SEC. 2. NATURE OF CHANGES

.01 The text and exhibits were updated for tax year 1997.

.02 Three new forms were developed for tax year 1997. They are: Form 1099–LTC, Long-Term Care and Accelerated Death Benefits (Exhibit H); Form 1099–MSA, Distributions From Medical Savings Accounts (Exhibit J); and Form 5498–MSA, Medical Savings Account Information (Exhibit Q).

.03 Information about including telephone numbers on recipient statements was added to Part A, Sections 7.01(8) and 7.03(3).

.04 Several existing forms were changed as follows: Form 1099–C (Exhibit D) was changed by eliminating box 4, previously titled ‘‘Penalties, fines, admin. costs included in box 2’’; Form 1099–MISC (Exhibit I) was changed by deleting the reporting of Excess Golden Parachute Payments (EPP) in box 7 and moving it the reporting to a new box 13; Form 1099–PATR (Exhibit L) was changed by retitling box 7 from ‘‘Energy investment credit’’ to ‘‘Investment credit’’, and retitling box 8 from ‘‘Jobs credit’’ to ‘‘Work opportunity credit’’; Form 1099–R (Exhibit M) was changed by adding ‘‘SIMPLE’’ to the check box in box 7 to designate a distribution from a SIMPLE retirement account; The title of Form 5498 (Exhibit P) was changed to ‘‘IRA, SEP or SIMPLE Retirement Plan Information’’, the title of box 2 was changed from ‘‘Rollover IRA contributions’’ to ‘‘IRA, SEP, or SIMPLE rollover contributions,’’ IRA and SIMPLE check boxes were added to box 5 to designate the type of account, box 6, titled ‘‘SEP contributions,’’ was added to report SEP contributions, box 7, titled ‘‘SIMPLE contributions,’’ was added to report SIMPLE contributions; and Form 1096 (Exhibit R) was changed to include three new checkboxes for new Forms 1099–LTC, 1099–MSA and 5498–MSA. NOTE: REFER TO THE 1997 INSTRUCTIONS FOR FORMS 1099, 1098, 5498, AND W–2G FOR ADDITIONAL INFORMATION REGARDING THESE FORM CHANGES.

.05 The IRS mailing address in Part A, Sec. 3.01 has changed.

.06 A statement regarding the use of logos on substitute statements to recipients was added to Part A, Sec. 7.01 (9).

SEC. 3 REQUIREMENTS FOR ACCEPTABLE SUBSTITUTE FORMS 1096, 1098, 1099, 5498, and W–2G

.01 Paper substitutes for Form 1096 and Copy A of Forms 1098, 1099, 5498, and W–2G that totally conform to the

July 7, 1997 10 1997-27 I.R.B.

.04 Machine printed forms should be printed using a 6 lines/inch option, and should be printed in 10 pitch pica ( i.e., 10 print positions per inch) or 12 pitch elite ( i.e., 12 print positions per inch). Proportional spaced fonts are unacceptable.

.05 DO NOT use a felt tip marker. The machine used to ‘‘read’’ paper forms generally cannot ‘‘read’’ this ink type.

.06 Substitute forms prepared in continuous or strip form must be burst and stripped to conform to the size specified for a single sheet before they are filed with IRS. The size specified does not include pinfeed holes. Pinfeed holes MUST NOT be present on forms filed with the IRS.

.07 Use decimal points to indicate dollars and cents. DO NOT use dollar signs ($), ampersands (&), asterisks (*), commas (,), or other special characters in the numbered money boxes. Example: 2000.00 is acceptable. .08 DO NOT FOLD Forms 1096, 1098, 1099, or 5498 being mailed to IRS. Mail these forms flat in an appropriately sized envelope or box. Folded documents cannot be readily moved through the scanner transport used in IRS processing.

.09 DO NOT STAPLE Forms 1096 to the returns being transmitted. Staple holes in the vicinity of the return code number reduce the IRS’s ability to machine scan the type of documents.

.10 DO NOT type other information on Copy A. DO NOT cut or separate the individual forms on the sheet of forms of Copy A (except Forms W–2G).

.11 MAIL completed paper forms to the IRS service center specified on the back of Form 1096 and in the 1997 ‘‘Instructions for Forms 1099, 1098, 5498, and W–2G.’’ Specific information needed to complete the forms in this revenue procedure is given in those instructions. A chart is included in those instructions giving a quick guide to which form must be filed to report a particular payment.