�

304-263-8700 - Call Site or email at mccirp@irs.gov

304-267-3367 - TDD (Telecommunication Device for the Deaf)

304-264-5602 - Fax Machine Electronic Filing – FIRE system

304-262-2400

******** (These are not toll-free telephone numbers.) ********

TO OBTAIN FORMS: 1-800-TAX-FORM (1-800-829-3676)

www.irs.gov - INTERNET access to forms (See Note.)

Note: Because the IRS processes paper forms by machine (optical character recognition equipment), you cannot file the IRS Form 1096 or Copy A of Forms 1098, 1099, or 5498 printed from the Internet.

.04 The 2001 “ General Instructions for Forms 1099, 1098, 5498, and W-2G” and the individual forms instructions have been included in the Publication 1220 for your convenience. The Form 1096 is used only to transmit Copy A of paper Forms 1099, 1098, 5498, and W-2G. If filing paper returns, follow the mailing instructions on Form 1096 and submit the paper returns to the appropriate IRS Service Center.

.05 Requests for paper Forms 1096, 1098, 1099, 5498, and W-2G, and publications related to magnetic media/electronic filing should be made by calling the IRS toll-free number 1-800-TAX-FORM (1-800-829-3676) or via the Internet at www.irs.gov.

.06 Questions pertaining to magnetic media filing of Forms W-2 must be directed to the Social Security Administration (SSA). Filers can call 1-800-SSA-6270 to obtain the phone number of the SSA Employer Service Liaison Officer for their area.

.07 Payers should not contact IRS/MCC if they have received a penalty notice and need additional information or are requesting an abatement of the penalty. A penalty notice contains an IRS representative’s name and/or phone number for contact purposes; or, the payer may be instructed to respond in writing to the address provided. IRS/MCC does not issue penalty notices and does not have the authority to abate penalties. For penalty information, refer to the Penalty section of the 2001 “General Instructions for Forms 1099, 1098, 5498, and W-2G.”

.08 A taxpayer or authorized representative may request a copy of a tax return, including Form W-2 filed with a return, by submitting Form 4506, Request for Copy or Transcript of Tax Form, to IRS. This form may be obtained by calling 1-800-TAX-FORM (1-800-829-3676) . For any questions regarding this form, call 1-800-829-1040.

.09 The Information Reporting Program Call Site answers both magnetic media and tax law questions relating to the filing of information returns (Forms 1096, 1098, 1099, 5498, 8027, W-2G, and W-4). The Call Site also answers magnetic media questions related to Forms 1042-S, and tax law and paper filing related questions about Forms W-2 and W-3, as well as handling inquiries dealing with backup withholding and reasonable cause requirements due to missing and incorrect taxpayer identification numbers. The Call Site is located at IRS/MCC and operates in conjunction with the Information Reporting Program. The Call Site provides service to the payer community (financial institutions, employers, and other transmitters of information returns). Recipients of information returns (payees) should continue to contact 1-800-829-1040 or other numbers specified in the tax return instructions with any questions on how to report information on their tax returns. The Call Site accepts calls from all areas of the country. The number to call is 304-263-8700 or Telecommunications Device for the Deaf (TDD) 304-267-3367. These are toll calls. The Call Site can also be reached via email at mccirp@irs.gov. Hours of operation for the Call Site are Monday through Friday, 8:30 a.m. to 4:30 p.m. Eastern time. The Call Site is in operation throughout the year to handle the questions of payers, transmitters, and employers. Due to the high demand for assistance at the end of January and February, it is advisable to call as soon as possible to avoid these peak filing seasons.

Sec. 4. Filing Requirements

.01 The regulations under section 6011(e)(2)(A) of the Internal Revenue Code provide that any person, including a corporation, partnership, individual, estate, and trust, who is required to file 250 or more information returns must file such returns magnetically/electronically. The 250 or more requirement applies separately for each type of return and separately to each type of cor-* rected return.

* Even though filers may submit up to 249 information returns on paper, IRS encourages filers to transmit those informa- tion returns magnetically or electronically . .02 All filing requirements that follow apply individually to each reporting entity as defined by its separate taxpayer identification number (TIN), social security number (SSN), employer identification number (EIN), individual taxpayer identification number (ITIN) or adoption taxpayer identification number (ATIN). For example, if a corporation with several branches or locations uses the same EIN, the corporation must aggregate the total volume of returns to be filed for that EIN and apply the filing requirements to each type of return accordingly.

2001–21 I.R.B. 1203 May 21, 2001

.03 Payers who are required to submit their information returns on magnetic media may choose to submit their documents by electronic filing. Payers who submit their information returns electronically by April 1, 2002, are considered to have satisfied the magnetic media filing requirements.

.04 IRS/MCC has one method for filing information returns electronically; see Part C . .05 The following requirements apply separately to both originals and corrections filed magnetically/electronically:

1098 250 or more of any of these forms require magnetic media 1098-E* or electronic filing with IRS. These are stand alone documents 1098-T ***** and are not to be aggregated for purposes of determining the 1099-A 250 threshold. For example, if you must file 100 Forms 1099-B 1099-B and 300 Forms 1099-INT, Forms 1099-B need not be filed 1099-C magnetically or electronically since they do not meet the threshold 1099-DIV of 250. However, Forms 1099-INT must be filed magnetically or 1099-G electronically since they meet the threshold of 250. 1099-INT 1099-LTC 1099-MISC 1099-MSA 1099-OID 1099-PATR 1099-R 1099-S 5498 5498-MSA W-2G

* For Tax Year 2001 , Forms 1098-E and 1098-T may be reported on paper regardless of the 250 threshold.

.06 The above requirements do not apply if the payer establishes hardship (see Part A, Sec. 5).

Sec. 5. Form 8508, Request for Waiver From Filing Information Returns on Magnetic Media

.01 If a payer is required to file on magnetic media but fails to do so (or fails to file electronically in lieu of magnetic media filing) and does not have an approved waiver on record, the payer will be subject to a penalty of $50 per return in excess of 250. (For penalty information, refer to the Penalty section of the 2001 “General Instructions for Forms 1099, 1098, 5498, and W-2G.” )

.02 If payers are required to file original or corrected returns on magnetic media, but such filing would create a hardship, they may request a waiver from these filing requirements by submitting Form 8508, Request for Waiver From Filing Information Returns on Magnetic Media, to IRS/MCC. A Form 8508 is included in Publication 1220 for the filer’s use.

.03 Even though a payer may submit as many as 249 corrections on paper, IRS encourages magnetically or electronically submitted corrections. Once the 250 threshold has been met, filers are required to submit any returns of 250 or more magnetically or electronically. However, if a waiver for original documents is approved, any corrections for the same type of returns will be covered under this waiver.

.04 Generally, only the payer may sign the Form 8508. A transmitter may sign if given power of attorney; however, a letter signed by the payer stating this fact must be attached to the Form 8508.

.05 A transmitter must submit a separate Form 8508 for each payer. Do not submit a list of payers. .06 All information requested on the Form 8508 must be provided to IRS for the request to be processed. .07 The waiver, if approved, will provide exemption from the magnetic media filing requirement for the current tax year only. Payers may not apply for a waiver for more than one tax year at a time; application must be made each year a waiver is necessary.

.08 Form 8508 may be photocopied or computer-generated as long as it contains all the information requested on the original form. .09 Filers are encouraged to submit Form 8508 to IRS/MCC at least 45 days before the due date of the returns. .10 File Form 8508 for the W-2 series of forms with IRS/MCC, not SSA. .11 Waivers are evaluated on a case-by-case basis and are approved or denied based on criteria set forth in the regulations under section 6011(e) of the Internal Revenue Code. The transmitter must allow a minimum of 30 days for IRS/MCC to respond to a waiver request. .12 If a waiver request is approved, the transmitter should keep the approval letter on file. The transmitter should not send a copy of the approved waiver to the service center where the paper returns are filed.

.13 An approved waiver from filing information returns on magnetic media does not provide exemption from all filing. The payer must timely file information returns on Copy A of acceptable paper forms with the appropriate service center.

Sec. 6. Vendor List

.01 IRS/MCC prepares a list of vendors who support magnetic media or electronic filing. The Vendor List (Pub. 1582) contains the names of service bureaus that will produce files on the prescribed types of magnetic media or via electronic filing. It also con

May 21, 2001 1204 2001–21 I.R.B.

tains the names of vendors who provide software packages for payers who wish to produce magnetic media or electronic files on their own computer systems. This list is compiled as a courtesy and in no way implies IRS/MCC approval or endorsement.

.02 If filers meeting the filing requirements engage a service bureau to prepare media on their behalf, the filers should be careful not to report duplicate data, which may cause penalty notices to be generated.

.03 The Vendor List, Publication 1582, may be updated in print every other year. The most recently printed copy will be available by contacting IRS/MCC at 304-263-8700 or by letter (see Part A, Sec. 3). The Vendor List is also available on the Internet at www.irs.gov .

.04 A vendor, who offers a software package, or has the ability to produce magnetic media for customers, or has the capability to electronically file information returns, and who would like to be included on the list must submit a written request to IRS/MCC. The request should include:

(a) Company name (b) Address (include city, state, and ZIP code) (c) Telephone number (include area code) (d) Contact person (e) Type(s) of service provided (e.g., service bureau and/or software) (f) Type(s) of media offered (e.g., magnetic tape, tape cartridge, 3 1/2-inch diskette, or electronic filing) (g) Type(s) of return(s)

Sec. 7. Form 4419, Application for Filing Information Returns Magnetically/Electronically

.01 Transmitters are required to submit Form 4419, Application for Filing Information Returns Magnetically/ Electronically, to request authorization to file information returns with IRS/MCC. A single Form 4419 should be filed no matter how many types of returns the transmitter will be submitting magnetically/electronically. For example, if a transmitter plans to file Forms 1099-INT, one Form 4419 should be submitted. If, at a later date, another type of form (Forms 1098, 1099, 5498 and W-2G) is to be filed, the transmitter does not need to submit a new Form 4419.

EXCEPTIONS An additional Form 4419 is required for filing each of the following types of returns:

Forms 1042-S, 8027, and W-4.

FORM TITLE EXPLANATION

1042-S Foreign Person’s U.S. Reports payments Source Income Subject subject to withholding to Withholding under Chapter 3 of the Code, including interest, dividends, royalties, pensions and annuities.

8027 Employer’s Annual Reports receipts from Information Return operations of Tip Income and where tipping is Allocated Tips customary. Used by the employers to report employees’ tips or allocated tips.

W-4 Employee’s Withholding Reports forms received (See Note ) Allowance Certificate during the quarter from employees still employed at the end of the quarter who claim the following: (a) More than 10 withholding

allowances or (b) Exempt status and

wages normally would be more than $200 a week. Note: Employers are not required to send other Forms W-4 unless notified to do so by the IRS .

2001–21 I.R.B. 1205 May 21, 2001

.02 Magnetic tape, tape cartridge, diskette, and electronically-filed returns may not be submitted to IRS/MCC until the application has been approved. Please read the instructions on the back of Form 4419 carefully. A Form 4419 is included in the Publication 1220 for the filer’s use. This form may be photocopied. Additional forms may be obtained by calling 1-800-TAX-FORM (1-800- 829-3676) . The form is also available on the Internet at www.irs.gov . .03 Upon approval, a five-character alpha/numeric Transmitter Control Code (TCC) will be assigned and included in an approval letter. The TCC must be coded in the Transmitter “T” Record. If a transmitter uses more than one TCC to file, each TCC must be reported on separate media or in separate transmissions if filing electronically.

.04 Annually, a Publication 1220 containing the current Revenue Procedure, forms, and instructions will be sent to the attention of the contact person indicated on Form 4419.

.05 If any of the information (name, TIN or address) on the Form 4419 changes, please notify IRS/MCC in writing so the IRS/MCC database can be updated. However, a change in the method by which information returns are being submitted is not information which needs to be updated (e.g., tape to disk). The transmitter should include the TCC in all correspondence.

.06 Form 4419 may be submitted anytime during the year; however, it must be submitted to IRS/MCC at least 30 days before the due date of the return(s) for current year processing. This will allow IRS/MCC the minimum amount of time necessary to process and respond to applications. In the event that computer equipment or software is not compatible with IRS/MCC, a waiver may be requested to file returns on paper documents.

.07 IRS/MCC encourages transmitters who file for multiple payers to submit one application and to use the assigned TCC for all payers.

.08 If a payer’s files are prepared by a service bureau, the payer may not need to submit an application to obtain a TCC. Some service bureaus will produce files, code their own TCC in the file, and send it to IRS/MCC for the payer. Other service bureaus will prepare the file and return the file to the payer for submission to IRS/MCC. These service bureaus may require the payer to obtain a TCC to be coded in the Transmitter “T” Record. Payers should contact their service bureaus for further information.

.09 Once a transmitter is approved to file magnetically or electronically, it is not necessary to reapply unless :

(a) The payer has discontinued filing magnetically or electronically for two consecutive years; the payer’s TCC may have been

reassigned by IRS/MCC. Payers who are aware the TCC assigned will no longer be used are requested to notify IRS/MCC so these numbers may be reassigned; or (b) The payer’s magnetic media files were transmitted in the past by a service bureau using the service bureau’s TCC, but now

the payer has computer equipment compatible with that of IRS/MCC and wishes to prepare his or her own files. The payer must request a TCC by filing Form 4419. .10 One Form 4419 may be submitted regardless of how many types of media or methods are used to file the return. While not encouraged, multiple TCCs can be issued to payers with multiple TINs. Only one TCC will be issued per TIN unless the filer has checked the application for the following forms in addition to the Forms 1098, 1099, 5498 or W-2G: Forms 1042–S, 8027, and/or W-4. A separate TCC will be assigned for each of these forms.

.11 In accordance with Regulations section 1.6041–7(b), payments by separate departments of a health care carrier to providers of medical and health care services may be reported on separate returns filed magnetically or electronically. In this case, the headquarters will be considered the transmitter, and the individual departments of the company filing reports will be considered payers. A single Form 4419 covering all departments filing magnetically/electronically should be submitted. One TCC may be used for all departments.

.12 Approval to file does not imply endorsement by IRS/MCC of any computer software or of the quality of tax preparation services provided by a service bureau or software vendor.

Sec. 8. Test Files

.01 IRS/MCC does not require test files, except for filers wishing to participate in the Combined Federal/State Filing Program. See Part A, Sec. 16, for further information concerning the Combined Federal/State Filing Program.

.02 IRS/MCC encourages first-time magnetic media or electronic filers to submit a test. The test file must consist of a sample of each type of record:

(a) Transmitter “T” Record (all fields marked required must include transmitter information) (b) Payer “A” Record (must not be fictitious data) (c) Multiple Payee “B” Records (at least 11 “B” Records per each “A” Record) (d) End of Payer “C” Record (e) State Totals “K” Record, if participating in the Combined Federal/State Filing Program (f) End of Transmission “F” Record

(See Part B for record formats.) .03 Use the Test Indicator “T” in Field Position 28 of the “T” Record to show this is a test file. .04 IRS/MCC will check the file to ensure it meets the specifications of this Revenue Procedure. For current filers, sending a test file will provide the opportunity to ensure their software reflects any programming changes.

.05 Electronic tests may be submitted November 1, 2001, through February 15, 2002 . See Part C, Sec. 5.03 for information on electronic test results.

May 21, 2001 1206 2001–21 I.R.B.

.06 Tests submitted on magnetic media should be sent to IRS/MCC between November 1 and December 17 . Tests must be received at MCC by December 17 in order to be processed. Magnetic media filers may begin submitting test tapes and diskettes after October 1; however, the data will not be processed until on or after November 1. For tests filed on magnetic tape, tape cartridge, 8mm, 4mm, and quarter inch cartridge , and 3 1/2-inch diskette, the transmitter must include the signed Form 4804 in the same package with the corresponding magnetic media. Mark the “TEST” box in Block 1 on the form. Also, mark “TEST” on the external media label.

.07 IRS/MCC will send a letter of acknowledgment to indicate the magnetic media test results. Unacceptable magnetic media files, along with documentation identifying the errors, will be returned. Resubmission of magnetic media test files must be received by IRS/MCC no later than December 17 .

.08 Successfully processed media will not be returned to filers.

Sec. 9. Filing of Information Returns Magnetically and Retention Requirements

.01 Form 4804, Transmittal of Information Returns Reported Magnetically, or a computer-generated substitute, must accompany all magnetic media shipments.

.02 IRS/MCC allows for the use of computer-generated substitutes for Form 4804. The substitutes must contain all information requested on the original forms including the affidavit and signature line. Photocopies are acceptable but an original signature is required. When using computer-generated forms, be sure to mark very clearly which tax year is being reported. This will eliminate a phone communication from IRS/MCC to question the tax year.

.03 A transmitter may report for any combination of payers and/or documents in a submission. Each file must begin with a “T” Record and end with an “F” Record for the end of a transmission. For example, if reporting Forms 1099–INT for Bank A, Forms 1099–DIV for Bank B, and Forms 1098 for Bank C, three separate tapes or diskettes need not be created. All three banks and all types of documents can be coded within a single file on one tape or diskette as long as each bank or type of return has a separate “A” Record. Multiple tapes or diskettes can be sent in one package. For each separate type of media, the first record on the file must be the Transmitter “T” Record. A Form 4804, Transmittal of Information Returns Reported Magnetically, must be submitted for every Transmitter “T” Record. Filers must include Form 4804, or computer-generated substitute with their shipment.

.04 Multiple types of media may be submitted in a shipment. However, submit a separate Form 4804 for each type of media. .05 Current and prior year data may be submitted in the same shipment; however, each tax year must be on separate media, and a separate Form 4804 must be prepared to clearly indicate each tax year.

.06 Filers who have prepared their information returns in advance of the due date are encouraged to submit this information to IRS/MCC no earlier than January 1 of the year the return is due.

.07 Do not report duplicate information. If a filer submits returns magnetically/electronically, identical paper documents must not be filed. This may result in erroneous penalty notices.

.08 Form 4804 may be signed by the payer or the transmitter, service bureau, paying agent, or disbursing agent (all hereafter referred to as agent) on behalf of the payer. Failure to sign the affidavit on Form 4804 may delay processing or could result in the files being unprocessed. An agent may sign the Form 4804 if the agent has the authority to sign the affidavit under an agency agreement (either oral, written, or implied) that is valid under state law and adds the caption “FOR: (name of payer).”

.09 Although an authorized agent may sign the affidavit, the payer is responsible for the accuracy of the Form 4804 and the returns filed. The payer will be liable for penalties for failure to comply with filing requirements.

.10 A self-adhesive external media label, created by the filer, must be affixed to each piece of magnetic media. For instructions on how to prepare an external media label, refer to Notice 210 in the forms section of this publication. If diskettes are used, be certain that only MS-DOS compatible operating systems were used to prepare the diskettes. Non-MS-DOS diskettes are no longer acceptable at IRS/MCC .

.11 On the outside of the shipping container, affix or attach a label which reads “IRB Box of” reflecting the number of containers in the shipment. (Filers can create a label with this information or cut out one of the labels on the special label page provided in this publication.) If there is only one container, mark the outside as Box 1 of 1. For multiple containers, include the sequence (for example, Box 1 of 3, 2 of 3, 3 of 3).

.12 When submitting files include the following:

(a) A signed Form 4804; (b) External media label (created by filer) affixed to magnetic media; (c) IRB Box _____ of ______ outside label.

Note: See Part C for Electronic Filing Specifications. Form 4804 is no longer needed for electronic filing.

.13 Do not use special shipping containers for mailing media to IRS/MCC. Shipping containers will not be returned. .14 If returns from different locations (using the same name and TIN) are submitted on the same file, IRS encourages the filer to consolidate each type of information return under one “A” Record. For example, all “B” Records for the same type of return should be together under one “A” Record and followed by the End of Payer “C” Record.

.15 IRS/MCC will not pay for or accept “Cash-on-Delivery” or “Charge to IRS” shipments of tax information that an individual or organization is legally required to submit.

2001–21 I.R.B. 1207 May 21, 2001

.16 Payers should retain a copy of the information returns filed with IRS or have the ability to reconstruct the data for at least 3 years from the reporting due date, with the exception of Form 1099–C. A financial entity must retain a copy of Form 1099–C, Cancellation of Debt, or have the ability to reconstruct the data required to be included on the return, for at least 4 years from the date such return is required to be filed. Whenever backup withholding is imposed, a 4-year retention is required .

Sec. 10. Due Dates

.01 The due dates for filing paper returns with IRS also apply to magnetic media. Filing of information returns is on a calendar year basis, except for Forms 5498 and 5498–MSA, which are used to report amounts contributed during or after the calendar year (but not later than April 15). The following due dates will apply to Tax Year 2001 :

Due Dates

Electronic Filing (See Note) Magnetic Filing Forms 1098, 1099, and W-2G Forms 1098, 1099, and W-2G Recipient Copy - January 31, 2002 Recipient Copy - January 31, 2002 IRS Copy - - - - - - - April 1, 2002* IRS Copy - - - - - - February 28, 2002 *Normal due date of March 31, 2002 falls on a Sunday.

Note: Electronically filed Forms 1099, 1098, or W-2G are due to the IRS by April 1, 2002. The due date for magneti- cally filed Forms 1099, 1098, and W-2G remains unchanged (February 28, 2002).

Legislation amending Internal Revenue Code section 6071(b), eliminates the necessity for electronic filers of Forms 1098, 1099, and W-2G to request an extension of the filing date from February 28 to March 31, effective for returns required to be filed after December 31, 1999.

Electronic/Magnetic Filing Forms 5498 and 5498–MSA Participant Copy - May 31, 2002* IRS Copy - - - - - - - May 31, 2002

• Participants’ copy of Form 5498 for education IRA and all other

Forms 5498 to furnish fair market value information January 31, 2002

.02 If any due date falls on a Saturday, Sunday, or legal holiday, the return or statement is considered timely if filed or furnished on the next day that is not a Saturday, Sunday, or legal holiday.

.03 Information returns filed magnetically for Forms 1098, 1099, and W-2G must be submitted to IRS/MCC postmarked on or before February 28, 2002.

