Media Tracking Slip Form 9267 accompanies media that IRS/MCC has returned to the filer for correction due to format or fatal errors encountered when trying to process media. THIS MUST BE RETURNED WITH THE REPLACEMENT FILE . Missing Taxpayer Identification Number (Missing TIN) The payee TIN on an information return is ‘‘missing’’ if: (a) there is no entry in the TIN field, (b) includes one or more alpha characters (a character or

symbol other than an Arabic number) as one of the nine digits, OR (c) payee TIN has less than nine digits PS 58 Costs The current cost of life insurance under a qualified plan taxable under section 72(m) and Regulations section 1.72– 16(b). (See Part B, Sec. 7, Payee ‘‘B’’ Record, Document Specific/Distribution Code, Category of Distribution, Code 9.) Payee Person or organization receiving payments from the payer, or for whom an information return must be filed. The payee includes a borrower (Form 1099–A), a debtor (1099–C), a participant (Form 5498), and a gambling winner (Form W– 2G). For Form 1098, the payee is the individual paying the interest. For Form 1099–S, the payee is the seller or other transferor. Payer Includes the person making payments, a recipient of mortgage interest payments, a broker, a person reporting a real estate transaction, a barter exchange, a creditor, a trustee, or an issuer of an IRA or SEP, or a lender who acquires an interest in secured property or who has reason to know that the property has been abandoned. The payer will be held responsible for the completeness, accuracy, and timely submission of magnetic media files. Replacement A replacement is an information return file that IRS/MCC has returned to the transmitter due to errors encountered during processing.

Note: Filers should never submit media to IRS/MCC marked ‘‘REPLACEMENT’’ unless IRS/MCC returned media to

the filers. When sending ‘‘REPLACEMENT’’ media, be sure to include the Media Tracking Slip (Form 9267) which will accompany media returned by IRS/MCC. Media that has been incorrectly marked as REPLACEMENT may result in duplicate filing.

Service Bureau Person or organization with whom the payer has a contract to prepare and/or submit information return files to IRS/ MCC. A parent company submitting data for a subsidiary is not considered a service bureau. Social Security Number (SSN) A nine-digit number assigned by SSA to an individual for wage and tax reporting purposes. Special Character Any character that is not a numeral, an alpha, or a blank. SSA Social Security Administration.

Element Description

Statement to Recipient For purposes of this revenue procedure, the copy of Form 1099, 1098, 5498, or W–2G that is required to be sent by the payer to the recipient to provide information to be reported on the recipient’s tax return. When reporting Form 1098, the payer is the receiver of the mortgage interest and the recipient is the person making the interest payment. When reporting Form 1099–S, the payer is the entity reporting the transaction and the recipient is the seller or other transferor. Taxpayer Identification Number (TIN) May be either an Employer Identification Number (EIN) or Social Security Number (SSN). Tax Year The year in which payments were made by a payer to a payee . Transfer Agent The transfer agent, or paying agent, is the entity who has been contracted or authorized by the payer to perform the services of paying and reporting backup withholding (Form 945). The payer may be required to submit to IRS/MCC a Form 2678, Employer Appointment of Agent Under Section 3504 of the Internal Revenue Code, which notifies IRS/MCC of the transfer agent relationship. Transmitter Person or organization submitting file(s) magnetically/ electronically. May be payer or agent of payer. Transmitter Control Code (TCC) A five character alpha/numeric number assigned by IRS/ MCC to the transmitter prior to actual filing magnetically or electronically. This number is inserted in the ‘‘A’’ Record of the files and must be present before the file can be processed. An application Form 4419 must be filed with IRS/MCC to receive this number. Vendor Service bureaus that will produce information return files on the prescribed types of magnetic media or via electronic filing for payers who meet the 250 threshold or may be unable to prepare their own media. Companies who provide software for payers who wish to produce their own media or electronic files.

Sec. 18. State Abbreviations

.01 The following state abbreviations are to be used when developing the state code portion of address fields. This table provides state abbreviations only, and does not represent those states participating in the Combined Federal/State Filing Program.

State Code State Code State Code

Alabama AL Kentucky KY Ohio OH Alaska AK Louisiana LA Oklahoma OK American Samoa AS Maine ME Oregon OR Arizona AZ Marshall Islands MH Pennsylvania PA Arkansas AR Maryland MD Puerto Rico PR California CA Massachusetts MA Rhode Island RI Colorado CO Michigan MI South Carolina SC Connecticut CT Minnesota MN South Dakota SD Delaware DE Mississippi MS Tennessee TN District of Columbia DC Missouri MO Texas TX Federated States Montana MT Utah UT of Micronesia FM Nebraska NE Vermont VT Florida FL Nevada NV Virginia VA Georgia GA New Hampshire NH Virgin Island VI Guam GU New Jersey NJ Washington WA Hawaii HI New Mexico NM West Virginia WV Idaho ID New York NY Wisconsin WI

State Code State Code State Code

Illinois IL North Carolina NC Wyoming WY Indiana IN North Dakota ND Iowa IA Northern Kansas KS Mariana Islands MP

.02 Filers must adhere to the city, state, and ZIP code format for U.S. addresses in the ‘‘B’’ Record. This also includes American Samoa, Federated States of Micronesia, Guam, Marshall Islands, Northern Mariana Islands, Puerto Rico, and the Virgin Islands.

.03 For foreign country addresses, filers may use a 40 position free format which should include city, province or state, postal code, and name of country in this order. This is allowable only if a ‘‘1’’ (one) appears in the Foreign Country Indicator Field of the ‘‘B’’ Record.

.04 When reporting APO/FPO addresses use the following format:

EXAMPLE : Payee Name PVT Willard J. Doe Mailing Address Company F, PSC Box 100 167 Infantry REGT Payee City APO (or FPO) *Payee State AE, AA, or AP Payee ZIP Code 098010100

AE is the designation for ZIPs beginning with 090-098, AA for ZIP 340, and AP for ZIPs 962-966.

Sec. 19. Major Problems Encountered

IRS/MCC encourages filers to verify the format and content of each type of record to ensure the accuracy of the data. This may eliminate the need for IRS/MCC to return files for replacement. This may be important for those payers who have either had their files prepared by a service bureau (see Note ) or who have purchased preprogrammed software packages. If a filer purchased a software package for a previous tax year, it may no longer be valid for reporting current tax year information returns. Following are some of the most frequently encountered problems with magnetic/electronic files submitted to IRS/MCC.

Some of the problems listed in the Major Problems Encountered may result in media being returned for replacement.

Note: If filers meet the filing requirements and engage a service bureau to prepare media on their behalf, the

filers should be careful not to report duplicate data which may generate penalty notices .

1. Discrepancy between IRS/MCC totals and totals in Payer ‘‘C’’ Records

The ‘‘C’’ Record is a summary record for a type of return for a given payer as reported in the ‘‘B’’ Records. IRS balances the total number of payees and payment amounts and compares them with totals in the ‘‘C’’ Records. Filers should verify the accuracy of the records because imbalances may necessitate return of files for replacement.

2. The Payment Amount Fields in the ‘‘B’’ Record do not correspond to the Amount Codes in the ‘‘A’’ Record

If codes 2, 4, and 7 appear in the Amount Codes Field of the ‘‘A’’ Record, then the ‘‘B’’ Record must show payment amounts in only Fields 2, 4, and 7, right-justified and unused positions must be zero (0) filled.

EXAMPLE: ‘‘A’’ RECORD 247bbbbbb - (‘b’ denotes a blank) (Pos. 23–31) ‘‘B’’ RECORD 0000867599 - (Payment Amount 2) (Pos. 61–70) 0000709097 - (Payment Amount 4) (Pos. 81–90) 0000044985 - (Payment Amount 7) (Pos. 111–120)

3. Blanks or invalid characters appear in Payment Amount Fields in the ‘‘B’’ Record

Money amounts must be right-justified and zero (0) filled. Do not use blanks.

4. Incorrect TIN in Payer ‘‘A’’ Record

The Payer’s TIN reported in positions 7–15 of the ‘‘A’’ Record must be correct in order for IRS/MCC to process the media. The TIN provided in the ‘‘A’’ Record should correspond with the name provided in the first payer name line.

5. Bad Format

IRS/MCC receives data in prior year format. Be sure to use the current revenue procedure (Publication 1220) for formatting data.

6. Incorrect tax year in the Payer ‘‘A’’ Record and the Payee ‘‘B’’ Record

The tax year in both the payee and payer record should reflect the year of the information that is being reported. Filers need to check their files to ensure that this information is correct.

7. Incorrect reporting of Form W–2 information to IRS

Form W–2 information is submitted to SSA, and not to IRS/MCC. SSA has its own magnetic media reporting program and specifications for wage information, and the media containing Forms W–2 is submitted to SSA. Any media received at IRS/ MCC that contains Form W–2 information will be returned to the filer. The local SSA office should be contacted for information concerning filing Forms W–2 on magnetic media.

8. Excessive withholding credits

Generally, for most information returns, other than Forms 1099–MISC, 1099–R, and W–2G, Federal withholding amounts should not exceed 31 percent of the income reported. Validate the total reported in the withholding field against the total income reported.

9. Incorrect format for TINs in the Payee ‘‘B’’ Record

A check of ‘‘B’’ Records should be made to ensure the Taxpayer Identification Numbers (TINs) are formatted correctly. There should be nine numerics, no alphas, hyphens, commas, or blanks. Incorrect formatting of TINs may result in a penalty. (For penalty information, refer to the Penalty section of the 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G.’’)

IRS/MCC contacts filers who have submitted payee data with missing TINs in an attempt to prevent erroneous notices. Payers/transmitters who submit data with missing TINs and have taken the required steps to obtain this information are encouraged to attach a letter of explanation to the required Form 4804. This will prevent unnecessary contact from IRS/ MCC. This letter, however, will not prevent backup withholding notices (CP2100 and CP2100A Notices) or penalties for missing or incorrect TINs. (For penalty information, refer to the Penalty section of the 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G.’’)

10. Distribution Codes for Form 1099–R reported incorrectly

Distribution Codes for Form 1099–R are being reported incorrectly or not being reported. See valid distribution codes for 1099–R in the Payee ‘‘B’’ Record layout.

11. Incorrect Record Totals Listed on Form 4804

The Combined Total Payee Records listed on the Form 4804 (Box 9) are used in the verification process of information returns. The figure in this box should be the total number of Payee ‘‘B’’ Records contained on the media submitted with the Form 4804. The figures on the Form 4804 are compared against the total number of Payee ‘‘B’’ Records processed on the media. Imbalances may necessitate the return of the files for replacement.

12. Invalid Use of IRA/SEP Indicator

The IRA/SEP Indicator for Form 1099–R should be used only for the reporting of a distribution from an IRA or SEP. The total amount distributed from an IRA or SEP should be reported in Payment Amount Field 2 (IRA/SEP Distribution).

.06 IRS/MCC can only read one data file on a tape. A data file is a group of records which may or may not begin with a tapemark, but must end with a trailer label. Any data beyond the trailer label cannot be read by IRS programs.

Sec. 3. Tape Cartridge Specifications

Part B. Magnetic Media Specifications

Sec. 1. General

.01 The specifications contained in this part of the revenue procedure define the required format and contents of the records to be included in the magnetic media file.

.02 A provision is made in the ‘‘B’’ Records for Special Data Entries. These entries are optional. If the field is not utilized, enter blanks to maintain a fixed record length of 420 positions. The field is intended to serve one or both of these purposes:

(a) Contain information required by state or local governments. Filers who wish to use this option for satisfying state or local reporting requirements should contact the state or local department of revenue for filing instructions. (Also refer to Part A, Sec. 16.) (b) Contain information for the filer’s own personal use and used at the discretion of the filer to include information related to each individual return. IRS/MCC will not use the information supplied in this field. The length of this field will vary depending on the type of return.

.03 Transmitters should be consistent in the use of recording codes and density on files. If the media does not meet these specifications, it could be returned to the transmitter for replacement. Filers are encouraged to submit a test prior to submitting the actual file. Contact IRS/MCC for further information at 304-263-8700.

.04 Use ‘‘K’’ Records only if the payer is an approved Combined Federal/State filer.

Sec. 2. Tape Specifications

(1) Odd parity. (2) A density of 1600 or 6250

CPI. Transmitters should be consistent in the use of recording codes and density on files.

.02 All compatible tape files must have the following characteristics: Type of tape— ¹ ⁄2-inch (12.7 mm) wide, computer-grade magnetic tape on reels of up to 2,400 feet (731.52 m) within the following specifications:

(a) Tape thickness: 1.0 or 1.5 mils

and (b) Reel diameter: 10 ¹ ⁄2-inch

.01 In most instances, IRS/MCC can process tape cartridges that meet the following specifications:

(a) Must be IBM 3480, 3490,

3490E, or AS400 compatible. (b) Must meet American National

(26.67 cm), 8 ¹ ⁄2-inch (21.59 cm), 7-inch (17.78 cm), or 6-inch. .03 The tape records defined in this revenue procedure may be blocked subject to the following:

(a) A block must not exceed

32,760 tape positions. (b) If the use of blocked records

would result in a short block, all remaining positions of the block must be filled with 9’s; however, the last block of the file may be filled with 9’s or truncated. Do not pad a block with blanks. (c) All records, except the header

Standard Institute (ANSI) standards, and have the following characteristics: (1) Tape cartridges will be ¹ ⁄2 inch tape contained in plastic cartridges which are approximately 4-inches by 5-inches by 1-inch in dimension. (2) Magnetic tape will be chro mium dioxide particle based 1⁄2-inch tape. (3) Cartridges must be 18-track

or 36-track parallel (See Note ). (4) Cartridges will contain

37,871 CPI or 75,742 CPI (characters per inch). (5) Mode will be full function. (6) The data may be com pressed using EDRC (Memorex) or IDRC (IBM) compression. (7) Either EBCDIC (Extended

.01 IRS/MCC can process most magnetic tape files if the following specifications are followed:

Binary Coded Decimal Interchange Code) or ASCII (American Standard Coded Information Interchange) may be used. .02 The tape cartridge records defined in this revenue procedure may be blocked subject to the following:

(a) 9 track EBCDIC (Extended

Binary Coded Decimal Interchange Code) with: (1) Odd parity. (2) A density of 1600 or 6250

CPI. (3) If transmitters use UNISYS

and trailer labels, may be blocked or unblocked. A record may not contain any control fields or block descriptor fields which describe the length of the block or the logical records within the block. The number of logical records within a block (the blocking factor) must be constant in every block with the exception of the last block which may be shorter (see item b above). The block length must be evenly divisible by 420. (d) Records may not span blocks. .04 Labeled or unlabeled tapes may be submitted.

.05 For the purposes of this revenue procedure the following must be used:

Series 1100, they must submit an interchange tape. (b) 9 track ASCII (American

Standard Coded Information Interchange) with:

Tape Mark: (a) Used to signify the physical

end of the recording on tape. (b) For even parity, use BCD

configuration 001111 (8421). (c) May follow the header label

and precede and/or follow the trailer label.

(a) A block must not exceed

32,760 tape positions. (b) If the use of blocked records

would result in a short block, all remaining positions of the block must be filled with 9’s; however, the last block of the file may be filled with 9’s or truncated. Do not pad a block with blanks . (c) All records, except the header

and trailer labels, may be blocked or unblocked. A rec

ord may not contain any control fields or block descriptor fields which describe the length of the block or the logical records within the block. The number of logical records within a block (the blocking factor) must be constant in every block with the exception of the last block which may be shorter (see item b above). The block length must be evenly divisible by 420. (d) Records may not span blocks. .03 Tape cartridges may be labeled or unlabeled.

.04 For the purposes of this revenue procedure, the following must be used:

(American Standard Coded Information Interchange) may be used. However, IRS/ MCC encourages the use of EBCDIC. This information must appear on the external media label affixed to the cartridge. (6) A file may consist of more

(g) No more than 250,000 docu-

ments per cartridge and per file. .03 For faster processing, IRS/MCC encourages transmitters to use header labeled cartridges. IRSTAX may be used as a suggested filename.

