SECTION 5. ALTERNATIVE

PROCEDURE

.01 The predecessor and the successor must agree that the successor assumes the predecessor’s entire information reporting obligations for those Forms 1042-S (as described in section 2.02 of this revenue procedure), forms in the series 1098, 1099, and 5498, and Forms W-2G to which their agreement applies. The predecessor is relieved of its information reporting obligations for reportable transactions occurring in the acquisition year only if and to the extent that their agreement meets, and the successor satisfies, each of the requirements of section 5 of this revenue procedure.

.02 The predecessor and successor must agree upon the specific Forms 1042S, forms in the series 1098, 1099, and 5498, and Forms W-2G to which this alternative procedure applies. The predecessor and successor may agree to (a) use the alternative procedure for all Forms 1042-S, forms in the series 1098, 1099, or 5498, or Forms W-2G; or (b) limit the use of the alternative procedure to (1) specific Forms 1042-S, forms in the series 1098, 1099, or 5498, or Forms W-2G; or (2) specific reporting entities ( i.e., any unit, branch or location within a particular business entity that files its own separate information returns). For example, if the only compatible computer or record keeping systems of a predecessor and successor are their dividends paid ledgers, they may use the alternative procedure for Forms 1099-DIV, and use the standard procedure for Forms 1042-S and all other forms in the series 1098 or 1099. Similarly, if the only compatible computer or record keeping systems of a predecessor and successor are in their branches located in the Midwest, they may use the alternative procedure with respect to the records maintained at those locations, and use the standard procedure with respect to the records maintained at all other locations. The sharing between the predecessor and successor of taxpayer identification numbers and other information obtained under § 3406 for information reporting and backup withholding purposes, for the sole purpose of complying with this revenue procedure, does not violate

the confidentiality rules contained in § 3406(f). .03 On each “appropriate form” ( i.e., each form to which the agreement in section 5 of this revenue procedure applies), the successor must combine (1) the payments made or received on account of a person by the predecessor in the pre-acquisition portion of the acquisition year with (2) the payments made or received on account of that person by the successor in that year, if any, and must report the aggregate amount(s) on account of that person for that year. In the case of amounts that are required or permitted to be reported transactionally (for example, broker sales of stock that are required to be reported on Forms 1099-B, Proceeds From Broker and Barter Exchange Transactions) the successor must report each transaction of the predecessor and each of its transactions on each appropriate form. The successor may include with the form additional information explaining to the recipient the combined reporting by the predecessor and successor.

.04 On each appropriate form, the successor must also combine the amount of any tax withheld under §§ 1441, 1442, 1443, 3402(q), 3402(r), 3405, and 3406(a) for a person by the predecessor in the pre-acquisition portion of the acquisition year with the amount withheld under such sections for that person by the successor in that year and, on the appropriate form(s), must report the aggregate amount for the year.

.05 The successor must file a statement with the Internal Revenue Service indicating that the appropriate forms are being filed on a combined basis in accordance with the provisions of this revenue procedure. This statement is needed to assist the Service in processing the forms filed under the alternative procedure. If tax has been withheld by the predecessor pursuant to §§ 3402(q), 3402(r), 3405, and 3406(a) during the acquisition year and reported by the predecessor on Form 945, Annual Return of Withheld Federal Income Tax, the total of the withholding amounts shown on the successor’s Forms 1099 and W-2G for that year will exceed the total of the withholding amounts shown on the successor’s Form 945. Therefore, the statement that must be filed with the Service must reflect the amount of any tax that

1999–52 I.R.B. 759 December 27, 1999

has been withheld by the predecessor and by the successor for each type of form (for example, Forms 1099-R or Forms 1099-MISC). Likewise, if any tax has been withheld under §§ 1441 and 1442 during the acquisition year and reported on Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, the total of the withholding amounts shown on the successor’s Forms 1042-S for that year will exceed the total of the withholding amounts shown on the successor’s Form 1042. Therefore, the statement that must be filed with the Service must reflect the amount of tax that has been withheld by the predecessor and successor for Form 1042-S.

.06 The statement required by section 5.05 of this revenue procedure must include the name, address, telephone number, and Employer Identification Numbers of both the successor and predecessor, and the name and telephone number of the person responsible for preparing this statement.

.07 The statement for Forms 1042-S must be attached to the Form 1042 and mailed to the address for filing the Form 1042 (appearing in the instructions to the form) on or before the date the Form 1042 is due.

.08 The statement for forms in the series 1098, 1099 and 5498, and Forms W2G must be filed separately from such forms and Form 945. Unless directed otherwise by the instructions to the forms, the statement for forms in the series 1098, 1099, and 5498, and Forms W-2G must be mailed to the following address on or before the date those forms are due:

Internal Revenue Service Martinsburg Computing Center 230 Murall Drive Attention: Chief, Information Returns Branch Mail Stop 360 Kearneysville, WV 25430