.04 Electronically filed information returns for Forms 1098, 1099 and W-2G must be submitted to IRS/MCC no later than April 1, 2002, and will be considered timely filed if submitted by that date. Electronically filed information returns submitted after April 1, 2002, will be considered late unless an extension has been applied for and approved. .05 Magnetic media returns postmarked by the United States Postal Service (USPS) on or before February 28, 2002, and delivered by United States mail to the IRS/MCC after the due date, are treated as timely under the “timely mailing as timely filing” rule. A similar rule applies to items delivered by private delivery services (PDSs) designated by the IRS. A PDS must be designated by the IRS before it will qualify for the timely mailing rule. (See Note .) Notice 99–41, 1999–2 C.B. 325, provides the list of designated PDSs. Designation is effective until the IRS issues a revised list. Notice 97–26 1997–1 C.B. 413, provides rules for determining the date that is treated as the postmark date. For items delivered by a non-designated PDS, the actual date of receipt by IRS/MCC will be used as the filing date. For items delivered by a designated PDS, but through a type of service not designated in Notice 99–41, the actual date of receipt by IRS/MCC will be used as the filing date. The timely mailing rule also applies to furnishing statements to recipients and participants.

Note: Due to security regulations at MCC, the Internal Revenue police officers will not accept media from PDSs or couriers from 3:00 p.m. to 11:00 p.m., seven days a week, and 11:00 p.m. to 7:00 a.m., Saturday and Sunday.

.06 Statements to recipients must be furnished on or before January 31, 2002, for TY 2001. Form 5498 statements to the participants must be furnished on or before January 31, 2002, for TY 2001 for the fair market value of the account and for contributions to an education IRA and by May 31, 2002, for TY 2001 for contributions made to all other types of IRAs for the prior calendar year.

.07 Forms 5498 and 5498–MSA filed magnetically or electronically must be filed with IRS/MCC on or before May 31, 2002, for TY 2001 .

May 21, 2001 1208 2001–21 I.R.B.

.08 Use this Revenue Procedure to prepare information returns filed magnetically or electronically beginning January 1, 2002, and received by IRS/MCC no later than December 15, 2002 .

Sec. 11. Extensions of Time

.01 An extension of time to file may be requested for Forms 1098, 1099, 5498, 5498–MSA, W-2G, W-2 series, 8027 and 1042–S. .02 Form 8809, Request for Extension of Time To File Information Returns, should be submitted to IRS/MCC at the address listed in .06 of this section. This form may be used to request an extension of time to file information returns submitted on paper, magnetically or electronically to the IRS

.03 Requesting an extension of time for multiple payers (50 or less) may be done by submitting Form 8809 and attaching a list of the payer names and associated TINs (EIN or SSN). The listing must be attached to ensure an extension is recorded for all payers. Form 8809 may be computer-generated or photocopied. Be sure that all the pertinent information is included. For Forms 1098, 1099 and W-2G that will be filed electronically, Form 8809 must be submitted on or before April 1, 2002 . .04 Requests for an extension of time to file for more than 50 payers are required to be submitted magnetically or electronically. Requests for an extension of time for 10 to 50 payers are encouraged to be filed magnetically or electronically. (See Part D, Sec. 3, for the record format.) The request may be filed on tape, tape cartridge, 3 1/2-inch diskette, or electronically.

.05 If a filer does not have an IRS/MCC assigned Transmitter Control Code (TCC), a Form 4419, Application for Filing Information Returns Magnetically/Electronically, must be submitted to obtain a TCC. This number must be used to submit an extension request magnetically/electronically.

.06 All requests for an extension of time filed on Form 8809 or filed magnetically on tape, tape cartridge, 8mm, 4mm, Quarter Inch Cartridges (QIC) or 3 1/2 inch diskette should be sent using the following address :

IRS-Martinsburg Computing Center Information Reporting Program Attn: Extension of Time Coordinator 240 Murall Drive Kearneysville, WV 25430

.07 Transmitters requesting an extension of time for multiple payers will receive one approval letter, accompanied by a list of payers covered under that approval.

.08 As soon as it is apparent that a 30-day extension of time to file is needed, Form 8809 should be submitted. It will take a minimum of 30 days for IRS/MCC to respond to an extension request. Under certain circumstances, a request for an extension of time could be denied. When a denial letter is received, any additional or necessary information may be resubmitted within 20 days.

.09 Form 8809 must be postmarked no later than the due date of the return for which an extension is requested. If requesting an extension of time to file several types of forms, use one Form 8809; however, the Form 8809 must be postmarked no later than the earliest due date. For example, if requesting an extension of time to file both Forms 1099–INT and 5498, submit Form 8809 postmarked on or before February 28, 2002. (See Note .) Complete more than one Form 8809 to avoid this problem.

Note: For Tax Year 2001, if you will be filing Forms 1098, 1099, or W-2G electronically, the Form 8809 is not required unless an extension is needed beyond April 1, 2002.

.10 If an additional extension of time is needed, a second Form 8809 must be filed by the initial extended due date. Check line 7 on the form to indicate that an additional extension is being requested. A second 30-day extension will be approved only in cases of extreme hardship or catastrophic event. If requesting a second 30-day extension of time, submit the information return files as soon as prepared. Do not wait for MCC’s response to your second extension request.

.11 If an extension request is approved, the approval letter should be kept on file. The approval letter, or copy of the approval letter, for an extension of time should not be sent to IRS/MCC with the magnetic media file or to the service center where the paper returns are filed.

.12 Request an extension for only one tax year. .13 The extension request must be signed by the payer or a person who is duly authorized to sign a return, statement or other document for the payer.

.14 Failure to properly complete and sign Form 8809 may cause delays in processing the request or result in a denial. Carefully read and follow the instructions on the back of Form 8809.

.15 Form 8809 may be obtained by calling 1-800-TAX-FORM (1-800-829-3676). The form is also available on the Internet at www.irs.gov . A copy of Form 8809 is also provided in the back of Publication 1220.

.16 Request an extension of time to furnish the statements to recipients of Forms 1098, 1099, 5498, W-2G, W-2 series, and 1042-S by submitting a letter to IRS/MCC at the address listed in .06 of this section. The letter should contain the following information: (a) Payer name (b) TIN (c) Address (d) Type of return

2001–21 I.R.B. 1209 May 21, 2001

(e) Specify that the extension request is to provide statements to recipients (f) Reason for delay (g) Signature of payer or duly authorized person. Requests for an extension of time to furnish the statements to recipients for Forms 1098, 1099, 5498, W-2G, W-2 series, and 1042-S are not automatically approved; however, if approved, generally an extension will allow a maximum of 30 additional days from the due date to furnish the statements to the recipients. The request must be postmarked by the date on which the statements are due to the recipients.

Sec. 12. Processing of Information Returns Magnetically

.01 All data received at IRS/MCC for processing will be given the same protection as individual income tax returns (Form 1040). IRS/MCC will process the data and determine if the records are formatted and coded according to this Revenue Procedure.

.02 If media is received with data formatted incorrectly, IRS/MCC will request a replacement file in writing. When IRS/MCC requests a replacement file, it is because we encountered errors (not limited to format) and were unable to process the media. Filers will receive a Media Tracking Slip (Form 9267), listing, and letter detailing the reason(s) their media could not be processed. It is imperative that filers maintain backup copies and/or recreate capabilities for their information return files. Open all correspondence from IRS/MCC immediately.

.03 Files must be corrected and returned with the Media Tracking Slip (Form 9267) to IRS/MCC within 45 days from the date of the letter. Refer to Part C, Section 6, for procedures for files submitted electronically. A penalty for failure to file correct information returns by the due date will be assessed if the files are not corrected and returned within the 45 days or if filers are notified by IRS/MCC of the need for a replacement file more than two times. A penalty for intentional disregard of filing requirements will be assessed if a replacement file is not received. (For penalty information, refer to the Penalty section of the 2001 “ General Instructions for Forms 1099, 1098, 5498, and W-2G.” )

.04 Sample records identifying errors encountered will be provided with the returned information. It is the responsibility of the transmitter to check the entire file for similar errors.

.05 The following definitions have been provided to help distinguish between a correction and a replacement:

• A correction is an information return submitted by the transmitter to correct an information return that was previously submitted to and processed by IRS/MCC, but contained erroneous information .

Note: Corrections should only be made to records that have been submitted incorrectly, not the entire file.

• A replacement is an information return file sent by the filer at the request of IRS/MCC because of errors encountered while pro- cessing the filer’s original submission. After the necessary changes have been made, the file must be returned for processing along with the Media Tracking Slip (Form 9267) which was included in the correspondence from IRS/MCC. (See Note 1 ).

Note 1: Filers should never send anything to IRS/MCC marked “Replacement” unless IRS/MCC has requested a replacement file in writing or via the FIRE System.

Note 2: IRS/MCC no longer returns problem media in need of replacement. Filers will receive a tracking slip, listing and letter detailing the reason(s) their media could not be processed. Filers will be expected to send a replacement file within the prescribed time frame . This makes it imperative that filers maintain backup copies and/or recreate capabilities for their information return files.

.06 IRS/MCC will not return media after successful processing. Therefore, if the transmitter wants proof that IRS/MCC received a shipment, the transmitter should select a service with tracking capabilities or one that will provide proof of delivery. Do not use special shipping containers for transmitting data to IRS/MCC. Shipping containers will not be returned.

.07 IRS/MCC will work with filers as much as possible to assist with processing problems. If the filer is contacted by IRS/MCC, a prompt response is important. IRS/MCC may have information that the filer needs to correct his or her file.

.08 IRS/MCC contacts payers who have submitted payee data with missing TINs in an attempt to prevent errors that could result in penalties. Payers who submit data with missing TINs and have taken the required steps to obtain this information are encouraged to send a letter of explanation. If you are filing magnetically, this letter may be included with your media and Form 4804. This will prevent unnecessary contact from IRS/MCC. This letter, however, will not prevent backup withholding notices (CP2100 or CP2100A Notices) or penalties for missing or incorrect TINs.

Sec. 13. Corrected Returns

.01 The magnetic media filing requirement of information returns of 250 or more applies separately to both original and corrected returns.

May 21, 2001 1210 2001–21 I.R.B.

If a payer has 100 Forms 1099-A to be corrected, they can be E filed on paper because they fall under the 250 threshold. However, X if the payer has 300 Forms 1099-B to be corrected, they must be A filed magnetically or electronically because they meet the 250 threshold. M If for some reason a payer cannot file the 300 corrections on magnetic P media, to avoid penalties, a request for a waiver must be submitted before L filing on paper. If a waiver is approved for original documents, any corrections E for the same type of return will be covered under this waiver.

.02 Corrections should be filed as soon as possible . Corrections filed after August 1 may be subject to the maximum penalty of $50 per return. Corrections filed by August 1 may be subject to a lesser penalty. (For information on penalties, refer to the Penalty section of the 2001 “ General Instructions for Forms 1099, 1098, 5498, and W-2G .”) However, if payers discover errors after August 1, they are still required to file corrections so they will not be subject to a penalty for intentional disregard of the filing requirements. Failure to correct information returns may result in penalties for failure to provide correct information. All fields must be com- pleted with the correct information, not just the data fields needing correction. Submit corrections only for the returns filed in error, not the entire file. Furnish corrected statements to recipients as soon as possible.

.03 There are numerous types of errors, and in some cases, more than one transaction may be required to correct the initial error. If the original return was filed as an aggregate, the filers must consider this in filing corrected returns.

.04 Corrected returns may be included on the same medium as original returns; however, separate “A” Records are required. Corrected returns must be identified on the Form 4804 and the external media label by indicating “Correction.” If filers discover that certain information returns were omitted on their original file, they must not code these documents as corrections. The file must be coded and submitted as originals.

.05 If a payer discovers errors for prior years that affect a large number of payees, in addition to sending IRS the corrected returns and notifying the payees, a letter containing the following information should be sent to IRS/MCC:

(a) Name and address of payer (b) Type of error (please explain clearly) (c) Tax year (d) Payer TIN (e) TCC (f) Type of Return (g) Number of Payees This information will be forwarded to the appropriate office in an attempt to prevent erroneous notices from being sent to the payees. The corrections must be submitted on actual information return documents or filed magnetically/electronically. If filing magnetically, provide the correct tax year in Block 2 of the Form 4804 and on the external media label. Form 4804 is not needed for electronic filing.

.06 Prior year data, original and corrected, must be filed according to the requirements of this Revenue Procedure. If submitting prior year corrections, use the record format for the current year and submit on separate media. However, use the actual year designation of the correction in Field Positions 2-5 of the “T”, “A”, and “B” Records. If filing electronically, a separate transmission must be made for each tax year.

.07 In general, filers should submit corrections for returns filed within the last 3 calendar years (4 years if the payment is a reportable payment subject to backup withholding under section 3406 of the Code and also for Form 1099-C, Cancellation of Debt).

.08 All paper returns, whether original or corrected, must be filed with the appropriate service center. .09 Form 4804 must be submitted with corrected files submitted magnetically . All references to the Form 4804 in the guidelines instructions apply only to files submitted magnetically. The Form 4804 is no longer required for electronic filing through the FIRE System.

.10 The “B” Record provides a 20-position field for the Payer’s Account Number for the Payee. This number will help identify the appropriate incorrect return if more than one return is filed for a particular payee. Do not enter a TIN in this field. A payer’s account number for the payee may be a checking account number, savings account number, serial number, or any other number assigned to the payee by the payer that will distinguish the specific account. This number should appear on the initial return and on the corrected return in order to identify and process the correction properly.

.11 The record sequence for filing corrections is the same as for original returns. .12 Review the chart that follows. Errors normally fall under one of the two categories listed. Next to each type of error made is a list of instructions on how to file the corrected return.

2001–21 I.R.B. 1211 May 21, 2001

Guidelines for Filing Corrected Returns Magnetically/Electronically

Error Made on the Original Return How To File the Corrected Return

Note: References to Form 4804 apply to magnetically filed media only. Form 4804 is no longer required for files submitted electronically through the FIRE System.

Two (2) separate transactions are required to make the following corrections properly. Follow the directions for both Transactions 1 and 2. (See Note 1.)

1 . Original return was filed Transaction 1: Identify incorrect returns with one or more of the following errors:

A. Prepare a new Form 4804 that includes

information related to this new file. (a) No payee TIN (SSN, ITIN, ATIN or EIN) B. Mark “Correction” in Block 1 of Form 4804. (b) Incorrect payee TIN C. Prepare a new file. The first record on the file (c) Incorrect payee name will be the Transmitter “T” Record. (d) Wrong type of return indicator D. Make a separate “A” Record for each type of

return and each payer being reported. The information in the “A” Record will be exactly the same as it was in the original submission with one exception; the Correction File Indicator (Field Position 50) must be set to “1” . E. The Payee “B” Records must contain exactly

the same information as submitted previously, except, insert a Corrected Return Indicator Code of “G” in Field Position 6 of the “B” Records, and for all payment amounts, enter “0” (zeros). F. Corrected returns submitted to IRS/MCC using

“G” coded “B” Records may be on the same file as those returns submitted with a “C” code; how- ever, separate “A” Records are required. G. Prepare a separate “C” Record for each type of

return and each payer being reported. H. Continue with Transaction 2 to complete the

correction.

Transaction 2: Report the correct information

A. Make a separate “A” Record for each type of

return and each payer being reported. The Correction File Indicator (Field Position 50), must be set to “1” (one). B. The Payee “B” Records must show the correct

information as well as a Corrected Return Indicator Code of “C” in Field Position 6. C. Corrected returns submitted to IRS/MCC using

“C” coded “B” Records may be on the same file as those returns submitted with “G” codes; how- ever, separate “A” Records are required. D. Prepare a separate “C” Record for each type of return and each payer being reported. E. The last record on the file will be the End of

Transmission “F” Record. F. I ndicate “Correction” on the external media

label.

Note 1: See the 2001 “General Instructions for Forms 1099, 1098, 5498, and W-2G.” for additional information on regulations affecting corrections and related penalties.

May 21, 2001 1212 2001–21 I.R.B.

Guidelines for Filing Corrected Returns Magnetically/Electronically (continued)

Error Made on the Original Return How To File the Corrected Return

One transaction is required to make the following corrections properly (See Note 2).

2 . Original return was filed A . Prepare a new Form 4804 that includes with one or more of the Information relating to this new file. following errors: B. Mark “Correction” in Block 1 of Form 4804. (a) Incorrect payment C. Prepare a new file. The first record on the file amount codes in the will be the Transmitter “T” Record. Payer “A” Record D. Make a separate “A” Record for each type of (b) Incorrect payment return and each payer being reported. amounts in the Payee Information in the “A” Record may be the same “B” Record as it was in the original submission. However, (c) Incorrect code in the the Correction File Indicator (Field Position 50) distribution code field in must be set to “1” (one). the Payee “B” Record E. The Payee “B” Records must show the correct (d) Incorrect payee address record information as well as a Corrected (e) Incorrect Direct sales indicator Return Indicator Code of “G” in Field Position 6. F. Corrected returns submitted to IRS/MCC using “G” coded “B” Records may be on the same file as those returns submitted without the “G” coded “B” Records; however, sepa- rate “A” Records are required. G. Prepare a separate “C” Record for each type of return and each payer being reported. H. The last record on the file will be the End of Transmission “F” Record. I. Indicate “Correction” on the external media label.

Note 2: If a filer is correcting the name and/or TIN in addition to any errors listed in item 2 of the chart, two transactions will be required. If a filer is reporting “G” coded, “C” coded, and/or “Non-coded” (original) returns on the same media, each category must be reported under separate “A” Records.

Sec. 14. Taxpayer Identification Number (TIN)

.01 Section 6109 of the Internal Revenue Code requires a person to furnish his/her TIN to the person obligated to file the information return.

.02 The payees’ TIN and name combinations are used to associate information returns reported to IRS/MCC with corresponding information on payees’ tax returns. It is imperative that correct Taxpayer Identification Numbers (TINs) for payees be provided to IRS/MCC. Do not enter hyphens or alpha characters. Entering all zeros, ones, twos, etc., will have the effect of an incorrect TIN.

.03 The payer and payee names, with associated TINs, should be consistent with the names and TINs used on other tax returns. Also, the name and TIN provided must belong to the owner of the account. If the account is recorded in more than one name, furnish the name and TIN of one of the owners of the account. The TIN provided must be associated with the name of the payee provided in the first name line of the “B” Record. For individuals, the payee TIN is generally the payee’s Social Security Number (SSN). For other entities, the payee TIN is the payee’s Employer Identification Number (EIN). The payee TIN may also refer to an Individual Taxpayer Identification Number (ITIN) or Adoption Taxpayer Identification Number (ATIN). For sole proprietors, the payee TIN may be either an SSN or EIN but the sole proprietor’s name (not the business name) must be used on the first name line and the SSN is preferred.

.04 Failure to provide the correct name and corresponding TIN could result in a proposed penalty notice 972CG and/or backup withholding notice CP 2100 (sometimes referred to as a “B” Notice).

.05 The following charts will help payers determine the TIN to be furnished to IRS/MCC for those persons (payees) for whom they are reporting information.

2001–21 I.R.B. 1213 May 21, 2001

Chart 1. Guidelines for Social Security Numbers

In the Taxpayer Identification Number Field of In the First Payee the Payee “B” Name Line of the For this type of Record, enter the Payee “B” Record, account- SSN of- enter the name of

1 . Individual The individual The individual

2 . Joint account (Two The actual owner The individual or more individuals, of the account or, whose SSN is including husband and if combined funds, entered wife) the first individual on the account

3 . Custodian account The minor The minor of a minor (Uniform Gift, or Transfers, to Minors Act)

4 . The usual revocable The grantor-trustee The grantor-trustee savings trust account (grantor is also trustee)

5 . A so-called trust The actual owner The actual owner account that is not a legal or valid trust under state law

6 . Sole The business owner The owner, not the business proprietorship (An SSN or EIN) name (The filer may enter the business name on the second name line.)

Chart 2. Guidelines for Employer Identification Numbers

In the Taxpayer Identification Number Field of In the First Payee the Payee “B” Name Line of the For this type Record, enter the Payee “B” Record, of account- EIN of- enter the name of 1. A valid trust, estate, The legal entity The legal trust, estate, or pension trust or pension trust

2. Corporate The corporation The corporation

3. Association, club, The organization The organization religious, charitable, educational, or other tax-exempt organization

4. Partnership account The partnership The partnership held in the name of the business

5. A broker or The broker or The broker or registered nominee/ nominee/middleman nominee/middleman middleman

6. Account with The public entity The public entity Department of Agriculture

May 21, 2001 1214 2001–21 I.R.B.

Chart 2. Guidelines for Employer Identification Numbers (Continued)

In the Taxpayer Identification Number Field of In the First Payee the Payee “B” Name Line of the For this type Record, enter the Payee “B” Record, of account- EIN of- enter the name of in the name of a public entity (such as a state or local government, school district, or prison) that receives agricultural program payments

7. Sole proprietorship The business owner The owner, not the (An EIN or SSN) business name (The filer may enter the business name on the second name line.)

Sec. 15. Effect on Paper Returns and Statements to Recipients

.01 Magnetic/electronic reporting of information returns eliminates the need to submit paper documents to the IRS. CAUTION: Do not send Copy A of the paper forms to IRS/MCC for any forms filed on magnetic media or electronically. This will result in duplicate filing; therefore, erroneous notices could be generated.

.02 Payers are responsible for providing statements to the payees as outlined in the 2001 “General Instructions for Forms 1099, 1098, 5498, and W-2G.” Refer to those instructions for filing information returns on paper with the IRS and furnishing statements to recipients.

.03 Statements to recipients should be clear and legible. If the official IRS form is not used, the filer must adhere to the specifications and guidelines in Publication 1179, “Rules and Specifications for Private Printing of Substitute Forms 1096, 1098, 1099, 5498, and W-2G.”