.04 For the purposes of this revenue procedure, the following must be used:

Tape Mark: (a) Used to signify the physical

end of the recording on tape. (b) For even parity, use BCD

configuration 001111 (8421). (c) May follow the header label

than one cartridge, how- ever, no more than 250,000 documents may be transmit- ted per file or per cartridge. The filename, for example; IRSTAX will contain a three digit extension. The exten- sion will indicate the se- quence of the cartridge within the file 1 of 3, 2 of 3, and 3 of 3 and would appear in the header label IRSTAX.001, IRSTAX.002, and IRSTAX.003 on each cartridge of the file. .02 The 8mm (.315-inch) tape car- tridge records defined in this revenue procedure may be blocked subject to the following:

and precede and/or follow the trailer label. Note: Filers should indicate on

Tape Mark: (a) Used to signify the physical

end of the recording on tape. (b) For even parity, use BCD

configuration 001111 (8421). (c) May follow the header label

and precede and/or follow the trailer label. .05 If extraneous data follows the end of the file ‘‘F’’ Record, the file must be returned for replacement. Therefore, IRS/MCC encourages trans- mitters to use blank tape cartridges rather than cartridges previously used, in the preparation of data when sub- mitting information returns.

.06 IRS/MCC can only read one data file on a tape. A data file is a group of records which may or may not begin with a tapemark, but must end with a trailer label. Any data beyond the trailer label cannot be read by IRS programs.

Sec. 5. 5 ¹ ⁄4-inch and 3 ¹ ⁄2-inch Diskette Specifications

the external media label and transmittal Form 4804 whether the cartridge is 36- track or 18-track .

Sec. 4. 8mm (.315-inch) Tape Cartridges

For Tax Year 1996, the processing of 8mm tape cartridge (also referred to as cassette) as an acceptable form of magnetic media is offered as a pilot program for transmitters with AS400 operations systems only.

.01 In most instances, IRS/MCC can process tape cartridges that meet the following specifications:

.01 To be compatible, a diskette file must meet the following specifications:

(a) Must meet American National

Standard Institute (ANSI) standards, and have the fol- lowing characteristics: (1) 8mm (.315-inch) tape car-

tridges will be 2 ¹ ⁄2-inch by 3 ³ ⁄4-inch. (2) Magnetic tape will be chro-

mium dioxide particle based 8mm tape. (3) Mode will be full function. (4) Compressed data is not

acceptable. (5) Either EBCDIC (Extended

(a) 5 ¹ ⁄4- or 3 ¹ ⁄2-inches in diameter. (b) Data must be recorded in

standard ASCII code. For 5 ¹ ⁄4inch diskettes, data may be recorded using EBCDIC if the diskette is created on an IBM System 36. (c) Records must be a fixed length

of 420 bytes per record. (d) Delimiter character commas

(,) must not be used. (e) Positions 419 and 420 of each

record have been reserved for use as carriage return/line feed (cr/lf) characters if applicable. (f) Filename of IRSTAX must be

Binary Coded Decimal In- terchange Code) or ASCII

(a) A block must not exceed

32,760 tape positions. (b) If the use of blocked records

would result in a short block, all remaining positions of the block must be filled with 9’s; however, the last block of the file may be filled with 9’s or truncated. Do not pad a block with blanks . (c) All records, except the header

and trailer labels, may be blocked or unblocked. A rec- ord may not contain any con- trol fields or block descriptor fields which describe the length of the block or the logical records within the block. The number of logical records within a block (the blocking factor) must be con- stant in every block with the exception of the last block which may be shorter (see item b above). The block length must be evenly divisible by 420. (d) ‘COPY’ or ’SAVE’ command

must be used to store data on the cartridge. (e) Extraneous data following the

‘‘F’’ record will result in media being returned for re- placement. (f) Records may not span blocks.

used. Do not enter any other data in this field. If a file will consist of more than one diskette, the filename IRSTAX will contain a three-digit extension. This extension will indicate the sequence of the dis

kettes within the file. For example, the first diskette will be named IRSTAX.001, the second diskette will be IRSTAX.002, etc. (g) A diskette file may consist of multiple diskettes as long as the file naming conventions are followed. (h) Diskettes must meet one of the following specifications:

Capacity Tracks Sides/Density Sector Size 1.44 mb 96tpi hd 512 1.44 mb 135tpi hd 512 1.2 mb 96tpi hd 512 720 kb 48tpi ds/dd 512 360 kb 48tpi ds/dd 512 320 kb 48tpi ds/dd 512 180 kb 48tpi ss/dd 512 160 kb 48tpi ss/dd 512

.02 IRS/MCC encourages transmitters to use blank or currently formatted diskettes when preparing files (See Note). If extraneous data follows the end of file ‘‘F’’ Record, the file must be returned for replacement.

.03 IRS/MCC prefers that 5 ¹ ⁄4- and 3 ¹ ⁄2-inch diskettes be created using MSDOS; however, diskettes created using other operating systems may be acceptable.

Note: 3 ¹ ⁄2-inch Diskettes Created

on a System 36 or AS400 Are Not Acceptable .

IRS/MCC has equipment that can convert diskettes created under most operating systems to the appropriate MS-DOS format. IRS/MCC strongly recommends that transmitters submit a test file for 5 ¹ ⁄4- and 3 ¹ ⁄2-inch diskettes, especially if their data was not created using MS-DOS.

.04 Transmitters are encouraged to use high density diskettes. Low density diskettes are acceptable but must be formatted in low density.

.05 Transmitters should check media for viruses before submitting media to IRS/MCC.

Sec. 6. Payer/Transmitter ‘‘A’’ Record—General Field Descriptions

.01 The Payer/Transmitter ‘‘A’’ Record identifies the payer and transmitter

of the magnetic media file and provides parameters for the succeeding Payee ‘‘B’’ Records. IRS computer programs rely on the absolute relationship between the parameters and data fields in the ‘‘A’’ Record and the data fields in the ‘‘B’’ Records to which they apply.

.02 The number of ‘‘A’’ Records depends on the number of payers and the different types of returns being reported. The payment amounts for one payer and for one type of return should be consolidated under one ‘‘A’’ Record if submitted on the same file.

.03 Do not submit separate ‘‘A’’ Records for each payment amount being reported. For example, if a payer is filing Form 1099–DIV to report Amount Codes 1, 2, and 3, all three amount codes should be reported under one ‘‘A’’ Record, not three separate ‘‘A’’ Records. For ‘‘B’’ Records that do not contain payment amounts for all three amount codes, enter zeros for those which have no payment to be reported.

.04 The first record on the file must be an ‘‘A’’ Record. A transmitter may include ‘‘B’’ Records for more than one payer on a tape or diskette. However, each group of ‘‘B’’ Records must be preceded by an ‘‘A’’ Record and followed by an End of Payer ‘‘C’’ Record. A single tape or diskette may contain different types of returns but the types of returns must not be intermingled. A separate ‘‘A’’ Record

is required for each payer and each type of return being reported.

.05 All records must be a fixed length of 420 positions.

.06 An ‘‘A’’ Record may be blocked with ‘‘B’’ Records, however, the initial record on a file must be an ‘‘A’’ Record. IRS/MCC will accept an ‘‘A’’ Record after a ‘‘C’’ Record.

.07 Do not begin any record at the end of a block or diskette and continue the same record into the next block.

.08 All alpha characters entered in the ‘‘A’’ Record must be upper-case .

.09 When filing Form 1098, Mortgage Interest Statement, the ‘‘A’’ Record will reflect the name of the recipient of the interest referred to as the payer in these instructions. The ‘‘B’’ Record will reflect the individual paying the interest (borrower/payer of record) and the amount paid.

Note: For all fields marked Re-

quired, a transmitter must provide the information described under Description and Remarks. For fields not marked Required, a transmitter must allow for the field, but may be instructed to enter blanks or zeros in the indicated media position(s) and for the indicated length. All records are now a fixed length of 420 positions.

Record Name: Payer/Transmitter ‘‘A’’ Record

Field Position Field Title Length Description and Remarks

1 Record Type 1 Required . Enter ‘‘A.’’

2–3 Payment Year 2 Required . Enter ‘‘96’’ (unless reporting prior year data).

Record Name: Payer/Transmitter ‘‘A’’ Record—Continued

Field Position Field Title Length Description and Remarks

4–6 Reel Sequence Number

3 The reel sequence number is incremented by 1 for each tape or diskette on the file starting with 001. The transmitter may enter blanks or zeros in this field. IRS/MCC bypasses this information. Indicate the proper sequence on the external media label.

7–15 Payer’s TIN 9 Required . Must be the valid nine-digit Taxpayer Identification Number assigned to the payer. Do not enter blanks, hyphens, or alpha characters. All zeros, ones, twos, etc., will have the effect of an incorrect TIN. For foreign entities that are not required to have a TIN, this field may be blank. However, the Foreign Entity Indicator, position 49 of the ‘‘A’’ Record, should be set to ‘‘1’’ (one).

16–19 Payer Name Control

20 Last Filing Indicator

21 Combined Federal/ State Filer

4 Not a required field. The Payer Name Control can be obtained only from the mail label on the Package 1099 that is mailed to most payers each December. To distinguish between Package 1099 and the Magnetic Media Reporting (MMR) Package, the Package 1099 contains instructions for paper filing only, and the mail label on the package contains a four (4) character name control. The MMR Package contains instructions for filing magnetically or electronically. The mail label does not contain a name control. Names of less than four (4) characters should be left-justified, filling the unused positions with blanks. If a Package 1099 has not been received or the Payer Name Control is unknown, this field must be blank filled.

1 Enter a ‘‘1’’ (one) if this is the last year the payer will file, otherwise, enter blank . Use this indicator if the payer will not be filing information returns under this payer name and TIN in the future either magnetically, electronically, or on paper.

1 Required for the Combined Federal/State Filing Program. Enter ‘‘1’’ (one) if participating in the Combined Federal/State Filing Program, otherwise, enter blank. Refer to Part A, Sec. 16, for further information. Forms 1098, 1099–A, 1099–B, 1099–C, 1099–S, and W–2G cannot be filed under this program.

22 Type of Return 1 Required . Enter the appropriate code from the table below: Type of Return Code 1098 3 1099–A 4 1099–B B 1099–C 5 1099–DIV 1 1099–G F 1099–INT 6 1099–MISC A 1099–OID D 1099–PATR 7 1099–R 9 1099–S S 5498 L W–2G W

23–31 Amount Codes (See Note )

9 Required . Enter the appropriate amount codes for the type of return being reported. Generally, for each amount code entered in this field, a corresponding payment amount must appear in the Payee ‘‘B’’ Record. In most cases, the box numbers on paper information returns correspond with the amount codes used to file magnetically/electronically. However, if discrepancies occur, this revenue procedure governs.

Record Name: Payer/Transmitter ‘‘A’’ Record—Continued

Field Position Field Title Length Description and Remarks

Example of Amount Codes: If position 22 of the Payer/Transmitter ‘‘A’’ Record is ‘‘A’’ (for 1099–MISC) and positions 23–31 are ‘‘1247bbbbb’’, this indicates the payer is reporting any or all four payment amounts (1247) in all of the following ‘‘B’’ Records. (In this example, ‘‘b’’ denotes blanks in the designated positions. Do not enter the letter ‘b’.) The first payment amount field will represent rents; the second will represent royalties; the third will be all ‘‘0’’ (zeros); the fourth will represent federal income tax withheld; the fifth and sixth will be all ‘‘0’’ (zeros); the seventh will represent nonemployed compensation;

and the eighth and ninth will be all ‘‘0’’ (zeros). Enter the amount codes in ascending sequence ( i.e., 1247bbbbb, left justify information, and fill unused positions with blanks. For further clarification of the amount codes, contact IRS/MCC. (In this example, ‘‘b’’ denotes blanks in the designated positions. Do not enter the letter ‘b’.)

Note: A type of return and an amount code must be present in every Payer ‘‘A’’ Record even if no money

amounts are being reported. For a detailed explanation of the information to be reported in each amount code, refer to the 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G.’’

Amount Codes Form 1098— Mortgage Interest Statement

Amount Codes Form 1098— For Reporting Mortgage Interest Received From Payers/Borrowers (Payer of Mortgage Interest Statement Record) on Form 1098:

Amount Code Amount Type 1 Mortgage interest received from payer(s)/borrower(s) 2 Points paid on purchase of principal residence 3 Refund of overpaid interest Amount Codes Form 1099–A - For Reporting the Acquisition or Abandonment of Secured Property on Form Acquisition or Abandonment of 1099–A: Secured Property (See Note 1 )

For Reporting the Acquisition or Abandonment of Secured Property on Form 1099–A:

Amount Code Amount Type 2 Balance of principal outstanding 4 Fair market value of property

Note 1: If, in the same calendar year, a debt is canceled in connection with the acquisition or abandonment of

secured property and the filer would be required to file both Forms 1099–A and 1099–C (Cancellation of Debt) for one debtor, the filer is required to file Form 1099–C only. See the 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G’’ for further information on coordination with Form 1099–C.

Amount Codes Form 1099–B Proceeds From Broker and Barter Exchange Transaction

For Reporting Payments on Form 1099–B:

Amount Code Amount Type 2 Stocks, bonds, etc. (For forward contracts, See Note 1 ) 3 Bartering (Do not report negative amounts.) 4 Federal income tax withheld (backup withholding) (Do not report negative amounts.) 6 Profit or (loss) realized on Closed Regulated Futures or Foreign Currency Contracts in 1996 (See Note 2 ). 7 Unrealized profit or (loss) on open contracts—12/31/ 95 (See Note 2 ). 8 Unrealized profit or (loss) on open contracts—12/31/ 96 (See Note 2 ). 9 Aggregate profit or (loss) (See Note 2 ).

Note 1: The payment amount field associated with Amount Code 2 may be used to represent a loss from a closing

transaction on a forward contract. Refer to the ‘‘B’’ Record — General Field Descriptions, Payment Amount Fields, for instructions on reporting negative amounts .

Record Name: Payer/Transmitter ‘‘A’’ Record—Continued

Field Position Field Title Length Description and Remarks

Note 2: Payment Amount Fields 6, 7, 8, and 9 are to be used for the reporting of regulated futures or foreign

currency contracts .

Amount Codes Form 1099–C— Cancellation of Debt (See Note 1 )

For Reporting Cancellation of Debt on Form 1099–C:

Amount Code Amount Type 2 Amount of debt canceled (See Note 2 ) 3 Interest included in Amount Code 2 4 Penalties, fines, or administrative costs included in Amount Code 2 7 Fair market value of property (See Note 3 )

Note 1: If, in the same calendar year, a debt is canceled in connection with the acquisition or abandonment of

secured property for one debtor and the filer would be required to file both Forms 1099–C and 1099–A (Acquisition or Abandonment of Secured Property) the filer is required to file Form 1099–C only. See the 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G’’ for further information on coordination with Form 1099–A.

Note 2: A debt is any amount owed to the debtor including principal, interest, penalties, administrative costs, and

fines, to the extent they are indebtedness under section 61(a)(12). The amount of debt discharged or canceled may be all or only part of the total amount owed. See the 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G’’ for further information .

Note 3: Amount Code 7 will be used only if a combined Form 1099–A and 1099–C is being filed. See the 1996

‘‘Instructions for Forms 1099, 1098, 5498, and W–2G’’ for further information on reporting the fair market value of property and coordination with Form 1099–A .

Amount Codes Form 1099–DIV— Dividends and Distributions

For Reporting Payments on Form 1099–DIV:

Amount Code Amount Type 1 Gross dividends and other distributions on stock (See Note ) 2 Ordinary dividends (See Note ) 3 Capital gain distributions (See Note ) 4 Nontaxable distributions (if determinable) (See Note ) 5 Investment expenses (See Note ) 6 Federal income tax withheld (backup withholding) 7 Foreign tax paid 8 Cash liquidation distributions 9 Noncash liquidation distributions (show fair market value)

Note: Amount Code 1 MUST be present (unless the payer is using Amount Codes 8 or 9 only) and must equal the

sum of amounts reported for Amount Codes 2, 3, 4, and 5. If an amount is present for Amount Code 1, there must be an amount present for Amount Codes 2-5 as applicable .

