SECTION 2. BACKGROUND AND

CHANGES

.01 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 CFR 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.

.02 For purposes of this revenue procedure, a magnetically or electronically filed Form 1040NR is a composite return consisting of data submitted on magnetic tape, floppy disk, or via modem (the ‘‘data portion’’), and certain paper documents (the ‘‘paper portion’’). The paper portion of the return consists of a Form 8453–NR, U.S. Nonresident Alien Income Tax Declaration for Magnetic Media Filing, and other paper documents that cannot be filed magnetically or electronically. Form 8453–NR must be received by the Service before any composite return is complete (see section 5.07 of this revenue procedure). A composite return must contain the same information that a return filed

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(6) the duties of a 1040NR Return Originator are clarified (sections 5.11, 5.12, 5.13, and 5.14); (7) the duties of a 1040NR Transmitter are clarified (section 5.17);

(8) a 1040NR Filer, financial institution, or any other entity associated with the magnetic or electronic filing of a return must not put its address on Form 8453–NR or anywhere in the data portion of the return (section 7.01);

(9) procedures for corrections to Form 8453–NR are clarified (section 7.02); (10) a 1040NR Return Originator must advise taxpayers that refund status information is available on TeleTax (section 8.05);

(11) information a 1040NR Filer must provide regarding a taxpayer’s address of record is clarified (section 8.06); (12) information a 1040NR Return Originator must provide regarding direct deposit is clarified (section 9.04);

(13) the two-year periods for denial and suspension are modified and clarified (sections 12.07 and 12.08); (14) 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 (15) the time and method to respond to a proposed suspension letter and a suspension letter are clarified (sections 14.02 and 14.05).

SECTION 3. 1040NR PROGRAM PARTICIPANTS—DEFINITIONS

.01 After acceptance into the 1040NR Program, as described in section 4 of this revenue procedure, a participant is referred to as a ‘‘1040NR Filer.’’

.02 A 1040NR Filer is categorized as follows:

(1) 1040NR RETURN ORIGINATOR. A ‘‘1040NR Return Originator’’ is: (a) a ‘‘1040NR Return Preparer’’ who prepares tax returns, including Forms 8453–NR, for taxpayers who intend to have their returns magnetically or electronically filed; and/or (b) a ‘‘1040NR Return Collector’’ who accepts completed tax returns, including Forms 8453–NR, from taxpayers who intend to have their returns magnetically or electronically filed.

(2) SERVICE BUREAU. A ‘‘Service Bureau’’ receives tax return information on any media from a 1040NR Return Originator, formats the return information, and either (a) sends back the return information to the 1040NR

Return Originator, (b) forwards the return information to a Transmitter, or (c) submits the composite tax return directly to the Service.

(3) SOFTWARE DEVELOPER. A ‘‘Software Developer’’ develops software for the purposes of (a) formatting returns according to the Service’s magnetic or electronic return filing specifications; and/or (b) filing returns magnetically or electronically directly with the Service. A Software Developer may also sell its software.

(4) TRANSMITTER. A ‘‘Transmitter’’ accepts a 1040NR composite tax return from a 1040NR Return Originator or Service Bureau and submits the return directly to the Service.

.03 The 1040NR Filer categories are not mutually exclusive. For example, a 1040NR Return Originator can, at the same time, be considered a Transmitter, Software Developer, or Service Bureau depending on the function(s) performed.