Part IV. Items of General Interest

Changes to Forms W–2 and W–3 Delayed Until Tax Year 2000

Announcement 98–84

Background In Announcement 98-–55, 1998–26 I.R.B. 41, the IRS asked for comments on proposed changes to Form W–2, Wage and Tax Statement, and Form W–3, Transmittal of Wage and Tax Statements. These changes had been proposed for the 1999 forms to be filed in 2000.

Changes Will Be Based on comments and suggestions received in response to Announcement 98–55, the IRS will postpone Delayed making major revisions to Forms W–2 and W–3 until tax year 2000; that is, the year 2000 forms filed in 2001. However, see the changes to the 1999 forms noted below.

The Service is delaying implementation to adequately consider all comments received and to give the payroll industry sufficient time to prepare for the changes. Many employers voiced concerns that changes to Forms W-2 and W-3 would hinder efforts to update systems for the year 2000 date change.

1999 Forms The 1999 Forms W–2 and W–3 will remain the same size and retain the same format as the 1998 forms. W–2 and W–3 However, the following changes will be made:

• The use of Form W–2, box 12, “Benefits included in box 1,” will be optional. However, employers must

continue to report the lease value of a vehicle provided to an employee either in box 12 or in a separate statement to the employee.

• Form W–3 will be a single copy with separate instructions provided in the “Instructions for Forms W–2

and W–3.” The second page, “YOUR COPY,” is eliminated.

2000 Forms The IRS plans to announce and request comments on proposed changes to the year 2000 Forms W–2 and W–2 and W–3 W–3 early in 1999.

not request reapproval if they choose to update the revision date for the application forms identified above. However, Schedule Q (Form 5300) and the related instructions must be changed to be wordfor-word identical to the revised schedule. Because Schedule Q is not scannable, advance approval after making this modification is not required.

The revision dates that are currently acceptable are:

Form Number Revision date 5300 1/96 & 7/98 5303 1/96 & 7/98 5307 3/96 & 7/98 6406 1/96 & 7/98 Not revised at this time: 5310 1/96 & 6/97 (see Announcement 97–81) 5310A 6/97 (see Announcement 97–81)

Announcement 98–85

The application forms used to request determination letters for ongoing qualified employee benefit plans have been revised. The revised forms are Forms 5300, 5303, 5307, and 6406. The new revision date for all forms is July 1998 (7/98). Except for the revision date, no significant changes have been made. Therefore, the current version of each form may continue to be used until further notice.

Schedule Q (Form 5300) has also been revised as of July 1998 to incorporate the changes made to IRC 401(a)(26) by the Small Business Job Protection Act of 1996, and to clarify that item 5 of Schedule Q, relating to coverage information, must be completed for nonstandardized safe harbor plans. Because of these modifications, the July 1998 version of Schedule Q must be used for applications submitted after December 31, 1998. Further,

effective immediately, Schedule Q is not required to be filed for governmental plans.

The revised forms and instructions will be available after October 1, 1998, and may be obtained from IRS distribution centers by calling 1-800-TAX FORM after that date. Except for Schedule Q (Form 5300), one copy of page one of the Form 5300 series applications is in scannable format and printed in special red ink. For these reasons, the Internet version of this page may not be used instead of the original. However, the forms may be computer generated as described in Notice 90–38. Notice 90–38 provides instructions for generating an “OCR Data Sheet” that may be substituted for the pink shaded copy of page one of each application.

The Internet address is:http://www.irs. ustreas.gov

Software developers having approval to computer generate these forms need

September 21, 1998 30 1998–38 I.R.B.

below has recently filed a timely declaratory judgment suit under section 7428 of the Code, challenging revocation of its status as an eligible donee under section 170(c)(2). Protection under section 7428(c) of the Code begins on the date that the notice of revocation is published in the Internal Revenue Bulletin and ends on the date on which a court first determines that an organization is not described in section 170(c)(2), as more particularly set forth in section 7428(c)(1). In the case of individual contributors, the maximum amount of contributions protected during this period is limited to $1,000.00, with a husband and wife being treated as one contributor. This protection is not extended to any individual who was responsible, in whole or in part, for the acts or omissions of the organization that were the basis for the revocation. This protection also applies (but without limitation as to amount) to organizations described in section 170(c)(2) which are exempt from tax under section 501(a). If the organization ultimately prevails in its declaratory judgment suit, deductibility of contributions would be subject to the normal limitations set forth under section 170.

Larry Lea Ministries, Inc.

Sherman, TX

Deletions From Cumulative List of Organizations Contributions to Which Are Deductible Under Section 170 of the Code

Announcement 98–86

The names of organizations that no longer qualify as organizations described in section 170(c)(2) of the Internal Revenue Code of 1986 are listed below.

Generally, the Service will not disallow deductions for contributions made to a listed organization on or before the date of announcement in the Internal Revenue Bulletin that an organization no longer qualifies. However, the Service is not precluded from disallowing a deduction for any contributions made after an organization ceases to qualify under section 170(c)(2) if the organization has not timely filed a suit for declaratory judgment under section 7428 and if the contributor (1) had knowledge of the revocation of the ruling or determination letter, (2) was aware that such revocation was imminent, or (3) was in part responsible for or was aware of the activities or omissions of the organization that brought about this revocation.

If on the other hand a suit for declaratory judgment has been timely filed, contributions from individuals and organizations described in section 170(c)(2) that are otherwise allowable will continue to be deductible. Protection under section 7428(c) would begin on September 21,

1998, and would end on the date the court first determines that the organization is not described in section 170(c)(2) as more particularly set forth in section 7428(c)(1). For individual contributors, the maximum deduction protected is $1,000, with a husband and wife treated as one contributor. This benefit is not extended to any individual who was responsible, in whole or in part, for the acts or omissions of the organization that were the basis for revocation.

Center for Affordable Housing

Baltimore, MD

Charlotte Chamber Foundation, Inc.

Charlotte, NC

Professional Football Alumni, Inc.

Metairie, LA

St. Matthew Publishing, Inc., f/k/a Church and Bible Study in the Home by Mail, Inc.

Los Angeles, CA

Virginia Association of Non-Profit Homes for the Aging

Glen Allen, VA

Section 7428(c) Validation of Certain Contributions Made During Pendency of Declaratory Judgment Proceedings

This announcement serves notice to potential donors that the organization listed

1998–38 I.R.B. 31 September 21, 1998