Section 1. Addresses for Martinsburg

Computing Center Section 2. Telephone Numbers for

Contacting IRS/MCC

Part A. General

Revenue procedures are generally revised annually to reflect legislative and form changes. Comments concerning this revenue procedure, or suggestions for making it more helpful, can be addressed to:

Internal Revenue Service Martinsburg Computing Center Attn: IRB, Information Support Section 230 Murall Drive Kearneysville, WV 25430

Sec. 1. Purpose

.01 The purpose of this revenue procedure is to provide the specifications for filing Forms 1098, 1099, 5498, and W-2G magnetically or electronically, which includes ¹ ⁄2-inch magnetic tape; IBM 3480, 3490 or AS400 compatible tape cartridges

(including 8mm); or 3 ¹ ⁄2-inch diskette with IRS. IRS/MCC has discontinued process- ing 8-inch, 5 ¹ ⁄4-inch diskette, and the mainframe electronic filing system. The previously used BBS (Bulletin Board Sys- tem) has also been replaced. This revenue procedure must be used for the preparation of Tax Year 1999 information returns and information returns for tax years prior to 1999 that are required to be filed. This revenue procedure must be used to prepare current and prior year information returns filed beginning January 1, 2000 and re- ceived by IRS/MCC or postmarked by De- cember 15, 2000. Specifications for filing the following forms are contained in this revenue procedure.

(a) Form 1098, Mortgage Interest Statement. (b) Form 1098-E, Student Loan Interest Statement (c) Form 1098-T, Tuition Payments Statement (d) Form 1099-A, Acquisition or Abandonment of Secured Property (e) Form 1099-B, Proceeds From Broker and Barter Exchange Transactions (f) Form 1099-C, Cancellation of Debt (g) Form 1099-DIV, Dividends and Distributions (h) Form 1099-G, Certain Government and Qualified State Tuition Program Payments (i) Form 1099-INT, Interest Income (j) Form 1099-LTC, Long-Term Care and Accelerated Death Benefits (k) Form 1099-MISC, Miscellaneous Income (l) Form 1099-MSA, Distributions From an MSA or Medicare+ Choice MSA (m) Form 1099-OID, Original Issue

Discount (n) Form 1099-PATR, Taxable Distributions Received From Cooperatives (o) Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. (p) Form 1099-S, Proceeds From Real Estate Transactions (q) Form 5498, IRA Contribution Information

1999–31 I.R.B. 139 August 2, 1999

(r) Form 5498-MSA or Medicare+ Choice MSA Information (s) Form W-2G, Certain Gambling Winnings .02 Specifications for filing Forms W2 on magnetic media are available from the Social Security Administration (SSA) only. Filers can call ( 1-800-SSA-6270) to obtain the phone number of the SSA Magnetic Media Coordinator for their area.

.03 IRS/MCC does not process Forms W-2. Paper and/or magnetic media for Forms W-2 must be sent to SSA. IRS/MCC does, however, process waiver requests (Form 8508), extension of time to file requests (Form 8809) for Forms W-2 and requests for an extension of time to provide the employee copies of Forms W-2.

.04 Generally, the box numbers on the paper forms correspond with the amount codes used to file magnetically/electronically; however, if discrepancies occur, the instructions in this revenue procedure govern.

.05 This revenue procedure also provides the requirements and specifications for magnetic media or electronic filing under the Combined Federal/State Filing Program.

.06 The following revenue procedures and publications provide more detailed filing procedures for certain other information returns.

ple: January 2, 1999 (19990102). The four-digit year must precede the month and the day to be Y2K compliant.

(2) The following types of media are no longer accepted by IRS/MCC:

(a) 5 ¹ ⁄4-inch diskettes (b) 3 ¹ ⁄2-inch diskettes created on a

non-MS-DOS system (c) 3 ¹ ⁄2-inch diskettes created on a

System 36 or AS400 (3) All references in text to 5 ¹ ⁄4-inch diskettes and instructions applicable to 5 ¹ ⁄4-inch diskettes have been deleted. (4) Part C (previously Bisynchronous Mainframe Electronic Filing Specifications) has been changed to Electronic Filing Specifications.

(a) The new phone number for

(a) 1999 “Instructions for Forms

1099, 1098, 5498, and W-2G” provides specific instructions on completing and submitting information returns to IRS. (b) Publication 1179, Rules and

Specifications for Private Printing of Substitute Forms 1096, 1098, 1099, 5498, and W-2G.