Sec. 16. Combined Federal/State Filing Program

.01 The Combined Federal/State Filing (CF/SF) Program was established to simplify information returns filing for the taxpayer. IRS/MCC will forward this information to participating states free of charge for approved filers. Separate reporting to those states is not necessary. The following information returns may be filed under the Combined Federal/State Filing Program:

Form 1099-DIV -------------- Dividends and Distributions Form 1099-G ----------------- Certain Government and Qualified State Tuition Program Payments Form 1099-INT -------------- Interest Income Form 1099-MISC ------------ Miscellaneous Income Form 1099-OID -------------- Original Issue Discount Form 1099-PATR ------------ Taxable Distributions Received From Cooperatives Form 1099-R ----------------- Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc. Form 5498 -------------------- IRA Contribution Information The following information returns may not be filed under this program:

Form 1098 -------------------- Mortgage Interest Statement Form 1098-E------------------ Student Loan Interest Statement Form 1098-T------------------ Tuition Payments Statement Form 1099-A ----------------- Acquisition or Abandonment of Secured Property Form 1099-B ----------------- Proceeds From Broker and Barter Exchange Transactions Form 1099-C ----------------- Cancellation of Debt Form 1099-LTC-------------- Long-Term Care and Accelerated Death Benefits Form 1099-MSA------------- Distributions From an MSA or Medicare+Choice MSA Form 1099-S------------------ Proceeds From Real Estate Transactions Form 5498-MSA------------- MSA or Medicare+Choice MSA Information Form W-2G ------------------ Certain Gambling Winnings

2001–21 I.R.B. 1215 May 21, 2001

.02 To request approval to participate, a magnetic media test file coded for this program must be submitted to IRS/MCC between November l, 2001, and December 17, 2001. Electronic test files coded for this program must be submitted between November 1, 2001, and February 15, 2002 . .03 Attach a letter to the Form 4804 submitted with the test file to indicate a desire to participate in the Combined Federal/State Filing Program. Test files sent electronically do not require the Form 4804 or letter. If the test file is coded for the Combined Federal State Filing Program and is acceptable, an approval letter and Form 6847 will be sent to the filer.

.04 Atest file is only required for the first year. Each record, both in the test and the actual data file, must conform to this Revenue Procedure. .05 If the test file is acceptable, IRS/MCC will send the filer an approval letter, and a Form 6847, Consent for Internal Revenue Service to Release Tax Information, which the payer must complete, sign, and return to IRS/MCC before any tax information can be released to the state. Filers must write their TCC on Form 6847.

.06 If the test file is not acceptable, IRS/MCC will return the media with a letter indicating the problems. Electronic filers must dial back within two days to the FIRE System to check the acceptability of their test file. The new test file must be returned to IRS/MCC no later than December 17 for magnetic media, or February 15 for an electronically filed test.

.07 A separate Form 6847 is required for each payer. A transmitter may not combine payers on one Form 6847 even if acting as Attorney-in-Fact for several payers. Form 6847 may be computer-generated as long as it includes all information that is on the original form or it may be photocopied. If the Form 6847 is signed by an Attorney-in-Fact, the written consent from the payer must clearly indicate that the Attorney-in-Fact is empowered to authorize release of the information.

.08 Only code the records for participating states and for those payers who have submitted Form 6847. .09 Some participating states require separate notification that the payer is filing in this manner. Since IRS/MCC acts as a forwarding agent only, it is the payer’s responsibility to contact the appropriate states for further information.

.10 All corrections properly coded for the Combined Federal/State Filing Program will be forwarded to the participating states. .11 Participating states and corresponding valid state codes are listed in Table 1 of this section. The appropriate state code must be entered for those documents that meet the state filing requirements; do not use state abbreviations.

.12 To simplify filing, some of the participating states have provided their information return reporting requirements (see Table 2). Each state’s filing requirements are subject to change by the state. It is the payer’s responsibility to contact the participating states to verify the criteria provided in this table.

.13 Upon submission of the actual files, the transmitter must be sure of the following:

(a) All records must be coded exactly as required by this Revenue Procedure. (b) The “C” Record must be followed by a State Totals “K” Record for each state being reported. (c) Payment amount totals and the valid participating state code must be included in the State Totals “K” Record. (d) The last “K” Record must be followed by an “A” Record or an End of Transmission “F” Record (if this is the last record of

the entire file).

Table 1. Participating States and Their Codes

State Code State Code State Code

Alabama 01 Hawaii 15 Mississippi 28 Arizona 04 Idaho 16 Missouri 29 Arkansas 05 Indiana 18 Montana 30 California 06 Iowa 19 New Jersey 34 Connecticut 08 Kansas 20 New Mexico 35 Delaware 10 Maine 23 North Dakota 38 District of Columbia 11 Massachusetts 25 South Carolina 45 Georgia 13 Minnesota 27 Wisconsin 55

Table 2. Dollar Criteria for State Reporting

1099- 1099- 1099- 1099- 1099- 1099- 1099STATE DIV G INT MISC OID PATR R 5498

May 21, 2001 1216 2001–21 I.R.B.

Table 2. Dollar Criteria for State Reporting (Continued)

1099- 1099- 1099- 1099- 1099- 1099- 1099STATE DIV G INT MISC OID PATR R 5498

The preceding list is for information purposes only. The state filing requirements are subject to change by the states. For complete information on state filing requirements, contact the appropriate state tax agencies.

Filing requirements for states in TABLE 1 not shown in TABLE 2 may be the same as the federal requirement.

NR = No filing requirement. Footnotes:

a All amounts are to be reported. b Amounts are for aggregates of several types of income from the same payer. c Missouri would prefer those returns filed with respect to non-Missouri residents to be sent directly to its state agency.

Sec. 17. Definition of Terms

Element Description

Asynchronous Protocols This type of data transmission is most often used by microcomputers, PCs and some minicomputers.

Asynchronous transmissions transfer data at arbitrary time intervals using the startstop method. Each character transmitted has its own start bit and stop bit.

ATIN A temporary taxpayer identification number assigned to a child who has been placed by an authorized placement agency in the household of a prospective adoptive parent prior to adoption. When the adoption becomes final, the adoptive parent must apply for a social security number for the child.

b/ Denotes a blank position. Enter blank(s) when this symbol is used (do not enter the letter “b”). This appears in numerous areas throughout the record descriptions.

Correction A correction is an information return submitted by the transmitter to correct an information return that was previously submitted to and processed by IRS/MCC, but contained erroneous information.

CUSIP Number A number developed by the Committee on Uniform Security Identification Procedures to serve as a common denominator in communications among users for security transactions and security information.

Employer Identification A nine-digit number assigned by IRS for Federal tax reporting purposes. Number (EIN)

Electronic Filing Submission of information returns using switched telecommunications network circuits. These transmissions use modems, dial-up phone lines, and asynchronous protocols. See Parts A and C of this publication for specific information on electronic filing.

File For purposes of this Revenue Procedure, a file consists of one Transmitter “T” Record at the beginning of the file, followed by a Payer “A” Record, Payee “B” Records, and an End of Payer “C” Record after each set of “B” Records. The last record on the file will be the End of Transmission “F” Record. Nothing should be reported after the End of Transmission “F” Record. A file format diagram is located at the end of Part E, Miscellaneous Information just before the mail labels.

Filer Person (may be payer and/or transmitter) submitting information returns to IRS.

Filing Year The actual year in which the information returns are being submitted to IRS.

Golden Parachute Payment A payment made by a corporation to a certain officer, shareholder, or highly compensated individual when a change in the ownership or control of the corporation

2001–21 I.R.B. 1217 May 21, 2001

Element Description

occurs or when a change in the ownership of a substantial part of the corporate assets occurs.

Incorrect Taxpayer A TIN may be incorrect for several reasons: Identification Number (a) The payee provided a wrong number or name (e.g., the payee is listed as the (Incorrect TIN) only owner of an account but provided someone else’s TIN). (b) A processing error (e.g., the number or name was typed incorrectly). (c) The payee’s status changed (e.g., a payee name change was not reported to the IRS or SSA).

Individual Taxpayer A nine-digit number issued by IRS to individuals who are required to have a U.S. Identification Number taxpayer identification number but are not eligible to obtain a social security number (ITIN) (SSN).

Information Return The vehicle for submitting required information about another person to IRS. Information returns are filed by financial institutions and by others who make certain types of payments as part of their trade or business. The information required to be reported on an information return includes interest, dividends, pensions, nonemployee compensation for personal services, stock transactions, sales of real estate, mortgage interest, and other types of information. For this Revenue Procedure, an information return is a Form 1098, 1098-E, 1098-T, 1099-A, 1099-B, 1099-C, 1099-DIV, 1099-G, 1099-INT, 1099-LTC, 1099-MISC, 1099-MSA, 1099-OID, 1099-PATR, 1099-R, 1099-S, 5498, 5498-MSA or W-2G.

ISDN - Integrated Services ISDN’s basic service is Basic Rate Interface (BRI) which is made up of two 64Kbps B Digital Network channels and one 16Kbps D Channel. If both channels are combined into one, called bonding, the total data rate becomes 128KPBS and is 4 1/2 times the bandwidth of a 28.8 modem.

Magnetic Media For this Revenue Procedure, the term “magnetic media” refers to 1/2 inch magnetic tape, IBM 3480, 3490, 3490E, 3590, 3590E, AS400 compatible tape cartridge (including 8mm, 4mm, and QIC), or 3 1/2-inch diskette.

Note: Beginning in calendar year 2003 for Tax Year 2002, 9 track magnetic tape will no longer be an acceptable type of media for submitting Information Returns to IRS/MCC.

Media Tracking Slip Form 9267 accompanies correspondence sent by IRS/MCC requesting a replace(Form 9267) ment file due to incorrect format or errors encountered when trying to process the media. This must be returned with the replacement file .

Missing Taxpayer The payee TIN on an information return is missing if: Identification Number (a) there is no entry in the TIN field, (Missing TIN) (b) it includes one or more alpha characters (a character or symbol other than an

Arabic number) as one of the nine digits, OR (c) the payee TIN has less than nine digits.

PS 58 Costs The current cost of life insurance under a qualified plan taxable under section 72(m) and Regulations section 1.72-16(b). (See Part B, Sec.10(15) Payee “B” Record, Distribution Code, Category of Distribution, Code 9.)

Payee Person or organization receiving payments from the payer, or for whom an information return must be filed. The payee also includes a student (Form 1098-T), borrower (Forms 1098, 1098-E, and 1099-A), a debtor (Form 1099-C), a policyholder or insured (Form 1099-LTC), any IRA plan participant (Form 5498) or MSA or Medicare+Choice MSA participant (Form 5498-MSA), and a gambling winner (Form W-2G). For Form 1099-S, the payee is the seller or other transferor.

Payer Includes the person making payments, a recipient of mortgage or student loan interest payments, an educational institution, a broker, a person reporting a real estate transaction, a barter exchange, a creditor, a trustee or issuer of any IRA or MSA plan, and a lender who acquires an interest in secured property or who has reason to know that the property has been abandoned. The payer will be held responsible for the completeness, accuracy, and timely submission of magnetic/electronic files.

May 21, 2001 1218 2001–21 I.R.B.

Element Description

PIN - Personal Identification This number is assigned by the user when the logon name and password is established. Number Each time the file is sent, the user will be prompted to enter the PIN. The PIN will allow IRS/MCC to release the file for processing and replaces the Form 4804 .

Replacement A replacement is an information return file sent by the filer at the request of IRS/MCC because of errors encountered while processing the filer’s original submission.

Note 1: Filers should never submit media to IRS/MCC marked “Replacement” unless IRS/MCC has requested a replacement file in writing or via the FIRE System. When sending a magnetic media “Replacement” file, be sure to include the Media Tracking Slip (Form 9267). Media that has been incorrectly marked as Replacement may result in duplicate filing.

Note 2: IRS/MCC is no longer returning problem media in need of replacement.

Service Bureau Person or organization with whom the payer has a contract to prepare and/or submit information return files to IRS/MCC. A parent company submitting data for a subsidiary is not considered a service bureau.

Social Security Number A nine-digit number assigned by SSA to an individual for wage and tax reporting (SSN) purposes.

Special Character Any character that is not a numeric, an alpha, or a blank.

SSA Social Security Administration.

Taxpayer Identification Refers to either an Employer Identification Number (EIN), Social Security Number Number (TIN) (SSN), Individual Taxpayer Identification Number (ITIN), or Adoption Taxpayer Identification Number (ATIN).

Tax Year Generally, the year in which payments were made by a payer to a payee.

Transfer Agent The transfer agent, or paying agent, is the entity who has been contracted or authorized by the payer to perform the services of paying and reporting backup withholding (Form 945).

Transmitter Refers to the person or organization submitting file(s) magnetically/electronically. The transmitter may be the payer or agent of the payer.

Transmitter Control Code A five character alpha/numeric number assigned by IRS/MCC to the transmitter prior to (TCC) actually filing magnetically or electronically. This number is inserted in the Transmitter “T” Record of the file and must be present before the file can be processed. An application Form 4419 must be filed with IRS/MCC to receive this number.

Vendor Vendors include service bureaus that produce information return files on the prescribed types of magnetic media or via electronic filing for payers. Vendors also include companies who provide software for payers who wish to produce their own media or electronic files.

Sec. 18. State Abbreviations

.01 The following state and U.S. territory abbreviations are to be used when developing the state code portion of address fields. This table provides state and territory abbreviations only, and does not represent those states participating in the Combined Federal/State Filing Program.

State Code State Code State Code

Alabama AL Kentucky KY Ohio OH Alaska AK Louisiana LA Oklahoma OK American Samoa AS Maine ME Oregon OR Arizona AZ Marshall Islands MH Pennsylvania PA Arkansas AR Maryland MD Puerto Rico PR California CA Massachusetts MA Rhode Island RI

2001–21 I.R.B. 1219 May 21, 2001

State Code State Code State Code

Colorado CO Michigan MI South Carolina SC Connecticut CT Minnesota MN South Dakota SD Delaware DE Mississippi MS Tennessee TN District of Columbia DC Missouri MO Texas TX Federated States of Montana MT Utah UT Micronesia FM Nebraska NE Vermont VT Florida FL Nevada NV Virginia VA Georgia GA New Hampshire NH (U.S.) Virgin Islands VI Guam GU New Jersey NJ Washington WA Hawaii HI New Mexico NM West Virginia WV Idaho ID New York NY Wisconsin WI Illinois IL North Carolina NC Wyoming WY Indiana IN North Dakota ND Iowa IA Northern Kansas KS Mariana Islands MP

.02 Filers must adhere to the city, state, and ZIP Code format for U. S. addresses in the “B” Record. This also includes American Samoa, Federated States of Micronesia, Guam, Marshall Islands, Northern Mariana Islands, Puerto Rico, and the U. S. Virgin Islands.

.03 For foreign country addresses, filers may use a 51 position free format which should include city, province or state, postal code, and name of country in this order. This is allowable only if a “1” (one) appears in the Foreign Country Indicator, Field Position 247, of the “B” Record. .04 When reporting APO/FPO addresses use the following format:

EXAMPLE :

Payee Name PVT Willard J. Doe Mailing Address Company F, PSC Box 100 167 Infantry REGT Payee City APO (or FPO) Payee State AE, AA, or AP ***** Payee ZIP Code 098010100

***** AE is the designation for ZIPs beginning with 090-098, AA for ZIP 340, and AP for ZIPs 962-966.

Sec. 19. Major Problems Encountered

IRS/MCC encourages filers to verify the format and content of each type of record to ensure the accuracy of the data. This may eliminate the need for IRS/MCC to request replacement files. This may be important for those payers who have either had their files prepared by a service bureau or who have purchased preprogrammed software packages.

Filers who engage a service bureau to prepare media on their behalf should be careful not to report duplicate data which may generate penalty notices .

The Major Problems Encountered lists some of the most frequently encountered problems with magnetic/electronic files submitted to IRS/MCC. These problems may result in IRS/MCC requesting replacement files. Some of the problems resulted from not referring to this publication for instructions.

1. Incorrect Format

• No Transmitter “T” Record - These files began with a Payer “A” Record. All files must begin with a Transmitter “T” Record.

• Invalid record length - Records not 750 Positions in length .

• Multiple Files on diskettes - Filers sending multiple files on diskettes. Please refer to Part B, Section 5. A file consists of one Transmitter “T” Record followed by a Payer “A” Record, Payee “B” Records, End of Payer “C” Record, State Totals “K” Record (if applicable for CF/SF Program), and the End of Transmission “F” Record. A file can contain mul- tiple Payer “A” Records, but, only one Transmitter “T” Record. A file format diagram is located at the end of Part E, Miscellaneous Information just before the mail labels.

IRS/MCC continues to receive prior year data in prior year format instead of current year format. Never send prior year data in prior year format. Be sure to use the current Revenue Procedure (Publication 1220) for formatting data for prior years.

May 21, 2001 1220 2001–21 I.R.B.

2. No Form 4804, Transmittal of Information Returns Reported Magnetically

Each shipment of media sent to IRS/MCC must include a Form 4804. More than one type of media may be sent in the same shipment, (i.e., a tape, a diskette, or a tape cartridge) but must have a separate Form 4804 to accompany each type of media . In the following example, three separate Forms 4804 would be required in the total shipment. However, multiples of one type of media (i.e., 6 diskettes) may be covered by one Form 4804.

EXAMPLE:

A & B Company sends in one shipment of the following magnetic media:

2 Diskettes = 1 Form 4804 covers both diskettes 3 Tape Cartridges = 1 Form 4804 covers all three cartridges Total Number of Forms 4804 for the above shipment = 2 Forms 4804

Note: Form 4804 is no longer needed for electronic filing.

3. Discrepancy Between IRS/MCC Totals and Totals in Payer “C” Records

The “C” Record is a summary record for a type of return for a given payer as reported in the “B” Records. IRS balances the total number of payees and payment amounts and compares them with totals in the “C” Records. Filers should verify the accuracy of the records because imbalances may necessitate a request for replacement files.

4. The Payment Amount Fields in the “B” Record Do Not Correspond to the Amount Codes in the “A” Record

If codes 2, 4, and 7 appear in the Amount Codes Field of the “A” Record, then the “B” Record must show payment amounts in only Payment Amount Fields 2, 4, and 7, right-justified and unused positions must be zero (0) filled.

EXAMPLE: “A” RECORD 247b/b/b/b/b/b/b/b/b/ —- (b/ denotes a blank) (Pos. 28-39) “B” RECORD 000000867599 —- (Payment Amount 2) (Pos. 67-78)

000000709097 —- (Payment Amount 4) (Pos. 91-102)

000000044985 —- (Payment Amount 7) (Pos. 127-138)

5. Blanks or Invalid Characters Appear in Payment Amount Fields in the “B” Record

Money amounts must be right-justified and zero (0) filled. Do not use blanks.

6. Incorrect TIN in Payer “A” Record

The Payer’s TIN reported in positions 12-20 of the “A” Record must be nine numeric characters (no alphas or special characters) in order for IRS/MCC to process the media. The TIN provided in the “A” Record must correspond with the name provided in the first payer name line.

7. Incorrect Tax Year in the Transmitter “T” Record, Payer “A” Record and the Payee “B” Record

The tax year in the transmitter, payer and payee records should reflect the year of the information being reported. Filers need to check their files to ensure this information is correct.

8. Incorrect Reporting of Form W-2 Information to IRS

Form W-2 information is submitted to SSA, and not to IRS/MCC. SSA has its own magnetic media reporting program and specifications for wage information, and the media containing Forms W-2 is submitted to SSA. Any media received at IRS/MCC that contains Form W-2 information will be forwarded to SSA. The filer will be notified of this action by letter. To inquire about filing Form W-2 information magnetically, call 1-800-SSA-6270.

9. Excessive Withholding Credits

Generally, for most information returns, other than Forms 1099-MISC, 1099-R, and W-2G, Federal withholding amounts should not exceed 31 percent (backup withholding rate) of the income reported. Validate the total reported in the withholding field against the total income reported.

2001–21 I.R.B. 1221 May 21, 2001

10. Incorrect Format for TINs in the Payee “B” Record

A check of “B” records should be made to ensure the Taxpayer Identification Numbers (TINs) are formatted correctly. There should be nine numerics, no alphas, hyphens, commas, or blanks . Incorrect formatting of TINs may result in a penalty.

IRS/MCC contacts filers who have submitted payee data with missing TINs in an attempt to prevent errors that could result in penalties. Payers/transmitters who submit data with missing TINs, and have taken the required steps to obtain this information are encouraged to attach a letter of explanation to the required Form 4804. This will prevent unnecessary contact from IRS/MCC. This letter, however, will not prevent backup withholding notices (CP2100 and CP2100A Notices) or proposed penalties (Notices 972CG) for missing or incorrect TINs. For penalty information, refer to the Penalty section of the 2001 “General Instructions for Forms 1099, 1098, 5498, and W-2G .”

11. Distribution Codes for Form 1099-R Reported Incorrectly

Distribution codes for Form 1099-R are being reported incorrectly or are not being reported. See valid distribution codes for Form 1099-R in the Payee “B” Record Layout, Field Positions 545-546.

12. Incorrect Record Totals Listed on Form 4804

The Combined Total Payee Records listed on the Form 4804 (Block 11) are used in the verification process of information returns. The figure in this block should be the total number of Payee “B” Records contained on the media submitted with the Form 4804. The figures on the Form 4804 are compared against the total number of Payee “B” Records processed on the media. Imbalances may necessitate a request for a replacement file.

13. Invalid Use of IRA/SEP/SIMPLE Indicator (Form 1099-R)

The IRA/SEP/SIMPLE indicator for Form 1099-R should be used for the reporting of a distribution from a traditional IRA/SEP/SIMPLE or a Roth conversion. The total amount distributed from a traditional IRA/SEP/SIMPLE or a Roth conversion should be reported in Payment Amount Field A as well as Payment Amount Field 1.

14. Failure To Identify the Rollover Contributions and/or Fair Market Value of the Account for Form 5498.

Rollover contributions (Amount Code 2 of the “A” Record) and/or fair market value of the account (Amount Code 5 of the “A” Record) for Form 5498 must be identified as an IRA (position 547 of the “B” Record), SEP (position 548 of the “B” Record), SIMPLE (position 549 of the “B” Record), Roth IRA (position 550 of the “B” Record), or Education IRA (position 552 of the “B” Record).

