Part IV. Items of General Interest

or former revenue provisions. Chief Counsel Advice is written by any national office component of the Office of Chief Counsel to Chief Counsel field offices or Service field offices. Chief Counsel Advice are not definitive statements of Service position, and may not be used or cited as precedent in resolving cases, but access will provide taxpayers with the views of personnel of the Office of Chief Counsel as to current tax issues. See H.R. Conf. Rep. No. 599, 105th Cong., 2d Sess., at 301 (1998).

Some of these Chief Counsel Advice documents will relate to tax issues of specific taxpayers; however, the release process will ensure that the public availability of Chief Counsel Advice will not violate taxpayer privacy. Pursuant to section 6110(c)(1) and (i)(4)(B) of the Code, after a document that constitutes Chief Counsel Advice has been issued to the field, the taxpayer will be contacted by the Service and will be provided an opportunity to help the Service locate and delete from the document, information that might identify the taxpayer. This will occur prior to the document being made available to the public.

Prior to the release of the document to the public and prior to the contact with any particular taxpayer involved, Congress has authorized the Service to remove other types of information that are exempt from public disclosure under the Freedom of Information Act (FOIA). See section 6110(i)(3)(B). These deletions will be made only if necessary to protect information that might jeopardize an ongoing controversy or that would be harmful to other interests specified in the FOIA. After the document has been made available to the public, the correctness of the deletion of this information from the document can be challenged under existing disclosure rules.

Documents released under this process will be found in the Freedom of Information Reading Room, 1111 Constitution Ave., NW, Washington, DC 20224, where they can be read and copied by the public.

Because no nontaxpayer specific Chief Counsel Advice was issued between October 20, 1998, and November 9, 1998, no documents will be available before the

The IRS Will Permit Electronic Submission of Form W-5

Announcement 99–3

The Internal Revenue Service will allow employers to establish a system to electronically receive Form W-5, Earned Income Credit Advance Payment Certificate. In general, the electronic system must meet the requirements described in paragraphs (1) through (5) below. In the next revision of Publication 15-A, Employer’s Supplemental Tax Guide, the IRS will reflect the provisions of this announcement.

For purposes of this announcement, “employer” refers to a person who employs one or more individuals eligible to receive advance earned income credit payments. “Employee” refers to a filer of Form W-5 with that employer.

Requirements

(1) In general. The electronic system must ensure that the information received by the employer is the information sent by the employee. The system must document all occasions of user access that result in a submission. In addition, the design and operation of the electronic system, including access procedures, must make it reasonably certain that the person accessing the system and submitting the Form W-5 is the person identified on the form.

(2) Same information as paper Form W-5. The electronic submission must provide the employer with exactly the same information as the paper Form W-5.

(3) Signature requirements and perjury statement. The electronic submission must be signed with an electronic signature by the employee whose name is on the Form W-5.

(A) Electronic signature. The electronic signature must identify the employee submitting the electronic form and must authenticate and verify the submission. For this purpose, the terms “authenticate” and “verify” have the same meanings as they do when applied to a written signature on a paper Form W-5. An electronic signature can be in any form that satisfies the foregoing requirements. The electronic signature must be the final entry in the submission.

(B) Perjury statement. The electronic signature on Form W-5 must be under penalties of perjury. The perjury statement must contain the language that appears on the paper W-5. The electronic system must inform the employee that he or she makes the declaration contained in the perjury statement and that the declaration is made by signing the Form W-5. The language of the perjury statement must immediately follow the employee’s certifying statements and immediately precede the electronic signature.

(4) Copies of electronic Forms W-5. Upon request by the Internal Revenue Service, the employer must supply a hard copy of the electronic Form W-5 and a statement that, to the best of the employer’s knowledge, the electronic Form W-5 was submitted by the named employee. The hard copy of the electronic Form W-5 must provide exactly the same information as, but need not be a facsimile of, the paper Form W-5.

(5) Recordkeeping. Employers who choose to establish an electronic system for submission of Form W-5 must comply with the applicable recordkeeping requirements. See Rev. Proc. 98–25, 1998– 11 I.R.B. 7. (6) Effective date. This announcement applies to Forms W-5 submitted electronically by employees on or after January 19, 1999. For further information regarding this announcement, contact Erinn Madden of the Office of the Assistant Chief Counsel (Employee Plans and Exempt Organizations) at (202) 622-6040 (not a toll-free call).