(c) Publication 1239, Specifications

for Filing Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips, Magnetically or Electronically (d) Publication 1187, Specifications

for Filing Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, Magnetically or Electronically (e) Publication 1245, Specifications

for Filing Form W-4, Employee’s Withholding Allowance Certificate, Magnetically or Electronically. .07 This revenue procedure supersedes Rev. Proc. 98–35 published as Publication 1220 (Rev. 5-98 ) Specifications for Filing Forms 1098, 1099, 5498, and W-2G Magnetically or Electronically.

.08 Refer to Part A, Sec. 17, for definitions of terms used in this publication.

Sec. 2. Nature of Changes— Current Year (Tax Year 1999)

.01 In this publication, all pertinent changes for Tax year 1999 are emphasized by the use of italics. Portions of text which require special attention have been bolded. Filers are always encouraged to read the publication in its entirety.

.02 Programming Changes

a. Global Changes Affecting All Records

(1) For all forms - In all date fields that have a one-digit month (January through September) and a one-digit day (1 through 9), the number must be preceded by a zero. The date fields, in all cases, are numeric; therefore, blanks, alphas, or special characters are not acceptable. Exam

electronic filing is (1-304-262- 2400). (5) Part D (previously Asynchronous IRP-BBS) has been changed to Magnetic/Electronic Specifications For Extensions of Time.

(6) In Part D, Sec. 3. Record Layout Field Position 186; Code 6 has been added for Form 5498-MSA.

(7) Electronic test files only may be submitted beginning November 1, 1999, and as late as January 31, 2000.

(8) The due date of information returns filed electronically has been changed to March 31, 2000. This change does not apply to the Forms 5498 or 5498-MSA nor to magnetic media filing.

(9) Filers who submitted information returns via the Information Reporting Program-Bulletin Board System or Mainframe may submit data via the new electronic filing system. See Part C for filing instructions and specifications.

(10) The following QIC (Quarter-Inch Cartridge) sizes have been deleted from Part B, Section 4:

Size Tracks Density Capacity

QIC-11 4/5 4 (8000BPI) 22Mb or 30Mb QIC-320 26 17 (16000 BPI) 320Mb QIC-1350 30 18 (51667 BPI) 1.3Gb

(11) The telephone number for filing Form W-2 information magnetically with the Social Security Administration has changed to 1-800-SSA-6270.

August 2, 1999 140 1999–31 I.R.B.

b. Programming Changes - Transmitter “T” Record

(1) For all forms, Payment Year, Field positions 2-5, must be incremented to reflect the 4 digit report year (1998 to 1999), unless reporting prior year data.

(2) Field positions 296-303, Total Number of Payees, is no longer a required field.

c. Programming Changes – Payer “A” Record

(1) For all forms, Payment Year, Field Positions 2-5, must be incremented to reflect the 4 digit year (1998 to 1999), unless reporting prior year data.

(2) Form 1098 - Mortgage Interest Statement, Field Positions 28-39: Amount Code 4 has been added for the use by the interest recipient to provide other information, such as real estate taxes or insurance paid from escrow.

(3) Form 1098-T - Tuition Payments Statement, Field Positions 28-39: For Tax Year 1999, payers are only required to report entity information (TIN, name, address and the appropriate student indicators).

(4) Form 1099-G - Certain Government and Qualified State Tuition Program Payments, Field Positions 28-39: Amount Code 5 has been added for Qualified state tuition program earnings.

(5) Form 1099-INT - Interest Income, Field Positions 28-39: Amount Code 5 has been renamed to represent Investment expenses and Foreign tax paid is now Amount Code 6.

(6) Form 1099-MSA - Distributions From an MSA or Medicare+Choice MSA, Field Positions 28-39: Amount Code 4 was added for Fair market value of the account at date of death.

(7) Form 1099-OID - Original Issue Discount, Field Positions 28-39: Two new amount codes were added:

Amount Code 6 - Original issue discount on U.S. Treasury obligations Amount Code 7 - Investment expenses (8) For all information returns - Field Positions 48, 49, and 50: a note has been added to instruct filers to select only one indicator for each Payer “A” Record. Corrections and originals may be submitted on the same media, however, they must be filed under separate “A” Records.

