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 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.

.02 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 paper portion of the return consists of Form 8453–OL, U.S. Individual Income Tax Declaration for OnLine Filing, and other paper documents that cannot be electronically transmitted. Form 8453–OL must be received by the Service before the composite return is considered filed (see section 5.07 of this revenue procedure). The composite return must contain the same information that a return filed completely on paper

September 21, 1998 20 1998–38 I.R.B.

contains. See section 7 of this revenue procedure for procedures for completing Form 8453–OL.

.03 Each year prior to the start of the filing season, the Service will issue Publication 1345A, Filing Season Supplement for Electronic Return Originators, and Publication 1346, Electronic Return File Specifications and Record Layouts for Individual Income Tax Returns. These publications list the forms and schedules associated with the Form 1040 series that can be electronically transmitted during the upcoming filing season.

.04 For purposes of the Form 1040 OnLine Filing Program, a Form 1040, Form 1040A, or Form 1040EZ for any taxable year cannot be electronically filed after the 15th day of October following the close of that taxable year, notwithstanding the fact that the taxpayer has been granted an extension to file a return beyond that date. If the 15th day of October falls on a Saturday, Sunday, or legal holiday, then the electronically filed return may be filed on the next succeeding day which is not a Saturday, Sunday, or legal holiday.

.05 An amended tax return cannot be electronically filed under the Form 1040 On-Line Filing Program. 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.

.06 A tax return that has a foreign address for the taxpayer cannot be electronically filed under the Form 1040 On-Line Filing Program. Army/Air Force (APO) and Fleet (FPO) post offices are not considered foreign addresses for this purpose.

.07 A tax return for a decedent cannot be electronically filed under the Form 1040 On-Line Filing Program. The decedent’s spouse or personal representative must file a paper tax return for the decedent.

.08 Some of the updates and changes to Rev. Proc. 97–61 are as follows:

(1) references to specific dates and specific tax years have been replaced with more general references in order to eliminate the need for annual updates to this revenue procedure;

(2) the application period for new applicants that intend to participate in the Form 1040 On-Line Filing Program for any filing season is extended beyond the beginning of the filing season (section 4.05);

(1) ON-LINE SERVICE PROVIDER. An “On-Line Service Provider” is an on-line information service organization that provides paying subscribers (individuals who use the various services offered by an On-Line Service Provider) dial-up access to a variety of data bases. For purposes of the Form 1040 On-Line Filing Program, an On-Line Service Provider must also have:

(a) an established subscriber or client base to whom the On-Line Service Provider offers services on a continuing basis and about which the On-Line Service Provider maintains certain minimum information identifying the subscriber. Such information could include the subscriber’s name, account number, credit card number, or demand deposit account number;

(b) a port capacity of at least 1,000 lines or the ability to simultaneously service 1,000 customers;

(c) a network of personal computers that are linked by modems;

(d) access to a broad spectrum of information and/or entertainment services; and

(e) a client base that has the ability to communicate using electronic mail.

(2) SOFTWARE DEVELOPER. A “Software Developer” develops software

(3) On-Line Filers participating as Software Developers must provide the Service with a copy of their software and its accompanying documentation (section 5.10(9)); (4) the number of returns that may be filed from one software package or from one e-mail address has been increased from three returns to five (sections 5.09(2), 5.10(3), 5.10(4), and 5.11(12)); and

(5) the provisions of this revenue procedure apply to participants in various pilot programs conducted with respect to the Form 1040 On-Line Filing Program (section 15).