Chief Counsel Advice Available for Public Inspection

Announcement 99–4

The Internal Revenue Service will soon begin to make certain documents, called “Chief Counsel Advice” available for public inspection. Under section 6110(i)(1) of the Internal Revenue Code, Chief Counsel Advice is written advice or instruction that conveys legal interpretations or positions of the Service or the Office of Chief Counsel concerning existing

1999–3 I.R.B 15 January 19, 1999

6047 of the Internal Revenue Code for completing Forms 1099–R or Forms 5498 for IRAs merely because, in the event of one or more recharacterizations occurring in 1998 using the same trustee and subsequent reconversions, if any, occurring in 1998 using that same trustee, the trustee reports the results of these recharacterizations and reconversions on the appropriate forms using a reasonable alternative method in lieu of the method described in Notice 98–49, § 1.408A–7 of the proposed Income Tax Regulations and the instructions to Forms 1099–R and 5498. Similarly, a trustee will not fail to satisfy the reporting requirements described in the preceding sentence merely because, in the event of one or more recharacterizations occurring in 1999 using the same trustee and subsequent reconversions, if any, occurring in 1999 using that same trustee, the trustee reports the results of these recharacterizations and reconversions on the appropriate forms using a reasonable alternative method.

Any trustee using an alternative method must provide instructions to the IRA owner, in conjunction with account statements (or other information) the trustee provides to the IRA owner, on how to use the information provided on the forms to properly report the recharacterizations and reconversions on his or her Federal income tax return for 1998 and/or 1999, as applicable, including how to use the information to complete related forms such as Form 8606 and Form 5329.

For purposes of this announcement, whether a transaction occurs using the same trustee is determined by the trustee’s Federal identification number. Thus, a transaction that occurs between trustees using different Federal identification numbers for purposes of issuing Forms 1099–R and Forms 5498 is not a transaction that occurs using the same trustee.

week of January 4, 1999. Thereafter, newly issued documents will be released on a weekly basis. Beginning February 1, 1999, Chief Counsel Advice will also be made available to the public by posting them weekly on the IRS public Internet site at http://www.irs.ustreas.gov/prod/ news/efoia/index.html.

Also beginning February 1, 1999, the Service anticipates making technical advice memoranda and private letter rulings available electronically on its Internet site. These documents have previously been released only in paper medium.

In addition, beginning in 1999, the Service will also start releasing to the public certain Chief Counsel Advice that had been issued in prior years. The Office of Chief Counsel has begun the preparation of these documents for release. Prior to release of documents which were prepared with respect to tax issues of a particular taxpayer, the Service will contact the taxpayer and provide an opportunity to assist the Service in deleting information that might identify the taxpayer.

The principal author of this announcement is Andrea Tucker of the Office of Associate Chief Counsel (Domestic). For further information regarding this announcement contact Ms. Tucker on (202) 622-4540 (not a toll-free call).

Alternative Methods for Reporting 1998 and 1999 IRA Recharacterizations and Reconversions

Announcement 99–5

Purpose

This announcement provides that alternative methods of reporting 1998 and 1999 recharacterizations of IRA contributions and 1998 and 1999 reconversions

will be acceptable in certain circumstances.

Background

Section 1.408A–7 of the proposed Income Tax Regulations provides that a conversion of an amount from an IRA other than a Roth IRA to a Roth IRA is a distribution from the nonRoth IRA, requiring the filing of a Form 1099–R by the trustee, custodian or issuer (hereinafter referred to as “trustee”) of the nonRoth IRA.

Notice 98–49, 1998–38 I.R.B. 5 (September 21, 1998), provides that, for a recharacterization occurring in 1998, the trustee of the FIRST IRA reports the transfer using Code G on Form 1099–R and the trustee of the SECOND IRA reports the receipt of the transferred amount as a rollover contribution on Form 5498.

Notice 98–50, 1998–44 I.R.B. 10 (November 2, 1998), generally provides that more than one “reconversion” (that is, a conversion from a traditional IRA to a Roth IRA of an amount that had previously been recharacterized as a contribution to the traditional IRA after having been earlier converted to a Roth IRA) occurring on or after the effective date of the notice is an “excess reconversion.” When a taxpayer has one or more excess reconversions, the taxable conversion amount (as defined in § 1.408A–8, Q&A-1(b)(7) of the proposed regulations) is based on the reconversion immediately preceding the first excess reconversion.

Announcement 98–113, 1998–51 I.R.B. 48 (December 21, 1998), provides that payers may use Code J in Box 7 on the 1998 Form 1099–R to report all distributions from Roth IRAs.

Alternative Reporting Methods

A trustee will not fail to satisfy the reporting requirements under §§ 408(i) and

January 19, 1999 16 1999–3 I.R.B.