15. Media Received Without Data

Transmitters/filers should verify the presence of Form 1099 information returns on the media before sending the shipment to IRS/MCC.

Part B. Magnetic Media Specifications

Sec. 1. General

.01 The specifications contained in this part of the Revenue Procedure define the required format and contents of the records to be included in the magnetic media/electronic file.

.02 A provision is made in the “B” Records for entries which are optional. If the field is not used, enter blanks to maintain a fixed record length of 750 positions. Each field description explains the intended use of specific field positions.

.03 Transmitters should be consistent in the use of recording codes and density on files. If the media does not meet these specifications, IRS/MCC will request a replacement file. Filers are encouraged to submit a test prior to submitting the actual file. Contact IRS/MCC for further information at 304-263-8700.

Sec. 2. Tape Specifications

Note: Beginning in calendar year 2003 for Tax Year 2002, 9 track magnetic tape will no longer be an acceptable method for submitting Information Returns to IRS/MCC.

.01 IRS/MCC can process most magnetic tape files if the following specifications are followed:

(a) 9 track EBCDIC (Extended Binary Coded Decimal Interchange Code) with:

(1) Odd parity.

May 21, 2001 1222 2001–21 I.R.B.

(2) A density of 1600 or 6250 BPI. (3) If transmitters use UNISYS Series 1100, they must submit an interchange tape. (b) 9 track ASCII (American Standard Coded Information Interchange) with:

(1) Odd parity. (2) A density of 1600 or 6250 BPI. .02 All compatible tape files must have the following characteristics: Type of tape - 1/2-inch (12.7 mm) wide, computer-grade magnetic tape on reels of up to 2,400 feet (731.52 m) within the following specifications:

(a) Tape thickness: 1.0 or 1.5 mils and (b) Reel diameter: 10 1/2-inch (26.67 cm), 8 1/2-inch (21.59 cm), 7-inch (17.78 cm), or 6-inch. .03 The tape records defined in this Revenue Procedure may be blocked subject to the following:

(a) A block must not exceed 32,250 tape positions. (b) If the use of blocked records would result in a short block, all remaining positions of the block must be filled with 9s; how ever, the last block of the file may be filled with 9s or truncated. Do not pad a block with blanks. (c) All records, except the header and trailer labels, may be blocked or unblocked. A record may not contain any control fields

or block descriptor fields which describe the length of the block or the logical records within the block. The number of logical records within a block (the blocking factor) must be constant in every block with the exception of the last block which may be shorter (see item (b) above). The block length must be evenly divisible by 750. (d) Records may not span blocks. .04 Labeled or unlabeled tapes may be submitted. .05 For the purposes of this Revenue Procedure the following must be used:

Tape Mark: (a) Signifies the physical end of the recording on tape. (b) For even parity, use BCD configuration 001111 (8421). (c) May follow the header label and precede and/or follow the trailer label. .06 IRS/MCC can only read one data file on a tape. A data file is a group of records which may or may not begin with a tapemark, but must end with a trailer label. Any data beyond the trailer label cannot be read by IRS programs.

Sec. 3. Tape Cartridge Specifications

.01 In most instances, IRS/MCC can process tape cartridges that meet the following specifications:

(a) Must be IBM 3480, 3490, 3490E, 3590, 3590E or AS400 compatible. (b) Must meet American National Standard Institute (ANSI) standards, and have the following characteristics:

(1) Tape cartridges will be 1/2-inch tape contained in plastic cartridges which are approximately 4-inches by 5-inches by

1-inch in dimension. (2) Magnetic tape will be chromium dioxide particle based 1/2-inch tape. (3) Cartridges must be 18-track, 36-track, 128-track or 256-track parallel (See Note ). (4) Cartridges will contain 37,871 CPI, 75,742 CPI, or 3590 CPI (characters per inch). (5) Mode will be full function. (6) The data may be compressed using EDRC (Memorex) or IDRC (IBM) compression. (7) Either EBCDIC (Extended Binary Coded Decimal Interchange Code) or ASCII (American Standard Coded Informa

tion Interchange) may be used. .02 The tape cartridge records defined in this Revenue Procedure may be blocked subject to the following:

(a) A block must not exceed 32,250 tape positions. (b) If the use of blocked records would result in a short block, all remaining positions of the block must be filled with 9s; how ever, the last block of the file may be filled with 9s or truncated. Do not pad a block with blanks. (c) All records, except the header and trailer labels, may be blocked or unblocked. A record may not contain any control fields

or block descriptor fields which describe the length of the block or the logical records within the block. The number of logical records within a block (the blocking factor) must be constant in every block with the exception of the last block which may be shorter (see item (b) above). The block length must be evenly divisible by 750. (d) Records may not span blocks. .03 Tape cartridges may be labeled or unlabeled. .04 For the purposes of this Revenue Procedure, the following must be used:

Tape Mark: (a) Signifies the physical end of the recording on tape. (b) For even parity, use BCD configuration 001111 (8421). (c) May follow the header label and precede and/or follow the trailer label.

Note: Filers should indicate on the external media label and transmittal Form 4804 whether the cartridge is 18-track, 36-track, 128-track or 256-track .

2001–21 I.R.B. 1223 May 21, 2001

Sec. 4. 8mm, 4mm, and Quarter-Inch Cartridge Specifications

.01 In most instances, IRS/MCC can process 8mm tape cartridges that meet the following specifications: (a) Must meet American National Standard Institute (ANSI) standards, and have the following characteristics:

(1) Created from an AS400 operating system only. (2) 8mm (.315-inch) tape cartridges will be 2 1/2-inch by 3 3/4-inch. (3) The 8mm tape cartridges must meet the following specifications:

Tracks Density Capacity 1 20 (43245 BPI) 2.3 Gb 1 21 (45434 BPI) 5 Gb

(4) Mode will be full function. (5) Compressed data is not acceptable. (6) Either EBCDIC (Extended Binary Coded Decimal Interchange Code) or ASCII (American Standard Coded Informa tion Interchange) may be used. However, IRS/MCC encourages the use of EBCDIC. This information must appear on the external media label affixed to the cartridge. (7) A file may consist of more than one cartridge; however, no more than 250,000 documents may be transmitted per file or

per cartridge. The filename, for example, IRSTAX, will contain a three digit extension. The extension will indicate the sequence of the cartridge within the file (e.g., 1 of 3, 2 of 3, and 3 of 3 will appear in the header label as IRSTAX.001, IRSTAX.002, and IRSTAX.003 on each cartridge of the file). The Transmitter “T” Record must only appear on the first cartridge. The End of Transmission “F” Record should be placed only on the last cartridge for files containing multiple cartridges. .02 The 8mm (.315-inch) tape cartridge records defined in this Revenue Procedure may be blocked subject to the following:

(a) A block must not exceed 32,250 tape positions. (b) If the use of blocked records would result in a short block, the last block of the file may be filled with 9s or truncated. (c) All records, except the header and trailer labels, may be blocked or unblocked. A record may not contain any control fields

or block descriptor fields which describe the length of the block or the logical records within the block. The number of logical records within a block (the blocking factor) must be constant in every block with the exception of the last block which may be shorter (see item (b) above). The block length must be evenly divisible by 750. (d) Various COPY commands have been successful; however, the SAVE OBJECT COMMAND is not acceptable . (e) Extraneous data following the “F” Record will result in IRS/MCC requesting a replacement file. (f) Records may not span blocks. (g) No more than 250,000 documents per cartridge and per file.

Note: Advanced Metal Evaporated (AME) cartridges are not acceptable.

.03 For faster processing, IRS/MCC encourages transmitters to use header labeled cartridges. IRSTAX may be used as a suggested filename.

.04 For the purposes of this Revenue Procedure, the following must be used:

Tape Mark: (a) Signifies the physical end of the recording on tape. (b) For even parity, use BCD configuration 001111 (8421). (c) May follow the header label and precede and/or follow the trailer label. .05 If extraneous data follows the End of Transmission “F” Record, IRS/MCC will request a replacement file. Therefore, IRS/MCC encourages transmitters to use blank tape cartridges, rather than cartridges previously used, in the preparation of data when submitting information returns.

.06 IRS/MCC can only read one data file on a tape. A data file is a group of records which may or may not begin with a tapemark, but must end with a trailer label. Any data beyond the trailer label cannot be read by IRS programs.

.07 4mm (.157-inch) cassettes are now acceptable with the following specifications:

(a) 4mm cassettes will be 2 1/4-inch by 3-inch. (b) The tracks are 1 (one). (c) The density is 19 (61000 BPI). (d) The typical capacity is DDS (DAT data storage) at 1.3 Gb (60 meter) or 2 Gb (90 meter), or DDS-2 at 4Gb (120 meter). (e) The general specifications for 8mm cartridges also apply to the 4mm cassettes.

Note: 4mm cassettes with a capacity of DDS-3 (125 meter) are not acceptable.

.08 Various Quarter-Inch Cartridges (QIC) (1/4-inch) are also acceptable.

(a) QIC cartridges will be 4” by 6”. (b) QIC cartridges must meet the following specifications:

May 21, 2001 1224 2001–21 I.R.B.

Size Tracks Density Capacity QIC-24 8/9 5 (8000 BPI) 45Mb or 60Mb QIC-120 15 15 (10000 BPI) 120Mb or 200Mb QIC-150 18 16 (10000 BPI) 150Mb or 250Mb QIC-525 26 17 (16000 BPI) 525Mb QIC-1000 30 21 (36000 BPI) 1Gb QIC-2Gb 42 34 (40640 BPI) 2Gb

(c) The general specifications that apply to 8mm cartridges also apply to QIC cartridges.

Sec. 5. 3 1/2-Inch Diskette Specifications

.01 To be compatible, a diskette file must meet the following specifications:

(a) 3 1/2-inches in diameter. (b) Data must be recorded in standard ASCII code. (c) Records must be a fixed length of 750 bytes per record. (d) Delimiter character commas (,) must not be used. (e) Positions 749 and 750 of each record have been reserved for use as carriage return/line feed (cr/lf) characters, if applicable. (f) Filename of IRSTAX must be used. Do not enter any other data in this field. If a file will consist of more than one diskette,

the filename IRSTAX will contain a three-digit extension. This extension will indicate the sequence of the diskettes within the file. For example, if the file consists of three diskettes, the first diskette will be named IRSTAX.001, the second will be IRSTAX.002, and the third will be IRSTAX.003. The first diskette, IRSTAX.001 will begin with a “T” Record and the third diskette, IRSTAX.003 will have an “F” Record at the end of the file. (g) A diskette will not contain multiple files as defined in Part A, Section 17. A file may have only ONE Transmitter “T”

Record. (h) Failure to comply with instructions will result in IRS/MCC requesting a replacement file. (i) Diskettes must meet one of the following specifications:

Capacity Tracks Sides/Density Sector Size 1.44 mb 96tpi hd 512 1.44 mb 135tpi hd 512 1.2 mb 96tpi hd 512 .02 IRS/MCC encourages transmitters to use blank or currently formatted diskettes when preparing files. If extraneous data follows the End of Transmission “F” Record, IRS/MCC will request a replacement file.

.03 IRS/MCC will only accept 3 1/2-inch diskettes created using MS-DOS. .04 3 1/2-inch diskettes created on a System 36 or AS400 are not acceptable . .05 Transmitters should check media for viruses before submitting it to IRS/MCC.

Sec. 6. Transmitter “T” Record - General Field Descriptions

.01 The Transmitter “T” Record identifies the entity transmitting the magnetic media/electronic file and contains information which is supplied on the Form 4804, Transmittal of Information Returns Reported Magnetically. The “T” Record has been created to facilitate current magnetic/electronic processing of information returns at IRS/MCC.

.02 The Transmitter “T” Record is the first record on each file and is followed by a Payer “A” Record. See Part A, Sec. 17, Definition of Terms, for the definition of file. A file format diagram is located at the end of Part E, Miscellaneous Information, just before the mail labels. A replacement file will be requested by IRS/MCC if the “T” Record is not present. For transmitters with multiple diskettes, refer to Sec. 5, 3 1/2-Inch Diskette Specifications.

.03 No money or payment amounts are reported in the Transmitter “T” Record. .04 For all fields marked “Required”, the transmitter must provide the information described under Description and Remarks. For those fields not marked “Required”, a transmitter must allow for the field, but may be instructed to enter blanks or zeros in the indicated field positions and for the indicated length.

.05 All records must be a fixed length of 750 positions. .06 The Transmitter “T” Record must be followed by the Payer “A” Record, which must be followed with Payee “B” Records; however, the initial record on each file must be a Transmitter “T” Record.

.07 All alpha characters entered in the “T” Record must be upper-case.

2001–21 I.R.B. 1225 May 21, 2001

Record Name: Transmitter “T” Record

Field Position Field Title Length Description and Remarks

1 Record Type 1 Required . Enter “T.”

2-5 Payment Year 4 Required. Enter “ 2001 ” (unless reporting prior year data; report the year which applies [1998, 1999, etc.] and set the Prior Year Data Indicator in field position 6).

6 Prior Year 1 Required. Enter “P” only if reporting prior year data; otherwise, Data enter blank. Indicator Do not enter a “P” if tax year is 2001.

7-15 Transmitter’s 9 Required . Enter the transmitter’s nine-digit Taxpayer Identification TIN Number. May be an EIN, SSN, or ITIN.

16-20 Transmitter 5 Required. Enter the five character alpha/numeric Transmitter Control Code Control Code (TCC) assigned by IRS/MCC. A TCC must be obtained to file data within this program.

21-22 Replacement Alpha 2 Required for replacement files only. Enter the alpha/numeric character Character which appears immediately following the TCC number on the Media Tracking Slip (Form 9267). The Form 9267 accompanies correspondence sent by IRS/MCC when files can not be processed. This field must be blank unless a replacement file has been requested. If the file is being replaced magnetically, information is required in this field. If the file was originally sent magnetically, but the replacement is being sent electronically, the information is required in this field. Otherwise, leave blank for electronic files. Left-justify information and fill unused positions with blanks. If this is not a replacement file, enter blanks.

23-27 Blank 5 Enter blanks.

28 Test File Indicator 1 Required for test files only. Enter a “T” if this is a test file; otherwise, enter a blank.

29 Foreign Entity Indicator 1 Enter a “1” (one) if the transmitter is a foreign entity. If the transmitter is not a foreign entity, enter a blank.

30-69 Transmitter Name 40 Required. Enter the name of the transmitter in the manner in which it is used in normal business. Left-justify and fill unused positions with blanks.

70-109 Transmitter Name 40 Enter any additional information that may be part of the name. Left (Continuation) justify information and fill unused positions with blanks.

110-149 Company Name 40 Required. Enter the name of the company to be associated with the address where correspondence should be sent.

150-189 Company Name 40 Enter any additional information that may be part of the name of (Continuation) the company where correspondence should be sent.

190-229 Company Mailing 40 Required. Enter the mailing address where correspondence should Address be sent.

Note: Any correspondence relating to problem media or electronic files will be sent to this address.

230-269 Company City 40 Required. Enter the city, town, or post office where correspondence should be sent.

270-271 Company State 2 Required. Enter the valid U. S. Postal Service state abbreviation. Refer to the chart of valid state codes in Part A, Sec.18.

May 21, 2001 1226 2001–21 I.R.B.

Record Name: Transmitter “T” Record (Continued)

Field Position Field Title Length Description and Remarks

272-280 Company ZIP Code 9 Required. Enter the valid nine-digit ZIP Code assigned by the U. S. Postal Service. If only the first five digits are known, left-justify information and fill unused positions with blanks.

281-295 Blank 15 Enter blanks

296-303 Total Number 8 Enter the total number of Payee “B” Records reported in the file. of Payees Right-justify information and fill unused positions with zeros.

304-343 Contact Name 40 Required. Enter the name of the person to be contacted if IRS/MCC encounters problems with the file or transmission.

344-358 Contact Phone 15 Required. Enter the telephone number of the person to contact Number & Extension regarding magnetic/electronic files. Omit hyphens. If no extension is available, left-justify information and fill unused positions with blanks. For example, the IRS/MCC Call Site phone number of 304263-8700 with an extension of 52345 would be 304263870052345.

359-360 Magnetic Tape File 2 Required for magnetic tape/tape cartridge filers only. Enter the Indicator letters “LS” (in uppercase only). Use of this field by filers using other types of media will be acceptable but is not required.

361-375 Electronic File Name For 15 Required. Use for an electronic file which “FILE STATUS” has a Replacement File indicated was rejected. Enter the ORIGINAL or CORRECTION electronic file name assigned by the IRS electronic FIRE system.

EXAMPLE: If you have sent an original file, the TCC is 44444 and it is your first original file, then the filename would be ORIG.44444.0001

If you are sending an original, correction, or test file, enter blanks.

376 Vendor Indicator 1 Required . Enter the appropriate code from the table below to indi- cate if your software was provided by a vendor or produced in- house.

Indicator Usage V Your software was purchased from a vendor or other outside source. I Your software was produced by in-house program- mers .

Note: In-house programmer is defined as an employee or a hired contract programmer. If your software is produced in- house the following Vendor information fields are not required.

377-416 Vendor Name 40 Required . Enter the name of the company from whom you purchased your software.

417-456 Vendor Mailing 40 Required. Enter the mailing address. Address

457-496 Vendor City 40 Required. Enter the city, town, or post office.

497-498 Vendor State 2 Required . Enter the valid U.S. Postal Service state abbre- viation. Refer to the chart of valid state codes in Part A, Sec. 18.

499-507 Vendor ZIP Code 9 Required. Enter the valid nine-digit ZIP Code assigned by the U.S. Postal Service. If only the first five digits are known, left-justify information and fill unused positions with blanks .

2001–21 I.R.B. 1227 May 21, 2001

Record Name: Transmitter “T” Record (Continued)

Field Position Field Title Length Description and Remarks

508-547 Vendor Contact 40 Required. Enter the name of the person who can be contacted Name concerning any software questions.

548-562 Vendor Contact Phone 15 Required. Enter the telephone number of the person to contact Number & Extension concerning software questions. Omit hyphens. If no extension is available, left-justify information and fill unused positions with blanks.

563-582 Vendor Contact 20 Required. Enter the email address of the person to contact Email Address concerning software questions.

583-748 Blank 186 Enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

Sec. 7. Transmitter “T” Record - Record Layout

190-229 230-269 270-271 272-280 281-295 296-303 304-343

497-498 499-507 508-547 548-562 563-582 583-748 749-750

May 21, 2001 1228 2001–21 I.R.B.

Sec. 8. Payer “A” Record - General Field Descriptions

.01 The Payer “A” Record identifies the person making payments, a recipient of mortgage or student loan interest payments, an educational institution, a broker, a person reporting a real estate transaction, a barter exchange, a creditor, a trustee or issuer of any IRA or MSA plan, and a lender who acquires an interest in secured property or who has reason to know that the property has been abandoned. The payer will be held responsible for the completeness, accuracy, and timely submission of magnetic/electronic files. The Payer “A” Record also provides parameters for the succeeding Payee “B” Records. IRS computer programs rely on the absolute relationship between the parameters and data fields in the “A” Record and the data fields in the “B” Records to which they apply.

.02 The number of “A” Records depends on the number of payers and the different types of returns being reported. The payment amounts for one payer and for one type of return should be consolidated under one “A” Record if submitted on the same file.

.03 Do not submit separate “A” Records for each payment amount being reported. For example, if a payer is filing Form 1099DIV to report Amount Codes 1, 2, and 3, all three amount codes should be reported under one “A” Record, not three separate “A” Records. For “B” Records that do not contain payment amounts for all three amount codes, enter zeros for those which have no payment to be reported.

.04 When reporting Form 1098, Mortgage Interest Statement, and Form 1098-E, Student Loan Interest Statement, the “A” Record will reflect the name and TIN of the recipient of the interest payment, (recipient/lender). The “B” Record will reflect the individual paying the interest (the borrower/payer of record) and the amount paid. When reporting Form 1099-LTC, Long-Term Care and Accelerated Death Benefits, the Payee Name Line of the “B” Record will reflect the policyholder. The name of the insured will be reported in Field Positions 557-596 of the Payee “B” Record . For Form 1099-S, Proceeds From Real Estate Transactions, the “A” Record will reflect the person responsible for reporting the transaction (the filer of the Form 1099-S) and the “B” Record will reflect the seller/transferor. When reporting Form 1098-T, Tuition Payments Statement, the “A” Record will reflect the name and TIN of the educational institution receiving tuition payments. The “B” Record will reflect the name and TIN of the student on whose behalf the tuition is being paid. Until regulations are adopted, no penalties will be imposed under IRC sections 6721 or 6722 for failure to file or furnish correct Forms 1098-E or 1098-T, if you made a good faith effort to file and furnish them.

.05 The second record on the file must be an “A” Record. A transmitter may include “B” Records for more than one payer on a tape or diskette. However, each group of “B” Records must be preceded by an “A” Record and followed by an End of Payer “C” Record. A single tape or diskette may contain different types of returns but the types of returns must not be intermingled. A separate “A” Record is required for each payer and each type of return being reported.

.06 All records must be a fixed length of 750 positions. .07 The initial record on a file must be a “T” Record followed by an “A” Record. IRS/MCC will accept an “A” Record after a “C” Record to report an additional payer or a different type of return. An “A” Record may be blocked with “B” Records. A file format diagram is located at the end of Part E, Miscellaneous Information, just before the mail labels.

.08 Do not begin any record at the end of a block or diskette and continue the same record into the next block or diskette. .09 All alpha characters entered in the “A” Record must be upper-case . .10 For all fields marked “Required”, the transmitter must provide the information described under Description and Remarks. For those fields not marked “Required”, a transmitter must allow for the field, but may be instructed to enter blanks or zeros in the indicated media position(s) and for the indicated length.

Record Name: Payer “A” Record

Field Position Field Title Length Description and Remarks

1 Record Type 1 Required. Enter “A.”

2-5 Payment Year 4 Required . Enter “ 2001 ” (unless reporting prior year data; report the year which applies [1999, 2000, etc.]).

6-11 Blank 6 Enter blanks.

12-20 Payer’s 9 Required. Must be the valid nine-digit Taxpayer Identification Taxpayer Number assigned to the payer. Do not enter blanks, hyphens, or Identification alpha characters. All zeros, ones, twos, etc., will have the effect Number of an incorrect TIN. (TIN)

Note: For foreign entities that are not required to have a TIN, this field must be blank. However, the Foreign Entity Indicator, position 52 of the “A” Record, must be set to “1” (one).

21-24 Payer Name 4 The Payer Name Control can be obtained only from the mail label Control on the Package 1099 that is mailed to most payers each December.

2001–21 I.R.B. 1229 May 21, 2001

Record Name: Payer “A” Record (Continued)

Field Position Field Title Length Description and Remarks

Package 1099 contains Form 7018-C, Order Blank for Forms, and the mail label on the package contains a four (4) character name control. If a Package 1099 has not been received or the Payer Name Control is unknown, this field must be blank filled. For a business, use the first four significant characters of the business name. Disregard the word “the” when it is the first word of the name, unless there are only two words in the name. A dash (-) and an ampersand (&) are the only acceptable special characters . Names of less than four (4) characters should be left-justified, filling the unused positions with blanks.

25 Last Filing 1 Enter a “1” (one) if this is the last year the payer will file; otherwise, Indicator enter blank. Use this indicator if the payer will not be filing information returns under this payer name and TIN in the future either magnetically, electronically, or on paper.

26 Combined 1 Required for the Combined Federal/State Filing Program. Enter Federal/State “1” (one) if participating in the Combined Federal/State Filing Program; Filer otherwise, enter blank. Refer to Part A, Sec. 16, for further information.

27 Type of 1 Required . Enter the appropriate code from the table below: Return

Type of Return Code 1098 3 1098-E 2 1098-T 8 1099-A 4 1099-B B 1099-C 5 1099-DIV 1 1099-G F 1099-INT 6 1099-LTC T 1099-MISC A 1099-MSA M 1099-OID D 1099-PATR 7 1099-R 9 1099-S S 5498 L 5498-MSA K W-2G W

28-39 Amount 12 Required . Enter the appropriate amount codes for the type of return Codes being reported. Generally, for each amount code entered in this (See Note ) field, a corresponding payment amount must appear in the Payee “B” Record. In most cases, the box numbers on paper information returns correspond with the amount codes used to file magnetically/electronically. However, if discrepancies occur, this Revenue Procedure governs.

May 21, 2001 1230 2001–21 I.R.B.

Record Name: Payer “A” Record (Continued)

Field Position Field Title Length Description and Remarks

Example of Amount Codes:

If position 27 of the Payer “A” Record is “A” (for 1099-MISC) and positions 28-39 are “1247ACb/b/b/b/b/b/”, this indicates the payer is reporting any or all six payment amounts (1247AC) in all of the following “B” Records. (In this example, “b/” denotes blanks in the designated positions. Do not enter the letter “b”.)

The first payment amount field (1) will represent rents; the second payment amount field (2) will represent royalties; the third payment amount field (3) will be all “0” (zeros); the fourth payment amount field (4) will represent Federal income tax withheld; the fifth and sixth payment amount fields (5 and 6) will be all “0” (zeros); the seventh payment amount field (7) will represent non-employee compensation; the eighth and ninth payment amount fields (8 and 9) will be all “0” (zeros); the tenth payment amount field (A) will represent crop insurance proceeds; the eleventh payment amount field (B) will be all “0” (zeros); and the twelfth payment amount field (C) will represent gross proceeds paid to an attorney in connection with legal services. Enter the amount codes in ascending sequence ( i.e., 1247ACb/b/b/b/b/b/), left-justify information, and fill unused positions with blanks. For further clarification of the amount codes, contact IRS/MCC.

Note: A type of return and an amount code must be present in every Payer “A” Record even if no money amounts are being reported. For a detailed explanation of the information to be reported in each amount code, refer to the appropriate paper instructions for each form.

Amount Codes Form 1098 - For Reporting Mortgage Interest Received From Mortgage Interest Payers/Borrowers (Payer of Record) on Form 1098: Statement

Amount Code Amount Type 1 Mortgage interest received from payer(s)/borrower(s) 2 Points paid on purchase of principal residence 3 Refund (or credit) of overpaid interest 4 Blank (Filer’s use)

Amount Codes Form 1098-E - For Reporting Interest on Student Loans on Student Loan Interest Form 1098-E Amount Code Amount Type 1 Student loan interest received by lender

Amount Codes Form 1098-T - For Reporting Tuition Payments on Form 1098-T: Tuition Payments Statement Amount Code Amount Type See the 2001 “Instructions for 1 Qualified tuition and related expenses Forms 1098-E and 1098-T” 2 Reimbursements or refunds for further Information 3 Scholarships or grants

Amount Codes Form 1099-A - For Reporting the Acquisition or Abandonment Acquisition or Abandonment of Secured Property on Form 1099-A: of Secured Property

2001–21 I.R.B. 1231 May 21, 2001

Record Name: Payer “A” Record (Continued)

Field Position Field Title Length Description and Remarks

Amount See the 2001 “Instructions for Code Amount Type Forms 1099-A and 1099-C” 2 Balance of principal outstanding for further information on 4 Fair market value of property coordination with Form 1099-C.

Amount Codes Form 1099-B - For Reporting Payments on Form 1099-B: Proceeds From Broker and Amount Barter Exchange Code Amount Type Transactions 2 Stocks, bonds, etc. (For forward contracts, see Note 1. ) 3 Bartering (Do not report negative amounts.) 4 Federal income tax withheld (backup withholding) (Do not report negative amounts.) 6 Profit (or loss) realized in 2001 7 Unrealized profit (or loss) on open contracts-12/31/2000 (See Note 2. ) 8 Unrealized profit (or loss) on open contracts-12/31/ 2001 (See Note 2. ) 9 Aggregate profit (or loss) (See Note 2. )

Note 1: The payment amount field associated with Amount Code 2 may be used to report a loss from a closing transaction on a forward contract. Refer to the “B” Record - General Field Descriptions and Record Layouts, Payment Amount Fields, for instructions on reporting negative amounts.

Note 2: Payment Amount Fields 6, 7, 8, and 9 are to be used for the reporting of regulated futures or foreign currency contracts .

Amount Codes Form 1099-C - For Reporting Cancellation of Debt on Form 1099-C: Cancellation of Debt

Amount Code Amount Type 2 Amount of debt canceled 3 Interest, if included in Amount Code 2 7 Fair market value of property (See Note )

Note: Use Amount Code 7 only if a combined Form 1099-A and 1099-C is being filed.

Amount Codes Form 1099-DIV - For Reporting Payments on Form 1099-DIV: Dividends and Distributions

Amount Code Amount Type See the 2001 “Instructions for 1 Ordinary dividends Form 1099-DIV” for further 2 Total capital gains distributions information. 3 28% rate gain 4 Qualified 5-year gain 5 Unrecaptured section 1250 gain 6 Section 1202 gain 7 Nontaxable distributions 8 Federal income tax withheld (backup withholding) 9 Investment expenses

May 21, 2001 1232 2001–21 I.R.B.

Record Name: Payer “A” Record (Continued)

Field Position Field Title Length Description and Remarks

Amount Code Amount Type A Foreign tax paid B Cash liquidation distribution C Noncash liquidation distribution

Amount Codes Form 1099-G - For Reporting Payments on Form 1099-G: Certain Government and Qualified State Tuition Program Payments Amount Code Amount Type 1 Unemployment compensation 2 State or local income tax refunds, credits, or offsets 4 Federal income tax withheld (backup withholding or voluntary withholding on unemployment compensation or Commodity Credit Corporation Loans, or certain crop disaster payments) 5 Qualified state tuition program earnings 6 Taxable grants 7 Agriculture payments

Amount Codes Form 1099-INT - For Reporting Payments on Form 1099-INT: Interest Income

Amount Code Amount Type 1 Interest income not included in Amount Code 3 2 Early withdrawal penalty 3 Interest on U.S. Savings Bonds and Treasury obligations 4 Federal income tax withheld (backup withholding) 5 Investment expenses 6 Foreign tax paid

Amount Codes Form 1099-LTC - For Reporting Payments on Form 1099-LTC: Long-Term Care and Accelerated Death Benefits Amount Code Amount Type 1 Gross long-term care benefits paid 2 Accelerated death benefits paid

Amount Codes Form 1099-MISC - For Reporting Payments on Form 1099-MISC: Miscellaneous Income (See Note 1 ) Amount Code Amount Type 1 Rents 2 Royalties (See Note 2 ) 3 Other income 4 Federal income tax withheld (backup withholding or withholding on Indian gaming profits) 5 Fishing boat proceeds

2001–21 I.R.B. 1233 May 21, 2001

Record Name: Payer “A” Record (Continued)

Field Position Field Title Length Description and Remarks

Amount Code Amount Type 6 Medical and health care payments 7 Nonemployee compensation 8 Substitute payments in lieu of dividends or interest A Crop insurance proceeds B Excess golden parachute payments C Gross proceeds paid to an attorney in connection with legal services

Note 1: When using the Direct Sales Indicator in position 547 of the Payee “B” Record, use Type of Return Code A and Amount Code 1 in the Payer “A” Record. All payment amount fields in the Payee “B” Record will contain zeros.

Note 2: Do not report timber royalties under a “pay-as-cut” contract; these must be reported on Form 1099-S .

Amount Codes Form 1099-MSA - For Reporting Distributions from a Medical Distributions From an MSA or Savings Account or Medicare+Choice MSA Medicare+Choice MSA on Form 1099-MSA:

Amount Code Amount Type 1 Gross distribution 2 Earnings on excess contributions 4 Fair market value of the account on date of death

Amount Codes Form 1099-OID - For Reporting Payments on Form 1099-OID: Original Issue Discount

Amount See the 2001 “Instructions for Code Amount Type Forms 1099-INT and 1099-OID ” 1 Original issue discount for 2001 for further reporting information. 2 Other periodic interest 3 Early withdrawal penalty 4 Federal income tax withheld (backup withholding) 6 Original issue discount on U.S. Treasury obligations 7 Investment expenses

Amount Codes Form 1099-PATR - For Reporting Payments on Form 1099-PATR: Taxable Distributions Received From Cooperatives Amount Code Amount Type 1 Patronage dividends 2 Nonpatronage distributions 3 Per-unit retain allocations 4 Federal income tax withheld (backup withholding) 5 Redemption of nonqualified notices and retain allocations Pass-Through Credits 6 For filer’s use for pass-through credits 7 Investment credit 8 Work opportunity credit

May 21, 2001 1234 2001–21 I.R.B.

Record Name: Payer “A” Record (Continued)

Field Position Field Title Length Description and Remarks

Pass-Through Credits

9 Patron’s alternative minimum tax (AMT) adjustment

Amount Codes Form 1099-R - For Reporting Payments on Form 1099-R: Distributions From Pensions, Annuities, Amount Retirement or Profit- Code Amount Type Sharing Plans, IRAs, 1 Gross distribution Insurance Contracts, etc. 2 Taxable amount (See Note 1. ) 3 Capital gain (included in Amount Code 2) 4 Federal income tax withheld 5 Employee contributions or insurance premiums 6 Net unrealized appreciation in employer’s securities 8 Other 9 Total employee contributions A Traditional IRA/SEP/SIMPLE distribution or Roth conversion (See Note 2. )

Note 1: If the taxable amount cannot be determined, enter a “1” (one) in position 547 of the “B” Record. For a traditional IRA, SEP, or SIMPLE distribution, generally enter in Payment Amount Field A the same amount entered in Payment Amount Field 1.

Note 2: For Form 1099-R, report the Roth conversion or total amount distributed from an IRA, SEP, or SIMPLE in Payment Amount Field A (IRA/SEP/SIMPLE distribution or Roth conversion) of the Payee “B” Record, and generally, the same amount in Payment Amount Field 1 (Gross Distribution). The IRA/SEP/SIMPLE indicator should be set in Field Position 548 of the Payee “B” Record.

Amount Codes Form 1099-S - For Reporting Payments on Form 1099-S: Proceeds From Real Estate Amount Transactions Code Amount Type 2 Gross proceeds (See Note. ) 5 Buyer’s part of real estate tax

Note: Include payments of timber royalties made under a “pay-as-cut” contract, reportable under IRC section 6050N. If timber royalties are being reported, enter “TIMBER” in the description field of the “B” Record.

Amount Codes Form 5498 - For Reporting Information on Form 5498: IRA Contribution Information

Amount Code Amount Type 1 IRA contributions (other than amounts in Amount Codes 2, 3, 4, 8, 9, A, and B) (See Notes 1 and 2. ) 2 Rollover contributions 3 Roth conversion amount 4 Recharacterized contributions 5 Fair market value of account 6 Life insurance cost included in Amount Code 1 8 SEP contributions 9 SIMPLE contributions

2001–21 I.R.B. 1235 May 21, 2001

Record Name: Payer “A” Record (Continued)

Field Position Field Title Length Description and Remarks

A Roth IRA contributions B Education IRA contributions

Note 1: If reporting IRA contributions for a participant in a military operation, see 2001 “ Instructions for Forms 1099-R and 5498 ”.

Note 2: Also include employee contributions to an IRA under a SEP plan but not salary reduction contributions. DO NOT include EMPLOYER contributions; these are included in Amount Code 8.

Amount Codes Form 5498-MSA- For Reporting Information on 5498-MSA: MSA or Medicare+Choice MSA Information Amount Code Amount Type 1 Employee or self-employed person’s MSA contributions made in 2001 and 2002 for 2001 2 Total contributions made in 2001 3 Total MSA contributions made in 2002 for 2001 4 Rollover contributions (See Note. ) 5 Fair market value of MSA or M+C MSA account on December 31, 2001

Note: This is the amount of any rollover made to this MSA in 2001 after a distribution from another MSA. For detailed information on reporting, see the 2001 “Instructions for Forms 1099-MSA and 5498-MSA.”

Amount Codes Form W-2G - For Reporting Payments on Form W-2G: Certain Gambling Winnings Amount Code Amount Type 1 Gross winnings 2 Federal income tax withheld 7 Winnings from identical wagers

40-47 Blank 8 Enter blanks.

48 Original File 1 Required for original files only. Enter “1” (one) if the information Indicator is original data. Otherwise, enter a blank.

49 Replacement 1 Required for replacement files only. Enter “1” (one) if this file is to File Indicator replace a file that IRS/MCC has informed you in writing can not be processed. Otherwise, enter a blank.

Note: If selecting the Replacement File Indicator in Position 49, Field Positions 48 and 50 must be blank. Only one indicator may be selected for each Payer “A” Record.

50 Correction 1 Required for correction files only. Enter “1” (one) if the purpose of File Indicator this file is to correct information which was previously submitted to IRS/MCC, was processed, but contained erroneous information. Do not submit original information as corrections. Any information return which was inadvertently omitted from a file must be submitted as original. Otherwise, enter a blank.

51 Blank 1 Enter a blank.

May 21, 2001 1236 2001–21 I.R.B.

Record Name: Payer “A” Record (Continued)

Field Position Field Title Length Description and Remarks

52 Foreign 1 Enter a “1” (one) if the payer is a foreign entity and income is paid Entity by the foreign entity to a U. S. resident. If the payer is not a foreign Indicator entity, enter a blank.

53-92 First 40 Required . Enter the name of the payer whose TIN appears in Payer Name positions 12-20 of the “A” Record. Any extraneous information Line must be deleted. Left-justify information, and fill unused positions with blanks. (Filers should not enter a transfer agent’s name in this field. Any transfer agent’s name should appear in the Second Payer Name Line Field.)

93-132 Second 40 If the Transfer (or Paying) Agent Indicator (position 133) contains Payer Name a “1” (one), this field must contain the name of the transfer (or Line paying) agent. If the indicator contains a “0” (zero), this field may contain either a continuation of the First Payer Name Line or blanks. Left-justify information and fill unused positions with blanks.

133 Transfer 1 Required . Identifies the entity in the Second Payer Name Line Agent Field. (See Part A, Sec. 17, for a definition of transfer agent.) Indicator

Code Meaning 1 The entity in the Second Payer Name Line Field is the transfer (or paying) agent. 0 (zero) The entity shown is not the transfer (or paying) agent (i.e., the Second Payer Name Line Field contains either a continuation of the First Payer Name Line Field or blanks).

134-173 Payer 40 Required . If the Transfer Agent Indicator in position 133 is a “1” Shipping (one), enter the shipping address of the transfer (or paying) agent. Address Otherwise, enter the actual shipping address of the payer. The street address should include number, street, apartment or suite number (or P. O. Box if mail is not delivered to street address). Left-justify information, and fill unused positions with blanks.

For U.S. addresses, the payer city, state, and ZIP Code must be reported as a 40, 2, and 9 position field, respectively. Filers must adhere to the correct format for the payer city, state, and ZIP Code.

For foreign addresses, filers may use the payer city, state, and ZIP Code as a continuous 51 position field. Enter information in the following order: city, province or state, postal code, and the name of the country. When reporting a foreign address, the Foreign Entity Indicator in position 52 must contain a “1” (one).

174-213 Payer City 40 Required . If the Transfer Agent Indicator in position 133 is a “1” (one), enter the city, town, or post office of the transfer agent. Otherwise, enter the city, town, or post office of the payer . Left-justify information, and fill unused positions with blanks. Do not enter state and ZIP Code information in this field.

214-215 Payer State 2 Required . Enter the valid U.S. Postal Service state abbreviations. Refer to the chart of valid state abbreviations in Part A, Sec. 18.

216-224 Payer ZIP 9 Required . Enter the valid nine-digit ZIP Code assigned by the U.S. Code Postal Service. If only the first five digits are known, left-justify information and fill the unused positions with blanks. For foreign countries, alpha characters are acceptable as long as the filer has entered a “1” (one) in the Foreign Entity Indicator, located in Field Position 52 of the “A” Record.

2001–21 I.R.B. 1237 May 21, 2001

Record Name: Payer “A” Record (Continued)

Field Position Field Title Length Description and Remarks

225-239 Payer Phone 15 Enter the payer’s phone number and extension. Number & Extension

240-748 Blank 509 Enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

Sec. 9. Payer “A” Record - Record Layout

174-213 214-215 216-224 225-239 240-748 749-750

Sec. 10. Payee “B” Record - General Field Descriptions and Record Layouts

.01 The “B” Record contains the payment information from the information returns. When filing information returns, the format for the “B” Records will remain constant and is a fixed length of 750 positions. The record layout for field positions 1 through 543 is the same for all types of returns. Field positions 544 through 750 vary for each type of return to accommodate special fields for individual forms. In the “A” Record, the amount codes that appear in field positions 28 through 39 will be left-justified and filled with blanks. In the “B” Record, the filer must allow for all twelve Payment Amount Fields. For those fields not used, enter “0s” (zeros). For example, a payer reporting on Form 1099-MISC should enter “A” in field position 27 of the “A” Record, Type of Return. If reporting payments for Amount Codes 1, 2, 4, 7, A and C, the payer would report field positions 28 through 39 of the “A” Record as “1247ACb/b/b/b/b/b/.” (In this example, “b/” denotes blanks. Do not enter the letter “b”.) In the “B” Record:

Positions 55 through 66 for Payment Amount 1 will represent rents. Positions 67-78 for Payment Amount 2 will represent royalties. Positions 79-90 for Payment Amount 3 will be “0’s” (zeros). Positions 91-102 for Payment Amount 4 will represent Federal income tax withheld. Positions 103-126 for Payment Amounts 5 and 6 will be “0’s” (zeros). Positions 127-138 for Payment Amount 7 will represent nonemployee compensation. Positions 139-162 for Payment Amounts 8 and 9 will be “0’s” (zeros). Positions 163-174 for Payment Amount A will represent crop insurance proceeds. Positions 175-186 for Payment Amount B will be “0’s” (zeros). Positions 187-198 for Payment Amount C will represent gross proceeds paid to an attorney in connection with legal services.

May 21, 2001 1238 2001–21 I.R.B.

.02 The following specifications include a field in the payee records called “Name Control” in which the first four characters of the payee’s surname are to be entered by the filer;

(a) If filers are unable to determine the first four characters of the surname, the Name Control Field may be left blank.

Compliance with the following will facilitate IRS computer programs in identifying the correct name control: (1) The surname of the payee whose TIN is shown in the “B” Record should always appear first. If, however, the records

have been developed using the first name first, the filer must leave a blank space between the first and last names. (2) In the case of multiple payees, only the surname of the payee whose TIN (SSN, EIN, ITIN, or ATIN) is shown in the “B”

Record must be present in the First Payee Name Line. Surnames of any other payees may be entered in the Second Payee Name Line. .03 See Part A, Sec. 14, for further information concerning Taxpayer Identification Numbers (TINs). .04 For all fields marked “Required”, the transmitter must provide the information described under Description and Remarks. For those fields not marked “Required”, the transmitter must allow for the field, but may be instructed to enter blanks or zeros in the indicated field position(s) and for the indicated length.

.05 All records must be a fixed length of 750 positions. .06 A field is also provided in these specifications for Special Data Entries. This field may be used to record information required by state or local governments, or for the personal use of the filer. IRS does not use the data provided in the Special Data Entries Field; therefore, the IRS program does not check the content or format of the data entered in this field. It is the filer’s option to use the Special Data Entry Field.

.07 Following the Special Data Entries Field in the “B” Record, payment fields have been allocated for State Income Tax Withheld and Local Income Tax Withheld. These fields are for the convenience of the filers. The information will not be used by IRS/MCC.

.08 Those payers participating in the Combined Federal/State Filing Program must adhere to all of the specifications in Part A, Sec. 16, to participate in this program. Filers may not file Forms 1098, 1098-E, 1098-T, 1099-A, 1099-B, 1099-C, 1099-LTC, 1099MSA, 1099-S, 5498-MSA, and W-2G under the Combined Federal/State Filing Program.

.09 All alpha characters in the “B” Record must be uppercase. .10 Do not use decimal points (.) to indicate dollars and cents. Ten dollars must appear as 000000001000 in the payment amount field.

.11 IRS strongly encourages transmitters to review the data for accuracy before submission to prevent issuance of erroneous notices. Transmitters should be especially careful that the names, TINs, account numbers, types of income, and income amounts are correct.

.12 When reporting Form 1098, Mortgage Interest Statement and Form 1098-E, Student Loan Interest Statement, the “A” Record will reflect the name and TIN of the recipient of the interest or payment (recipient/lender). The “B” Record will reflect the individual paying the interest (borrower/payer of record) and the amount paid. When reporting Form 1099-LTC, Long-Term Care and Accelerated Death Benefits, the Payee Name Line of the “B” Record will reflect the policyholder. The name of the insured will be reported in Field Positions 557-596 of the Payee “B” Record . For Form 1099-S, Proceeds From Real Estate Transactions, the “A” Record will reflect the person responsible for reporting the transaction (the filer of the Form 1099-S) and the “B” Record will reflect the seller/transferor. When reporting Form 1098-T, Tuition Payments Statement, the “A” Record will reflect the name and TIN of the educational institution receiving tuition payments. The “B” Record will reflect the name and TIN of the student on whose behalf the tuition is being paid.

Record Name: Payee “B” Record

Field Position Field Title Length Description and Remarks

1 Record Type 1 Required . Enter “B”.

2-5 Payment Year 4 Required . Enter “ 2001 ” (unless reporting prior year data; report the year which applies [1999, 2000, etc.]).

6 Corrected 1 Required for corrections only. Indicates a corrected return. Return Indicator (See Note .) Code Definition G If this is a one-transaction correction or the first of a two-transaction correction

C If this is the second transaction of a two transaction correction

Blank If this is not a return being submitted to correct information already processed by IRS.

2001–21 I.R.B. 1239 May 21, 2001

Record Name: Payee “B” Record (Continued)

Field Position Field Title Length Description and Remarks

Note: C, G, and non-coded records must be reported using separate Payer “A” Records. Refer to Part A, Sec. 13, for specific instructions on how to file corrected returns.

7-10 Name Control 4 If determinable, enter the first four characters of the surname of the person whose TIN is being reported in positions 12-20 of the “B” Record; otherwise, enter blanks . This usually is the payee. If the name that corresponds to the TIN is not included in the first or second payee name line and the correct name control is not provided, a backup withholding notice may be generated for the record. Surnames of less than four characters should be left-justified, filling the unused positions with blanks. Special characters and imbedded blanks should be removed. In the case of a business, other than a sole proprietorship, use the first four significant characters of the business name. Disregard the word “the” when it is the first word of the name, unless there are only two words in the name. A dash (-) and an ampersand (&) are the only acceptable special characters. Surname prefixes are considered, e.g., for Van Elm, the name control would be VANE. For a sole proprietorship use the name of the owner to create the name control and report the owner’s name in positions 248 – 287, First Payer Name Line.

Note: Imbedded blanks, extraneous words, titles, and special characters (i.e., Mr., Mrs., Dr., period [.], apostrophe [’]) should be removed from the Payee Name Lines. This information may be dropped during subsequent processing at IRS/MCC. A dash (-) and an ampersand (&) are the only acceptable special characters.

The following examples may be helpful to filers in developing the Name Control:

Name Name Control Individuals:

Jane Brow n BROW John A. Lee LEE ***** James P. En , Sr. EN ***** John O ’ Nei ll ONEI Mary Van B uren VANB Juan De Je sus DEJE Gloria A. El-R oy EL-R Mr. John Smit h SMIT Joe McCa rthy MCCA Pedro Torr es-Lopes TORR Maria Lope z Moreno ****** LOPE Binh To La LA ***** Nhat Thi Pham PHAM Mark D’All esandro DALL

Corporations:

The Firs t National Bank FIRS The H ideaway THEH A & B C afe A&BC 11TH Street Inc. 11TH

Sole Proprietor:

Mark Heml ock DBA The Sunshine Club HEML

May 21, 2001 1240 2001–21 I.R.B.

Record Name: Payee “B” Record (Continued)

Field Position Field Title Length Description and Remarks

Name Name Control Partnership:

Robert Aspe n and Bess Willow ASPE Harold Fir , Bruce Elm, and Joyce Spruce et al Ptr FIR *****

Estate:

Frank Whit e Estate WHIT Estate of Sheila Blue BLUE

Trusts and Fiduciaries:

Dais y Corporation Employee Benefit Trust DAIS Trust FBO The Cher ryblossom Society CHER

Exempt Organization:

Labo rer’s Union, AFL-CIO LABO St . Be rnard’s Methodist Church Bldg. Fund STBE

***** Name Controls of less than four significant characters must be left-justified and blank-filled. ** For Hispanic names, when two last names are shown for an individual, derive the name control from the first last name.

11 Type of 1 This field is used to identify the Taxpayer Identification Number TIN (TIN) in positions 12-20 as either an Employer Identification Number (EIN), a Social Security Number (SSN), an Individual Taxpayer Identification Number (ITIN) or an Adoption Taxpayer Identification Number (ATIN). Enter the appropriate code from the following table: Code Type of TIN Type of Account 1 EIN A business, organization, sole proprietor, or other entity 2 SSN An individual, including a sole proprietor or 2 ITIN An individual required to have a taxpayer identification number, but who is not eligible to obtain an SSN or 2 ATIN An adopted individual prior to the assignment of a social security number Blank N/A If the type of TIN is not determinable, enter a blank.

12-20 Payee’s 9 Required . Enter the nine digit Taxpayer Identification Number of Taxpayer the payee (SSN, ITIN, ATIN, or EIN). If an identification number Identification has been applied for but not received, enter blanks. Do not enter Number hyphens or alpha characters. All zeros, ones, twos, etc., will have (TIN) the effect of an incorrect TIN. If the TIN is not available, enter blanks . Payers who submit data with missing TINs, and have taken the required steps to obtain this information, should con- tact IRS/MCC by telephone or mail.

21-40 Payer’s 20 Enter any number assigned by the payer to the payee (e.g., checking Account Number or savings account number). Filers are encouraged to use this field. For Payee This number helps to distinguish individual payee records and should be unique for each document. Do not use the payee’s TIN

2001–21 I.R.B. 1241 May 21, 2001

Record Name: Payee “B” Record (Continued)

Field Position Field Title Length Description and Remarks

since this will not make each record unique. This information is particularly useful when corrections are filed. This number will be provided with the backup withholding notification and may be helpful in identifying the branch or subsidiary reporting the transaction. Do not define data in this field in packed decimal format. If fewer than twenty characters are used, filers may either left or right-justify, filling the remaining positions with blanks.

41-44 Payer’s Office 4 Enter office code of payer; otherwise, enter blanks. For payers Code with multiple locations, this field may be used to identify the location of the office submitting the information return. This code will also appear on backup withholding notices.

45-54 Blank 10 Enter blanks.

Payment Required. Filers should allow for all payment amounts. For Amount Fields those not used, enter zeros. See Sec. 10.01 for a detailed example. (Must be numeric) Each payment field must contain 12 numeric characters. Each payment (See Note. ) amount must contain U.S. dollars and cents. The right-most two positions represent cents in the payment amount fields. Do not enter dollar signs, commas, decimal points, or negative payments, except those items that reflect a loss on Form 1099-B. Positive and negative amounts are indicated by placing a “+” (plus) or “-” (minus) sign in the left-most position of the payment amount field. A negative over punch in the units position may be used, instead of a minus sign, to indicate a negative amount. If a plus sign, minus sign, or negative over punch is not used, the number is assumed to be positive. Negative over punch cannot be used in PC created files. Payment amounts must be right-justified and unused positions must be zerofilled. Federal income tax withheld cannot be reported as a neg- ative amount on any form .

Note: Filers must enter numeric information in all payment fields when filing magnetically or electronically. However, when reporting information on the statement to the recipient, the payer may be instructed to leave a box blank. Follow the guidelines provided in the paper instructions for the statement to the recipient.

55-66 Payment 12 The amount reported in this field represents payments for Amount Amount 1 * Code 1 in the “A” Record.

67-78 Payment 12 The amount reported in this field represents payments for Amount 2 * Amount Code 2 in the “A” Record.

79-90 Payment 12 The amount reported in this field represents payments for Amount 3 * Amount Code 3 in the “A” Record.

91-102 Payment 12 The amount reported in this field represents payments for Amount 4 * Amount Code 4 in the “A” Record.

103-114 Payment 12 The amount reported in this field represents payments for Amount 5 * Amount Code 5 in the “A” Record.

115-126 Payment 12 The amount reported in this field represents payments for Amount 6 * Amount Code 6 in the “A” Record.

127-138 Payment 12 The amount reported in this field represents payments for Amount 7 * Amount Code 7 in the “A” Record.

139-150 Payment 12 The amount reported in this field represents payments for Amount 8 ***** Amount Code 8 in the “A” Record.

May 21, 2001 1242 2001–21 I.R.B.

Record Name: Payee “B” Record (Continued)

Field Position Field Title Length Description and Remarks

151-162 Payment 12 The amount reported in this field represents payments for Amount 9 * Amount Code 9 in the “A” Record.

163-174 Payment 12 The amount reported in this field represents payments for Amount A * Amount Code A in the “A” Record.

175-186 Payment 12 The amount reported in this field represents payments for Amount B * Amount Code B in the “A” Record.

187-198 Payment 12 The amount reported in this field represents payments for Amount C ***** Amount Code C in the “A” Record.

*If there are discrepancies between the payment amount fields and the boxes on the paper forms, the instructions in this Revenue Procedure govern.

199-246 Reserved 48 Enter blanks.

247 Foreign 1 If the address of the payee is in a foreign country, enter a “1” Country (one) in this field ; otherwise, enter blank. When filers use this Indicator indicator, they may use a free format for the payee city, state, and ZIP Code. Address information must not appear in the First or Second Payee Name Line.

248-287 First Payee 40 Required . Enter the name of the payee (preferably surname first) Name Line whose Taxpayer Identification Number (TIN) was provided in (See Notes. ) positions 12-20 of the “B” Record. Left-justify and fill unused positions with blanks. If more space is required for the name, use the Second Payee Name Line Field. The names of any other payees may be entered in the Second Payee Name Line Field. If reporting information for a sole proprietor, the individual’s name must always be present, preferably on the First Payee Name Line. The use of the business name is optional in the Second Payee Name Line Field. End the First Payee Name Line with a full word. Do not split words.

Note 1: Extraneous words, titles, and special characters (i.e., Mr., Mrs., Dr., period, apostrophe) should be removed from the Payee Name Lines. This information may be dropped during subsequent processing at IRS/MCC. A dash and an ampersand are the only acceptable special characters.

Note 2: On Form 5498, for Inherited IRAs, enter the beneficiary’s name followed by the word “beneficiary”, for example, “Brian Young as beneficiary of Joan Smith”. Filers may abbreviate the word “beneficiary” as, for example, “benef”. The beneficiary’s TIN must be reported in positions 12-20 of the “B” Record. Refer to the 2001 “Instructions for Forms 1099-R and 5498”.

288-327 Second Payee 40 If there are multiple payees (e.g., partners, joint owners, or Name Line spouses), use this field for those names not associated with the TIN provided in positions 12-20 of the “B” Record, or if not enough space was provided in the First Payee Name Line, continue the name in this field. Do not enter address information. It is important that filers provide as much payee information to IRS/MCC as possible to identify the payee associated with the TIN. Left-justify and fill unused positions with blanks. Fill with blanks if no entries are present for this field.

328-367 Blank 40 Enter blanks.

368-407 Payee Mailing 40 Required . Enter mailing address of payee. Street address should Address include number, street, apartment or suite number (or P.O. Box if mail is not delivered to street address). Left-justify information and

2001–21 I.R.B. 1243 May 21, 2001

Record Name: Payee “B” Record (Continued)

Field Position Field Title Length Description and Remarks

fill unused positions with blanks. This field must not contain any data other than the payee’s mailing address.

For U.S. addresses, the payee city, state, and ZIP Code must be reported as a 40, 2, and 9 position field, respectively. Filers must adhere to the correct format for the payee city, state, and ZIP Code.

For foreign addresses, filers may use the payee city, state, and ZIP Code as a continuous 51 position field. Enter information in the following order: city, province or state, postal code, and the name of the country. When reporting a foreign address, the Foreign Country Indicator in position 247 must contain a “1” (one).

408-447 Blank 40 Enter blanks.

448-487 Payee City 40 Required. Enter the city, town or post office. Left-justify information and fill the unused positions with blanks. Enter APO or FPO if applicable. Do not enter state and ZIP Code information in this field.

488-489 Payee State 2 Required . Enter the valid U.S. Postal Service state abbreviations for states or the appropriate postal identifier (AA, AE, or AP) described in Part A, Sec. 18.

490-498 Payee ZIP 9 Required. Enter the valid ZIP Code (nine or five digit) assigned Code by the U.S. Postal Service. If only the first five digits are known, left-justify information and fill the unused positions with blanks. For foreign countries, alpha characters are acceptable as long as the filer has entered a “1” (one) in the Foreign Country Indicator, located in position 247 of the “B” Record.

499-543 Blank 45 Enter blanks.

Standard Payee “B” Record Format For

All Types of Returns, Positions 1-543

41-44 45-54 55-66 67-78 79-90 91-102 103-114

115-126 127-138 139-150 151-162 163-174 175-186

187-198 199-246 247 248-287 288-327 328-367

May 21, 2001 1244 2001–21 I.R.B.

368-407 408-447 448-487 488-489 490-498 499-543

The following sections define the field positions for the different types of returns in the Payee “B” Record (positions 544-750):

(l) Form 1098 (2) Form 1098-E (3) Form 1098-T (4) Form 1099-A (5) Form 1099-B (6) Form 1099-C (7) Form 1099-DIV* (8) Form 1099-G* (9) Form 1099-INT* (10) Form 1099-LTC (11) Form 1099-MISC* (12) Form 1099-MSA (13) Form 1099-OID* (14) Form 1099-PATR* (15) Form 1099-R* (16) Form 1099-S (17) Form 5498* (18) Form 5498-MSA (19) Form W-2G

• These forms may be filed through the Combined Federal/State Filing Program. IRS/MCC will forward these records to participating states for filers who have been approved for the program. See Part A, Sec. 16, for information about the program, including specific codes for the record layouts.

(1) Payee “B” Record - Record Layout Positions 544-750 for Forms 1098

Field Position Field Title Length Description and Remarks

544-662 Blank 119 Enter blanks.

663-722 Special Data 60 This portion of the “B” Record may be used to record information Entries for state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for filing requirements. If this field is not utilized, enter blanks .

723-748 Blank 26 Enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

Payee “B” Record - Record Layout Positions 544-750

Forms 1098

Blank Special Blank Blank Data or CR/LF Entries

544-662 663-722 723-748 749-750

2001–21 I.R.B. 1245 May 21, 2001

(2) Payee “B” Record - Record Layout Positions 544-750 for Forms 1098-E

Field Position Field Title Length Description and Remarks

544-546 Blank 3 Enter blanks.

547 Origination 1 Enter “1” (one) if the amount reported in Payment Amount Field Fees/Capitalized 1 includes loan origination fees and/or capitalized interest. Otherwise, Interest Indicator enter a blank .

548-662 Blank 115 Enter blanks.

663-722 Special Data 60 This portion of the “B” Record may be used to record information for Entries state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for the filing requirements. If this field is not utilized, enter blanks.

723-748 Blank 26 Enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

Payee “B” Record - Record Layout Positions 544-750

Forms 1098-E

544-546 547 548-662 663-722 723-748 749-750

(3) Payee “B” Record - Record Layout Positions 544-750 for Forms 1098-T

Field Position Field Title Length Description and Remarks

544-546 Blank 3 Enter blanks.

547 Half-time 1 Enter “1” (one) if the student was at least a half-time Student student during any academic period that began in 2001. Otherwise, Indicator enter a blank.

548 Graduate 1 Enter “1” (one) if the student is enrolled exclusively in a graduate Student level program. Otherwise, enter a blank. Indicator

549-662 Blank 114 Enter blanks.

663-722 Special Data 60 This portion of the “B” Record may be used to record information Entries for state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for the filing requirements. If this field is not utilized, enter blanks.

723-748 Blank 26 Enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

May 21, 2001 1246 2001–21 I.R.B.

Payee “B” Record - Record Layout Positions 544-750

Form 1098-T

Blank Half-time Graduate Blank Special Blank Blank or Student Student Data CR/LF Indicator Indicator Entries

544-546 547 548 549-662 663-722 723-748 749-750

(4) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-A

Field Position Field Title Length Description and Remarks

544-546 Blank 3 Enter blanks.

547 Personal 1 Enter the appropriate indicator from the table below: Liability Indicator

Indicator Usage 1 Borrower was personally liable for repayment of the debt.

Blank Borrower was not personally liable for repayment of the debt.

548-555 Date of 8 Enter the acquisition date of the secured property or the Lender’s date the lender first knew or had reason to know the property was Acquisition or abandoned, in the format YYYYMMDD (e.g., January 5, 2001, would Knowledge of be 20010105). Do not enter hyphens or slashes . Abandonment

556-594 Description 39 Enter a brief description of the property. For real property, enter of Property the address, or, if the address does not sufficiently identify the property, enter the section, lot and block. For personal property, enter the type, make and model (e.g., Car - 1999 Buick Regal or Office Equipment). Enter “CCC” for crops forfeited on Commodity Credit Corporation loans. If fewer than 39 positions are required, left-justify information and fill unused positions with blanks.

595-662 Blank 68 Enter blanks.

663-722 Special Data 60 This portion of the “B” Record may be used to record information Entries for state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for the filing requirements. If this field is not utilized, enter blanks.

723-748 Blank 26 Enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

Payee “B” Record - Record Layout Positions 544-750

Form 1099-A

Blank Personal Date of Lender’s Description Blank Liability Acquisition or of Indicator Knowledge of Property Abandonment

544-546 547 548-555 556-594 595-662

2001–21 I.R.B. 1247 May 21, 2001

Special Blank Blank Data or CR/LF Entries

663-722 723-748 749-750

(5) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-B

Field Position Field Title Length Description and Remarks

544 Second TIN 1 Enter “2” (two) to indicate notification by IRS twice within three calendar Notice years that the payee provided an incorrect name and/or TIN combination; (Optional) otherwise, enter a blank.

545-546 Blank 2 Enter blanks.

547 Gross 1 Enter the appropriate indicator from the following table, to identify Proceeds the amount reported in Amount Code 2; otherwise, enter a blank. Indicator

Indicator Usage 1 Gross proceeds 2 Gross proceeds less commissions and options premiums

548-555 Date of 8 For broker transactions, enter the trade date of the transaction. For Sale barter exchanges, enter the date when cash, property, a credit, or scrip is actually or constructively received in the format YYYYMMDD (e.g., January 5, 2001, would be 20010105). Enter blanks if this is an aggregate transaction. Do not enter hyphens or slashes .

556-568 CUSIP Number 13 For broker transactions only, enter the CUSIP (Committee on Uniform Security Identification Procedures) number of the item reported for Amount Code 2 (stocks, bonds, etc.). Enter blanks if this is an aggregate transaction. Enter “0s” (zeros) if the number is not available. Right-justify information and fill unused positions with blanks.

569-607 Description 39 If fewer than 39 characters are required, left-justify information and fill unused positions with blanks. For broker transactions, enter a brief description of the disposition item (e.g., 100 shares of XYZ Corp). For regulated futures and forward contracts, enter “RFC” or other appropriate description. For bartering transactions, show the services or property provided.

608-662 Blank 55 Enter blanks.

663-722 Special Data 60 This portion of the “B” Record may be used to record information Entries for state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for filing requirements. If this field is not utilized, enter blanks.

723-734 State Income 12 State income tax withheld is for the convenience of the filers. This Tax Withheld information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zerofilled. If not reporting state tax withheld, this field may be used as a continuation of the Special Data Entries Field.

735-746 Local Income 12 Local income tax withheld is for the convenience of the Tax Withheld filers. This information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zero-filled. If not reporting local tax withheld, this field may be used as a continuation of the Special Data Entries field.

May 21, 2001 1248 2001–21 I.R.B.

(5) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-B (Continued)

Field Position Field Title Length Description and Remarks

747-748 Blank 2 Enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

Payee “B” Record - Record Layout Positions 544-750

for Form 1099-B

608 - 662 663-722 723-734 735-746 747-748 749-750

(6) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-C

Field Position Field Title Length Description and Remarks

544-546 Blank 3 Enter blanks.

547 Bankruptcy 1 Enter “1” (one) to indicate the debt was discharged in bankruptcy, Indicator if known. Otherwise, enter a blank.

548-555 Date 8 Enter the date the debt was canceled in the format of YYYYMMDD Canceled (e.g., January 5, 2001, would be 20010105). Do not enter hyphens or slashes.

556-594 Debt 39 Enter a description of the origin of the debt, such as student loan, Description mortgage, or credit card expenditure. If a combined Form 1099-C and 1099-A is being filed, also enter a description of the property.

595-662 Blank 68 Enter blanks.

663-722 Special Data 60 This portion of the “B” Record may be used to record Entries information for state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for filing requirements. If this field is not utilized, enter blanks.

723-748 Blank 26 Enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

2001–21 I.R.B. 1249 May 21, 2001

Payee “B” Record - Record Layout Positions 544-750

for Form 1099-C

Blank Bankruptcy Date Debt Blank Special Indicator Canceled Description Data Entries

544-546 547 548-555 556-594 595-662 663-722

723-748 749-750

(7) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-DIV

Field Position Field Title Length Description and Remarks

544 Second TIN 1 Enter “2” (two) to indicate notification by IRS twice within three calendar Notice years that the payee provided an incorrect name and/or TIN combination; (Optional) otherwise, enter a blank.

545-546 Blank 2 Enter blanks.

547-586 Foreign Country 40 Enter the name of the foreign country or U.S. possession to which or U.S. the withheld foreign tax (Amount Code A) applies. Otherwise, Possession enter blanks.

587-662 Blank 76 Enter blanks.

663-722 Special Data 60 This portion of the “B” Record may be used to record Entries information for state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for filing requirements. If this field is not utilized, enter blanks.

723-734 State Income 12 State income tax withheld is for the convenience of the Tax Withheld filers. This information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zero-filled. If not reporting state tax withheld, this field may be used as a continuation of the Special Data Entries Field.

735-746 Local Income 12 Local income tax withheld is for the convenience of the Tax Withheld filers. This information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zero-filled. If not reporting local tax withheld, this field may be used as a continuation of the Special Data Entries Field.

747-748 Combined 2 If this payee record is to be forwarded to a state agency Federal/ as part of the Combined Federal/State Filing Program, enter the valid State Code state code from Part A, Sec. 16, Table 1. For those payers or states not participating in this program, enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

May 21, 2001 1250 2001–21 I.R.B.

Payee “B” Record - Record Layout Positions 544-750

for Form 1099-DIV

723-734 735-746 747-748 749-750

(8) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-G

Field Position Field Title Length Description and Remarks

544-546 Blank 3 Enter blanks.

547 Trade or 1 Enter “1” (one) to indicate the state or local income tax refund, credit, Business or offset (Amount Code 2) is attributable to income tax that applies Indicator exclusively to income from a a trade or business. Indicator Usage 1 Income tax refund applies exclusively to a trade or business. Blank Income tax refund is a general tax refund.

548-551 Tax Year 4 Enter the tax year for which the refund, credit, or offset (Amount of Refund Code 2) was issued. The tax year must reflect the year for which the payment was made, not the tax year of the Form 1099-G. The tax year must be in the four position format of YYYY (e.g., 1999 ) . The valid range of years for the refund is 1991 through 2000.

Note: This data is not considered prior year data since it is required to be reported in the current tax year. Do NOT enter “P” in field position 6 of the Transmitter “T” Record.

552-662 Blank 111 Enter blanks.

663-722 Special Data 60 This portion of the “B” Record may be used to record information for Entries state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for filing requirements. You may enter your routing and transit number (RTN) here. If this field is not utilized, enter blanks.

723-734 State Income 12 State income tax withheld is for the convenience of the filers. This Tax Withheld information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zerofilled. If not reporting state tax withheld, this field may be used as a continuation of the Special Data Entries Field.

735-746 Local Income 12 Local income tax withheld is for the convenience of the filers. This Tax Withheld information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zero

2001–21 I.R.B. 1251 May 21, 2001

(8) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-G (Continued)

Field Position Field Title Length Description and Remarks

filled. If not reporting local tax withheld, this field may be used as a continuation of the Special Data Entries Field.

747-748 Combined 2 If this payee record is to be forwarded to a state agency as part of the Federal/ Combined Federal/State Filing Program, enter the valid state code State Code from Part A, Sec. 16, Table 1 . For those payers or states not participating in this program, enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

Payee “B” Record - Record Layout Positions 544-750

for Form 1099-G

735-746 747-748 749-750

(9) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-INT

Field Position Field Title Length Description and Remarks

544 Second TIN 1 Enter “2” (two) to indicate notification by IRS twice within three calendar Notice years that the payee provided an incorrect name and/or TIN combination; (Optional) otherwise, enter a blank.

545-546 Blank 2 Enter blanks.

547-586 Foreign Country 40 Enter the name of the foreign country or U.S. possession to which or U.S. the withheld foreign tax (Amount Code 6) applies. Otherwise, enter Possession blanks.

587-662 Blank 76 Enter blanks.

663-722 Special Data 60 This portion of the “B” Record may be used to record Entries information for state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for filing requirements. You may enter your routing and transit number (RTN) here. If this field is not utilized, enter blanks.

723-734 State Income 12 State income tax withheld is for the convenience of the Tax Withheld filers. This information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zero-filled. If not reporting state tax withheld, this field may be used as a continuation of the Special Data Entries Field.

May 21, 2001 1252 2001–21 I.R.B.

(9) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-INT (Continued)

Field Position Field Title Length Description and Remarks

735-746 Local Income 12 Local income tax withheld is for the convenience of the filers. This Tax Withheld information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zerofilled. If not reporting local tax withheld, this field may be used as a continuation of the Special Data Entries Field.

747-748 Combined 2 If this payee record is to be forwarded to a state agency as part of the Federal/ Combined Federal/State Filing Program, enter the valid state code from State Code Part A, Sec. 16, Table 1. For those payers or states not participating in this program, enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

Payee “B” Record - Record Layout Positions 544-750

for Form 1099-INT

735-746 747-748 749-750

(10) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-LTC

Field Position Field Title Length Description and Remarks

544-546 Blank 3 Enter blanks.

547 Type of 1 Enter the appropriate indicator from the following table; otherwise, Payment enter blanks. Indicator

Indicator Usage 1 Per diem 2 Reimbursed amount

548-556 Social Security 9 Required. Enter the Social Security Number of the insured. Number of Insured

557-596 Name of 40 Required. Enter the name of the insured. Insured

597-636 Address 40 Required. Enter the address of the insured. Street address should of Insured include number, street, apartment or suite number (or P.O. Box if not delivered to street address). Left-justify information and fill unused positions with blanks. This field must not contain any data other than payee’s address.

2001–21 I.R.B. 1253 May 21, 2001

(10) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-LTC (Continued)

Field Position Field Title Length Description and Remarks

For U.S. addresses, the payee city, state, and ZIP Code must be reported as a 40, 2, and 9 position field, respectively. Filers must adhere to the correct format for the insured’s city, state, and ZIP Code.

For foreign addresses, filers may use the insured’s city, state, and ZIP Code as a continuous 51 position field. Enter information in the following order: city, province or state, postal code, and the name of the country. When reporting a foreign address, the Foreign Country Indicator in position 247 must contain a “1” (one).

637-676 City of 40 Required. Enter the city, town, or post office. Left-justify information Insured and fill the unused positions with blanks. Enter APO or FPO, if applicable. Do not enter state and Zip Code information in this field.

677-678 State of 2 Required. Enter the valid U.S. Postal Service state abbreviations for Insured states or the appropriate postal identifier (AA, AE, or AP) described in Part A, Sec. 18.

679-687 ZIP Code 9 Required. Enter the valid nine digit ZIP Code assigned by the U.S. of Insured Postal Service. If only the first five digits are known, left-justify information and fill the unused positions with blanks. For foreign countries, alpha characters are acceptable as long as the filer has entered a “1” (one) in the Foreign Country Indicator located in position 247 of the “B” Record.

688 Status of 1 Enter the appropriate code from the table below to indicate the Illness status of the illness of the insured; otherwise, enter blank: Indicator (Optional)

Indicator Usage 1 Chronically ill 2 Terminally ill

689-696 Date 8 Enter the latest date of a doctor’s certification of the Certified status of the insured’s illness. The format of the date is YYYYMMDD (Optional) (e.g., January 5, 2001, would be 20010105). Do not enter hyphens or slashes.

697 Qualified 1 Enter a “1” (one) if benefits were from a qualified long-term Contract (Optional) care insurance contract; otherwise, enter blank.

698-722 Blank 25 Enter blanks.

723-734 State Income 12 State income tax withheld is for the convenience of the filers. This Tax Withheld information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zero-filled.

735-746 Local Income 12 Local income tax withheld is for the convenience of the Tax Withheld filers. This information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zero-filled.

747-748 Blank 2 Enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

May 21, 2001 1254 2001–21 I.R.B.

Payee “B” Record - Record Layout Positions 544-750

for Form 1099-LTC

747-748 749-750

(11) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-MISC

Field Position Field Title Length Description and Remarks

544 Second TIN 1 Enter “2” to indicate notification by IRS twice within three calendar Notice years that the payee provided an incorrect name and/or TIN (Optional) combination; otherwise, enter a blank.

545-546 Blank 2 Enter blanks.

547 Direct Sales 1 Enter a “1” (one) to indicate sales of $5,000 or more of consumer Indicator products to a person on a buy-sell, deposit-commission, (See Note. ) or any other commission basis for resale anywhere other than in a permanent retail establishment. Otherwise, enter a blank.

Note: If reporting a direct sales indicator only, use Type of Return “A” in Field Position 27, and Amount Code 1 in Field Position 28 of the Payer “A” Record. All payment amount fields in the Payee “B” Record will contain zeros.

548-662 Blank 115 Enter blanks.

663-722 Special Data 60 This portion of the “B” Record may be used to record Entries information for state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for filing requirements. If this field is not used, enter blanks.

723-734 State Income 12 State income tax withheld is for the convenience of the Tax Withheld filers. This information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zero-filled. If not reporting state tax withheld, this field may be used as a continuation of the Special Data Entries Field.

735-746 Local Income 12 Local income tax withheld is for the convenience of the Tax Withheld filers. This information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zero-filled. If not reporting local tax withheld, this field may be used as a continuation of the Special Data Entries Field.

2001–21 I.R.B. 1255 May 21, 2001

(11) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-MISC (Continued)

Field Position Field Title Length Description and Remarks

747-748 Combined 2 If this payee record is to be forwarded to a state agency as part of Federal/ the Combined Federal/State Filing Program, enter the valid state code State Code from Part A, Sec. 16, Table 1. For those payers or states not participating in this program, enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

Payee “B” Record - Record Layout Positions 544-750

for Form 1099-MISC

747-748 749-750

(12) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-MSA

Field Position Field Title Length Description and Remarks

544 Blank 1 Enter blank.

545 Distribution 1 Required. Enter the applicable code to indicate the type of Code payment: Code Category 1 Normal distribution 2 Excess contribution 3 Disability 4 Death distribution other than code 6 (This includes distributions to a spouse, nonspouse, or estate beneficiary in the year of death and to an estate after the year of death.) 5 Prohibited transaction 6 Death distribution after year of death to a nonspouse beneficiary (Do not use for distribution to an estate.)

546 Blank 1 Enter a blank .

547 Medicare+Choice 1 Enter “1” (one) if distributions are from a Medicare+Choice MSA. MSAIndicator Otherwise, enter a blank.

548 - 662 Blank 115 Enter blanks.

May 21, 2001 1256 2001–21 I.R.B.

(12) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-MSA (Continued)

Field Position Field Title Length Description and Remarks

663-722 Special Data 60 This portion of the “B” Record may be used to record Entries information for state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for filing requirements. If this field is not utilized, enter blanks.

723-734 State Income 12 State income tax withheld is for the convenience of the Tax Withheld filers. This information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zero-filled. If not reporting state tax withheld, this field may be used as a continuation of the Special Data Entries Field.

735-746 Local Income 12 Local income tax withheld is for the convenience of the Tax Withheld filers. This information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zero-filled. If not reporting local tax withheld, this field may be used as a continuation of the Special Data Entries Field.

747-748 Blank 2 Enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

Payee “B” Record - Record Layout Positions 544-750

for Form 1099-MSA

723-734 735-746 747-748 749-750

(13) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-OID

Field Position Field Title Length Description and Remarks

544 Second TIN 1 Enter “2” (two) to indicate notification by IRS twice within three calendar Notice years that the payee provided an incorrect name and/or TIN combination; (Optional) otherwise, enter a blank.

545-546 Blank 2 Enter blanks.

547-585 Description 39 Required. Enter the CUSIP number, if any. If there is no CUSIP number, enter the abbreviation for the stock exchange and issuer, the coupon rate, and year ( must be 4 digit year ) of maturity (e.g., NYSE XYZ 12 1/ 2001 ). Show the name of the issuer if other than the payer. If fewer than 39 characters are required, leftjustify information and fill unused positions with blanks.

2001–21 I.R.B. 1257 May 21, 2001

(13) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-OID (Continued)

Field Position Field Title Length Description and Remarks

586-662 Blank 77 Enter blanks.

663-722 Special Data 60 This portion of the “B” Record may be used to record information for Entries state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for filing requirements. If this field is not utilized, enter blanks.

723-734 State Income 12 State income tax withheld is for the convenience of the filers. This Tax Withheld information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zerofilled. If not reporting state tax withheld, this field may be used as a continuation of the Special Data Entries Field.

735-746 Local Income 12 Local income tax withheld is for the convenience of the filers. This Tax Withheld information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zerofilled. If not reporting local tax withheld, this field may be used as a continuation of the Special Data Entries Field.

747-748 Combined 2 If this payee record is to be forwarded to a state agency as part of the Federal/ Combined Federal/State Filing Program, enter the valid state code State Code from Part A, Sec. 16, Table l. For those payers or states not participating in this program, enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

Payee “B” Record - Record Layout Positions 544-750 for Form 1099-OID

735-746 747-748 749-750

(14) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-PATR

Field Position Field Title Length Description and Remarks

544 Second TIN 1 Enter “2” (two) to indicate notification by IRS twice within three Notice calendar years that the payee provided an incorrect name and/or TIN (Optional) combination; otherwise, enter a blank.

545-662 Blank 118 Enter blanks.

663-722 Special Data 60 This portion of the “B” Record may be used to record information for Entries state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for fil

May 21, 2001 1258 2001–21 I.R.B.

(14) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-PATR (Continued)

Field Position Field Title Length Description and Remarks

ing requirements. If this field is not utilized, enter blanks.

723-734 State Income 12 State income tax withheld is for the convenience of the filers. This Tax Withheld information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zerofilled. If not reporting state tax withheld, this field may be used as a continuation of the Special Data Entries Field.

735-746 Local Income 12 Local income tax withheld is for the convenience of the filers. Tax Withheld This information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zerofilled. If not reporting local tax withheld, this field may be used as a continuation of the Special Data Entries Field.

747-748 Combined 2 If this payee record is to be forwarded to a state agency as part of the Federal/ Combined Federal/State Filing Program, enter the valid state code from State Code Part A, Sec. 16, Table 1. For those payers or states not participating in this program, enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

Payee “B” Record - Record Layout Positions 544-750

for 1099-PATR

Second Blank Special State Local Combined Blank TIN Data Income Income Federal/ or CR/LF Notice Entries Tax Tax State (Optional) Withheld Withheld Code

544 545-662 663-722 723-734 735-746 747-748 749-750

(15) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-R

Field Position Field Title Length Description and Remarks

544 Blank 1 Enter blank.

545-546 Distribution Code 2 Required. Enter at least one distribution code from the table below. More than one code may apply. If only one code is required, it must be entered in position 545 and position 546 must be blank. A blank in (For a detailed position 545 is not acceptable. Position 545 must contain a numeric explanation of code except when using Code D, E, F, G, H, J, L, M, N, P, R, S, or T. distribution codes, Distribution Code A, when applicable, must be entered in position see the 2001“Instruc- 546 with the applicable numeric code in position 545. When using Code tions for Forms P for an IRA distribution under section 408(d)(4) of the Internal 1099-R and 5498.”) Revenue Code, the filer may also enter Code 1, 2, or 4, if applicable. Only three numeric combinations are acceptable, Codes 8 and 1, 8 and 2, and 8 and 4, on one return. These three combinations can be used only if both codes apply to the distribution being reported. If more than one numeric code is applicable to different parts of a distribution, report two separate “B” Records. Distribution Codes E, F, H, N, R, and S cannot be used with any other codes. Distribution Code G may be used with Distribution Code 4 only if applicable.

2001–21 I.R.B. 1259 May 21, 2001

(15) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-R (Continued)

Field Position Field Title Length Description and Remarks

Code Category 1 *Early distribution, no known exception (in most cases, under age 59 1/2) 2 *Early distribution, exception applies (Under age 59 1/2) 3 *Disability 4 *Death 5 *Prohibited transaction 6 Section 1035 exchange (a tax-free exchange of life insurance, annuity, or endowment contracts) 7 *Normal distribution 8 *Excess contributions plus earnings/ excess deferrals (and/or earnings) taxable in 2001 9 PS 58 costs (premiums paid by a trustee or custodian for current insurance protection ) A May be eligible for 10-year tax option D *Excess contributions plus earnings/ excess deferrals taxable in 1999 E Excess annual additions under section 415 F Charitable gift annuity G Direct rollover to IRA H *Direct rollover to qualified plan or taxsheltered annuity or a transfer from a conduit IRA to a qualified plan J Early distribution from a Roth IRA, no known exception. (This code may be used with Code 5, 8, or P.) L Loans treated as deemed distributions under section 72(p) M Distribution from an education IRA (Ed IRA) N Recharacterized IRA contribution made for 2001 P *Excess contributions plus earnings/ excess deferrals taxable in 2000 R Recharacterized IRA contribution made for 2000 (See Note. ) S *Early distribution from a SIMPLE IRA in first 2 years, no known exception T Roth IRA distribution, exception applies. (This code may be used with Code 5, 8, or P.)

*If reporting a traditional IRA, SEP, or SIMPLE distribution or a Roth conversion, use the IRA/SEP/SIMPLE Indicator of “1” (one) in position 548 of the Payee “B” Record.

Note: The trustee of the first IRA must report the recharacterization as a distribution on Form 1099-R (and the original contribution and its character on Form 5498).

May 21, 2001 1260 2001–21 I.R.B.

(15) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-R (Continued)

Field Position Field Title Length Description and Remarks

547 Taxable Amount 1 Enter “1” (one) only if the taxable amount of the payment entered Not Determined for Payment Amount Field 1 (Gross distribution) of the “B” Record Indicator cannot be computed; otherwise, enter blank . (If Taxable Amount Not Determined Indicator is used, enter “0’s” [zeros] in Payment Amount Field 2 of the Payee “B” Record.) Please make every effort to compute the taxable amount.

548 IRA/SEP/ 1 Enter “1” (one) for a traditional IRA, SEP, or SIMPLE distribution or SIMPLE Indicator Roth conversion; otherwise, enter a blank. (See Note. ) If the IRA/SEP/SIMPLE Indicator is used, enter the amount of the Roth conversion or distribution in Payment Amount Field A of the Payee “B” Record. Do not use the indicator for a distribution from a Roth or education IRA or for an IRA recharacterization.

Note: For Form 1099-R, generally, report the Roth conversion or total amount distributed from a traditional IRA, SEP, or SIMPLE in Payment Amount Field A (traditional IRA/SEP/SIMPLE distribution or Roth conversion), as well as Payment Amount Field 1 (Gross Distribution) of the “B” Record. Refer to the 2001 “ Instructions for Forms 1099-R and 5498 ” for exceptions (Box 2a instructions).

549 Total 1 Enter a “1” (one) only if the payment shown for Amount Code 1 Distribution is a total distribution that closed out the account; otherwise, enter a blank. Indicator (See Note. )

Note: A total distribution is one or more distributions within one tax year in which the entire balance of the account is distributed. Any distribution that does not meet this definition is not a total distribution.

550-551 Percentage 2 Use this field when reporting a total distribution to more than one of Total person, such as when a participant is deceased and a payer distributes Distribution to two or more beneficiaries. Therefore, if the percentage is 100, leave this field blank. If the percentage is a fraction, round off to the nearest whole number (for example, 10.4 percent will be 10 percent; 10.5 percent will be 11 percent). Enter the percentage received by the person whose TIN is included in positions 12-20 of the “B” Record. This field must be right-justified, and unused positions must be zero-filled. If not applicable, enter blanks. Filers are not required to enter this information for any IRA distribution or for direct rollovers.

552-662 Blank 111 Enter blanks.

663-722 Special Data 60 This portion of the “B” Record may be used to record information Entries for state or local government reporting or for the filer’s own purposes. The state/payer’s state number, state distribution, name of locality, and/or local distribution can be entered in this field. Payers should contact the state or local revenue departments for filing requirements. If this field is not utilized, enter blanks.

723-734 State Income 12 State income tax withheld is for the convenience of the Tax Withheld filers. This information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zero-filled. If not reporting state tax withheld, this field may be used as a continuation of the Special Data Entries field.

735-746 Local Income 12 Local income tax withheld is for the convenience of the filers. Tax Withheld This information does not need to be reported to IRS. The payment

2001–21 I.R.B. 1261 May 21, 2001

(15) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-R (Continued)

Field Position Field Title Length Description and Remarks

amount must be right-justified and unused positions must be zerofilled. If not reporting local tax withheld, this field may be used as a continuation of the Special Data Entries field.

747-748 Combined 2 If this payee record is to be forwarded to a state agency as part Federal/State of the Combined Federal/State Filing Program, enter the valid state Code code from Part A, Sec. 16, Table 1. For those payers or states not participating in this program, enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

Payee “B” Record—Record Layout Positions 544-750

for Form 1099-R

550-551 552-662 663-722 723-734 735-746 747-748 749-750

(16) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-S

Field Position Field Title Length Description and Remarks

544-546 Blank 3 Enter blanks.

547 Property or 1 Required. Enter “1” (one) if the transferor received or will receive Services property (other than cash and consideration treated as cash in Indicator computing gross proceeds) or services as part of the consideration for the property transferred. Otherwise, enter a blank.

548-555 Date of 8 Required . Enter the closing date in the format YYYYMMDD Closing (e.g., January 5, 2001, would be 20010105). Do not enter hyphens or slashes .

556-594 Address or 39 Required . Enter the address of the property transferred Legal (including city, state, and ZIP Code). If the address does not sufficiently Description identify the property, also enter a legal description, such as section, lot, and block. For timber royalties, enter “TIMBER.” If fewer than 39 positions are required, left-justify information and fill unused positions with blanks.

595-662 Blank 68 Enter blanks.

663-722 Special Data 60 This portion of the “B” Record may be used to record information for Entries state or local government reporting or for the filer’s own purposes.

May 21, 2001 1262 2001–21 I.R.B.

(16) Payee “B” Record - Record Layout Positions 544-750 for Form 1099-S (Continued)

Field Position Field Title Length Description and Remarks

Payers should contact the state or local revenue departments for filing requirements. If this field is not utilized, enter blanks .

723-734 State Income 12 State income tax withheld is for the convenience of the Tax Withheld filers. This information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zero-filled. If not reporting state tax withheld, this field may be used as a continuation of the Special Data Entries Field.