Amount Codes Form 1099–G— Certain Government Payments

For Reporting Payments on Form 1099–G:

Amount Code Amount Type 1 Unemployment compensation 2 State or local income tax refunds, credits, or offsets 4 Federal income tax withheld (backup withholding) 6 Taxable grants 7 Agriculture payments Amount Codes For Reporting Payments on Form 1099–INT: Form 1099–INT —Interest Income

For Reporting Payments on Form 1099–INT:

Record Name: Payer/Transmitter ‘‘A’’ Record—Continued

Field Position Field Title Length Description and Remarks

Amount Code Amount Type 1 Interest income not included in Amount Code 3 2 Early withdrawal penalty 3 Interest on U.S. Savings Bonds and Treasury obligations 4 Federal income tax withheld (backup withholding) 5 Foreign tax paid Amount Codes For Reporting Payments on Form 1099–MISC: Form 1099–MISC Miscellaneous Income Amount

For Reporting Payments on Form 1099–MISC:

Amount Code Amount Type 1 Rents (See Note 1 ) 2 Royalties (See Note 2 ) 3 Other income 4 Federal income tax withheld (backup withholding and withholding on payments of Indian gaming profits) 5 Fishing boat proceeds 6 Medical and health care payments 7 Nonemployed compensation or crop insurance proceeds (See Note 3 ) 8 Substitute payments in lieu of dividends or interest 9 Excess golden parachute payments (Filers: See Note 4)

Note 1: If reporting the Direct Sales Indicator only, use Type of Return Code A for 1099–MISC in position 22,

and Amount Code 1 in position 23 of the Payer ‘‘A’’ Record. All payment amount fields in the Payee ‘‘B’’ Record will contain zeros .

Note 2: Do not report timber royalties under a ‘‘pay-as-cut’’ contract; these must be reported on Form 1099–S .

Note 3: Amount Code 7 is normally used to report nonemployed compensation. However, Amount Code 7 may

also be used to report crop insurance proceeds. See positions 4-5 of the ‘‘B’’ Record for instructions. If nonemployed compensation and crop insurance proceeds are being paid to the same payee, a separate ‘‘B’’ Record for each transaction is required .

Note 4: For the convenience of the payer, the Special Data Entries Field in the Payee ‘‘B’’ Record may be used to

report state and local income tax withheld. This information does not need to be reported to IRS .

Amount Codes Form 1099–OID —Original Issue Discount

For Reporting Payments on Form 1099–OID:

Amount Code Amount Type 1 Original issue discount for 1996 2 Other periodic interest 3 Early withdrawal penalty 4 Federal income tax withheld (backup withholding) Amount Codes For Reporting Payments on Form 1099–PATR: Form 1099–PATR —Taxable Distributions Received From Amount Cooperatives Code Amount Type

For Reporting Payments on Form 1099–PATR:

Amount Code Amount Type

1 Patronage dividends 2 Nonpatronage distributions 3 Per-unit retain allocations 4 Federal income tax withheld (backup withholding) 5 Redemption of nonqualified notices and retain allocations Pass-Through Credits (See Note ) 6 For filers’ use

Record Name: Payer/Transmitter ‘‘A’’ Record—Continued

Field Position Field Title Length Description and Remarks

Amount Code Amount Type 7 Energy investment credit 8 Jobs credit 9 Patron’s Alternative Minimum Tax (AMT) Adjustment

Note: Amount Codes 6, 7, and 8 are reserved for the patron’s share of unused credits that the cooperative is

passing through to the patron. Other credits, such as the Indian employment credit may be reported in Amount Code 6. The title of the credit reported in Amount Code 6 should be reported in the Special Data Entries Field in the Payee ‘‘B’’ Record. The amounts shown for Amount Codes 6, 7, 8, and 9 must be reported to the payee. These Amount Codes and the Special Data Entries Field are for the convenience of the filer. This information is not needed by IRS/MCC .

Amount Codes Form 1099–R Distributions From Pensions, Annuities, Retirement or ProfitSharing Plans, IRAs, Insurance Contracts, etc. (See Note 1 )

For Reporting Payments on Form 1099–R:

Amount Code Amount Type

1 Gross distribution (See Note 2 ) 2 Taxable amount (See Note 3 ) 3 Capital gain (included in Amount Code 2) 4 Federal income tax withheld (See Note 4 ) 5 Employee contributions or insurance premiums 6 Net unrealized appreciation in employers’ securities 8 Other 9 Total employee contributions

Note 1: Additional information may be required in the ‘‘B’’ Record. Refer to positions 44 through 48 of the ‘‘B’’

Record .

Note 2: If the payment shown for Amount Code 1 is a total distribution, enter a ‘‘1’’ (one) in position 47 of the

‘‘B’’ Record. An amount must be shown in Amount Field 1 .

Note 3: If a distribution is a loss, do not enter a negative amount. For example, if stock is distributed but the

value is less than the employee’s after-tax contributions, enter the value of the stock in Amount Code 1, enter ‘‘0’’ (zero) in Amount Code 2, and enter the employee’s contributions in Amount Code 5. If the taxable amount cannot be determined, enter a ‘‘1’’ (one) in position 48 of the ‘‘B’’ Record. If reporting an IRA/SEP distribution, generally include the amount of the distribution in the Taxable Amount (Payment Amount Field 2, positions 61-70) and enter a ‘‘1’’ (one) in the IRA/SEP Indicator Field (position 44). A ‘‘1’’ (one) may be entered in the Taxable Amount Not Determined Indicator Field (position 48) of the Payee ‘‘B’’ Record, but the amount of the distribution must still be reported in Payment Amount Fields 1 and 2. See the explanation for Box 2a of Form 1099–R in the 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G’’ for more information on reporting the taxable amount.

Note 4: See the 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G’’ for information concerning federal

income tax withheld for Form 1099–R.

Note: For payers who wish to report state or local income tax, see Part B, Section 7 (6) Payee ‘‘B’’ Record—

Record Layout Positions 322-420 Form 1099–R.

Amount Codes Form 1099– S —Proceeds From Real Estate Transactions

For Reporting Payments on Form 1099–S:

Amount Code Amount Type 2 Gross proceeds (See Note ) 5 Buyer’s part of real estate tax

Note: Include payments of timber royalties made under a ‘‘pay-as-cut’’ contract, reportable under section 6050N.

If timber royalties are being reported, enter ‘‘TIMBER’’ in the description field of the ‘‘B’’ Record. For more information, see Announcement 90–129, 1990–48 I.R.B. 10.

Record Name: Payer/Transmitter ‘‘A’’ Record—Continued

Field Position Field Title Length Description and Remarks

Amount Codes Form 5498 Individual Retirement Arrangement Information (See Note )

For Reporting Payments on Form 5498:

Amount Code Amount Type 1 Regular IRA contributions made in 1996 and 1997 for 1996 . 2 Rollover IRA contributions 3 Life insurance cost included in Amount Code 1 4 Fair market value of the account

Note: For information regarding Inherited IRAs, refer to the 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and

W–2G’’ and Rev. Proc. 89–52, 1989–2 C.B. 632. Beneficiary information must be given in the Payee Name Line Field of the ‘‘B’’ Record. If reporting IRA contributions for a Desert Storm/Shield participant for other than 1996 or an Operations Joint Endeavor (Bosnia Region) participant, enter ‘‘DS,’’ for Desert Storm or ‘‘JE’’ for Joint Endeavor, the year for which the contribution was made, and the amount of the contribution in the Special Data Entries Field of the ‘‘B’’ Record. Do not enter the contributions in Amount Code 1. For information concerning Desert Storm/Shield participant reporting, refer to the 1994 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G,’’ or Notice 91–17, 1991–1 C.B. 319. The instructions for filing Form 5498 for Desert Storm/Shield participants will also apply to participants of Operation Joint Endeavor of the Bosnia Region .

Amount Codes Form W–2G Certain Gambling Winnings

For Reporting Payments on Form W–2G:

Amount Code Amount Type 1 Gross winnings 2 Federal income tax withheld 3 State income tax withheld (See Note ) 7 Winnings from identical wagers

Note: State income tax withheld is added for the convenience of the payer but need not be reported to IRS/MCC .

32 Test Indicator 1 Required . Enter ‘‘T’’ if this is a test file, otherwise enter a blank.

33 Service Bureau Indicator

1 Enter ‘‘1’’ (one) if a service was used to develop and/or transmit files, otherwise, enter blank . See Part A, Sec. 17 for the definition of service bureau.

34–41 Blank 8 Enter blanks .

42–43 Magnetic Tape Filer Indicator

44–48 Transmitter Control Code (TCC)

49 Foreign Entity Indicator

2 Required for magnetic tape/tape cartridge filers only . Enter the letters ‘‘LS’’ (in uppercase only ). Use of this field by filers using other types of media will be acceptable but is not required.

5 Required . Enter the five character alpha/numeric Transmitter Control Code assigned by IRS/MCC. A TCC must be obtained to file data on this program. Do not enter more than one TCC per file.

1 Enter a ‘‘1’’ (one) if the payer s a foreign entity and income is paid by the corporation to a U.S. resident. If the payer is not a foreign entity, enter a blank (See Note ).

Note: If payers erroneously report entities as foreign, they may be subject to a penalty for providing incorrect

information to IRS. Therefore, payers must be sure to code only those records as foreign entities that should be coded .

50–89 First Payer Name Line

40 Required . Enter the name of the payer whose TIN appears in positions 7–15 of the ‘‘A’’ Record. Any extraneous information must be deleted. Left justify information, and fill unused positions with blanks. (Filers should not enter a transfer agent’s name in this field. Any transfer agent’s name should appear in the Second Payer Name Line Field.)

Record Name: Payer/Transmitter ‘‘A’’ Record—Continued

Field Position Field Title Length Description and Remarks

Note: When reporting Form 1098, Mortgage Interest Statement, the ‘‘A’’ Record will reflect the name and TIN of the recipient of the interest/the filer of Form 1098 (the payer). The ‘‘B’’ Record will reflect the individual paying the interest (the payer of record) and the amount paid. For Form 1099–S, the ‘‘A’’ Record will reflect the person responsible for reporting the transaction (the filer of Form 1099–S) and the ‘‘B’’ Record will reflect the seller/transferor .

90–129 Second Payer Name Line

130 Transfer Agent Indicator

131–170 Payer Shipping Address

171–210 Payer City, State, and ZIP Code

40 If the Transfer (or Paying) Agent Indicator (position 130) contains a ‘‘1’’ (one), this field must contain the name of the transfer (or paying) agent. If the indicator contains a ‘‘0’’ (zero), this field may contain either a continuation of the First Payer Name Line or blanks. Left justify information and fill unused positions with blanks.

1 Required . Identifies the entity in the Second Payer Name Line Field. (See Part A, Sec. 17 for a definition of transfer agent.)

Code Meaning 1 The entity in the Second Payer Name Line Field is the transfer (or paying) agent. 0 (zero) The entity shown is not the transfer (or paying) agent ( i.e., the Second Payer Name Line Field contains either a continuation of the First Payer Name Line Field or blanks).

40 Required . If the Transfer Agent Indicator in position 130 is a ‘‘1’’ (one), enter the shipping address of the transfer (or paying) agent. Otherwise, enter the actual shipping address of the payer. The street address should include number, street, apartment or suite number (or P. O. Box if mail is not delivered to street address). Left justify information, and fill unused positions with blanks.

40 Required . If the Transfer Agent Indicator in position 130 is a ‘‘1’’ (one), enter the city, town, or post office, state abbreviation and ZIP Code of the transfer agent. Otherwise, enter the city, town, or post office, state, and ZIP Code of the payer. Left justify information, and fill unused positions with blanks.

211–290 Transmitter Name 80 Required if the payer and the transmitter are not the same. Enter the name of the transmitter in the manner in which it is used in normal business. The name of transmitter must be reported in the same manner throughout the entire file. Left justify information, and fill unused positions with blanks. If the payer and transmitter are the same, this field may be blank.

291–330 Transmitter Mailing Address

331–370 Transmitter City, State, and ZIP Code

40 Required if the payer and transmitter are not the same. Enter the mailing address of the transmitter. Street address should include number, street, apartment or suite number (or P.O. Box if mail is not delivered to street address). Left justify information, and fill unused positions with blanks. If the payer and transmitter are the same, this field may be blank.

40 Required if the payer and transmitter are not the same. Enter the city, town, or post office, state, and ZIP Code of the transmitter. Left justify information and fill unused positions with blanks. If the payer and transmitter are the same, this field may be blank.

371–418 Blank 48 Enter blanks .

419–420 Blank 2 Enter blanks or Carriage Return/Line Feed (CR/LF).

Sec. 7. Payer/Trasmitter ‘‘A’’ Record—Record Layout

Last Filing Indicator

Record

Type

Payment

Year

Reel Sequence

Number

Payer’s

TIN*

Payer Name Control*

1 2–3 4–6 7–15 16–19 20

Combined Federal/State

Filer

Type

of Return

Amount

Codes

Test Indicator

Service

Bureau Indicator

21 22 23–31 32 33

Second

Payer Name Line*

Foreign

Entity Indicator

First Payer Name Line*

Blank

Magnetic

Tape Filer Indicator

Transmitter

Control

Code

34–41 42–43 44–48 49 50–89 90–129

Transfer

Agent Indicator

Payer Shipping Address*

Payer City

State And Zip Code*

Transmitter

Name

Transmitter

Mailing Address

130 131–170 171–210 211–290 291–330

Transmitter City, State, and Zip Code

Blank

or CR/LF

331–370 371–418 419–420

Note: When reporting Form 1098, Mortgage Interest Statement, the ‘‘A’’ Record will reflect the name and TIN of

the recipient of the interest (the payer). For Form 1099–S, the ‘‘A’’ Record will reflect the person responsible for reporting the transaction.

Sec. 8. Payee ‘‘B’’ Record—General Field Descriptions and Record Layouts

.01 The ‘‘B’’ Record contains the payment information from the information returns. When filing information returns, the format for the ‘‘B’’ Records will remain constant and is a fixed length of 420 positions. The record layout for positions 1 through 321 is the same for all ‘‘B’’ Records. Positions 322 through 420 vary for Forms 1099–A, 1099–B, 1099–C, 1099– OID, 1099–S, and W–2G to accommodate variations within these forms. In the ‘‘A’’ Record, the amount codes that appear in tape or diskette positions 23 through 31 will be left-justified and filled with blanks. In the ‘‘B’’ Record, the filer must allow for all nine Payment Amount Fields. For those fields not used, enter ‘‘0’s’’ (zeros). For example, a payer reporting on Form 1099–MISC, should ENTER ‘‘A’’ in tape position 22 of the ‘‘A’’ Record, Type of Return. If reporting payments for Amount Codes 1, 2, 4, and 7, the payer would report media positions 23 through 31 of the ‘‘A’’ Record as ‘‘1247bbbbb.’’ (In this example, ‘‘b’’ denotes blanks. Do not enter the letter ’b’.) In the ‘‘B’’ Record:

Positions 51 through 60 for Pay ment Amount 1 will represent Rents. Positions 61–70 for Payment

Amount 2 will represent Royalties. Positions 71–80 for Payment

Amount 3 will be ‘‘0’s’’ (zeros). Positions 81–90 for Payment

Amount 4 will represent Federal income tax withheld. Positions 91–110 for Payment

Amounts 5 and 6 will be ‘‘0’s’’ (zeros). Positions 111–120 for Payment

Amount 7 will represent Nonemployee compensation. Positions 121–140 for Payment

.08 Do not use decimal points (.) to indicate dollars and cents. Ten dollars must appear as 0000001000 in the payment amount field.

.09 IRS strongly encourages transmitters to review the data for accuracy before submission to prevent issuance of erroneous notices. Transmitters should be especially careful that the names, TINs, account numbers, types of income, and income amounts are correct.

.10 When reporting Form 1098, Mortgage Interest Statement, the ‘‘A’’ Record will reflect the name and TIN of the recipient of the interest, the filer of the Form 1098 (the payer). The ‘‘B’’ Record will reflect the individual paying the interest (borrower/payer of record) and the amount paid. For Form 1099–S, the ‘‘A’’ Record will reflect the person responsible for reporting the transaction (the filer of the Form 1099– S) and the ‘‘B’’ Record will reflect the seller/transferor.

Note: For all fields marked Re-

quired, the transmitter must provide the informa- tion described under De- scription and Remarks. For those fields not marked Required, the transmitter must allow for the field, but may be instructed to enter blanks or zeros in the indicated position(s) and for the indicated length. All records are a fixed length of 420 positions .

Amounts 8 and 9 will be ‘‘0’s’’ (zeros). .02 The following specifications include a field in the payee records called ‘‘Name Control’’ in which the first four characters of the payee’s surname are to be entered by the filer.

.03 If filers are unable to determine the first four characters of the surname, the Name Control Field may be left blank. Compliance with the following will facilitate IRS computer programs in generating the name control:

(a) The surname of the payee

whose TIN is shown in the ‘‘B’’ Record should always appear first. If, however, the records have been developed using the first name first, the

filer must leave a blank space between the first and last names. (b) In the case of multiple payees,

only the surname of the payee whose TIN (SSN or EIN) is shown in the ‘‘B’’ Record must be present in the First Payee Name Line. Surnames of any other payees may be entered in the Second Payee Name Line. .04 See Part A, Sec. 14 for further information concerning Taxpayer Identification Numbers (TINs).

.05 A field is also provided in these specifications for Special Data Entries. This field may be used to record information required by state or local governments, or for the personal use of the filer. IRS does not use the data provided in the Special Data Entries Field, therefore, the IRS program does not check the content or format of the data entered in this field. It is the filer’s option to use the Special Data Entry Field. If this field is coded, it will not affect the processing of the ‘‘B’’ Records.

.06 Those payers participating in the Combined Federal/State Filing Program must adhere to all of the specifications in Part A, Sec. 16, in order to participate in this program. Forms 1098, 1099–A, 1099–B, 1099–C, 1099– S, and W–2G cannot be filed under the Combined Federal/State Filing Program.

.07 All alpha characters entered in the ‘‘B’’ Record must be uppercase.

Record Name: Payee ‘‘B’’ Record

Field Position Field Title Length Description and Remarks

1 Record Type 1 Required . Enter ‘‘B.’’

2–3 Payment Year 2 Required . Enter ‘‘96’’ (unless reporting prior year data).

4–5 Document Specific/ Distribution Code

2 Required for Forms 1099–G, 1099–MISC, 1099–R and W–2G. For all other forms, or if not used, enter blanks.

Record Name: Payee ‘‘B’’ Record—Continued

Field Position Field Title Length Description and Remarks

Tax Year of Refund (Form For Form 1099–G, use only for reporting the tax year for which the *refund, 1099–G only) credit, or offset (Amount Code 2) was issued. Enter in position 4; position 5 must be blank. If the refund, credit, or offset is not attributable to income from a trade or business, enter the numeric year from the table below for which the refund, credit, or offset was issued ( e.g., for 1995, enter 5 ). If the refund, credit or offset is exclusively attributable to income from a trade or business and is not of general application, enter the alpha equivalent of the year from the table below ( e.g., for 1995, enter E ).

Code For Tax Year Which Refund Was Issued

Tax Year For Which Refund Was

*Code For General

Refund

*Code For Trade/Business

Refund (Alpha

Issued

Issued Refund Equivalent)

1991 1 A 1992 2 B 1993 3 C 1994 4 D 1995 5 E 1986 6 F 1987 7 G 1988 8 H 1989 9 I 1990 0 J

*Be sure the distribution code reflects the tax year for which the REFUND was made, not the tax year of the Form 1099–G.

Crop Insurance Proceeds (Form 1099–MISC only)

Crop Insurance Proceeds For Form 1099–MISC, Enter ‘‘1’’ (one) in position 4 if the payments reported (Form 1099–MISC only) for Amount Code 7 are crop insurance proceeds. Position 5 will be blank.

Distribution Code (Form For Form 1099–R, enter the appropriate distribution code(s). More than one 1099–R only) (For a code may apply for Form 1099–R. If only one code is required, it must be detailed explanation of the entered in position 4 and position 5 must be blank. Enter at least one (1) disDistribution Codes, see the tribution code. A blank in position 4 is not acceptable. 1996 ‘‘Instructions for Forms 1099, 1098, 5498, Enter the applicable code from the table that follows. Position 4 must contain a and W–2G.’’) numeric code in all cases except when using P, D, E, F, G, or H. Distribution

For Form 1099–R, enter the appropriate distribution code(s). More than one code may apply for Form 1099–R. If only one code is required, it must be entered in position 4 and position 5 must be blank. Enter at least one (1) distribution code. A blank in position 4 is not acceptable.

Enter the applicable code from the table that follows. Position 4 must contain a numeric code in all cases except when using P, D, E, F, G, or H. Distribution Code A, B, or C, when applicable, must be entered in position 5 with the applicable numeric code in position 4. When using Code P for an IRA distribution under section 408(d)(4) of the Internal Revenue Code, the filer may also enter Code 1 if applicable. Only three numeric combinations are acceptable, Codes 8 and 1, Codes 8 and 2 and Codes 8 and 4, on one return. These three combinations can be used only if both codes apply to the distribution being reported. If more than one numeric code is applicable to different parts of a distribution, report two separate ‘‘B’’ Records.

Record Name: Payee ‘‘B’’ Record—Continued

Field Position Field Title Length Description and Remarks

Form 1099–R Continued

Distribution Codes E, F, and H cannot be used in conjunction with other codes. Distribution Code G may be used in conjunction with Distribution Code 4 only, if applicable. Category Code Early (premature) distribution, no known exception 1* Early (premature) distribution, exception applies (as defined in sec- 2*

tion 72(q), (t), or (v) of the Internal Revenue Code) (other than disability or death)

Disability 3* Death (includes payments to an estate or other beneficiary) 4* Prohibited transaction 5* Section 1035 exchange 6 Normal distribution 7* Excess contributions plus earnings/excess deferrals (and/or earnings) 8*

taxable in 1996

PS 58 costs 9 Excess contributions plus earnings/excess deferrals taxable in 1995 P* May be eligible for 5- or 10-year tax option A May be eligible for death benefit exclusion B May be eligible for both A and B C Excess contributions plus earnings/excess deferrals taxable in 1994 D* Excess annual additions under section 415 E Charitable gift annuity F Direct rollover to IRA G Direct rollover to qualified plan or tax-sheltered annuity H

taxable in 1996

***** If reporting an IRA or SEP distribution, code a ‘‘1’’ (one) in position 44 of the ‘‘B’’ Record.

Type of Wager (Form W–2G only)

For Form W–2G, enter the applicable code in position 4. Position 5 will be blank. Category Code Horse race track (or off-track betting of a horse track nature) 1 Dog race track (or off-track betting of a dog track nature) 2 Jai-alai 3 State-conducted lottery 4 Keno 5 Bingo 6 Slot machines 7 Any other type of gambling winnings 8

Record Name: Payee ‘‘B’’ Record—Continued

Field Position Field Title Length Description and Remarks

6 2nd TIN Notice 1 For Forms 1099–B, 1099–DIV, 1099–INT, 1099–MISC, 1099–OID, and 1099– PATR only. Enter ‘‘2’’ to indicate notification by IRS/MCC twice within three calendar years that the payee provided an incorrect name and/or TIN combination, otherwise, enter a blank .

7 Corrected Return Indicator

1 Indicate a corrected return.

Code Definition G If this is a one-transaction correction or the first of a two-transaction correction C If this is the second transaction of a two transaction correction Blank If this is not a return being submitted to correct information already processed by IRS.

Note: C, G, and non-coded records must be reported using separate Payer ‘‘A’’ Records. Refer to Part A, Sec. 13,

for specific instructions on how to file corrected returns .

8–11 Name Control 4 If determinable, enter the first four (4) characters of the surname of the person whose TIN is being reported in positions 15–23 of the ‘‘B’’ Record, otherwise, enter blanks. This is usually the payee. If the name that corresponds to the TIN is not included in the first or second payee name line and the correct name control is not provided, a backup withholding notice may be generated for the record. Surnames of less than four (4) characters should be left-justified, filling the unused positions with blanks. Special characters and imbedded blanks should be removed. In the case of a business, other than a sole proprietorship, use the first four significant characters of the business name. Disregard the word ‘‘the’’ when it is the first word of the name, unless there are only two words in the name. A dash (-) and an ampersand (&) are the only acceptable special characters. Surname prefixes are considered part of the surname, e.g., for Van Elm, the name control would be VANE.

Note: Although extraneous words, titles, and special characters are allowed ( i.e., Mr., Mrs., Dr., apostrophe, or

dash), this information may be dropped during subsequent IRS/MCC processing.

The following examples may be helpful to filers in developing the Name Control:

Name Name Control Individuals:

Jane Brow n BROW John A. Lee LEE* James P. En, Sr. EN* John O ’ Nei ll ONEI Mary Van B uren VANB Juan De Je sus DEJE Gloria A. El-R oy EL-R Mr. John Smit h SMIT Joe McCa rthy MCCA Pedro Torr es-Lopes TORR Maria Lope z Moreno** LOPE Binh To La LA* Nhat Thi Pham PHAM Mark D ’ All esandro DALL

Corporations:

The Firs t National Bank FIRS The H ideaway THEH A & B C afe A&BC 11TH Street Inc. 11TH

Record Name: Payee ‘‘B’’ Record—Continued

Field Position Field Title Length Description and Remarks

Sole Proprietor:

Name Name Control

Mark Heml ock DBA HEML The Sunshine Club

Partnership:

Robert Aspe n and Bess Willow ASPE Harold Fir, Bruce Elm, and Joyce Spruce et al Ptr FIR*

Estate:

Frank Whit e Estate WHIT Sheila Blue Estate BLUE

Trusts and Fiduciaries:

Dais y Corporation Employee Benefit Trust DAIS Trust FBO The Cher ryblossom Society CHER

Exempt Organization:

Labo rer’s Union, AFL-CIO LABO St . Be rnard’s Methodist Church Bldg. Fund STBE

Name Controls of less than four (4) significant characters must be left-justified and blank-filled. ** For Hispanic names, when two last names are shown for an individual, derive the name control from the first last name.

12 Direct Sales Indicator

1 1099 MISC only . Enter a ‘‘1’’ (one) to indicate sales of $5,000 or more of consumer products to a person on a buy/sell, deposit/commission, or any other commission basis for resale anywhere other than in a permanent retail establishment. Otherwise, enter a blank.

Note: If reporting direct sales only, use Type of Return ‘‘A’’ in position 22, and Amount Code 1 in position 23 of

the Payer ‘‘A’’ Record. All payment amount fields in the Payee ‘‘B’’ Record will contain zeros .

13 Blank 1 Enter blank.

14 Type of TIN 1 This field is used to identify the Taxpayer Identification Number (TIN) in positions 15–23 as either an Employer Identification Number (EIN), or a Social Security Number (SSN). ***** Enter the appropriate code from the following table:

*** While not a ‘‘Required’’ field, this information is important for the correct processing of the payee’s TIN.**

Type of TIN Type of Account

1 EIN A business, organization, sole proprietor, or other entity 2 SSN An individual, including a sole proprietor Blank N/A If the type of TIN is not determinable, enter a blank.

15–23 Taxpayer Identification Number

9 Required . Enter the nine digit Taxpayer Identification Number of the payee (SSN or EIN). If an identification number has been applied for but not received, enter blanks. Do not enter hyphens or alpha characters. All zeros, ones, twos, etc. will have the effect of an incorrect TIN. If the TIN is not available, enter blanks (See Note ).

Note: IRS/MCC contacts payers who have submitted payee data with missing TINs in an attempt to prevent

erroneous notices. Payers who submit data with missing TINs, and have taken the required steps to obtain this information are encouraged to attach a letter of explanation to the required Form 4804. This will prevent unnecessary contact from IRS/MCC. This letter, however, will not prevent backup withholding notices (CP2100 or CP2100A) or penalties. (Refer to the Penalty section of the 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G’’ for missing or incorrect TINs.)

Record Name: Payee ‘‘B’’ Record—Continued

Field Position Field Title Length Description and Remarks

24–43 Payer’s Account Number for Payee

20 Enter any number assigned by the payer to the payee ( e.g., checking or savings account number). Filers are encouraged to use this field. This number helps to distinguish individual payee records and should be unique for each document. Do not use the payee’s TIN since this will not make each record unique . This information is particularly useful when corrections are filed. This number will be provided with the backup withholding notification and may be helpful in identifying the branch or subsidiary reporting the transaction. Do not define data in this field in packed decimal format. If fewer than twenty characters are used, filers may either left or right justify, filling the remaining positions with blanks.

44 IRA/SEP Indicator 1 Form 1099–R . Enter ‘‘1’’ (one) if reporting a distribution from an IRA or SEP; otherwise, enter a blank (See Note ). Form 5498. Enter ‘‘1’’ (one) if reporting Simplified Employee Pension (SEP).

Note: For Form 1099–R, generally, report the total amount distributed from an IRA or SEP in Payment Amount

Field 2 (Taxable Amount), as well as Payment Amount Field 1 (Gross Distribution) of the ‘‘B’’ Record. Filers may indicate the taxable amount was not determined by using the Taxable Amount Not Determined Indicator (position 48) of the ‘‘B’’ Record. However, still report the amount distributed in Payment Amount Fields 1 and 2. Refer to the 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G’’ for exceptions .

45–46 Percentage of Total Distribution

47 Total Distribution Indicator (See Note )

2 Form 1099–R only . Use this field when reporting a total distribution to more than one person, such as when a participant is deceased and a payer distributes to two or more beneficiaries. Therefore, if the percentage is 100, leave this field blank. If the percentage is a fraction, round off to the nearest whole number (for example, 10.4 percent will be 10 percent; 10.5 percent or more will be 11 percent). Enter the percentage received by the person whose TIN is included in positions 15–23 of the ‘‘B’’ Record. This field must be right-justified, and unused positions must be zero-filled. If not applicable, enter blanks . Filers need not enter this information for IRA or SEP distributions or for direct rollovers.

1 Form 1099–R only . Enter a ‘‘1’’ (one) only if the payment shown for Amount Code 1 is a total distribution that closed out the account; otherwise, enter a blank.

Note: A total distribution is one or more distributions within one tax year in which the entire balance of the

account is distributed. Any distribution that does not meet this definition is not a total distribution .

48 Taxable Amount Not Determined Indicator

1 Form 1099–R only . Enter a ‘‘1’’ (one) only if the taxable amount of the payment entered for Payment Amount Field 1 (Gross Distribution) of the ‘‘B’’ Record cannot be computed; otherwise, enter blank. If Taxable Amount Not Determined Indicator is used, enter ‘‘0’s’’ (zeros) in Payment Amount Field 2 of the Payee ‘‘B’’ Record unless the IRA/SEP Indicator is present (See Note ). Please make every effort to compute the taxable amount.

Note: If reporting an IRA or SEP distribution for Form 1099–R, the Taxable Amount Not Determined Indicator

may be used; but, it is not required. If the IRA/SEP Indicator is present, generally, the amount of the distribution must be reported in both Payment Amount Fields 1 and 2. Refer to the 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G’’ for more information .

Record Name: Payee ‘‘B’’ Record—Continued

Field Position Field Title Length Description and Remarks

49–50 Blank 2 Enter blanks .

Payment Amount Fields Required . Filers should allow for all payment amounts. For those not used, (Must be numeric) (See enter zeros . For example: If position 22, Type of Return, of the ‘‘A’’ Record is Note 1 ) ‘‘A’’ (for 1099–MISC) and positions 23–31, Amount Codes, are ‘‘1247bbbbb’’.

This indicates the payer is reporting any or all four payment amounts (1247) in all of the following ‘‘B’’ Records. (In this example, ‘‘b’’ denotes blanks in the designated positions. Do not enter the letter ’b.’) Payment Amount 1 will represent rents; Payment Amount 2 will represent royalties; Payment Amount 3 will be all ‘‘0’s’’ (zeros); Payment Amount 4 will represent Federal income tax withheld; Payment Amounts 5 and 6 will be all ‘‘0’s’’ (zeros); Payment amount 7 will represent nonemployed compensation, and Payment Amounts 8 and 9 will be all ‘‘0’s’’ (zeros). Each payment field must contain 10 numeric characters (See Note 2 ). Each payment amount must be entered in U.S. dollars and cents. The right-most two positions represent cents in the payment amount fields. Do not enter dollar signs, commas, decimal points, or negative payments, except those items that reflect a loss on Form 1099–B. Positive and negative amounts are indicated by placing a ‘‘+’’ (plus) or ‘‘-’’ (minus sign) in the left-most position of the payment amount field. A negative over punch in the units position may be used, instead of a minus sign, to indicate a negative amount. If a plus sign, minus sign, or negative over punch is not used, the number is assumed to be positive. Negative over punch cannot be used in PC created files. Payment amounts must be right-justified and unused positions must be zerofilled. Federal income tax withheld cannot be reported as a negative amount on any form. Note 1: Filers are instructed to enter numeric information in all payment fields when filing magnetically or

Payment Amount Fields (Must be numeric) (See Note 1 )

electronically. However, when reporting information on the statement to recipient, the payer may be instructed to leave a box blank. Follow the guidelines provided in the paper instructions for the statement to recipient.

Note 2: *If a payer is reporting a money amount in excess of 9999999999 (dollars and cents), it must be reported

as follows: (1) The first Payee ‘‘B’’ Record MUST contain *9999999999. (2) The second Payee ‘‘B’’ Record will contain the remaining money amount.

DO NOT SPLIT THIS FIGURE IN HALF. 51–60 Payment 10 The amount reported in this field represents payments for Amount Code 1 in the Amount 1 ‘‘A’’ Record.

61–70 Payment Amount 2*

71–80 Payment Amount 3*

81–90 Payment Amount 4*

91–100 Payment Amount 5*

101–110 Payment Amount 6*

111–120 Payment Amount 7*

121–130 Payment Amount 8*

10 The amount reported in this field represents payments for Amount Code 2 in the ‘‘A’’ Record.

10 The amount reported in this field represents payments for Amount Code 3 in the ‘‘A’’ Record.

10 The amount reported in this field represents payments for Amount Code 4 in the ‘‘A’’ Record.

10 The amount reported in this field represents payments for Amount Code 5 in the ‘‘A’’ Record.

10 The amount reported in this field represents payments for Amount Code 6 in the ‘‘A’’ Record.

10 The amount reported in this field represents payments for Amount Code 7 in the ‘‘A’’ Record.

10 The amount reported in this field represents payments for Amount Code 8 in the ‘‘A’’ Record.

Record Name: Payee ‘‘B’’ Record—Continued

Field Position Field Title Length Description and Remarks

131–140 Payment 10 The amount reported in this field represents payments for Amount Code 9 in the Amount 9* ‘‘A’’ Record.

If there are discrepancies between the payment amount fields and the boxes on the paper forms, the instructions in this revenue procedure govern.

141–160 Blank 20 Enter blanks .

161 Foreign Country Indicator

1 If the address of the payee is in a foreign country, enter a ‘‘1’’ (one) in this field; otherwise, enter blanks. When filers use this indicator, they may use a free format for the payee city, state, and ZIP Code. Address information must not appear in the First or Second Payee Name Line.

162–201 First Payee Name 40 Required . Enter the name of the payee (preferably surname first) whose Line Taxpayer Identification Number (TIN) was provided in positions 15–23 of the

‘‘B’’ Record. Left justify and fill unused positions with blanks. If more space is required for the name, utilize the Second Payee Name Line Field. If there are multiple payees, only the name of the payee whose TIN has been provided should be entered in this field. The names of the other payees may be entered in the Second Payee Name Line Field. If reporting information for a sole proprietor, the individual’s name must always be present, preferably on the First Payee Name Line. The use of the business name is optional in the Second Payee Name Line Field. Note: When reporting Form 1098, Mortgage Interest Statement, the ‘‘A’’ Record will reflect the name of the

162–201 First Payee Name Line

recipient of the interest (the payer). The ‘‘B’’ Record will reflect the individual paying the interest (the borrower/payer of record) and the amount paid. For Form 1099–S, the ‘‘B’’ Record will reflect the seller/ transferor information.

For Form 5498 Inherited IRAs, enter the beneficiary’s name followed by the word ‘‘beneficiary.’’ For example, ‘‘Brian Young as beneficiary of Joan Smith’’ or something similar that signifies that the IRA was once owned by Joan Smith. Filers may abbreviate the word ‘‘beneficiary’’ as, for example, ‘‘benef.’’ Refer to the 1996 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G.’’ The beneficiary’s TIN must be reported in positions 15–23 of the ‘‘B’’ Record.

202–241 Second Payee Name Line

242–281 Payee Mailing Address

40 If there are multiple payees, ( e.g., partners, joint owners, or spouses), use this field for those names not associated with the TIN provided in position 15–23 of the ‘‘B’’ Record or if not enough space was provided in the First Payee Name Line, continue the name in this field. Do not enter address information . It is important that filers provide as much payee information to IRS/MCC as possible to identify the payee assigned the TIN. Left justify and fill unused positions with blanks. Fill with blanks if no entries are present for this field.

40 Required . Enter mailing address of payee. Street address should include number, street, apartment or suite number (or P.O. Box if mail is not delivered to street address). Left justify information and fill unused positions with blanks. This field must not contain any data other than the payee’s mailing address.

For U.S. addresses, the payee city, state, and ZIP Code must be reported as a 29, 2, and 9 position field, respectively. Filers must adhere to the correct format for the payee city, state, and ZIP Code. For foreign addresses, filers may use the payee city, state, and ZIP Code as a continuous 40 position field. Enter information in the following order: city, province or state, postal code, and the name of the country. When reporting a foreign address, the Foreign Country Indicator in position 161 must contain a ‘‘1’’ (one).

282–310 Payee City 29 Required . Enter the city, town or post office. Left justify information and fill the unused positions with blanks. Enter APO or FPO if applicable. Do not enter state and ZIP Code information in this field.

311–312 Payee State 2 Required . Enter the valid U.S. Postal Service state abbreviations for states or the appropriate postal identifier (AA, AE, or AP) described in Part A, Sec. 18.

313–321 Payee ZIP Code 9 Required . Enter the valid nine digit ZIP Code assigned by the U.S. Postal Service. If only the first five digits are known, left justify information and fill the unused positions with blanks. For foreign countries, alpha characters are acceptable as long as the filer has entered a ‘‘1’’ (one) in the Foreign Country Indicator Field, located in position 161 of the ‘‘B’’ Record.

Standard Payee ‘‘B’’ Record Format For

All Types of Returns up to Position 321

Record

Type

Payment

Year

Specific/ Distribution

Document

Code

2nd TIN Notice (Optional)

Corrected

Return Indicator

1 2–3 4–5 6 7

Taxpayer Identification

Number

Payer’s Account

Number For Payee

Name Control

Direct

Sales Indicator

Blank

Type

of TIN

8–11 12 13 14 15–23 24–43

Total Distribution

Indicator

Taxable Amt Not Determined

Indicator

IRA/SEP Indicator

Percentage of

Total Distribution

Blank

44 45–46 47 48 49–50

Payment Amount 1

Payment Amount 2

Payment Amount 3

Payment Amount 4

Payment Amount 5

51–60 61–70 71–80 81–90 91–100

Payment Amount 6

Payment Amount 7

Payment Amount 8

Payment Amount 9

101–110 111–120 121–130 131–140

First Payee Name

Line

Second Payee Name

Line

Payee Mailing Address

Blank

Foreign Country

Indicator

141–160 161 162–201 202–241 242–281

Payee

City

Payee

State

Payee

Zip Code

282–310 311–312 313–321

Record Name: Payee ‘‘B’’ Record—Continued

Field Position Field Title Length Description and Remarks

The following sections define the field positions for the different types of returns in the Payee ‘‘B’’ Record (positions 322–420):

(l) Forms 1098, 1099–DIV, 1099–G, 1099–INT, 1099–MISC, 1099–PATR, and 5498 (2) Form 1099–A (3) Form 1099–B (4) Form 1099–C (5) Form 1099–OID (6) Form 1099–R (7) Form 1099–S (8) Form W–2G

(1) Payee ‘‘B’’ Record—Record Layout Positions 322–420 Forms 1098, 1099–DIV, 1099–G, 1099–INT, 1099–MISC,

1099–PATR, and 5498

322–349 Blank 28 Enter blanks .

350–416 Special Data Entries

417–418 Combined Federal/ State Code

67 This portion of the ‘‘B’’ Record may be used to record information for state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for filing requirements. If this field is not utilized, enter blanks .

2 If this payee record is to be forwarded to a state agency as part of the Combined Federal/State Filing Program, enter the valid state code from Part A, Sec. 16, Table 1. For those payers or states not participating in this program or for forms not valid for state reporting, enter blanks.

419–420 Blank 2 Enter blanks, or carriage return/line feed (cr/lf) characters.

Payee ‘‘B’’ Record—Record Layout Positions 322–420

Forms 1098, 1099–DIV, 1099–G, 1099–INT, 1099–MISC, 1099–PATR, and 5498

Blank

or CR/LF

Combined

State Code

Blank

Special

Data Entries

Federal/

322–349 350–416 417–418 419–420

(2) Payee ‘‘B’’ Record—Record Layout Positions 322–420 Form 1099–A

322–349 Blank 28 Enter blanks .

350–370 Special Data Entries

371–376 Date of Lender’s Acquisition or Knowledge of Abandonment

21 This portion of the ‘‘B’’ Record may be used to record information for state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for the filing requirements. If this field is not utilized, enter blanks .

6 Form 1099–A only . Enter the acquisition date of the secured property or the date they first knew or had reason to know the property was abandoned, in the format MMDDYY ( i.e., 0522 96 ). Do NOT enter hyphens or slashes.

377 Liability Indicator 1 Form 1099–A only . Enter the appropriate indicator from the table below:

Record Name: Payee ‘‘B’’ Record—Continued

Form 1099–a

Field Position Field Title Length Description and Remarks

Liability Indicator

378–416 Description of Property

Indicator Usage

1 Borrower was personally liable for repayment of the debt. Blank Borrower was not liable for repayment debt.

39 Form 1099–A only . Enter a brief description of the property. For real property, enter the address, or if the address does not sufficiently identify the property, enter the section, lot and block. For personal property, enter the type, make and model ( e.g., Car-19 95 Buick Regal or office equipment). Enter ‘‘CCC’’ for crops forfeited on Commodity Credit Corporation loans. If fewer than 39 positions are required, left justify information and fill unused positions with blanks.

417–418 Blank 2 Enter blanks.

419–420 Blank 2 Enter blanks, or carriage return/line feed (cr/lf) characters.

Payee ‘‘B’’ Record—Record Layout Positions 322–420 Form 1099–A

Date of Lender’s Acquisition or Abandonment

Description Blank of Property

Blank

or Cr/lf

Blank

Special

Data Entries

Liability

Indicator

322–349 350–370 371–376 377 378–416 417–418 419–420

(3) Payee ‘‘B’’ Record—Record Layout Position 322–420 Form 1099–B

Field Position Field Title Length Description and Remarks

322–349 Blank 28 Enter blanks .

350–359 Special Data Entries

360 Gross Proceeds Indicator

10 This portion of the ‘‘B’’ Record may be used to record information for state or local government reporting or the filer’s own purposes. Payers should contact the state or local revenue departments for the filing requirements. If this field is not utilized, enter blanks.

1 Form 1099–B only . Enter the appropriate indicator from the following table, otherwise, enter blanks.

Indicator Usage 1 Gross proceeds 2 Gross proceeds less commissions and option premiums

361–366 Date of Sale 6 Form 1099–B only . For broker transactions, enter the trade date of the transaction. For barter exchanges, enter the date when cash, property, a credit, or scrip is actually or constructively received in the format MMDDYY ( e.g., 0521 96 ). Enter blanks if this is an aggregate transaction. Do NOT enter hyphens or slashes

367–379 CUSIP Number 13 Form 1099–B only . For broker transactions only, enter the CUSIP (Committee on Uniform Security Identification Procedures) number of the item reported for Amount Code 2 (stocks, bonds, etc.). Enter blanks if this is an aggregate transaction. Enter ‘‘0’’ (zeros) if the number is not available. Right justify information and fill unused positions with blanks.

Payee ‘‘B’’ Record—Record Layout Positions 322–420 Form 1099–A—Continued

Field Position Field Title Length Description and Remarks

380–418 Description 39 Form 1099–B only . If fewer than 39 characters are required, left justify information and fill unused positions with blanks. For broker transactions, enter a brief description of the disposition item ( e.g., 100 shares of XYZ Corp.). For regulated futures and forward contracts, enter ‘‘RFC’’ or other appropriate description and any amount subject to backup withholding (see Note ). For bartering transactions, show the services or property provided.

Note: The amount withheld in these situations is to be included in Amount Code 4 .

419–420 Blank 2 Enter blanks, or carriage return/ line feed (cr/lf) characters.

Payee ‘‘B’’ Record—Record Layout Positions 322–420 Form 1099–B

Gross Proceeds Indicator

CUSIP Description Number

Blank

Special

Data Entries

Date of

Sale

322–349 350–359 360 361–366 367–379 380–418

Blank

or CR/LF

419–420

(4) Payee ‘‘B’’ Record—Record Layout Positions 322–420 Form 1099–C

Field Position Field Title Length Description and Remarks

322–349 Blank 28 Enter blanks.

350–370 Special Data Entries

371–376 Date Canceled

377 Bankruptcy Indicator

378–416 Debt Description

21 This portion of the ‘‘B’’ Record may be used to record information for state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for filing requirements. If this field is not utilized, enter blanks.

6 Form 1099–C only . Enter the date the debt was canceled in the format of MMDDYY ( i.e., 0522 96 ). Do not enter hyphens or slashes.

1 Form 1099–C only. Enter ‘‘1’’ (one) to indicate the debt was discharged in bankruptcy. Indicator Usage 1 Debt was discharged in bankruptcy. Blank Debt was not discharged in bankruptcy.

39 Form 1099–C only. Enter a description of the origin of debt, such as student loan, mortgage, or credit card expenditure. If a combined Form 1099–C and 1099–A is being filed, also enter a description of the property.

417–418 Blank 2 Enter blanks.

419–420 Blank 2 Enter blanks, or carriage return/line feed (cr/lf).

Payee ‘‘B’’ Record—Record Layout Positions 322–422 Form 1099–C

Bankruptcy

Indicator

Debt Description

Blank

Special

Data Entries

Date Canceled

322–349 350–370 371–376 377 378–416

Blank

Or CR/LF

417–418 419–420

(5) Payee ‘‘B’’ Record—Record Layout Position 322–420 Form 1099–OID

Field Position Field Title Length Description and Remarks

322–349 Blank 28 Enter blanks.

350–377 Special Data Entries

28 This portion of the ‘‘B’’ Record may be used to record information for state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for filing requirements. If this field is not used, enter blanks.

378–416 Description 39 Required 1099–OID only . Enter the CUSIP number, if any. If there is no CUSIP number, enter the abbreviation for the stock exchange and issuer, the coupon rate, and year of maturity ( e.g., NYSE XYZ 12 1/2 98). Show the name of the issuer if other than the payer. If fewer than 39 characters are required, left justify information and fill unused positions with blanks.

417–418 Combined Federal/ State Code

2 If payee record is to be forwarded to a state agency as part of the Combined Federal/State Filing Program, enter the valid state code from Part A, Sec. 16, Table l. For those payers or states not participating in this program and for forms not valid for state reporting, enter blanks.

419–420 Blank 2 Enter blanks or carriage return/line feed (cr/lf) characters.

Payee ‘‘B’’ Record—Record Layout Positions 322–420 Form 1099–OID

Blank

or CR/LF

Blank

Special

Data Entries

Description

Combined

Federal/ State Code

322–349 350–377 378–416 417–418 419–420

(6) Payee ‘‘B’’ Record—Record Layout Positions 322–420 1099–R

Field Position Field Title Length Description and Remarks

322–349 Blank 28 Enter blanks .

350–396 Special Data Entries

47 This portion of the ‘‘B’’ Record may be used to record information for state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for filing requirements. If this field is not utilized, enter blanks.

Record Name: Payee ‘‘B’’ Record Form 1099–R—Continued

Field Position Field Title Length Description and Remarks

397–406 State Income Tax Withheld (Form 1099–R only)

407–416 Local Income Tax Withheld (Form 1099–R only)

417–418 Combined Federal/State Code

10 State income tax withheld is for the convenience of the filers. This information does not need to be reported to IRS. The payment amount must be right justified and unused positions must be zero-filled. If not reporting state tax withheld, this field may be used as a continuation of the Special Data Entries field.

10 Local income tax withheld is for the convenience of the filers. This information does not need to be reported to IRS. Payment amount must be right justified and unused positions must be zero-filled. If not reporting local tax withheld, this field may be used as a continuation of the Special Data Entries field.

419–420 Blank 2 Enter blanks, or carriage return/line feed (cr/lf) characters.

Payee ‘‘B’’ Record—Record Layout Positions 322–420 Form 1099–R

Local Income

Tax Withheld (Form 1099–R

Only)

Combined

State Code

State Income Tax Withheld (Form 1099–R

Only)

Blank

Special

Data Entries

Federal/

322–349 350–396 397–406 407–416 417–418

Blank

or CR/LF

419–420

(7) Payee ‘‘B’’ Record—Record Layout Positions 322–420 Form 1099–S

Field Position Field Title Length Description and Remarks

322–349 Blank 28 Enter blanks .

350–372 Special Data Entries

373–378 Date of Closing

379–417 Address or Legal Description

23 This portion of the ‘‘B’’ Record may be used to record information for state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for filing requirements. If this field is not utilized, enter blanks.

6 Required Form 1099–S only . Enter the closing date in the format MMDDYY ( e.g., 0522 96 ). Do not enter hyphens or slashes .

39 Required Form 1099–S only . Enter the address of the property transferred (including city, state, and ZIP Code). If the address does not sufficiently identify the property, also enter a legal description, such as section, lot, and block. For timber royalties, enter ‘‘TIMBER.’’ If fewer than 39 positions are required, left justify information and fill unused positions with blanks.

Record Name: Payee ‘‘B’’ Record—Form 1099–S—Continued

Field Position Field Title Length Description and Remarks

418 Property or Services To Be Received

1 Required Form 1099–S only . Enter ‘‘1’’ (one) if the transferor received or will receive property (other than cash and consideration treated as cash in computing gross proceeds) or services as part of the consideration for the property transferred. Otherwise, enter a blank.

419–420 Blank 2 Enter blanks or carriage return/line feed (cr/lf) characters.

Payee ‘‘B’’ Record—Record Layout Positions 322–420 Form 1099–S

Property

Or Services Received

Address

Or Legal Description

Blank

or CR/LF

Blank

Special

Data Entries

Date of

Closing

322–349 350–372 373–378 379–417 418 419–420

Note: When reporting Form 1099–S, the ‘‘B’’ Record will reflect the seller/transferor information .

(8) Payee ‘‘B’’ Record—Record Layout Positions 322–420 Form W–2G

Field Position Field Title Length Description and Remarks

322–352 Blank 31 Enter blanks.

353–358 Date Won 6 Required Form W–2G only . Enter the date of the winning event in the format MMDDYY ( e.g., 0522 96 ). Do not enter hyphens or slashes. This is not the date the money was paid, if paid after the date of the race (or game).

359–373 Transaction 15 Required Form W–2G only . For state-conducted lotteries, enter the ticket or other identifying number. For keno, bingo, and slot machines, enter the ticket or card number (and color, if applicable), machine serial number, or any other information that will help identify the winning transaction. All others, enter blanks .

374–378 Race 5 Form W–2G only . If applicable, enter the race (or game) relating to the winning ticket. Otherwise, enter blanks.

379–383 Cashier 5 Form W–2G only . If applicable, enter the initials of the cashier making the winning payment; otherwise, enter blanks.

384–388 Window 5 Form W–2G only . If applicable, enter the window number or location of the person paying the winnings; otherwise, enter blanks.

389–403 First ID 15 Form W–2G only. For other than state lotteries, enter the first identification number of the person receiving the winnings; otherwise, enter blanks.

404–418 Second ID 15 Form W–2G only . For other than state lotteries, enter the second identification number of the person receiving the winnings; otherwise, enter blanks.

419–420 Blank 2 Enter blanks, or carriage return/line feed (cr/lf) characters.

Payee ‘‘B’’ Record — Record Layout Positions 322–420 Form W–2G

First Blank Date Won Transaction Race Cashier Window

322–352 353–358 359–373 374–378 379–383 384–388 389–403

Second

Blank

or CR/LF

404–418 419–420

Sec. 9. End of Payer ‘‘C’’ Record—Record Layout

.01 The End of Payer ‘‘C’’ Record is a fixed record length of 420 positions . The control total fields are each 15 positions in length.

.02 The ‘‘C’’ Record consists of the total number of payees and the totals of the payment amount fields filed by a given payer and/or a particular type of return. The ‘‘C’’ Record must be written after the last ‘‘B’’ Record for each type of return for a given payer. For each ‘‘A’’ Record and group of ‘‘B’’ Records on the file, there must be a corresponding ‘‘C’’ Record.

.03 In developing the ‘‘C’’ Record, for example, if a payer used Amount Codes 1, 3, and 6 in the ‘‘A’’ Record, the totals from the ‘‘B’’ Records will appear in Control Totals 1, 3, and 6 of the ‘‘C’’ Record. In this example, positions 26–40, 56– 85, and 101–145 would be zero filled. Positions 146–420 would be blank filled. .04 Payers/Transmitters should verify the accuracy of the totals since data with missing or incorrect ‘‘C’’ Records may be returned for replacement.

Field Position Field Title Length Description and Remarks

1 Record Type 1 Required . Enter ‘‘C.’’

2–7 Number of Payees

6 Required . Enter the total numberof ‘‘B’’ Records covered by the preceding ‘‘A’’ Record. Right justify information and fill unused positions with zeros .

8–10 Blank 3 Enter blanks.

Required . Accumulate totals of any payment amount fields in the ‘‘B’’ Record into the appropriate control total fields of the ‘‘C’’ Record. Control totals must be right-justified and unused control total fields zero-filled . All control total fields are 15 positions in length.

11–25 Control 15 Total 1 26–40 Control 15 Total 2 41–55 Control 15 Total 3 56–70 Control 15 Total 4 71–85 Control 15 Total 5 86–100 Control 15 Total 6 101–115 Control 15 Total 7 116–130 Control 15 Total 8 131–145 Control 15 Total 9

146–420 Blank 275 Enter blanks . Filers may enter carriage return/line feed (cr/lf) characters in positions 419-420.

End of Payer ‘‘C’’ Record—Record Layout

Record

Type

Number of Control

Blank Payees Total 1

Control Total 2

Control Total 3

1 2–7 8–10 11–25 26–40 41–55

End of Payer ‘‘C’’ Record—Record Layout—Continued

Control Total 4

Control Total 5

Control Total 6

Control Total 7

Control Total 8

Control Total 9

Blank

or CR/LF

56–70 71–85 86–100 101–115 116–130 131–145 146–420

Sec. 10. State Totals ‘‘K’’ Record—Record Layout

.01 The State Totals ‘‘K’’ Record is a fixed record length of 420 positions. The control total fields are each 15 positions in length.

.02 The ‘‘K’’ Record is a summary for a given payer and a given state in the Combined Federal/State Filing Program, used only when state reporting approval has been granted.

.03 The ‘‘K’’ Record will contain the total number of payees and the totals of the payment amount fields filed by a given payer for a given state. The ‘‘K’’ Record(s) must be written after the ‘‘C’’ Record for the related ‘‘A’’ Record.

.04 In developing the ‘‘K’’ Record, for example, if a payer used Amount Codes 1, 3, and 6 in the ‘‘A’’ Record, the totals from the ‘‘B’’ Records coded for this state will appear in Control Totals 1, 3, and 6 of the ‘‘K’’ Record.

.05 There must be a separate ‘‘K’’ Record for each state being reported. .06 Refer to Part A, Sec. 16 for the requirements and conditions that must be met to file via this program. .07 Control total fields have been added for the accumulated totals of state and local withholding fields from the ‘‘B’’ Records for Form 1099–R only for each state being reported.

(1) State Totals ‘‘K’’ Record—Record Layout Forms 1099–DIV, 1099–G, 1099–INT, 1099–MISC, 1099–OID, 1099– PATR, and 5498

Field Position Field Title Length Description and Remarks

1 Record Type 1 Required . Enter ‘‘K.’’

2–7 Number of Payees

6 Required . Enter the total number of ‘‘B’’ Records being coded for this state. Right justify information and fill unused positions with zeros.

8–10 Blank 3 Enter blanks.

Required . Accumulate totals of any payment amount fields in the ‘‘B’’ Records for each state being reported into the appropriate control total fields of the appropriate ‘‘K’’ Record. Control totals must be right-justified, and unused control total fields zero-filled. All control total fields are 15 positions in length.

146–416 Blank 271 Reserved for IRS use. Enter blanks.

417–418 Combined Federal/ State Code

2 Required . Enter the code assigned to the state which is to receive the information. (Refer to Part A, Sec. 16 Table l.)

Record Name: State Totals ‘‘K’’ Record—Continued

Field Position Field Title Length Description and Remarks

419–420 Blank 2 Enter blanks or carriage return/line feed (cr/lf) characters.

State Totals ‘‘K’’ Record—Record Layout

Record

Type

Number of Control

Blank Payees Total 1

Control Total 2

Control Total 3

1 2–7 8–10 11–25 26–40 41–55

Control Total 4

Control Total 5

Control Total 6

Control Total 7

Control Total 8

Control Total 9

56–70 71–85 86–100 101–115 116–130 131–145

Blank

or CR/LF

Blank

Combined

Federal/ State Code

146–416 417–418 419–420

(2) State Totals ‘‘K’’ Record—Record Layout Form 1099–R

Field Position Field Title Length Description and Remarks

1 Record Type 1 Required. Enter ‘‘K.’’

2–7 Number of Payees

6 Required. Enter the total number of ‘‘B’’ Records being coded for this state. Right justify and fill unused positions with zeros.

8–10 Blank 3 Enter blanks .

Required. Accumulate totals of any payment amount fields in the ‘‘B’’ Records for each state being reported into the appropriate control total fields of the appropriate ‘‘K’’ Record. Control totals must be right justified, and unused control total fields zero-filled. All control total fields are 15 positions in length.

146–386 Blank 241 Reserved for IRS use. Enter blanks.

Record Name: State Totals ‘‘K’’ Record 1099–R—Continued

Field Position Field Title Length Description and Remarks

387–401 Control Total State Income Tax Withheld (Form 1099–R only)

402–416 Control Total Local Income Tax Withheld (Form 1099–R only)

417–418 Combined Federal/State Code

15 Accumulate totals of the state income tax withheld field in the Payee ‘‘B’’ Record. Otherwise, enter blanks.

15 Accumulate totals of the local income tax withheld field in the Payee ‘‘B’’ Record. Otherwise, enter blanks.

2 Required. Enter the code assigned to the state which is to receive the information. (Refer to Part A, Sec. 16, Table 1.)

419–420 Blank 2 Enter blanks or carriage return/line feed (cr/lf) characters.

State Totals ‘‘K’’ Record—Record Layout—1099–R

Record

Type

Number of Control

Blank Payees Total 1

Control Total 2

Control Total 3

1 2–7 8–10 11–25 26–40 41–55

Control Total 4

Control Total 5

Control Total 6

Control Total 7

Control Total 8

Control Total 9

56–70 71–85 86–100 101–115 116–130 131–145

Blank

or CR/LF

Combined

State Code

Blank

Control Total

State Income Tax Withheld (Form 1099–R

Only

Control Total Local Income

Tax Withheld (Form 1099–R Only)

Federal/

146–386 387–401 402–416 417–418 419–420

Sec. 11. End of Transmission ‘‘F’’ Record—Record Layout

.01 The end of transmission ‘‘F’’ Record is a fixed record length of 420 positions . The ‘‘F’’ Record is a summary of the number of payers in the entire file.

.02 This record should be written after the last ‘‘C’’ Record (or last ‘‘K’’ Record, when applicable) of the entire file.

Record Name: End of Transmission ‘‘F’’ Record

1 Record Type 1 Required . Enter ‘‘F.’’

2–5 Number of ‘‘A’’ Records

4 Enter the total number of Payer ‘‘A’’ Records in the entire file (right justify and zero fill) or enter all zeros.

6–30 Zero 25 Enter zeros.

31–420 Blank 390 Enter blanks . Filers may enter carriage return/line feed (cr/lf) characters in positions 419–420.

End of Transmission ‘‘F’’ Record—Record Layout

Record

Type

Number of Zeros ‘‘A’’ Records

Blank

or CR/LF

1 2–5 6–30 31–420

Part C. Bisynchronous (Mainframe) Electronic Filing Specifications

Sec. 1. General

.01 Bisynchronous electronic filing of Forms 1098, 1099, 5498, and W–2G information returns is offered as an alternative to magnetic media (tape, tape cartridge, or diskette) or paper filing, but is not a requirement. This method uses IBM 3780 communications protocols and is used primarily by mainframe filers. Electronic filing will fulfill the magnetic media requirements for those payers who are required to file magnetically. It may also be used by payers who are under the filing threshold requirement, but would prefer to file their information returns this way.

.02 The electronic filing of information returns is not affiliated with the Form 1040 electronic filing program. These two programs are totally independent, and filers must obtain separate approval to participate in each of them. All inquiries concerning the electronic filing of information returns should be directed to IRS/MCC. IRS/MCC personnel cannot answer questions or assist taxpayers in the filing of Form 1040 tax returns. Filers with questions of this nature will be directed to the Taxpayer Service toll free number ( 1-800-829-1040 ) for assistance.

.03 Filers participating in the electronic filing program for information returns will submit their returns to IRS/MCC by way of modems, and not through magnetic media or paper filing.

.04 If a request for extension is approved, transmitters who file electronically will be granted an extension of 30 days to file. Part A, Sec. 11, explains procedures for requesting extensions of time. Filers are encouraged to file their data as soon as possible.

file; therefore, each transmission must have an End of Transmission (EOT) ‘‘F’’ Record.

Sec. 2. Electronic Filing Approval Procedure

the user (person who will actually transmit the data) will separate the acknowledgment from the password. Both the user and the user’s manager must sign the acknowledgment and mail to:

u Chief, Security and Disclosure

Branch IRS, Martinsburg Computing Center P. O. Box 1208, MS-370 Martinsburg, WV 25401

.01 Filers must obtain, or already have, a Transmitter Control Code (TCC) assigned to them prior to submitting their files electronically. (Filers who currently have a TCC for magnetic filing do not have to request a second TCC for electronic filing.) Refer to Part A, Sec. 7, for information on how to obtain a TCC.

.02 Filers using bisynchronous protocols must obtain an IRS/MCCassigned password prior to submitting test or actual data files. To obtain a password, the following steps must be taken:

(a) Bisynchronous filers who al ready have a TCC must submit either Form 4419 or a letter to indicate that they wish to file information returns electronically. Another TCC will not be assigned. If a letter is submitted, it must contain the following: 1) Name and address of transmitter. 2) Transmitter Control Code. 3) Name and phone number of a contact person within the filer’s organization to whom a password will be assigned. (b) Within 30 days of receiving

the application or letter, IRS/ MCC will send Form 6086, Time Sharing Operation (TSO) Password Assignment, to the filer which will contain the password to be used for electronic submissions. (c) Upon receipt of Form 6086,

(d) The users or filers should retain

a copy of the signed acknowledgment for their records. It is the filer’s responsibility to ensure that the password is not compromised. Access to IRS/ MCC computers will not be allowed without a valid password. After a password is received and the acknowledgment returned, the filer may submit a data file. (e) For security reasons, all bi synchronous passwords will expire periodically, and a new password will automatically be assigned. If filers have any questions relating to the security procedures, and/or they need to report their password has been compromised, they must contact IRS/MCC as soon as possible at:

u IRS/MCC

Information Returns Branch P. O. Box 1359, MS-360 Martinsburg, WV 25401

or by calling : 304-263-8700.

.03 It is the user’s responsibility to remember the password and not allow the password to be compromised.

Sec. 3. Test Files

.01 Filers are not required to submit a test file; however, the submission of a test file is encouraged for first time electronic filers in order to resolve any data or communication problems prior to the filing season. If filers wish to submit an electronic test file for Tax Year 1996 (returns to be filed in 1997), it must be submitted to IRS/MCC no earlier than November 1, 1996, through December 31, 1996 .

.02 If a filer encounters problems while transmitting electronic test files, contact IRS/MCC for assistance.

.03 A password must be obtained before submitting an electronic test file.

.04 Bisynchronous electronic test files will be processed and filers will be notified as to the acceptability of their data within 5 workdays of the date the data and transmittal Form 4804 are received by IRS/MCC. .05 A test file is required from filers who want approval for the Combined Federal/State Filing Program. See Part A, Sec. 16, for further details.

Sec. 4. Electronic Submissions

.01 Electronically filed information may be submitted to IRS/MCC 7 days a week, 24 hours a day, except for routine maintenance/backup which is performed at 4:00 a.m. Eastern Time. Technical assistance will be available Monday through Friday between 8:30 a.m. and 4:30 p.m. Eastern Time by calling 304-263-8700.

.02 Lengthy transmissions (100,000 or more records) are not encouraged since the transmission may be interrupted by line noise problems. It is advisable to break lengthy files into multiple transmissions.

.03 The time required to transmit information returns electronically will vary depending on the modem speed, if IBM 3780 data compression is used, and if the records are blocked. The following transmission rate was based on an actual test file received at MCC using 4800 bps, no compression, and one record per block:

4500 records 50 minutes

Sec. 5. Transmittal Requirements

.01 All data submitted electronically is verified by transmittal Form 4804. The transmitter must send the signed Form 4804 the same day the transmission is made. No return is considered filed until a Form 4804 is received by IRS/MCC.

.02 Form 4804 can be ordered by calling the IRS toll free forms and publications order number 1-800-TAX- FORM (1-800-829-3676) or it may be computer-generated. If a filer chooses to computer-generate Form 4804, all of the information contained on the original form, including the affidavit, must also be contained on the computergenerated form.

.03 The filer whose TCC is used in the ‘‘A’’ Record is responsible for submitting the transmittal Form 4804.

.04 Forms 4804 may be mailed to the following addresses:

If by Postal Service: IRS-Martinsburg Computing Center u Attn: Electronic Filing Coordi-

nator P. O. 1359, MS-360 Martinsburg, WV 25401-1359

If by truck or air freight:

IRS-Martinsburg Computing Center v Attn: Electronic Filing Coordi-

nator Route 9 and Needy Road, MS-360 Martinsburg, WV 25401

.05 A signed Form 4804 submitted for electronically filed information returns may be faxed to IRS/MCC at the following number: 304-264-5602. Faxed transmittals will allow IRS/MCC to begin processing the file immediately; however, a filer must still send the actual signed Form 4804 the same day as the electronic submission.

Sec. 6. IBM 3780 Bisynchronous Communication Specifications

.01 Transmissions using IBM 3780 bisynchronous protocols must be in EBCDIC character code. Modems must be compatible with either Bell 208B for 4800 bps transmissions, AT&T 2296A for 9600 bps transmissions, or Hayes OPTIMA 288 V.FC Smartmodem for 14400 bps transmissions . These modems are dial-up type modems using the Public Switched Telephone Network. IBM 3780 data compression is acceptable for any bisynchronous transmission. Records may be blocked up to 4096 bytes with INTER RECORD SEPARATORS.

.02 IRS/MCC will accept information returns filed electronically over switched telecommunications network circuits. For 4800 bps, the circuit will be 304- 264-7080. For 9600 bps, the circuit will be 304- 264-7040. For 14400 bps, the circuit will be 304-264-7045 . These circuits are equipped for bisynchronous transmission using the IBM 3780 protocol.

.03 The 4800 bps line terminates at a Bell 208B modem. The Bell 208B modem uses phase-shift keying and eight-phase modulation to transmit binary serial data signals over the telephone line in half-duplex mode. The following options have been selected:

Transmit Level set to –4 dBm
Compromise Equalizer in (4–Db Slope)

DSR off in Analog Loop Mode
Automatic Answer
Transmitter Internally Timed
RS–CS Interval of 50 ms .04 The 9600 bps line terminates at an AT&T Dataphone II 2296A modem. The AT&T 2296A modem is a fullduplex, CCITT V.32 compatible unit which operates at 9600 bps or 4800 bps (fallback). The following options have been selected:
Receiver Responds to Remote Loopback
Loss-of-Carrier Disconnect
Received-Space Disconnect
Send-Space Disconnect
Automatic Answer
Answer on Ring 1
DTR Interlock
Retrain Enable
Internal Timing
CTS Controlled by RTS
0—1 ms RTS to CTS Delay
CTS Dependent on Carrier
RR Indicates Carrier
9600 Trellis Coding
4800 bps Fallback
4 dB Compromise Equalization .05 The 14400 bps line terminates at a Hayes OPTIMA 288 V.FC smart- modem. The Hayes OPTIMA smart- modem is a half-duplex, ITU-T (for- merly CCITT) V.32 and V.32 bis compatible unit which operates at 14400 bps, 9600 bps, or 4800 bps (fallback). The following options have been selected:

— Monitor DTR signal

— Assert DSR signal after hand- shake negotiation, but before connect result code

— Ring control S=1

Sec. 7. Bisynchronous Electronic Filing Record Specifications

.01 For bisynchronous filing there are two additional identifier records which must be used to transmit data. These records are 420 positions in length and are the first ($$REQUEST) and second ($$ADD) records sent in an electronic transmission. The purpose of these records is to provide the password and identity of the transmitter. The $$REQUEST, $$ADD, and the data file should be transmitted as one file. In some cases, filers have attempted to send the $$REQUEST and

$$ADD as separate files. Doing this will result in a failed transmission.

.02 With the exception of these additional records, the file format for electronic filing is the same as for magnetic media filing. The format of each of these records is as follows:

Record Name: $$REQUEST

Field Position Field Title Length Description and Remarks

1–20 $$REQUEST Identifier Record

20 Enter the following characters: $$REQUEST ID=MSGFILE

21–420 Blank 400 Enter blanks.

Electronic Filing Identifier $$REQUEST RECORD—Record Layout

$$REQUEST

Blank

Identifier

Record

1–20 21–420

.03 Upon making contact with IRS/MCC and furnishing a valid password in the $$ADD identifier record, a data transmission session will commence. The transmission will continue until an End of Transmission (EOT) ‘‘F’’ record is received. At the end of each transmission, the following message should be received electronically by the filer: ‘‘DATA RECEIVED AT MCC’’ and the line will be disconnected. If this message is not received, there was a problem with the submission, and the filer should contact IRS/MCC immediately.

.04 Upon receiving a data file and transmittal Form 4804, IRS/MCC will release the data for further processing. If the media cannot be processed, the filer will be notified by either letter or telephone that the data must be retransmitted. This file name, if necessary, will be provided by IRS/MCC and is to be placed in positions 45–51 of the $$ADD record when the file is retransmitted.

Record Name: $$ADD

Field Position Field Title Length Description and Remarks

1–9 $$ADD Identifier Record

9 Enter the following characters: $$ADD ID=

10–17 Password 8 Enter the password assigned by IRS/MCC. For information concerning the password, see Part C, Sec. 2.

18 Blank 1 Enter a blank.

19–26 BATCHID 8 Enter the following characters: BATCHID=

27 Quote 1 Enter a single quote (’).

28–43 Transmitter Name 16 Enter the transmitter’s name. This name should remain consistent in all transmissions. If the transmitter’s name exceeds 16 positions, truncate the name.

44 Type of File Indicator

45–51 Replacement File Name

1 Enter the Type of File Indicator from the list below: O = Original filing T = Test File C = Correction file R = Replacement file E = Extension File

7 Use this field only if this is a replacement file . Enter the replacement file name which IRS/MCC has assigned to this file. This file name will be provided to the filer in the letter notifying them that a replacement file is necessary. If contact is made by telephone, the replacement file name will be given to the filer by IRS/MCC at that time. For other than replacement files, this field will contain blanks.

Record Name: $$ADD—Continued

Field Position Field Title Length Description and Remarks

52 Quote 1 Enter a single quote (’).

53–420 Blanks 368 Enter blanks .

Electronic Filing Identifier $$ADD Record—Record Layout

$$ADD Identifier

Record

Transmitter Password Blank Batchid Quote

Name

1–9 10–17 18 19–26 27 28–43

Type of

File Indicator

Replacement

Quote Blanks File Name

44 45–51 52 53–420

mitting their files electronically. (Filers who currently have a TCC for magnetic filing do not have to request a second TCC for electronic filing.) Refer to Part A, Sec. 7 for information on how to obtain a TCC.

.02 Once a TCC is obtained, filers using IRP-BBS assign their own passwords and do not need special approval.

.03 With all passwords, it is the user’s responsibility to remember the password and not allow the password to be compromised. However, if filers do forget their password, call 304-263-8700 for assistance.

Note: Passwords on the IRP–

BBS are case sensitive.

Sec. 3. Test Files

.01 Filers are not required to submit a test file; however, the submission of a test file is encouraged for first time electronic filers in order to resolve any data or communication problems prior to the filing season. If filers wish to submit an electronic test file for Tax Year 1996 (returns to be filed in 1997 ), it must be submitted to IRS/MCC no earlier than November 1, 1996, through December 31, 1996.

.02 If a filer encounters problems while transmitting the electronic test files, contact IRS/MCC for assistance.

.03 Filers can verify the status of their transmitted test data by dialing the

Part D. Asynchronous (IRP–BBS) Electronic Filing Specifications

Sec. 1. General

.01 Asynchronous electronic filing of Forms 1098, 1099, 5498, and W–2G, originals, corrections, and replacements of information returns is offered as an alternative to magnetic media (tape, tape cartridge, or diskette) or paper filing, but is not a requirement. Electronic filing using the Information Reporting Program Bulletin Board System (IRP–BBS) will fulfill the magnetic media requirements for those filers who are required to file magnetically. It may also be used by those payers who are under the filing threshold requirement, but would prefer to file their information returns this way. If the original file was sent magnetically, but was returned for replacement, the replacement may be transmitted electronically. Also, if the original file was submitted via magnetic media, any corrections may be transmitted electronically.

sonnel cannot answer questions or assist taxpayers in the filing of Form 1040 tax returns. Filers with questions of this nature will be directed to the Taxpayer Service toll-free number ( 1-800-829-1040 ) for assistance.

.03 Filers participating in the electronic filing program for information returns will submit their returns to IRS/MCC by way of modems and not through magnetic media or paper filing. Files submitted in this manner must be in standard ASCII code .

.05 The formats of the ‘‘A’’, ‘‘B’’, ‘‘C’’, ‘‘K’’, and ‘‘F’’ Records are the same for electronically filed records as they are for 5 ¹ ⁄4- and 3 ¹ ⁄2-inch diskettes, tapes, and tape cartridges and must be in standard ASCII code . For electronically filed documents, each transmission is considered a separate file; therefore each transmission must have an End of Transmission (EOT) ‘‘F’’ Record.

Sec. 2. Electronic Filing Approval Procedure

.01 Filers must obtain, or already have, a Transmitter Control Code (TCC) assigned to them prior to sub

IRP–BBS. This information will be available within two workdays after their transmission is received by IRS/ MCC.

.04 A test file is required from filers who want approval for the Combined Federal/State Filing Pro- gram . See Part A, Sec. 16 for further details.

Sec. 4. Electronic Submissions

.01 Electronically filed information may be submitted to IRS/MCC 24 hours a day, 7 days a week. Technical assistance will be available Monday through Friday between 8:30 a.m. and 4:30 p.m. Eastern Time by calling 304-263-8700. .02 Filers may submit as many documents as they choose electronically. Filers are allowed 240 minutes a day; however, more time may be re

quested if needed. It may be advantageous to break down large files (files in excess of two hours of transmission time) into several smaller files. For example, if large files contain several types of returns or payers, transmit each return or payer as a separate file. As a result, if only one of the files is incorrect, a replacement would be needed for only the incorrect file.

.03 Do not transmit data using IRP–BBS January 1 through Janu- ary 7 . This will allow time for the IRP–BBS to be updated to reflect current year changes.

.04 Data compression is encouraged when submitting information returns by way of the IRP–BBS. MCC has the ability to decompress files created using several popular software compression programs such as ARC, LHARC, and PKZIP. Software data compression can be done alone or in

conjunction with V.42bis hardware compression.

The time required to transmit information returns electronically will vary depending on the modem speed and the type of data compression used, if any. However, transmissions to IRP–BBS will be significantly faster than electronic filing to the mainframe. The time required to transmit a file can be reduced by as much as 85 percent by using software compression and hardware compression.

The following are actual transmission rates achieved in test uploads at MCC using compressed files (PKZIP) and the xmodem protocol. The actual transmission rates will vary depending on the protocol that is used. (Uploads will be approximately 25 percent faster when using the XMODEM-1K or ZMODEM protocols.)

Transmission Speed in bps	500 Records	2500 Records	10000 Records
2400	2 min 55 sec	10 min 25 sec	55 min 10 sec
9600	1 min 5 sec	4 min 35 sec	21 min 20 sec
19200	41 sec	2 min 51 sec	13 min 23 sec
38400	25 sec	1 min 55 sec	9 min 10 sec

.05 Files submitted to IRP–BBS must have a unique filename; therefore, the IRP–BBS will build the filename that must be used. The name will consist of the filer’s TCC, submission type (T = Test, P = Production, C = Correction, and R = Replacement) and a sequence number. Filers may call the file anything they choose on their end. The sequence number will be incremented every time they send, or attempt to send, a file. Record the upload date, time, and filename. This information will be needed by MCC in order to identify the file if assistance is required and to complete Form 4804.

Sec. 5. Transmittal Requirements

.01 The results of the electronic transmission will be posted to the (F)ile Status area of the IRP–BBS, however, no further processing will occur until the signed Form 4804 is received. The transmitter must send the signed Form 4804 the same day the electronic transmission is made. No return is considered filed until a Form 4804 is received by IRS/MCC.

.02 Form 4804 can be ordered by calling the IRS toll-free forms and publication order number 1-800-TAX- FORM, (1-800-829-3676), downloaded from the IRP–BBS, or it may be computer-generated. A copy of the form is also available in the back of this publication. If a filer chooses to computer-generate Form 4804, all of the information contained on the original form, including the affidavit, must also be contained on the computergenerated form.

.03 The filer whose TCC is used in the ‘‘A’’ Record is responsible for submitting the transmittal Form 4804.

.04 Forms 4804 may be mailed to the following addresses:

IRS-Martinsburg Computing Center

v Attn: Electronic Filing Coordi-

nator Route 9 and Needy Road, MS-360 Martinsburg, WV 25401

Sec. 6. Information Reporting Program Bulletin Board System (IRP–BBS) Specifications

.01 The IRP–BBS is an electronic bulletin board system available to filers of information returns. In addition to filing information returns electronically, the IRP–BBS provides other capabilities. Some of the advantages of IRP–BBS are as follows:

If by Postal Service:

IRS-Martinsburg Computing Center u Attn: Electronic Filing Coordi-

nator P. O. Box 1359, MS-360 Martinsburg, WV 25401-1359 If by truck or air freight:

(1) Notification within two work days as to the acceptability of the data transmitted. (2) Immediate access to the latest

changes and updates that affect the Information Reporting Program at IRS/MCC (program, legislative, etc.). (3) Access to publications such as

the Publication 1220 as soon as they are available.

(4) Capability to communicate

with IRS/MCC personnel. (5) Ability to retrieve information

304-264-7070. The communication software settings for IRP–BBS are:

No parity
Eight data bits
One stop bit
Full duplex The communication software should be set up to use the fastest speed allowed by the filer’s modem.

.05 Due to the large number of communication products available, it is impossible to provide specific information on a particular software package or hardware configuration. Filers should contact their software or hardware supplier for assistance.

.06 IRP–BBS software provides a menu-driven environment allowing access to different parts of IRP–BBS. Whenever possible, IRS/MCC personnel will provide assistance in resolving any communication problems with IRP–BBS.

.07 IRP–BBS can be accessed at speeds from 1200 to 28,800 bps. The speed is automatically negotiated for connection at the speed of the calling modem. The communication standards supported include Industry Standard 212A, V.22bis, V.32, V.32bis, V.34, and V.FC. Point-to-point error control is supported using the V.42 ITU-T standard or MNP 2–4. Data compression is supported using V.42bis ITU-T standard or MNP5.

Sec. 7. IRP–BBS First Logon Procedures

sponds to the filer’s terminal, from the following:

and files applicable to the IRP–BBS. .02 The IRP–BBS is available for public use and accessible using various personal computer communications equipment; however, electronic submission of information returns is limited to holders of valid TCCs. A TCC is not needed to access those portions of the IRP–BBS that contain forms and publications or to leave questions or messages for IRS/MCC personnel.

.03 Filers using IRP–BBS can determine the acceptability of files submitted by checking the file status area of the bulletin board. These reports are not immediately available but will be available two workdays after the transmission is received by IRS/MCC.

.01 The following information will be requested to set up the filer’s user profile when logging onto the IRP– BBS for the first time.

(A) Enter the letter, that corre

.04 Contact the IRP–BBS by dialing

�A� IBM PC �B� IBM w/ANSI �C� Atari �D� ADM–3 �E� H19/Z19/H89 �F� Televid 925 �G� TRS–80 �H� Vidtex �I� VT–52 �J� VT–100 �CR� if none of the above

Most PCs, clones, etc., will select the IBM PC emulation. Machines with color, CGA, EGA, or VGA should select IBM w/ANSI. (B) Upper/lower case, line feed needed, O (zero) nulls after each �CR�, do you wish to modify this? (Most users

answer no.)

Common User Problems

Problem Probable Cause Solution

File does not upload/download Not starting communication when prompted by ‘Awaiting Start Signal’

All files not processed Compressing several files into one filename

Start upload/download on filers end

Compress only one file for every filename

Replacement needed Original data incorrect Replacement must be submitted within 45 days of original transmission

Cannot determine file status Not dialing back thru IRP–BBS to check the status of the file

Within 24 to 48 hours after sending a file, check under (F)ile Status for notification of acceptability

Transfer aborts before it starts Transfer protocol mismatch Ensure protocols match on both the sending and receiving ends

Loss of carrier during session Incorrect modem setting on user’s end

Unreadable screens after selecting ‘‘IBM w/ANSI’’

ANSI.SYS driver not loaded in the user’s PC

Reference your modem manual about increasing the value of the S10 register

Select non ANSI under (Y)our settings

IRS Encountered Problems

Problem Probable Cause Solution

IRS cannot complete final processing of data

IRS cannot determine which file is being replaced

IRS cannot determine the type of file being sent

Incorrect file not replaced within 45 days

User did not mail the Form 4804 Mail completed Form complete final 4804 the same day as the electronic transmission

User did not indicate which file is being replaced

User incorrectly indicated T, P, C, or R for the type of file

User did not dial back thru IRP–BBS to check the status of file

Must enter the filename that is being being replaced under the replacement option

When prompted, enter the correct type of file for data being sent

Within two workdays check under (F)ile Status for notification of acceptability

Only submit corrections for incorrect records

Duplicate data Transmitter sends corrections for entire file

Route 9 and Needy Road,

MS-360 Martinsburg, WV 25401 Note: Due to the large volume of

mail received by IRS/MCC and the time factor in- volved in processing the Form 8809, it is imperative that the attention line be present on all envelopes or packages containing Exten- sion of Time (EOT) requests. .09 If using a delivery service other than postal service, the actual date of receipt by IRS/MCC will be used as the submitted date. This should be considered in meeting filing requirements timely.

.10 Transmitters who submit their extensions of time requests magnetically or electronically will receive a letter from IRS/MCC with an attached list of the payers specifying approval and/or denial.

.11 Do not submit tax year 1996 extensions of time to file requests on magnetic media or electronically before January 1, 1997 .

.12 Filers may request an extension of time as soon as they are aware that an extension is necessary but not later than the due date of the return. It will take a minimum of 30 days for IRS/ MCC to respond to an extension request. Under certain circumstances a request for an extension of time could be denied. In such cases, the transmitter receives a denial letter. When this denial letter is received, the transmitter has 20 days to provide the additional or necessary information and resubmit the extension request to IRS/MCC.

Part E. Magnetic/Electronic Specification for Extensions of Time

Sec. 1. General Information

.01 The specifications in Part E include the required 200-byte record format for extensions of time to file requests submitted on magnetic media or via electronically. Also included are the instructions for the information that is to be entered in the record. Filers are advised to read this section in its entirety to ensure proper filing.

.02 Only filers who have been as- signed a Transmitter Control Code may request an extension of time magnet- ically or electronically. If you meet the threshold of more than 50 payers when requesting an extension but are below the 250 documents threshold, you must still submit a Form 4419, Application for Filing Information Returns Magnetically/Electronically . Requests for extensions of time may be made for Forms 1098, 1099, 5498, W–2G, W–2, and 1042–S.

.03 For Tax Year 1996 (returns due to be filed in 1997 ), transmitters requesting an extension of time to file for more than 50 payers (not payees) are required to file the extension request on magnetic media or electronically . Transmitters requesting an extension of time for 10 to 50 payers (not payees) are encouraged to file the request magnetically or electronically. The request may be filed on tape, tape cartridge, 5 ¹ ⁄4- and 3 ¹ ⁄2-inch diskette, or electronically through the IRP–BBS.

.04 For extension requests filed on magnetic media, the transmitter must

fax the completed, signed Form 8809, Request for Extension of Time to File Information Returns, in the same package as the corresponding media. For extension requests filed electronically, the transmitter must FAX the Form 8809 the same day the transmission is made.

.05 Transmitters should not sub- mit a list of payer names and TINS with the Form 8809 with the mag- netic media or electronic files. Box 6 of the Form 8809 must be completed with the total number of payer records (total number of payers) on the transmitter’s extension of time file.

.06 To be considered, an extension request must be postmarked or transmitted by the due date of the returns; otherwise, the request will be denied.

.07 The extension record format is also on the IRP–BBS and can be downloaded. See Part D for more information on how to contact the IRP–BBS .

.08 A magnetically-filed request for an extension of time should be sent using the following addresses:

If by Postal:

IRS-Martinsburg Computing Center u Attn: Extension of Time Coordi-

nator P. O. Box 879, MS-360 Kearneysville, WV 25430

If by truck or air freight:

IRS-Martinsburg Computing Center v Attn: Extension of Time Coordi-

nator

.13 Each piece of magnetic media must have an external media label containing the following information:

(a) Transmitter name (b) Transmitter Control Code

(TCC) (c) Tax year (d) The words ‘‘Extension of

(a) Must be IBM 3480, 3490, or

AS400 compatible. (b) Must meet American National

Standard Institute (ANSI) standards and have the following characteristics: (1) Tape cartridges will be 1/2 inch tape contained in plastic cartridges which are approximately 4-inches by 5-inches by 1-inch in dimension. (2) Magnetic tape will be chro mium dioxide particle based 1/2-inch tape. (3) Cartridges will be 18-track

or 36-track parallel. Indicate on the external media label if the tape cartridge is 18- or 36-track . (4) Mode will be full function. (5) The data may be com

record have been reserved for use as carriage return/line feed (cr/lf) characters, if applicable. .04 Bisynchronous electronic specifications include:

Note: See Part C, Bisynchronous

(Mainframe) Electronic Fil- ing Specifications, for de- tailed information on filing with IRS/MCC via bi- synchronous protocols.

(f) Delimiter character commas (,)

must not be used. (g) Positions 199 and 200 of each

(a) Transmitter must have Trans

Time’’ (e) Record count .14 A request for an extension of time to file is not automatically granted. Approval or denial is dependent on information provided on the Form 8809.

.15 If the first request for an extension of time to file was submitted magnetically or electronically, additional extension requests should be submitted in the same manner.

.16 If an additional extension of time is needed, a second Form 8809 may be submitted before the end of the initial extension with a postmark reflecting the date mailed. Line 7 on the form should be checked to indicate that the original extension has been received and the additional extension is being requested.

.17 See Part A, Sec. 11, for complete information on requesting an extension of time to file information returns. If there are additional questions or concerns, contact IRS/MCC.

tridges may be submitted. .03 Diskette specifications are as follows:

mitter Control Code number (TCC). (b) Access phone numbers : 4800 bps 304-264-7080 9600 bps 304-264-7040 14400 bps 304-265-7045 (c) Data compression is encouraged.

pressed using EDRC (Memorex) or IDRC (IBM) compression. (6) Either EBCDIC or ASCII. (c) A block must not exceed

32,600 tape positions and must be a multiple of 200. (d) Record length of 200 bytes. (e) Labeled or unlabeled tape car

.05 IRP–BBS specifications include:

(a) Transmitter must have Trans mitter Control Code number (TCC). (b) IRP–BBS access phone num ber is 304-264-7070. (c) Communications software set tings are:

No parity
Eight data bits
One stop bit
Full duplex (d) Access speeds from 1200 to

28,800 bps. ( e ) D a t a c o m p r e s s i o n i s encouraged.

Sec. 2. Magnetic Tape, Tape Cartridge, 5 ¹ ⁄4- and 3 ¹ ⁄2-inch Diskette and IRP–BBS Specifications

.01 Tape specifications are as follows:

(a) 9 track. (b) EBCDIC (Extended Binary

Coded Decimal Interchange Code) or ASCII (American Standard Coded Information Interchange) recording mode. (c) 1600 or 6250 BPI. (d) A block must not exceed

32,600 tape positions and must be a multiple of 200. (e) Record length of 200 bytes. (f) Labeled or unlabeled tapes

(a) 5 ¹ ⁄4- or 3 ¹ ⁄2-inches in diameter. (b) ASCII recording mode only .

Additional specifications may be found in Part B, Sec. 3, of this revenue procedure. (c) Record length of 200 bytes. (d) Diskettes must be created

using the MS-DOS operating system. (e) Filename of IRSEOT must be

used. No other filenames are acceptable. If a file will consist of more than one diskette, the filename IRSEOT will contain a three-digit extension. This extension will indicate the sequence of the diskettes within the file. For example, the first diskette will be named IRSEOT.001, the second diskette will be named IRSEOT.002, etc.

Note: See Part D, IRP–BBS

Electronic Filing Specifica- tions, for detailed informa- tion on filing with IRS/ MCC via IRP/BBS.

Sec. 3. Record Layout

.01 Positions 6 through 174 of the following record should contain information about the payer for whom the extension of time to file is being requested. Do not enter transmitter information in these fields . Only one TCC may be present in a file.

may be submitted. .02 Tape cartridge specifications are as follows:

Record Layout

Field Position Field Title Length Description and Remarks

1–5 Transmitter Control Code (TCC)

5 Required . Enter the five digit Transmitter Control Code issued by IRS. Only one TCC per file is acceptable.

6–14 Payer TIN 9 Required . Must be the valid nine-digit EIN/SSN assigned to the payer. Do not enter blanks, hyphens or alpha characters. All zeros, ones, twos, etc. will have the effect of an incorrect TIN. For foreign entities that are not required to have a TIN, this field may be blank; however, the Foreign Entity Indicator, position 17 6, must be set to ‘‘X.’’

15–54 Payer Name 40 Required . Enter the name of the payer whose TIN appears in positions 6-14. Left justify information.

55–94 Second Payer Name

40 If additional space is needed, this field may be used to continue name line information ( e.g., % First National Bank), otherwise, enter blanks.

95–134 Payer Address 40 Required . Enter the payer’s address. Street address should include number, street, apartment or suite number (or P.O. Box if mail is not delivered to a street address).

135–163 Payer City 29 Required . Enter payer city, town, or post office.

164–165 Payer State 2 Required . Enter payer valid U.S. Postal Service state abbreviation (refer to Part A, Sec. 18).

166–174 Payer ZIP Code 9 Required . Enter payer ZIP code. If using a five-digit ZIP code, left justify information and fill unused positions with blanks.

175 Document Indicator (See Note )

1 Required . Enter the document you are requesting an extension of time for using the following code:

Code Document 1 W–2 2 1098, 1099–A, 1099–B, 1099–C, 1099–DIV, 1099–G, 1099–INT, 1099– MISC, 1099–OID, 1099–PATR, 1099–R, 1099–S, or W–2G 3 5498 4 1042–S 5 REMIC Documents (1099–INT or 1099– OID)

Note: Do not enter any other values in this field. Submit a separate record for each document. For example, if

you are requesting an extension for 1099–INT and 5498 for the same payer, submit one record with ‘‘2’’ coded in this field and another record with ‘‘3’’ coded in this field. If you are requesting an extension for 1099–DIV and 1099–MISC for the same payer, submit one record with ‘‘2’’ coded in this field.

176 Foreign Entity Indicator

1 Enter character ‘‘X’’ if Indicator the payer is a foreign entity.

177–198 Blank 22 Enter blanks.

199–200 Blank 2 Enter blanks. Diskette filers may code the ASCII carriage return/line feed (cr/ lf) characters.

Extension of Time Record Layout

Transmitter

Payer

EIN

Payer Name

Second

Payer Name

Payer Address

Payer

City

Control

Code

1–5 6–14 15–54 55–94 95–134 135–163

Payer

State

Payer

Zip Code

Document

Indicator

Foreign Entity

Blank Indicator

164–165 166–174 175 176 177–198

Blank

or CR/LF

199–200

Part F. Miscellaneous Information

Sec. 1. Addresses for Martinsburg Computing Center

To submit an application to file, waiver request (forms), correspondence, and magnetic media files, use the following:

Mailing by U. S. Postal Service: u

Shipping by truck or air freight: v

IRS—Martinsburg Computing Center

P. O. Box 1359, MS-360 Martinsburg, WV 25401-1359

Information Reporting Program Route 9 and Needy Road, MS-360

Martinsburg, WV 25401

To submit a magnetically filed extension of time request, use the following:

Mailing by U.S. Postal Service: u

Shipping by truck or air freight: v

IRS—Martinsburg Computing Center ATTN: Extension of Time Coordinator

P. O. Box 879, MS-360 Kearneysville, WV 25430

Route 9 and Needy Road, MS-360

Martinsburg, WV 25401

Sec. 2. Telephone Numbers for Contacting IRS/MCC

Phone Numbers for

Contacting the Martinsburg Computing Center