(9) For Tax Year 1999, Form 1098-E, Student Loan Interest Statement and Form 1098-T, Tuition Payments Statement, may be reported on paper regardless of the 250 return threshold.

d. Programming Changes — Payee “B” Record

(1) For all forms, Payment Year, Field Positions 2-5 must be incremented to reflect the 4-digit reporting year (1998 to 1999), unless reporting prior year data.

(2) Form 1099-MSA - Distributions From an MSA or Medicare+Choice MSA:

a) Field Position 545, Distribution Code - Code 6, Death distribution after year of death to a nonspouse beneficiary, has been added.

b) Field Position 547 - A new Medicare+Choice Indicator has been added to specifically identify this type of distribution. (3) Form 1099-R - Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.

• Field positions 545-546 - The following codes have been deleted :

a) Code B – May be eligible for death benefit exclusion b) Code C – May be eligible for both A and B c) Code K – Distribution from a 1998 Roth conversion IRA in first 5 years. The following code has been added:

a) Code R – Recharacterized IRA contribution. The following code has be changed:

a) Code J – Distribution from a Roth IRA. (4) Form 5498 - Field Position 551 has been changed to Recharacterization indicator. (5) Form 5498-MSA - Field Positions 544-750 have been created to accommodate changes to the form.

3. Editorial Changes — General

(a) Files containing information returns on magnetic media; Form 4804, Transmittal of Information Returns reported Magnetically/Electronically; Form 4419, Application for Filing Information Returns Magnetically/Electronically, and any correspondence regarding information returns (i.e. suggestions, name and/or address changes) must be sent to the following address:

Internal Revenue Service Martinsburg Computing Center Attn: Information Returns Branch 230 Murall Drive Kearneysville, WV 25430

1999–31 I.R.B. 141 August 2, 1999

(b) Magnetically filed requests for extension of time to file as well as Form 8809, Request for Extension of Time To File Information Returns, and Form 8508, Request for Waiver From Filing Information Returns on Magnetic Media, must be sent to the following address:

Internal Revenue Service Martinsburg Computing Center Attn: Extension of Time Coordinator 240 Murall Drive Kearneysville, WV 25430

(c) Only tests submitted electronically may be submitted and/or resubmitted through January 31, 2000. (d) In Part A, Sec. 5.14, reference to Operation Allied Force (Yugoslavia) has been added. (e) In Part A, Sec. 8.04, the statement instructing filers submitting hard copy prints for tests has been deleted. Hard copy print tests are no longer acceptable.

(f) Information has been added to Part A, Sec. 10.01, regarding filing methods and applicable due dates. (g) The following note has been added to Part A, Sec. 10.01, supporting the changed due date for electronic filing:

As a result of recent legislation, electronically filed Forms 1099, 1098 or W-2G are due to the IRS by March 31, 2000. The due date for magnetically filed Forms 1099, 1098 and W-2G remains unchanged (February 28, 2000). (h) Due to security regulations at IRS/MCC, a note has been added to Part A, Sec. 10.05 alerting filers to the hours of delivery for PDSs.

(i) Part A, Sec. 11.02 – A footnote was added in reference to Internal Revenue Code Section 6071(b) which eliminates the necessity for electronic filers of information returns to request an extension of the filing date from February 28, 2000, to March 31, 2000, effective for returns required to be filed after December 31, 1999.

(j) Part A, Sec. 11.10 – Additional information has been added to the note referencing the extension of time to file electronically. (k) In Part A, Sec. 12.05 – A note of clarification has been added to the term correction. (l) Form 1099-G - The title of the form has been changed to Certain Government and Qualified State Tuition Program Payments. (m) Form 1099-MSA - The title of the form has been changed to Distributions From an MSA or Medicare+Choice MSA. (n) Form 5498-MSA - The title of the form has been changed to MSA or Medicatre + Choice MSA Information. (o) In Part A, Sec. 17, Definition of Terms – The term bisynchronous and the related definition has been deleted. (p) In Part A, Sec. 17, Definition of Terms – The term ISDN (Integrated Services Digital Network) and related definition has been added.

(q) In Part A, Sec. 17, Definition of Terms – A note has been added under the definition of Payer to identify the eligible educational institution that received the qualified tuition and related expenses in 1999 as the payer.

(r) In Part B, Sec. 4.07.(d), clarification has been added in describing the typical capacity of DDS.

Sec. 3. Where To File and How to Contact the IRS, Martinsburg Computing Center

.01 All information returns filed magnetically or electronically are processed at IRS/MCC. Files containing information returns and requests for IRS magnetic media and electronic filing information should be sent to the following address: