SECTION 2. BACKGROUND AND

CHANGES

.01 During the 1996 federal income tax filing season, all returns filed through the On-Line Filing Program were filed at the Austin Service Center. For the 1997 federal income tax filing season, the program is being expanded to allow returns filed through the OnLine Filing Program to be filed at all service centers that process electronic returns.

.02 Section 1.6012–5 of the Income Tax Regulations provides that the Commissioner may authorize the use, at the option of a person required to make a return, of a composite return in lieu of any form specified in 26 C.F.R. Part 1 (Income Tax), subject to the conditions, limitations, and special rules governing the preparation, execution, filing, and correction thereof as the Commissioner may deem appropriate.

.03 For purposes of this revenue procedure, an on-line electronically filed Form 1040, Form 1040A, or Form 1040EZ is a composite return consisting of electronically transmitted data and certain paper documents. The non

38

DARDS FOR ON-LINE FILERS SECTION 12 MONITORING AND

SUSPENSION OF AN ON-LINE FILER SECTION 13 ADMINISTRATIVE RE VIEW PROCESS FOR DENIAL OF PARTICIPATION IN THE ON-LINE FILING PROGRAM SECTION 14 ADMINISTRATIVE RE

VIEW PROCESS FOR SUSPENSION FROM THE ON-LINE FILING PROGRAM SECTION 15 EFFECT ON OTHER

DOCUMENTS SECTION 16 EFFECTIVE DATE SECTION 17 INTERNAL REVENUE

SERVICE OFFICE CONTACT SECTION 18 PAPERWORK REDUC

TION ACT

electronic portion of the return consists of Form 8453–OL, U.S. Individual Income Tax Declaration for On-Line Filing, and other paper documents that cannot be electronically transmitted. Form 8453–OL must be received by the Service before an on-line electronically filed return is complete (See section 5.07 of this revenue procedure). An on-line electronically filed return must contain the same information that a return filed completely on paper contains. See section 7 of this revenue procedure for procedures for completing Form 8453–OL.

.04 The Service will periodically issue a publication that lists the forms and schedules associated with a Form 1040 that can be electronically transmitted.

.05 A Form 1040, a Form 1040A, or a Form 1040EZ cannot be electronically filed after October 15, 1997, notwithstanding the fact that the taxpayer has been granted an extension to file a return beyond that date.

.06 An amended tax return cannot be electronically filed. A taxpayer must file an amended tax return on paper in accordance with the instructions for Form 1040X, Amended U.S. Individual Income Tax Return.

.07 A tax return that has a foreign address for the taxpayer cannot be electronically filed. Army/Air Force (APO) and Fleet (FPO) post offices are not considered foreign addresses.

.08 A tax return for a decedent cannot be electronically filed. The decedent’s spouse or personal representative must file a paper tax return for the decedent.

.09 This revenue procedure updates Rev. Proc. 96–20, which applied to the On-Line Filing Program for the 1996 filing season. The updates include changes in the On-Line Filing Program for the 1997 filing season, clarifications of prior On-Line Filing Program statements, and additional guidance derived from other Service documents that relate to the On-Line Filing Program. Some of the updates are:

(1) in certain circumstances, a letter may be submitted in lieu of a revised Form 8633 (section 4.04);

(2) the time period to submit a revised Form 8633 is extended to 30 days (section 4.05);

(3) a fee for the electronic transmission of a tax return may not be computed using any amount from the return (section 5.04);

(4) a revised Form 8633 must be filed with the IRS Headquarters On-Line Filing Analyst (section 5.05);

(5) the time period for an On-Line Filer to notify the Service that it is discontinuing its participation in the OnLine Filing Program is extended to 30 days (section 5.06);

(6) a Software Developer must ensure that its software package cannot be used to transmit more than three electronic returns (section 5.10(3));

(7) a Software Developer must ensure that its software package contains a Form 8453–OL format that can be printed and used by a taxpayer to file with the Service (section 5.10(4));

(8) a Software Developer must ensure that its software package contains a consent to disclosure statement (section 5.10(5)); (9) a Software Developer must provide software and accompanying documentation to the IRS Headquarters OnLine Filing Analyst once the software has been successfully tested (section 5.10(6)); (10) a Transmitter must transmit electronic returns to the appropriate service center based on the state code in the taxpayer’s return address (section 5.11(3)); (11) a Transmitter must enter the letter ‘‘O’’ in Field #15 (Transmission Type Code) when transmitting the electronic portion of an on-line electronically filed return to the Service (section 5.13); (12) a Transmitter must not combine the electronic portion of an on-line electronically filed return with the electronic portion of any other return within the same transmission to the Service (section 5.14);

(13) a Transmitter must provide a taxpayer with the appropriate service center’s address for mailing the Form 8453–OL (section 5.15(5)); (14) a Software Developer that performs a function in the On-line Filing Program other than software development is a tax return preparer under the definition of § 301.7216–1(a) of the Regulations on Procedure and Administration (section 6.01(1));

(15) a taxpayer will mail Form 8453–OL to the appropriate service center (section 7.01);

(16) the effect of suspending a Principal or a Responsible Official, on entities that listed the Principal or Responsible Official on their Forms 8633, is clarified (section 12.02);

(17) the two-year periods for denial and suspension are modified and clarified (sections 12.09 and 12.10);

(18) the time and method to respond to a proposed letter of denial and a denial letter are clarified (sections 13.03 and 13.06); and

(19) the time and method to respond to a proposed suspension letter and a suspension letter are clarified (sections 14.02 and 14.05).