735-746 Local Income 12 Local income tax withheld is for the convenience of the Tax Withheld filers. This information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zero-filled. If not reporting local tax withheld, this field may be used as a continuation of the Special Data Entries Field.

747-748 Blank 2 Enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

Payee “B” Record - Record Layout Positions 544-750

for Form 1099-S

723-734 735-746 747-748 749-750

(17) Payee “B” Record - Record Layout Positions 544-750 for Form 5498

Field Position Field Title Length Description and Remarks

544-546 Blank 3 Enter blanks.

547 IRA Indicator 1 Required, if applicable. Enter “1” (one) if reporting a rollover ( I ndividual (Amount Code 2) or Fair Market Value (Amount Code 5 ) for an IRA. R etirement Otherwise, enter a blank. A ccount)

548 SEP Indicator 1 Required, if applicable. Enter “1” (one) if reporting rollover ( S implified (Amount Code 2) or Fair Market Value (Amount Code 5 ) for a SEP. E mployee P ension) Otherwise, enter a blank.

549 SIMPLE Indicator 1 Required, if applicable. Enter “1” (one) if reporting a rollover ( S avings I ncentive (Amount Code 2) or Fair Market Value (Amount Code 5 ) for a M atch Pl an for SIMPLE. Otherwise, enter a blank. E mployees)

2001–21 I.R.B. 1263 May 21, 2001

(17) Payee “B” Record - Record Layout Positions 544-750 for Form 5498 (Continued)

Field Position Field Title Length Description and Remarks

550 Roth 1 Required, if applicable. Enter “1” (one) if reporting a rollover IRA (Amount Code 2) or Fair Market Value (Amount Code 5 ) for a Roth Indicator IRA. Otherwise, enter a blank.

551 Blank 1 Enter blank .

552 Education 1 Required, if applicable. Enter “1” (one) if reporting a rollover IRA (Amount Code 2) or Fair Market Value (Amount Code 5 ) for an Indicator Education IRA. Otherwise, enter a blank.

553-662 Blank 110 Enter blanks.

663-722 Special Data 60 This portion of the “B” Record may be used to record information for Entries state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for filing requirements. If this field is not utilized, enter blanks.

723-746 Blank 24 Enter blanks.

747-748 Combined 2 If this payee record is to be forwarded to a state agency as part of the Federal/State Combined Federal/State Filing Program, enter the valid state code Code from Part A, Sec. 16, Table 1. For those payers or states not participating in this program, enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

Payee “B” Record - Record Layout Positions 544-750

for Form 5498

553-662 663-722 723-746 747-748 749-750

(18) Payee “B” Record - Record Layout Positions 544-750 for Form 5498-MSA

Field Position Field Title Length Description and Remarks

544-546 Blank 3 Enter blanks.

547 Medicare+ 1 Enter “1” (one) for Medicare+Choice MSA. Choice MSA Indicator

548-662 Blank 115 Enter blanks.

May 21, 2001 1264 2001–21 I.R.B.

(18) Payee “B” Record - Record Layout Positions 544-750 for Form 5498-MSA (Continued)

Field Position Field Title Length Description and Remarks

663-722 Special 60 This portion of the “B” Record may be used to record information Data for state or local government reporting or for the filer’s own purposes. Entries Payers should contact the state or local revenue departments for filing requirements. If this field is not utilized, enter blanks.

723-748 Blank 26 Enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters .

Payee “B” Record - Record Layout Positions 544-750

for Form 5498-MSA

Blank Medicare + Blank Special Data Blank Blank or Choice MSA Entries CR/LF Indicator

544-546 547 548-662 663-722 723-748 749-750

(19) Payee “B” Record - Record Layout Positions 544-750 for Form W-2G

Field Position Field Title Length Description and Remarks

544-546 Blank 3 Enter blanks.

547 Type of 1 Required. Enter the applicable type of wager code from the table Wager Code below:

Code Category 1 Horse race track (or off-track betting of a horse track nature) 2 Dog race track (or off-track betting of a dog track nature) 3 Jai-alai 4 State-conducted lottery 5 Keno 6 Bingo 7 Slot machines 8 Any other type of gambling winnings

548-555 Date Won 8 Required. Enter the date of the winning transaction in the format YYYYMMDD (e.g., January 5, 2001, would be 20010105). Do not enter hyphens or slashes . This is not the date the money was paid, if paid after the date of the race (or game).

556-570 Transaction 15 Required. For state-conducted lotteries, enter the ticket or other identifying number. For keno, bingo, and slot machines, enter the ticket or card number (and color, if applicable), machine serial number, or any other information that will help identify the winning transaction. For all others, enter blanks.

571-575 Race 5 If applicable, enter the race (or game) relating to the winning ticket; otherwise, enter blanks.

576-580 Cashier 5 If applicable, enter the initials or number of the cashier making the winning payment; otherwise, enter blanks.

2001–21 I.R.B. 1265 May 21, 2001

(19) Payee “B” Record - Record Layout Positions 544-750 for Form W-2G (Continued)

Field Position Field Title Length Description and Remarks

581-585 Window 5 If applicable, enter the window number or location of the person paying the winning payment; otherwise, enter blanks.

586-600 First ID 15 For other than state lotteries, enter the first identification number of the person receiving the winning payment; otherwise, enter blanks.

601-615 Second ID 15 For other than state lotteries, enter the second identification number of the person receiving the winnings; otherwise, enter blanks.

616-662 Blank 47 Enter blanks.

663-722 Special Data 60 This portion of the “B” Record may be used to record information for Entries state or local government reporting or for the filer’s own purposes. Payers should contact the state or local revenue departments for filing requirements. If this field is not utilized, enter blanks.

723-734 State Income 12 State income tax withheld is for the convenience of the filers. This Tax Withheld information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zerofilled. If not reporting state tax withheld, this field may be used as a continuation of the Special Data Entries Field.

735-746 Local Income 12 Local income tax withheld is for the convenience of the filers. This Tax Withheld information does not need to be reported to IRS. The payment amount must be right-justified and unused positions must be zerofilled. If not reporting local tax withheld, this field may be used as a continuation of the Special Data Entries Field.

747-748 Blank 2 Enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

Payee “B” Record - Record Layout Positions 544-750

for Form W-2G

601-615 616-662 663-722 723-734 735-746 747-748 749-750

Sec. 11. End of Payer “C” Record - General Field Descriptions and Record Layout

.01 The End of Payer “C” Record is a fixed record length of 750 positions. The control total fields are each 18 positions in length. .02 The “C” Record consists of the total number of payees and the totals of the payment amount fields filed by a given payer and/or a particular type of return. The “C” Record must be written after the last “B” Record for each type of return for a given payer. For each “A” Record and group of “B” Records on the file, there must be a corresponding “C” Record. A file format diagram is located at the end of Part E, Miscellaneous Information, just before the mail labels.

May 21, 2001 1266 2001–21 I.R.B.

.03 In developing the “C” Record, for example, if a payer used Amount Codes 1, 3, and 6 in the “A” Record, the totals from the “B” Records would appear in Control Totals 1 (positions 16-33), 3 (positions 52-69), and 6 (positions 106-123) of the “C” Record. In this example, positions 34-51, 70-105, and 124-231 would be zero-filled. Positions 232-748 would be blank filled.

.04 Payers/Transmitters should verify the accuracy of the totals. IRS/MCC will request a replacement file for files with missing or incorrect “C” Records.

Record Name: End of Payer “C” Record

Field Position Field Title Length Description and Remarks

1 Record Type 1 Required. Enter “C.”

2-9 Number of 8 Required. Enter the total number of “B” Records covered by the Payees preceding “A” Record. Right-justify information and fill unused positions with zeros.

10-15 Blank 6 Enter blanks.

16-33 Control 18 Required. Accumulate totals of any payment amount fields in the Total 1 “B” Records into the appropriate control total fields of the “C” Record. 34-51 Control 18 Control totals must be right-justified and unused control total fields Total 2 zero-filled. All control total fields are 18 positions in length. 52-69 Control 18 Total 3 70-87 Control 18 Total 4 88-105 Control 18 Total 5 106-123 Control 18 Total 6 124-141 Control 18 Total 7 142-159 Control 18 Total 8 160-177 Control 18 Total 9 178-195 Control 18 Total A 196-213 Control 18 Total B 214-231 Control 18 Total C

232-748 Blank 517 Enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

End of Payer “C” Record - Record Layout

124-141 142-159 160-177 178-195 196-213 214-231 232-748 749-750

2001–21 I.R.B. 1267 May 21, 2001

Sec. 12. State Totals “K” Record - General Field Descriptions and Record Layout

.01 The State Totals “K” Record is a fixed record length of 750 positions. The control total fields are each 18 positions in length. .02 The “K” Record is a summary for a given payer and a given state in the Combined Federal/State Filing Program, used only when state reporting approval has been granted.

.03 The “K” Record will contain the total number of payees and the totals of the payment amount fields filed by a given payer for a given state. The “K” Record(s) must be written after the “C” Record for the related “A” Record. A file format diagram is located at the end of Part E, Miscellaneous Information, just before the mail labels.

.04 In developing the “K” Record, for example, if a payer used Amount Codes 1, 3, and 6 in the “A” Record, the totals from the “B” Records coded for this state would appear in Control Totals 1, 3, and 6 of the “K” Record.

.05 There must be a separate “K” Record for each state being reported. .06 Refer to Part A, Sec. 16, for the requirements and conditions that must be met to file via this program.

(1) State Totals “K” Record - Record Layout Forms 1099-DIV, 1099-G, 1099-INT, 1099-MISC, 1099-OID,

1099-PATR, 1099-R, and 5498

Field Position Field Title Length Description and Remarks

1 Record Type 1 Required. Enter “K.”

2-9 Number of 8 Required. Enter the total number of “B” Records being coded for Payees this state. Right-justify information and fill unused positions with zeros.

10-15 Blank 6 Enter blanks.

16-33 Control 18 Required. Accumulate totals of any payment amount fields in the Total 1 “B” Records for each state being reported into the appropriate control 34-51 Control 18 total fields of the appropriate “K” Record. Control totals must be Total 2 right-justified and unused control total fields zero-filled. All 52-69 Control 18 control total fields are 18 positions in length. Total 3 70-87 Control 18 Total 4 88-105 Control 18 Total 5 106-123 Control 18 Total 6 124-141 Control 18 Total 7 142-159 Control 18 Total 8 160-177 Control 18 Total 9 178-195 Control 18 Total A 196-213 Control 18 Total B 214-231 Control 18 Total C

232-706 Blank 475 Enter blanks.

707-724 State Income 18 State income tax withheld total is for the convenience of the filers. Tax Withheld Aggregate totals of the state income tax withheld field in the Payee “B” Total Records; otherwise, enter blanks.

725-742 Local Income 18 Local income tax withheld total is for the convenience of the filers. Tax Withheld Aggregate totals of the local income tax withheld field in the Payee “B” Total Records; otherwise, enter blanks.

May 21, 2001 1268 2001–21 I.R.B.

(1) State Totals “K” Record - Record Layout Forms 1099-DIV, 1099-G, 1099-INT, 1099-MISC, 1099-OID,

1099-PATR, 1099-R, and 5498 (Continued)

Field Position Field Title Length Description and Remarks

743-746 Blank 4 Enter blanks.

747-748 Combined Federal/ 2 Required . Enter the code assigned to the state which is to receive State Code the information. (Refer to Part A, Sec. 16, Table l.)

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

State Totals “K” Record - Record Layout Forms 1099-DIV, 1099-G, 1099-INT, 1099-MISC,

1099-OID, 1099-PATR, 1099-R, and 5498

743-746 747-748 749-750

Sec. 13. End of Transmission “F” Record - General Field Descriptions and Record Layout

.01 The End of Transmission “F” Record is a fixed record length of 750 positions. The “F” Record is a summary of the number of payers in the entire file.

.02 This record should be written after the last “C” Record (or last “K” Record, when applicable) of the entire file.

Record Name: End of Transmission “F” Record

Field Position Field Title Length Description and Remarks

1 Record Type 1 Required. Enter “F.”

2-9 Number of 8 Enter the total number of Payer “A” Records in the entire file “A” Records (right-justify and zero-fill) or enter all zeros.

10-30 Zero 21 Enter zeros.

31-748 Blank 718 Enter blanks.

749-750 Blank 2 Enter blanks or carriage return/line feed (CR/LF) characters.

2001–21 I.R.B. 1269 May 21, 2001

End of Transmission “F” Record - Record Layout

Record Number of Zero Blank Blank Type “A” Records or CR/LF

1 2-9 10-30 31-748 749-750

Part C. Electronic Filing Specifications

Sec. 1. Background

1. All electronic filing of information returns are received at IRS/MCC via the FIRE (Filing Information Returns Electronically) System. The FIRE System can be accessed via analog and ISDN BRI connections. The system is designed to support the electronic filing of information returns only. The telephone number for electronic filing is (304-262-2400) .

Sec. 2. Advantages of Filing Electronically

Some of the advantages of filing electronically are as follows:

(1) Results available within 1-2 workdays regarding the acceptability of the data transmitted. It is the filer’s responsibility to dial

back in and check results. (2) Later due date than magnetic media or paper for electronically filed Forms 1098, 1099, and W-2G (refer to Part A, Section

10.01). (3) Allows more attempts than magnetic media filing to correct bad files within a specific time frame before imposing penalties

(refer to Part C, Section 6.05). (4) Better customer service due to on-line availability of transmitter’s files for research purposes. (5) Extended period to test electronic files: November 1, 2001, to February 15, 2002.

Sec. 3. General

.01 Electronic filing of Forms 1098, 1099, 5498, and W-2G, originals, corrections, and replacements of information returns is offered as an alternative to magnetic media (tape, tape cartridge, or diskette) or paper filing, but is not a requirement. Transmitters filing electronically will fulfill the magnetic media requirements for those payers who are required to file magnetically. It may also be used by payers who are under the filing threshold requirement, but would prefer to file their information returns electronically. If the original file was sent magnetically, but IRS/MCC has requested a replacement file, the replacement may be transmitted electronically. Also, if the original file was submitted via magnetic media, any corrections may be transmitted electronically.

.02 The electronic filing of information returns is not affiliated with the Form 1040 electronic filing program. These two programs are totally independent, and filers must obtain separate approval to participate in each of them. All inquiries concerning the electronic filing of information returns should be directed to IRS/MCC. IRS/MCC personnel cannot answer questions or assist taxpayers in the filing of Form 1040 and will direct taxpayers, to the Customer Service toll-free number ( 1-800-829-1040 ).

.03 Files submitted to IRS/MCC electronically must be in standard ASCII code. No magnetic media or paper forms are to be submitted with the same information as the electronically submitted file.

.04 If a request for extension is approved, transmitters who file electronically will be granted an extension of time to file. Part A, Sec. 11, explains procedures for requesting extensions of time. Filers are encouraged to file their data as soon as possible.

.05 The formats of the “T”, “A”, “B”, “C”, “K”, and “F” records are the same for electronically filed records as they are for magnetic media, and must be in standard ASCII code. For electronically filed documents, each transmission is considered a separate file; therefore, each transmission must begin with a Transmitter “T” Record and end with an End of Transmission (EOT) “F” Record.

Sec. 4. Electronic Filing Approval Procedure

.01 Filers must obtain, or already have, a Transmitter Control Code (TCC) assigned prior to submitting files electronically. (Filers who currently have a TCC for magnetic media filing will not be assigned a second TCC for electronic filing.) Refer to Part A, Sec. 7, for information on how to obtain a TCC. .02 Once a TCC is obtained, electronic filers assign their own logon name, password and PIN (Personal Identification Number) and do not need prior or special approval . See Sec. 7, for more information on the PIN.

.03 If a filer is submitting files for more than one TCC, it is not necessary to create a separate logon and password for each TCC. .04 For all passwords, it is the user’s responsibility to remember the password and not allow the password to be compromised. Passwords are user assigned at first logon and are up to 8 alpha/numerics, which are case sensitive . However, if filers forget their password or PIN, call 304-263-8700 for assistance. The FIRE System will require users to change their passwords on a yearly basis.

May 21, 2001 1270 2001–21 I.R.B.

Sec. 5. Test Files

.01 Filers are not required to submit a test file; however, the submission of a test file is encouraged for all new electronic filers to test hardware and software. If filers wish to submit an electronic test file for Tax Year 2001 (returns to be filed in 2002 ), it must be submitted to IRS/MCC no earlier than November 1, 2001, and no later than February 15, 2002.

.02 If a filer encounters problems while transmitting the electronic test file, contact IRS/MCC for assistance at 304-263-8700. .03 Filers can verify the status of the transmitted test data by connecting to the FIRE System at 304-262-2400 . This information will be available within 1-2 workdays after the transmission is received by IRS/MCC.

. 04 Form 4804 is no longer required for test files submitted electronically. See Part C, Sec.7. .05 A test file is required from filers who want approval for the Combined Federal/State Filing Program. See Part A, Sec. 16, for further details.

Sec. 6. Electronic Submissions

.01 Electronically filed information may be submitted to IRS/MCC 24 hours a day, 7 days a week. Technical assistance will be available Monday through Friday between 8:30 a.m. and 4:30 p.m. Eastern time by calling 304-263-8700 .

.02 The FIRE System will be down from December 27, 2001, through January 6, 2002. This allows IRS/MCC to update its system to reflect current year changes.

.03 Data compression is encouraged when submitting information returns electronically. WinZip and PKZip are acceptable compression packages. UNIX COMPRESS may be acceptable; however, a test file is recommended to verify compatibility. IRS/MCC cannot accept self-extracting zip files or compressed files containing multiple files.

The time required to transmit information returns electronically will vary depending on the modem speed and the type of data compression used, if any. The time required to transmit a file can be reduced by as much as 95 percent by using compres- sion.

The following are transmission rates achieved in test uploads at MCC using compressed files. The transmission rates will vary depending on the modem speeds.

.04 Files submitted electronically will be assigned a unique filename by the FIRE System (the users may name files anything they choose from their end). The filename assigned by the FIRE System will consist of submission type (TEST, ORIG [original], CORR [correction], and REPL [replacement]), the filer’s TCC and a four digit number sequence. The sequence number will be incremented for every file sent. For example, if it is your first original file for the calendar year and your TCC is 44444, the IRS assigned filename would be ORIG.44444.0001. Record the filename. This information will be needed by MCC to identify the file, if assistance is required.

.05 If a file was submitted timely and is bad, the filer will have up to 60 days from the day the file was transmitted or 4 replacement attempts within that 60 day period, whichever comes first, to transmit an acceptable file. If an acceptable file is not received within 60 days or within 4 replacement attempts, then the payer could be subject to late filing penalties. This only applies to files originally sent electronically.

.06 The following definitions have been provided to help distinguish between a correction and a replacement:

• A correction is an information return submitted by the transmitter to correct an information return that was previously submit- ted to and processed by IRS/MCC, but contained erroneous information.

Note: Corrections should only be made to records that have been submitted incorrectly, not the entire file.

• A replacement is an information return file sent by the filer because FILE STATUS on the FIRE System indicated the original file was bad. After the necessary changes have been made, the file must be transmitted through the FIRE System. (See Note ).

Note: Filers should never transmit anything to IRS/MCC as a “Replacement” file unless FILE STATUS on the FIRE System indicates the file is bad.

.07 The TCC in the Transmitter “T” Record must be the TCC used to transmit the file; otherwise, the file will be considered an error.

2001–21 I.R.B. 1271 May 21, 2001

Sec. 7. PIN Requirements

.01 The Form 4804 is not required for electronic files. Effective 1/1/2002 all new users will be prompted to create a PIN con- sisting of 10 numerics when establishing their initial logon name and password. All users having existing accounts will be prompt- ed for a PIN assignment at the first logon after 12/31/2001.

.02 Filers must provide some on line information, such as, TCC, EIN, Company name, contact person and telephone number, before establishing their PIN number.

.03 The PIN is required each time a file is sent electronically and is permission to release the file. If you forget your PIN, please call 304-263-8700 for assistance.

.04 If the file is good, it is released for mainline processing 10 calendar days from receipt. Contact us at 304-263-8700 within this 10 day period if there is a reason the file should not be released for further processing. If the file is bad, normal replacement procedures are followed.

Sec. 8. Electronic Filing Specifications

.01 The FIRE System is designed exclusively for the filing of Forms 1042-S, 1098, 1099, 5498, 8027, W-2G and W-4. .02 A transmitter must have a TCC before a file can be transmitted. A TCC assigned for magnetic media filing, should also be used for electronic filing.

.03 The results of the electronic transmission will be available in the File Status area of the FIRE System within 1-2 business days. It is the filer’s responsibility to dial back to verify the acceptability of files submitted by checking the file status area of the system. Forms 1042-S, 8027 and W-4 require a longer processing time.

.04 Connect to the FIRE System by dialing 304-262-2400. This number supports analog connections from 1200bps to 56Kbps or ISDN BRI 128Kbps. The system can be accessed via Dial-up network/web browser (see Part C, Sec. 9) or communications software such as Hyperterminal, Procomm, PCAnywhere or other VT100 emulation products (see Part C, Sec.10). The Dial-up network/web browser (point-to-point) will provide an Internet-like look, however, it is not the Internet.

Sec. 9. Dial-up Network/Browser Specifications (Web Interface)

.01 The following are some general instructions (many of these may already be set by default in your software):

Dial-up network settings: (a) Set dial-up server type to PPP (b) Set network protocol to TCP/IP (c) Disable software compression (d) Disable PPP-LCP extensions (NT and 2000)

Browser settings: (a) Browser must be capable of file uploads (i.e., Internet Explorer 4.0, Netscape 2.0 or higher) (b) Enter the URL address of http://10.225.224.2 after you have connected via dial-up. (Remember, this is a point-to-point connection, not the Internet.)

.02 Due to the large number of communication products available, it is impossible to provide specific information on all software/hardware configurations. However, since most filers use Windows 95, 98, NT, 2000 or ME software (more current versions are similar), the following instructions are geared toward those products: