Part III. Administrative, Procedural, and Miscellaneous

in which the taxable year begins. The reference price determined under § 29(d)(2)(C) for the 2000 calendar year is $26.73.

Table 1 contains the applicable percentages for marginal production for taxable years beginning in calendar years 1991 through 2001.

2001 Marginal Production Rates

Notice 2001–53

Section 613A(c)(6)(C) of the Internal Revenue Code defines the term “applicable percentage” for purposes of determining percentage depletion for oil and gas

produced from marginal properties. The applicable percentage is the percentage (not greater than 25 percent) equal to the sum of 15 percent, plus one percentage point for each whole dollar by which $20 exceeds the reference price (determined under § 29(d)(2)(C)) for crude oil for the calendar year preceding the calendar year

Notice 2001–53 Table 1

APPLICABLE PERCENTAGE FOR MARGINAL PRODUCTION

Calendar Year Applicable Percentage

1991 15 percent 1992 18 percent 1993 19 percent 1994 20 percent 1995 21 percent 1996 20 percent 1997 16 percent 1998 17 percent 1999 24 percent 2000 19 percent 2001 15 percent

The principal author of this notice is Brenda M. Stewart of the Office of Associate Chief Counsel (Passthroughs and Special Industries). For further information regarding this notice, contact Ms. Stewart at (202) 622-3120 (not a toll-free call).

2001 Section 43 Inflation Adjustment

Notice 2001–54

Section 43(b)(3)(B) of the Internal Revenue Code requires the Secretary to publish an inflation adjustment factor. The en

hanced oil recovery credit under § 43 for any taxable year is reduced if the “reference price,” determined under § 29(d)(2)(C), for the calendar year preceding the calendar year in which the taxable year begins is greater than $28 multiplied by the inflation adjustment factor for that year.

The term “inflation adjustment factor” means, with respect to any calendar year, a fraction the numerator of which is the GNP implicit price deflator for the preceding calendar year and the denominator of which is the GNP implicit price deflator for 1990.

Because the reference price for the 2000 calendar year ($26.73) does not ex

ceed $28 multiplied by the inflation adjustment factor for the 2001 calendar year, the enhanced oil recovery credit for qualified costs paid or incurred in 2001 is determined without regard to the phaseout for crude oil price increases.

Table 1 contains the GNP implicit price deflator used for the 2001 calendar year, as well as the previously published GNP implicit price deflators used for the 1991 through 2000 calendar years.

2001–37 I.R.B. 225 September 10, 2001

Notice 2001–54 TABLE 1

GNP IMPLICIT PRICE DEFLATORS

Calendar Year GNP Implicit Price Deflator

1990 112.9 (used for 1991) 1991 117.0 (used for 1992) 1992 120.9 (used for 1993) 1993 124.1 (used for 1994) 1994 126.0 (used for 1995) 1995 107.5 (used for 1996)* 1996 109.7 (used for 1997) 1997 112.35 (used for 1998)** 1998 112.64 (used for 1999) 1999 104.59 (used for 2000)*** 2000 106.89 (used for 2001)

• Beginning in 1995, the GNP implicit price deflator was rebased relative to 1992. The 1990 GNP implicit price deflator used to compute the 1996 § 43 inflation adjustment factor is 93.6.

** Beginning in 1997, two digits follow the decimal point in the GNP implicit price deflator. The 1990 GNP price deflator used to compute the 1998 § 43 inflation adjustment factor is 93.63.

*** Beginning in 1999, the GNP implicit price deflator was rebased relative to 1996. The 1990 GNP implicit price deflator used to compute the 2000 § 43 inflation adjustment factor is 86.53.

Table 2 contains the inflation adjustment factor and the phase-out amount for taxable years beginning in the 2001 calendar year as well as the previously published inflation adjustment factors and phase-out amounts for taxable years beginning in the 1991 through 2000 calendar years.

Notice 2001–54 TABLE 2

INFLATION ADJUSTMENT FACTORS AND

PHASE-OUT AMOUNTS

Calendar Inflation Adjustment Phase-out Year Factor Amount

1991 1.0000 0 1992 1.0363 0 1993 1.0708 0 1994 1.0992 0 1995 1.1160 0 1996 1.1485 0 1997 1.1720 0 1998 1.1999 0 1999 1.2030 0 2000 1.2087 0 2001 1.2353 0

DRAFTING INFORMATION

The principal author of this notice is Brenda M. Stewart of the Office of Associate Chief Counsel (Passthroughs and Special Industries). For further informa

tion regarding this notice, contact Ms. Stewart at (202) 622-3120 (not a toll-free call).

September 10, 2001 226 2001–37 I.R.B.

NOTE: This revenue procedure will be reprinted as the next revision of IRS Publication 1167, Substitute Printed, Computer-

Prepared, and Computer-Generated Tax Forms and Schedules.

Rev. Proc. 2001–45

TABLE OF CONTENTS

CHAPTER 1 - INTRODUCTION TO SUBSTITUTE FORMS

Section 1.1 - Overview of Revenue Procedure 2001–45 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .228 Section 1.2 - IRS Contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .229 Section 1.3 - Nature of Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .229 Section 1.4 - Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .230 Section 1.5 - Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .231

CHAPTER 2 - GENERAL GUIDELINES FOR SUBMISSIONS AND APPROVALS

Section 2.1 - General Specifications for Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .231 Section 2.2 - Highlights of Permitted Changes and Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .231 Section 2.3 - Vouchers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .232 Section 2.4 - Restrictions on Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .233 Section 2.5 - Guidelines for Obtaining IRS Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .233 Section 2.6 - Office of Management and Budget (OMB) Requirements

for All Substitute Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .235

CHAPTER 3 - PHYSICAL ASPECTS AND REQUIREMENTS

Section 3.1 - General Guidelines for Substitute Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .236 Section 3.2 - Paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .237 Section 3.3 - Printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .238 Section 3.4 - Margins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .239 Section 3.5 - Examples of Approved Formats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .239 Section 3.6 - Miscellaneous Information for Substitute Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .240

CHAPTER 4 - ADDITIONAL RESOURCES

Section 4.1 - Guidance From Other Revenue Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .240 Section 4.2 - Ordering Publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .241 Section 4.3 - Electronic Tax Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .241 Section 4.4 - Federal Tax Forms on CD-ROM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .242

CHAPTER 5 - REQUIREMENTS FOR SPECIFIC TAX RETURNS

Section 5.1 - Tax Returns (Form 1040, 1040A, 1120, Etc.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .242 Section 5.2 - Changes Permitted to Graphics (Forms 1040A and 1040) . . . . . . . . . . . . . . . . . . . . . . . . . .243 Section 5.3 - Changes Permitted to Form 1040A Graphics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .244 Section 5.4 - Changes Permitted to Form 1040 Graphics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .244

CHAPTER 6 - FORMAT AND CONTENT OF SUBSTITUTE RETURNS

Section 6.1 - Acceptable Formats for Computer-Generated Forms and Schedules . . . . . . . . . . . . . . . . . . 245 Section 6.2 - Additional Instructions for All Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .246

CHAPTER 7 - MISCELLANEOUS FORMS AND PROGRAMS

Section 7.1 - Paper Substitutes for Form 1042-S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .247 Section 7.2 - Specifications for Substitute Schedules K-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .249 Section 7.3 - Procedures for Printing IRS Envelopes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .249 Section 7.4 - Changes Involving EPMF Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .250 Section 7.5 - Procedures for Substitute Forms 5471 and 5472 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .251

CHAPTER 8 - ALTERNATIVE METHODS OF FILING

Section 8.1 - Forms for Electronically Filed Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .252 Section 8.2 - FTD Magnetic Tape Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .253 Section 8.3 - Effect on Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .253

2001–37 I.R.B. 227 September 10, 2001

EXHIBITS

Exhibit A-1 Schedule A (Preferred) Exhibit A-2 Schedule A (Acceptable) Exhibit B-1 Schedule B (Preferred) Exhibit B-2 Schedule B (Acceptable) Exhibit CG-A Schedule A (Computer Generated) Exhibit CG-B Schedule B (Computer Generated) Exhibit C Sample Checklist Exhibit D List of Forms Referred to in the Revenue Procedure

Chapter 1 Introduction to Substitute Forms

Section 1.1—Overview of Revenue Procedure 2001–45

1.1.1 Purpose The purpose of this revenue procedure is to provide procedural guidelines and general requirements for the development, printing, and approval of all substitute tax forms. Approval will be based on these guidelines. After review and approval, submitted forms will be accepted as substitutes for official IRS forms.

1.1.2 Unique Forms Certain unique specialized forms require the use of other additional revenue procedures to supplement this publication. See Chapter 4.

1.1.3 Scope The Internal Revenue Service accepts quality substitute tax forms that are consistent with the official forms and do not have an adverse impact on our processing. The IRS Substitute Forms Program administers the formal acceptance and processing of these forms nationwide. While this program deals primarily with paper documents, it also interfaces with other processing and filing media such as:

• Magnetic tape,

• Optical character recognition, and

• Electronic filing.

Only those substitute forms that comply fully with the requirements set forth are acceptable. Exhibit D lists the form numbers mentioned in this document, their titles, and where their references are made. This revenue procedure is updated as required to reflect pertinent tax year form changes and to meet processing and/or legislative requirements.

1.1.4 Forms The following types of forms are covered by this revenue procedure: Covered by This Revenue Procedure - IRS tax returns and their related forms and schedules.

• Worksheets as they appear in instruction packages.

• Applications for permission to file returns electronically and forms used as required documentation for

electronically filed returns.

• Powers of Attorney.

• Over-the-counter estimated tax payment vouchers.

• Forms and schedules relating to partnerships, exempt organizations, and employee plans.

1.1.5 The following types of forms are not covered by this revenue procedure: Forms NOT Covered by This - W-2, W-3 (see Publication 1141 for information on these forms). Revenue Procedure - 1096, 1098 series, 1099 series, 5498 series, and W-2G (see Publication 1179 for information on these forms).

• Federal Tax Deposit (FTD) coupons, which may not be reproduced.

• Forms 1040-ES(OCR) and 1041-ES(OCR), which may not be reproduced.

  • Requests for information or documentation initiated by the Service.

  • Forms used internally by the Service.

  • State tax forms.

• Forms developed outside IRS (except for Form TD F 90–22.1, Report of Foreign Bank and Financial

Accounts ).

September 10, 2001 228 2001–37 I.R.B.

Section 1.2—IRS Contacts

In addition, the Substitute Forms Program Unit can be contacted via e-mail at tfp@publish.no.irs.gov. Please enter “Substitute Forms” on the Subject Line. Use this e-mail address only to inquire about forms covered by this revenue procedure. DO NOT attach graphic files for approval with e-mail.

For questions about Forms W-2 and W-3, refer to IRS Publication 1141, General Rules and Specifica- tions for Private Printing of Substitute Forms W-2 and W-3 . For Forms 1096, 1098, 1099, 5498, and W-2G, refer to IRS Publication 1179, Rules and Specifications for Private Printing of Substitute Forms 1096, 1098, 1099, 5498, and W-2G.

Section 1.3—Nature of Changes

1.3.1 Changes The following changes have been made to the Revenue Procedure for 2001: to the Revenue Procedure • The pages have been renumbered for easier use.

• IRS Internet Web Site addresses have been updated.

  • The OCR Forms address in Section 1.2.1 has been omitted. These form submissions may now be sent

to the Substitute Forms Program Unit.

• The Substitute Forms Program office symbols have been changed to W:CAR:MP:FP:S:CS.

  • The definition under Section 1.4.7 has been deleted.

  • The list of related publications in Chapter 4 has been updated. Pub. 1192 has been deleted from the list

because it is obsolete.

• Pricing information for the Federal Tax Forms CD-ROM has been revised.

• Section 7.1 has been deleted. Form 1040EZ is no longer being scanned.

• Information about Form 1040PC in Section 7.2 and elsewhere has been deleted. Effective tax year

2000, the Service is no longer accepting Form 1040PC.

• Section 7.3 has been deleted. The information concerning these OCR scannable forms is no longer valid.

• Because the information in Chapter 7 of the previous revision has been deleted, Chapters 8 and 9 are

now Chapters 7 and 8.

• Form 1042–S specifications have been revised.

• Forms 5500 and 5500–EZ are now handled by the Pension and Welfare Benefits Administration (PWBA).

Forms 5500 and 5500–EZ will no longer be accepted for IRS approval. Information can be found in Section 7.4. Other references to these forms have been deleted throughout this revenue procedure.

• Exhibit L–1 is renamed Exhibit D. The list has been reformatted and updated.

• Various editorial changes have been made.

2001–37 I.R.B. 229 September 10, 2001

Section 1.4—Definitions

1.4.1 Substitute A tax form (or related schedule) that differs in any way from the official version and is intended to replace Form the entire form that is printed and distributed by the Service. This term also covers those approved substitute forms exhibited in this revenue procedure.

1.4.2 Printed/ A form produced using conventional printing processes. Also, a printed form which has been reproduced Preprinted Form by photocopying or a similar process.

1.4.3 Preprinted A printed form that has marginal perforations for use with automated and high-speed printing equipment. Pin-Fed Form

1.4.4 Computer- A preprinted form in which the taxpayer’s tax entry information has been inserted by a computer, comPrepared Substitute puter-printer, or other computer type equipment such as word-processing equipment. Form

1.4.5 Computer- A tax return or form that is entirely designed and printed using a computer printer such as a laser printer, Generated Substitute etc., on plain white paper. This return or form must conform to the physical layout of the corresponding Tax Return or Form IRS form, although the typeface may differ. The text should match the text on the officially printed form as closely as possible. Condensed text and abbreviations will be considered on a case-by-case basis.

Exception: All jurats (perjury statements) must be reproduced verbatim.

1.4.6 Manually- A preprinted reproduced form in which the taxpayer’s tax entry information is entered by an individual Prepared Form using a pen, pencil, typewriter, or other non-automated equipment.

1.4.7 Graphics Parts of a printed tax form that are not tax amount entries or required information. Examples of graphics are line numbers, captions, shadings, special indicators, borders, rules, and strokes created by typesetting, photo-graphics, photo-composition, etc.

1.4.8 Acceptable A legible photocopy of an original form. Reproduced Form

1.4.9 Supporting A document providing detailed information to support a line entry on an official or approved substitute Statement form and filed with (attached to) a tax return. (Supplemental Schedule) Note: A supporting statement is not a tax form and does not take the place of an official form unless specifically permitted elsewhere in this procedure.

1.4.10 Specific The following specific terms are used throughout this revenue procedure in reference to all substitute Form Terms forms: format, sequence, line reference, item caption, and data entry field.

1.4.11 Format The overall physical arrangement and general layout of a substitute form.

1.4.12 Sequence Sequence is an integral part of the total format requirement. The substitute form should show the same numeric and logical placement order of data, as shown on the official form.

1.4.13 Line Reference The line numbers, letters, or alphanumerics used to identify each captioned line on an official form. These line references are printed to the immediate left of each caption or data entry field.

1.4.14 Item Caption The text on each line of a form, which identifies the data required.

September 10, 2001 230 2001–37 I.R.B.

1.4.15 Data Designated areas for the entry of data such as dollar amounts, quantities, responses, checkboxes, etc. Entry Field

1.4.16 Advanced A draft version of a new or revised form may be posted to the IRS Internet site for information purposes. Draft Substitute forms may be submitted based on these advanced drafts, but any company that receives forms approval based on these early drafts is responsible for monitoring and revising forms to mirror any revisions in the final forms provided by the Service.

Section 1.5—Agreement

1.5.1 Important Any person or company who uses substitute forms and makes all or part of the changes specified in Stipulation of this revenue procedure agrees to the following stipulations: This Revenue Procedure - The Internal Revenue Service presumes the changes are made in accordance with these procedures and, as such, will be non-interruptive to the processing of the tax return.

• Should any of the changes prove to be not exactly as described, and as a result become disruptive to the Internal Revenue Service during processing of the tax return, the person or company agrees to accept the determination of the IRS as to whether or not the form may continue to be used during the filing season.

• The person or company agrees to work with the IRS in correcting noted deficiencies. Notification of deficiencies may be made by any combination of fax, letter, e-mail, or phone contact and may include the return of unacceptable forms for re-submission of acceptable forms.

Chapter 2 General Guidelines for Submissions and Approvals

Section 2.1—General Specifications for Approval

2.1.1 Overview If you produce any tax returns and forms using IRS guidelines on permitted changes, you can generate your own substitutes without further approval. If your changes are more extensive, you must get official approval before using substitute forms. These changes include the use of typefaces and sizes other than those found on the official form and the condensing of line item descriptions to save space.

2.1.2 Schedules Schedules are considered to be an integral part of a complete tax return. A schedule may be included as part of a form or printed separately.

2.1.3 Example of Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, is an example of this Schedules That Must situation. Its Schedules A through U have pages numbered as part of the basic return. For Form 706 Be Submitted With to be approved, the entire form including Schedules A through U must be submitted. the Return

2.1.4 Examples of However, Schedules 1, 2, and 3 of Form 1040A are examples of schedules that can be separately Schedules That Can computer-generated. Although printed by the IRS as a supplement to Form 1040A, none of these Be Submitted schedules are required to be filed with Form 1040A. These schedules may be separated from Form Separately 1040A and submitted as computer-generated substitute forms.

2.1.5 Use and The Internal Revenue Service is continuing a program to identify and contact tax return preparers, forms Distribution of developers, and software publishers who use or distribute unapproved forms that do not conform to this Unapproved Forms revenue procedure. The use of unapproved forms impedes processing of the returns.

Section 2.2—Highlights of Permitted Changes and Requirements

2.2.1 Methods of Official versions are supplied by the Internal Revenue Service, such as those in the taxpayer’s tax package, Reproducing Internal those printed in revenue procedures, and over-the-counter forms available at IRS and other Revenue Service governmental public offices or buildings. Forms are also available on CD-ROM, and on-line via the Forms Internet.

2001–37 I.R.B. 231 September 10, 2001

There are methods of reproducing Internal Revenue Service printed tax forms suitable for use as substitute tax forms without prior approval.

• You can photocopy most tax forms and use them instead of the official ones. The entire substitute form,

including entries, must be legible.

• You can reproduce any current tax form as cut sheets, snap sets, and marginally punched, pin-fed forms

so long as you use an official IRS version as the master copy.

• You can reproduce a “signature form” as a valid substitute form. Many tax forms (including returns) have a taxpayer signature requirement as part of the form layout. The jurat/perjury state- ment/signature line areas must be retained and worded exactly as on the official form . The requirement for a signature by itself does not prohibit a tax form from being properly computer-generated.

Section 2.3—Vouchers

2.3.1 Overview All payment vouchers (Forms 940–V, 940–EZ(V), 941–V, 943–V, 945–V, 1040–V, and 2290–V) must be reproduced. Substitute vouchers must be the same size as the officially printed vouchers. Vouchers that are prepared for printing on a laser printer may include a scan line.

2.3.2 Scan Line NNNNNNNNN AAAAAA NN N NNNNNN NNN Specifications Item: A B C D E F G

A. Social Security Number/Employer Identification Number (SSN/EIN) has 9 numeric spaces. B. Check Digit has 2 alpha spaces. C. Name Control has 4 alphanumeric spaces. D. Master File Tax (MFT) Code has 2 numeric spaces (see below). E. Taxpayer Identification Number (TIN) Type has 1 numeric space (see below). F. Tax period has six numeric spaces in year/month format (YYYYMM). G . Transaction Code has 3 numeric spaces.

2.3.3 MFT Code Code Number for Form:

• 1040 family – 30;

• 940/940–EZ – 10;

• 941 – 01;

• 943 – 11;

• 945 – 16; and

• 2290 – 60.

2.3.4 TIN Type Type Number for:

• Form 1040 family – 0; and

• Forms 940, 940–EZ, 941, 943, 945, and 2290 – 2.

2.3.5 Voucher Size The voucher size must be exactly 8.0� x 3.25� (Forms 1040–ES and 1041–ES must be 7.625� x 3.0�). The document scan line must be vertically positioned 0.25 inches from the bottom of the scan line to the bottom of the voucher. The last character on the right of the scan line must be placed 3.5 inches from the right leading edge of the document. The minimum required horizontal clear space between characters is .014 inches. The line to be scanned must have a clear band 0.25 inches in height from top to bottom of the scan line, and from border to border of the document. “Clear band” means no printing except for dropout ink.

2.3.6 Print and Vouchers must be imaged in black ink using OCR A, OCR B, or Courier 10. These fonts may not be Paper Weight mixed in the scan line. The horizontal character pitch is 10 CPI. The paper must be 20 to 24 pound OCR bond paper weight.

September 10, 2001 232 2001–37 I.R.B.

Section 2.4—Restrictions on Changes

2.4.1 Things You You cannot, without prior IRS approval, change any IRS tax form or use your own (non-approved) CANNOT Do to IRS versions including graphics, unless specifically permitted by this revenue procedure. Forms Suitable for Substitute Tax Forms You cannot adjust any of the graphics on Forms 1040, 1040A, and 1040EZ (except in those areas specified in Chapter 5 of this revenue procedure) without prior approval from the IRS Substitute Forms Program Unit.

You cannot use your own preprinted label on tax returns filed with the IRS unless you fully comply with the criteria specified in the section in this revenue procedure on use of pre-addressed IRS labels.

Section 2.5—Guidelines for Obtaining IRS Approval

2.5.1 Basic Preparers who submit substitute privately-designed, privately-printed, computer-generated, or computerRequirements prepared tax forms must develop these substitutes using the guidelines established in this chapter. These forms, unless excepted by the revenue procedure, must be approved by the IRS before being filed.

2.5.2 Conditional The IRS cannot grant final approval of your substitute form until the official form has been published. Approval Based on However, the IRS has established a location on the Internet for the posting of advance drafts of forms. Advance Drafts This site can be reached through the Tax Professional’s Corner at:

http://www.irs.gov/prod/bus_info/tax_pro.

We encourage submission of proposed substitutes of these advance draft forms, and will grant conditional approval based solely on these early drafts. These advance drafts are subject to significant change before forms are finalized. If these advance drafts are used as the basis for your substitute forms, you will be responsible for subsequently updating your final forms to agree with the final official version. These revisions need not be submitted for further approval.

Note: Approval of forms based on advance drafts will not be granted after the final version of an official form is published.

2.5.3 Submission Please follow these general guidelines when submitting substitute forms for approval. Procedures

• Any alteration of forms must be within the limits acceptable to the Service. It is possible that, from one

filing period to another, a change in law or a change in internal need (processing, audit, compliance, etc.) may change the allowable limits for the alteration of the official form.

• When specific approval of any substitute form (other than those specified in Chapter 2, IRS Contacts) is

desired, a sample of the proposed substitute should be forwarded for consideration by letter to the Substitute Forms Program Unit at the address shown in Section 1.2.

• To expedite multiple forms approval, we prefer that your proposed forms be submitted in separate sets by return. For example, Forms 1040 and their normally related schedules or attachments should be submitted separately from Forms 1120 and 1065 if possible. Schedules and forms ( e.g ., Forms 3468, 4136, etc.) that can be used with more than one type of return ( e.g ., 1040, 1041, 1120, etc.) should be submitted only once for approval, regardless of the number of different tax returns with which they may be associated. Also, all pages of multi-page forms or returns should be submitted in the same package.

2.5.4 Approving As no IRS office except the ones specified in this procedure (per the chart in Section 1.2) are authorized Offices to approve substitute forms, unnecessary delay may result if forms are sent elsewhere for approval. All forms submitted to any other office must be forwarded to the appropriate office for formal control and review. The Substitute Forms Program Unit may then coordinate the response with the program analyst responsible for the processing of that form. Such coordination may include allowing the analyst to officially approve the form. No IRS office is authorized to allow deviations from this revenue procedure.

2001–37 I.R.B. 233 September 10, 2001

2.5.5 Service’s The IRS does not review or approve the logic of specific software programs, nor does the IRS Review of Software confirm the calculations on the forms produced by these programs. The accuracy of the program remains Programs, etc. the responsibility of the software package developer, distributor, or user.

The Substitute Forms Program is primarily concerned with the pre-filing quality review of the final forms, produced by whatever means, that are expected to be processed by IRS field offices. For the above reasons, you should submit forms without including any “taxpayer” information such as names, addresses, monetary amounts, etc.

2.5.6 When To Send Proposed substitutes, which are required to be submitted per this revenue procedure, should be sent as Proposed Substitutes much in advance of the filing period as possible. This is to allow adequate time for analysis and response.

2.5.7 Accompanying When submitting sample substitutes, you should include an accompanying statement that lists each Statement form number and its changes from the official form (position, arrangement, appearance, line numbers, additions, deletions, etc.). With each of the items you should include a detailed reason for the change and an estimate of the number of forms expected to be filed.

When requesting approval for multiple forms, the statement should be presented as a checklist. Checklists are not mandatory, but do expedite the approval process. The checklist may look like the example (Exhibit C) displayed in the back of this procedure or may be one of your own design. Please include your fax number on the checklist.

2.5.8 Approval/Non- The Substitute Forms Unit will fax the checklist or an approval letter to the originator if a fax number has Approval Notice been provided, unless:

• The requester has asked for a formal letter; or

  • Significant corrections to the submitted forms are required.

Notice of approval may contain qualifications for use of the substitutes. Notices of nonapproval letters may specify the changes required for approval, and may also require re-submission of the form(s) in question. Telephone contact is used when possible.

2.5.9 Duration of Most signature tax returns and many of their schedules and related forms have the tax (liability) Approval year printed in the upper right corner. Approvals for these forms are usually good for one calendar year (January through December of the year of filing). Quarterly tax forms in the 94X series and Form 720 require approval for any quarter in which the form has been revised.

Because changes are made to a form every year, each new filing season generally requires a new submission of a form. Very rarely is updating the preprinted year the only change made to a form.

2.5.10 Limited Limited continued use of a change approved for one tax year may be allowed for the same form in Continued Use of an the following tax year. Examples of such limitations and requirements are the use of abbreviated words, Approved Change revised form spacing, compressed text lines, shortened captions, etc., which do not change the consistency of lines or text on the official forms.

If substantial changes are made to the form, new substitutes must be submitted for approval. If only minor editorial changes are made to the form, it is not subject to review. It is the responsibility of each vendor who has been granted permission to use substitute forms to monitor and revise forms to mirror any revisions to official forms made by the Service. If there are any questions, please contact the Substitute Forms Unit.

If you received written approval of a previous tax year substitute form governed by this revenue procedure and continue to use the approved change on your current tax year substitute form, you may revise your form to include this change. Without additional written approval, you may use it as a current tax year substitute form, provided you comply with the requirements in this revenue procedure.

2.5.11 When Approval If you received written approval for a specific change on a form last year, such as deleting the vertical Is Not Required lines used to separate dollars and cents, you may make the same change this year if the item is still present on the official form.

• The new substitute does not have to be sent to the IRS and written approval is not required.

September 10, 2001 234 2001–37 I.R.B.

• However, the new substitute must conform to the official current year IRS form in other respects: date, Office of Management and Budget (OMB) approval number, attachment sequence number, Paperwork Reduction Act Notice Statement, arrangement, item caption, line number, line reference, data sequence, etc.

• It must also comply with this revenue procedure. The procedure may have eliminated, added to, or otherwise changed the guideline(s) that affected the change approved last year.

  • An approved change is authorized only for the period from a prior tax year substitute form to a current

tax year substitute form.

Exception: Forms with temporary, limited, or interim approvals (or with approvals that state an approved change is not allowed in any other tax year) are subject to review in subsequent years.

2.5.12 Continuous Forms without preprinted tax years are called “continuous use” forms. Continuous use forms are revised Use Forms when a legislative change affects the form or a change will facilitate processing. These forms may have revision dates that are valid for longer than one year.

2.5.13 Internet A chart of print dates (for annual and quarterly forms) and most current revision dates (for continuous use Program Chart forms) will be maintained on the Internet. For further details, see Section 4.3.1 on access to the Internet.

2.5.14 Required Generally, you must send us one copy of each form being submitted for approval. However, if you Copies are producing forms for different computer systems ( e.g., IBM (or compatible) vs. Macintosh) or different types of printers (laser vs. dot matrix), and these forms differ significantly in appearance, submit one copy for each type of system or printer.

2.5.15 Requestor’s Following the receipt of initial approval for a substitute forms package or of a software output Responsibility program to print substitute forms, it is the responsibility of the originator (designer or distributor) to provide client firms or individuals with the Service forms requirements that must be met for continuing acceptability. Examples of this responsibility include:

• Using the prescribed print paper, font size, legibility, state tax data deletion, etc.

• Informing all users of substitute forms of the legal requirements of the Paperwork Reduction Act Notice, which is generally found in the instructions for the official IRS forms.

2.5.16 Source Code The Substitute Forms Program Unit, W:CAR:MP:FP:S:CS, will assign a unique source code to each firm that submits substitute paper forms for approval. This will be a permanent control number that should be used on every form created by a particular firm.

The source code:

• For paper returns consists of three alpha characters.

• Should be printed at the bottom left margin area on the first page of every approved substitute paper form.

• Should not be used on optically scanned (OCR) forms.

Section 2.6—Office of Management and Budget (OMB) Requirements for All Substitute Forms

2.6.1 OMB There are legal requirements of the Paperwork Reduction Act of 1995 (The Act). Public Law 104–13 Requirements for requires that: All Substitute Forms

• OMB approve all IRS tax forms that are subject to the Act,

• Each IRS form contains (in the upper right corner) the OMB number, if any, and

• Each IRS form (or its instructions) states why IRS needs the information, how it will be used, and whether or not the information is required to be furnished.

This information must be provided to every user of official or substitute tax forms.

2.6.2 Application of On forms that have been assigned OMB numbers: the Paperwork Reduction Act - All substitute forms must contain in the upper right corner the OMB number that is on the official form.

• The required format is: OMB No. XXXX-XXXX (Preferred) or OMB # XXXX-XXXX (Acceptable).

2001–37 I.R.B. 235 September 10, 2001

2.6.3 Required You must inform the users of your substitute forms of the IRS use and collection requirements stated in Explanation to the instructions for official IRS forms. Users

• If you provide your users or customers with the official IRS instructions, page 1 of each form must retain either the Paperwork Reduction Act Notice (or Disclosure, Privacy Act, and Paperwork Reduction Act Notice), or a reference to it as the IRS does on the official forms (usually in the lower left corner of the forms).

• This notice reads, in part, “We ask for the information on this form to carry out the Internal Revenue

laws of the United States. You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax....”

Note: If the IRS instructions are not provided to users of your forms, the exact text of the Paperwork Re- duction Act Notice (or Disclosure, Privacy Act, and Paperwork Reduction Act Notice) must be furnished separately or on the form.

2.6.4 Finding the The OMB number and the Paperwork Reduction Act Notice, or references to it, may be found printed OMB Number and on an official form (or its instructions). The number and the notice are included on the official paper Paperwork Reduction format and in other formats produced by the IRS ( e.g., compact disc (CD) or Internet download) Act Notice

Chapter 3 Physical Aspects and Requirements

Section 3.1—General Guidelines for Substitute Forms

3.1.1 General The official form is the standard. Because a substitute form is a variation from the official form, you Information should know the requirements of the official form for the year of use before you modify it to meet your needs. The IRS provides several means of obtaining the most frequently used tax forms. These include the Internet, fax-on-demand, and CD-ROM (see Chapter 4).

3.1.2 Design Each form must follow the design of the official form as to format arrangement, item caption, line numbers, line references, and sequence.

3.1.3 State Tax State tax information must not appear on the Federal tax return, associated form, or schedule Information that is filed with the IRS. Exceptions occur when amounts are claimed on, or required by, the Federal Prohibited return ( e.g., state and local income taxes, on Schedule A of Form 1040).

Alignment of

3.1.5 Attachment Many individual income tax forms have a required “attachment sequence number” located just below Sequence Number the year designation in the upper right corner of the form. The IRS uses this number to indicate the order

September 10, 2001 236 2001–37 I.R.B.

in which forms are to be attached to the tax return for processing. Some of the attachment sequence numbers may change each year.

On computer-prepared forms:

• The sequence number may be printed in no less than 12-point boldface type and centered below the

form’s year designation.

• The sequence number may also be placed following the year designation for the tax form and separated

with an asterisk.

• The actual number may be printed without labeling it the “Attachment Sequence Number.”

3.1.6 Paid Preparer’s On Forms 1040EZ, 1040A, 1040, and 1120, etc., the “Paid Preparer’s Use Only” area may not be reInformation and arranged or relocated. You may, however, add three extra lines to the paid preparer’s address area Signature Area without prior approval. This applies to other tax forms as well.

3.1.7 Assembly of If developing software or forms for use by others, please inform your customers/clients that the order in

Supporting statements should then follow in the same sequence as the forms they support. Additional information required should be attached last.

In this way, the forms are received in the order in which they must be processed. If you do not send returns to us in order, processing may be delayed.

Section 3.2—Paper

3.2.1 Paper Content The paper must be:

• Chemical wood writing paper that is equal to or better than the quality used for the official form,

• At least 18 pound (17� x 22�, 500 sheets), or

• At least 50 pound offset book (25� x 38�, 500 sheets).

3.2.2 Paper With There are several kinds of paper prohibited for substitute forms. These are: Chemical Transfer

• Carbon-bonded paper. Properties

  • Chemical transfer paper except when the following specifications are met:

  • Each ply within the chemical transfer set of forms must be labeled, and

  • Only the top ply (ply one and white in color), the one that contains chemical on the back only (coated

back), may be filed with the Service.

3.2.3 Example A set containing three plies would be constructed as follows: ply one (coated back), “Federal Return, File with IRS”; ply two (coated front and back), “Taxpayer’s copy”; and ply three (coated front), “Preparer’s copy.”

The file designation, “Federal Return, File with IRS,” for ply one must be printed in the bottom right margin (just below the last line of the form) in 12-point, bold-face type.

2001–37 I.R.B. 237 September 10, 2001

It is not mandatory, but recommended, that the file designation “Federal Return, File with IRS,” be printed in a contrasting ink for visual emphasis.

3.2.4 Carbon Paper Do not attach any carbon paper to any return you file with the IRS.

3.2.5 Paper and We prefer that the color and opacity of paper substantially duplicates that of the original form. This Ink Color means that your substitute must be printed in black ink and may be on white or on the colored paper the IRS form is printed on. Forms 1040A and 1040 substitute reproductions may be in black ink without the colored shading. The only exception to this rule is Form 1041–ES, which should always be printed with a very light gray shading in the color screened area. This is necessary to assist us in expeditiously separating this form from the very similar Form 1040–ES.

3.2.6 Page Size Substitute or reproduced forms and computer prepared/generated substitutes may be the same size as the official form (8� x 11� in most cases) or they may be the standard commercial size (8 1/2� x 11�) exclusive of pin-feed holes. The thickness of the stock cannot be less than .003 inch.

Section 3.3—Printing

3.3.1 Printing The private printing of all substitute tax forms must be by conventional printing processes, Medium photocopying, computer-graphics, or similar reproduction processes.

3.3.2 Legibility All forms must have a high standard of legibility as to printing, reproduction, and fill-in matter. Entries of taxpayer data may be no smaller than eight points. The IRS reserves the right to reject those with poor legibility. The ink and printing method used must ensure that no part of a form (including text, graphics, data entries, etc.) develops “smears” or similar quality deterioration. This includes any subsequent copies or reproductions made from an approved master substitute form, either during preparation or during IRS processing.

3.3.3 Type Font Many Federal tax forms are printed using “Helvetica” as the basic type font. We request that you use this type font when composing substitute forms.

3.3.4 Print Spacing Substitute forms should be printed using a 6 lines/inch vertical print option. They should also be printed horizontally in 10 pitch pica ( i.e., 10 print characters per inch) or 12 pitch elite ( i.e., 12 print positions per inch).

3.3.5 Image Size The image size of a printed substitute form should be as close as possible to that of the official form. You may omit any text on both computer-prepared and computer-generated forms that is solely instructional.

3.3.6 Title Area To allow a large top margin for marginal printing and more lines per page, the title line(s) for all Changes substitute forms (not including the form’s year designation and sequence number, when present) may be photographically reduced by 40 percent or reset as one line of type. When reset as one line, the type size may be no smaller than 14-point. You may omit “Department of the Treasury, Internal Revenue Service” and all reference to instructions in the form’s title area.

3.3.7 Remove When privately printing substitute tax forms, the Government Printing Office (GPO) symbol and/or Government Printing jacket number must be removed. In the same place, using the same type size, print the Employer Office Symbol and Identification Number (EIN), the Social Security Number (SSN) of the printer or designer, or the IRS Catalog Number IRS-assigned source code. (We prefer this last number be printed in the lower left area of the first page of each form.) Also, remove the IRS Catalog Number (Cat. No.) if one is present in the bottom center margin, and the recycle symbol if the substitute is not produced on recycled paper.

September 10, 2001 238 2001–37 I.R.B.

3.3.8 Printing on While it is preferred that both sides of the paper be used for substitute and reproduced forms, One Side of Paper resulting in the same page arrangement as that of the official form or schedule, the IRS will not reject your forms if only one side of the paper is used.

3.3.9 Photocopy The IRS does not undertake to approve or disapprove the specific equipment or process used Equipment in reproducing official forms. Photocopies of forms must be entirely legible and satisfy the conditions stated in this and other revenue procedures.

3.3.10 Reproductions Reproductions of official forms and substitute forms that do not meet the requirements of this revenue procedure may not be filed instead of the official forms. Illegible photocopies are subject to being returned to the filer for re-submission of legible copies.

3.3.11 Removal of You may remove references to instructions. No prior approval is needed. Instructions

Exception: The words “For Paperwork Reduction Act Notice, see instructions” must be retained or a similar statement provided on each form. Some forms refer the taxpayer to a page number in the instructions for information on the Paperwork Reduction Act Notice.

Section 3.4—Margins

3.4.1 Margin Size The format of a reproduced tax return when printed on the page must have margins on all sides at least as large as the margins on the official form. This allows room for IRS employees to make the necessary entries on the form during processing.

• A 1/2 inch to 1/4 inch margin must be maintained across the top, bottom, and both sides (exclusive of

any pin-fed holes) of all computer-generated substitutes.

• The marginal, perforated strips containing the pin-fed holes must be removed from all forms prior to filing with the Internal Revenue Service.

3.4.2 Marginal Prior approval is not required for the marginal printing allowed when printed on an official form or Printing on a photocopy of an official form.

• With the exception of the actual tax return forms ( i.e., Forms 1040, 1040A, 1040EZ, 1120, 940, 941,

etc.), you may print in the left vertical margin and in the left half of the bottom margin.

• Printing is never allowed in the top right margin of the tax return form ( i.e., Forms 1040, 1040A,

1040EZ, 1120, 940, 941, etc.). The Service uses this area to imprint a Document Locator Number for each return. There are no exceptions to this requirement.

Section 3.5—Examples of Approved Formats

3.5.1 Examples of Two sets of exhibits (Exhibits A-1, A-2, B-1, and B-2) are at the end of this revenue procedure. Approved Formats These are examples of how the guidelines in this revenue procedure may be used in some specific From the Exhibits cases. Vertical spacing is six (6) lines to the inch.

3.5.2 Examples of Examples of acceptable computer-generated formats are also shown in the exhibits section of Acceptable Computer- this revenue procedure. Exhibits CG-A and CG-B show computer-generated 1995 Schedules A and B. Generated Formats Vertical spacing is six (6) lines to the inch. You may also refer to them as examples of how the guidelines in this revenue procedure may be used in specific cases. A combination of upper and lower-case print fonts is acceptable in producing the computer-generated forms included in this procedure. The same logic for computer-generated forms can be applied to any IRS form that is normally reproducible as a substitute form, with the exception of tax return forms as discussed elsewhere. These examples are from a prior year and are not to be used as substitute forms.

2001–37 I.R.B. 239 September 10, 2001

Section 3.6—Miscellaneous Information for Substitute Forms

3.6.1 Filing To be acceptable for filing, a substitute return or form must print out in a format that will allow Substitute Forms the party submitting the return to follow the same instructions as for filing official forms. These instructions are in the taxpayer’s tax package or in the related form instructions. The form must be on the appropriate size paper, be legible, and include a jurat where one appears on the published form.

3.6.2 Caution to The IRS has received returns produced by software packages with approved output where either the Software Publishers form heading was altered or the lines were spaced irregularly. This produces an illegible or unrecognizable return or a return with the wrong number of pages. We realize that many of these problems are caused by individual printer differences but they may delay input of return data and, in some cases, generate correspondence to the taxpayer. Therefore, in the instructions to the purchasers of your product, both individual and professional, please stress that their returns will be processed more efficiently if they are properly formatted. This includes:

• Having the correct form numbers and titles at the top of the return, and

• Submitting the same number of pages as if the form were an official IRS form with the line items on the

proper pages.

3.6.3 Use Pre- If you are a practitioner filling out a return for a client or a software publisher who prints instruction Addressed IRS manuals, stress the use of the pre-addressed label provided in the tax package the IRS sent to the taxpayer, Label when available. The use of this label (or its precisely duplicated label information) is extremely important for the efficient, accurate, and economical processing of a taxpayer’s return. Labeled returns indicate that a taxpayer is an established filer and permits the IRS to automatically accelerate processing of those returns. This results in quicker refunds, more accurate names/addresses and postal deliveries, and less manual review by IRS functions.

3.6.4 Caution to If you are producing a software package that generates name and address data onto the tax Producers of Software return, do not under any circumstances, program either the Service preprinted check digits or a Packages practitioner-derived name control to appear on any return prepared and filed with the IRS.

3.6.5 Programming Whenever applicable: To Print Forms

• Use only the following label information format for single filers:

JOHN Q. PUBLIC 310 OAK DRIVE HOMETOWN, STATE 94000

• Use only the following information for joint filers:

JOHN Q. PUBLIC MARY I. PUBLIC 310 OAK DRIVE HOMETOWN, STATE 94000

Chapter 4 Additional Resources

Section 4.1—Guidance From Other Revenue Procedures

4.1.1 General Guidance for the substitute tax forms not covered in this revenue procedure and the revenue procedures that govern their use are as follows:

• Revenue Procedure 94–79, IRS Publication 1355, Requirements and Conditions for the Reproduction,

Private Design, and Printing of Substitute Forms 1040–ES .

• Revenue Procedure 2001–26, IRS Publication 1141, General Rules and Specifications for Private Printing of Substitute Forms W-2 and W-3 .

September 10, 2001 240 2001–37 I.R.B.

• Revenue Procedure 2000–28, IRS Publication 1179, Rules and Specifications for Private Printing of

Substitute Forms 1096, 1098, 1099, 5498, and W-2G.

• Revenue Procedure 2001–40, IRS Publication 1187, Specifications for Filing Form 1042–S, Foreign

Person’s U.S. Source Income Subject to Withholding Magnetically or Electronically.

• Revenue Procedure 2001–32, IRS Publication 1220, Specifications for Filing Forms 1098, 1099, 5498,

and W-2G Magnetically or Electronically.

• Revenue Procedure 95–18, IRS Publication 1223, Specifications for Private Printing of Substitute

Forms W-2c and W-3c.

Section 4.2—Ordering Publications

4.2.1 Sources of The publications listed below are available either on the IRS Internet web site or may be ordered by Publications calling 1-800-TAX-FORM (1-800-829-3676). Identify the requested document by IRS publication number:

• Pub. 1141, the revenue procedure on specifications for private printing for Forms W-2 and W-3.

• Pub. 1167, the revenue procedure on substitute printed, computer-prepared, and computer-generated tax

forms and schedules.

• Pub. 1179, the revenue procedure on paper substitute information returns (Forms 1096, 1098, 1099,

5498, and W-2G).

• Pub. 1220, the revenue procedure on electronic or magnetic reporting for information returns (Forms

1098, 1099 series, 5498, and W-2G).

• Pub. 1223, the revenue procedure on substitute Forms W-2c and W-3c.

• Pub. 1239, Specifications for Filing Form 8027, Employer’s Annual Information Return of Tip Income

and Allocated Tips, on Magnetic Tape.

• Pub. 1245, Magnetic Tape Reporting for Forms W-4 .

• Pub. 1345, Handbook for Electronic Filers of Individual Income Tax Returns (Tax Year 2000) . (This is

an annual publication; tax year is subject to change).

• Pub. 1345-A, Handbook for Electronic Filers of Individual Income Tax Returns (Tax Year 2000) (Supplement). This publication, printed in the late fall, supplements Publication 1345.

• Pub. 1355, the revenue procedure on the requirements for substitute Form 1040–ES.

4.2.2 Where To Order If you are mailing your order, the address to use is determined by your location.

Section 4.3—Electronic Tax Products

4.3.1 The Internet Copies of tax forms with instructions, publications, and other tax-related materials may be obtained via the Internet at www.irs.gov. Forms can be downloaded in several file formats (PDF - Portable Document Format, PS - PostScript, and PCL - Printer Control Language). Those choosing to use PDF files for viewing on a personal computer can also download a free copy of the Adobe Acrobat Reader.

2001–37 I.R.B. 241 September 10, 2001

4.3.2 Tax Fax The most frequently requested tax forms, instructions, and other information are available through IRS Tax Fax at (703) 368-9694. Call from your fax machine and follow the voice prompts. Your request will be transmitted directly back to you. Each call is limited to requesting three items; users pay the telephone line charges.

4.3.3 Report of The Service makes available a site on the Internet that shows print dates for forms used by taxpayers Print Dates in the preparation of returns and subsequent transactions. It has three schedules:

• Anticipated print dates of annual returns,

• Anticipated print dates of quarterly returns, and

• Last revision dates for continuous use only forms.

The site address is http://www.irs.gov/prod/bus_info/tax_pro/formsch.html . The site will be updated weekly during peak printing periods and as necessary at other times.

Section 4.4—Federal Tax Forms on CD-ROM

4.4.1 Information The CD-ROM contains over 3,000 tax forms and publications for small businesses, return preparers, About Federal Tax and others who frequently need current or prior year tax products. Most current tax forms on the Forms CD-ROM CD-ROM may be filled in electronically, then printed out for submission and saved for record keeping. Other products on the CD-ROM include the Internal Revenue Bulletins, Tax Supplements, and Internet resources for the tax professional with links to the World Wide Web.

All necessary software to view the files must be installed from the CD-ROM. Software for Adobe Acrobat Reader is included on the disk. The software will run under Windows 95/98/NT and Macintosh System 7.5 and later. All products are presented in Adobe’s Portable Document Format (PDF). In addition, the TIPs are provided in the Hyper Text Markup Language (HTML).

4.4.2 System For system requirements, contact the National Technical Information Service (NTIS) help desk at Requirements and 703-487-4608. How To Order the Federal Tax Forms The cost of the CD, if purchased via the Internet at http://www.irs.gov/cdorders from NTIS, is $21 CD-ROM (with no handling fee).

If purchased using the following methods, the cost for each CD is $21 (plus a $5 handling fee). The price for 100 or more copies is $15.75 per CD (plus a $5 handling fee). These methods are:

• By phone - 1-877-CDFORMS (1-877-233-6767)

• By fax - (703) 605-6900

• By mail using the order form contained in IRS Publication 1045 (Tax Professionals Program)

• By mail to:

National Technical Information Service 5285 Port Royal Road Springfield, VA 22161

Chapter 5 Requirements for Specific Tax Returns

Section 5.1—Tax Returns (Form 1040, 1040A, 1120, Etc.)

5.1.1 Acceptable Forms Tax return forms (such as Forms 1040, 1040A, and 1120) require signature and establish tax liability upon completion. Computer-generated versions are acceptable under the following conditions:

• These substitute returns must be printed on plain white paper.

• Substitute returns and forms must conform to the physical layout of the corresponding IRS form although the typeface may differ. The text should match the text on the officially published form as

September 10, 2001 242 2001–37 I.R.B.

closely as possible. Condensed text and abbreviations will be considered on a case-by-case basis. Caution: All jurats (perjury statements) must be reproduced verbatim. No text can be added, deleted, or changed in meaning.

• Various computer-graphic print media such as laser printing, dot matrix printing, etc., may be used to

produce the substitute forms.

• The substitute return must be the same number of pages and contain the same line text as the official return.

• All computer-generated tax returns must be submitted for approval prior to their original use. You do

not need approval for a substitute tax return form if its only change is the preprinted year and you had received a prior year approval letter.

Exception: If the approval letter specifies a one-time exception for your return, the next year’s return must be approved.

5.1.2 Prohibited The following are prohibited: Forms

• Tax returns (e.g., Forms 1040, etc.) computer-generated on lined or color-barred paper.

• Tax returns that differ from the official IRS forms in a manner that makes them not standard or processable.

5.1.3 Changes Certain changes (listed in Sections 5.2 through 5.4) are permitted to the graphics of the form without Permitted to Forms prior approval, but these changes apply only to acceptable preprinted forms. Changes not requiring prior 1040 and 1040A approval are good only for the annual filing period, which is the current tax year. Such changes are valid in subsequent years only if the official form does not change.

5.1.4 Other Changes All changes not listed in Sections 5.2 through 5.4 require approval from the Service before the form Not Listed may be filed.

Section 5.2—Changes Permitted to Graphics (Forms 1040A and 1040)

5.2.1 Adjustments You may make minor vertical and horizontal spacing adjustments to allow for computer or word-processing printing. This includes widening the amount columns or tax entry areas if the adjustments comply with other provisions stated in revenue procedures. No prior approval is needed for these changes.

5.2.2 Name and The horizontal rules and instructions within the name and address area may be removed and the Address Area entire area left blank. No line or instruction can remain in the area. However, the statement regarding use of the IRS label should be retained. The heavy ruled border (when present) that outlines the name, address area, and social security number must not be removed, relocated, expanded, or contracted.

5.2.3 Required Format When the name and address area is left blank, the following format must be used when printing the taxpayer’s name and address. Otherwise, unless the taxpayer’s preprinted label is affixed over the information entered in this area, the lines must be filled in as shown:

• 1st name line (35 characters maximum).

• 2nd name line (35 characters maximum).

• In-care-of name line (35 characters maximum).

• City, state (25 characters maximum), one blank character, & ZIP code.

5.2.4 Conventional When there is no in-care-of name line, the name and address will consist of only three lines Name and Address (single filer) or four lines (joint filer). Name and address (joint filer) with no in-care-of name line: Data JOHN Z. JONES MARY I. JONES 1234 ANYWHERE ST., APT 111 ANYTOWN, STATE 12321

2001–37 I.R.B. 243 September 10, 2001

5.2.5 Example of In- Name and address (single filer) with in-care-of name line: Care-Of Name Line JOHN Z. JONES C/O THOMAS A. JONES 4311 SOMEWHERE AVE. SAMETOWN, STATE 54345

5.2.6 SSN and The vertical lines separating the format arrangement of the SSN/EIN may be removed. When the Employer Identification vertical lines are removed, the SSN and EIN formats must be 000-00-0000 or 00-0000000, respectively. Number (EIN) Area

5.2.7 Cents Column - You may remove the vertical rule that separates the dollars from the cents.

• All entries in the amount column should have a decimal point following the whole dollar amounts

whether or not the vertical line that separates the dollars from the cents is present.

• You may omit printing the cents, but all amounts entered on the form must follow a consistent format.

You are strongly urged to round off the figures to whole dollar amounts, following the official return instructions.

• When several amounts are summed together, the total should be rounded off after addition ( i.e, individual amounts should not be rounded off for computation purposes).

• When printing money amounts, you must use one of the following ten-character formats: (a) 0,000,000.

(b) 000,000.00.

• When there is no entry for a line, leave the line blank.

5.2.8 “Paid On all forms, the paid preparer’s information area may not be rearranged or relocated. You may add three lines Preparer’s Use and remove the horizontal rules in the preparer’s address area. Only” Area

Section 5.3—Changes Permitted to Form 1040A Graphics

5.3.1 General No prior approval is needed for the following changes (for use with computer-prepared forms only).

5.3.2 Line 4 of This line may be compressed horizontally (to allow for same line entry for the name of the qualifying Form 1040A child) by using the following caption: “Head of household; child’s name” (name field).

5.3.3 Other Lines Any line with text that takes up two or more vertical lines may be compressed to one line by using contractions, etc., and by removing instructional references.

5.3.4 Page 2 of All lines must be present and numbered in the order shown on the official form. These lines may also Form 1040A be compressed.

5.3.5 Color Screening It is not necessary to duplicate the color screening used on the official form. A substitute Form 1040A may be printed in black and white only with no color screening.

5.3.6 Other Changes No other changes to the Form 1040A graphics are allowed without prior approval except for the Prohibited removal of instructions and references to instructions.

Section 5.4—Changes Permitted to Form 1040 Graphics

5.4.1 General No prior approval is needed for the following changes (for use with computer-prepared forms only).

September 10, 2001 244 2001–37 I.R.B.

5.4.2 Line 4 of This line may be compressed horizontally (to allow for a larger entry area for the name Form 1040 of the qualifying child) by using the following caption: “Head of household; child’s name” (name field).

5.4.3 Line 6c of The vertical lines separating columns (1) through (4) may be removed. The captions may be Form 1040 shortened to allow a one-line caption for each column.

5.4.4 Other Lines Any other line with text that takes up two or more vertical lines may be compressed to one line by using contractions, etc., and by removing instructional references.

5.4.5 Line 21 - The fill-in portion of this line may be expanded vertically to three lines. The amount entry box must Other Income remain a single entry.

5.4.6 Line 40 of You may change the line caption to read “Tax” and computer print the words “Total includes tax from” Form 1040 - Tax and either “Form(s) 8814” or “Form 4972”. If both forms are used, print both form numbers.

5.4.7 Line 49 of You may change the caption to read: “Other credits from Form” and computer-print only the form(s) Form 1040 that apply.

5.4.8 Color Screening It is not necessary to duplicate the color screening used on the official form. A substitute Form 1040 may be printed in black and white only with no color screening.

5.4.9 Other Changes No other changes to the Form 1040 graphics are permitted without prior approval except for the Prohibited removal of instructions and references to instructions.

Chapter 6 Format and Content of Substitute Returns

Section 6.1—Acceptable Formats for Computer-Generated Forms and Schedules

6.1.1 Exhibits and Exhibits of acceptable computer-generated formats for the schedules usually attached to the Use of Acceptable Form 1040 are shown in the exhibits section of this revenue procedure. Computer-Generated Formats - If your computer-generated forms appear exactly like the exhibits, no prior authorization is needed.

• You may computer-generate forms not shown here, but you must design them by following the manner and style of those in the exhibits section. Take care to observe other requirements and conditions in this revenue procedure. The Service encourages the submission of all proposed forms covered by this revenue procedure.

6.1.2 Instructions The format of each substitute schedule or form must follow the format of the official schedule or form as to item captions, line references, line numbers, sequence, form arrangement and format, etc. Basically, try to make the form look like the official one, with readability and consistency being primary factors. You may use periods and/or other similar special characters to separate the various parts and sections of the form. DO NOT use alpha or numeric characters for these purposes. With the exceptions described in paragraph 6.1.3, all line numbers and items must be printed even though an amount is not entered on the line.

6.1.3 Line Numbers When a line on an official form is designated by a number or a letter, that designation (reference code) must be used on a substitute form. The reference code must be printed to the left of the text of each line and immediately preceding the data entry field, even if no reference code precedes the data entry field on the official form. If an entry field contains multiple lines and shows the line references once on the left and right side of the form, use the same number of line references on the substitute return.

2001–37 I.R.B. 245 September 10, 2001

In addition, the reference code that is immediately before the data field must either be followed by a period or enclosed in parentheses. There also must be at least two blank spaces between the period or the right parenthesis and the first digit of the data field. (See example below.)

6.1.4 Decimal Points A decimal point (i.e ., a period) should be used for each money amount regardless of whether the amount is reported in dollars and cents or in whole dollars, or whether or not the vertical line that separates the dollars from the cents is present. The decimal points must be vertically aligned when possible.

Example:

5 STATE & LOCAL INC. TAXES................5 495.00 6 REAL ESTATE TAXES................6 7 PERSONAL PROPERTY TAXES................7 198.00

or 5 STATE & LOCAL INC. TAXES................(5) 495.00 6 REAL ESTATE TAXES................(6) 7 PERSONAL PROPERTY TAXES................(7) 198.00

6.1.5 Multi-Page When submitting a multi-page form, send all its pages in the same package. If you are not producing Forms certain pages, please note that in your cover letter.

Section 6.2—Additional Instructions for All Forms

6.2.1 Use of Your You may show computer-preparer internal control numbers and identifying symbols on the substitute, Own Internal if using such numbers or symbols is acceptable to the taxpayer and the taxpayer’s representative. Such Control Numbers information must not be printed in the top 1/2 inch clear area of any form or schedule requiring a signand Identifying ature. Except for the actual tax return form (Forms 1040, 1120, 940, 941, etc.), you may print in the left Symbols vertical and bottom left margins. The bottom left margin you may use extends 3 1/2 inches from the left edge of the form.

6.2.2 Descriptions for Descriptions for captions, lines, etc., appearing on the substitute forms may be limited to one print line Captions, Lines, etc. by using abbreviations and contractions, and by omitting articles, prepositions, etc. However, sufficient key words must be retained to permit ready identification of the caption, line, or item.

6.2.3 Determining Final

Totals

Explanatory detail and/or intermediate calculations for determining final line totals may be included on

the substitute. We prefer that such calculations be submitted in the form of a supporting statement. If intermediate calculations are included on the substitute, the line on which they appear may not be numbered or lettered. Intermediate calculations may not be printed in the right column. This column is reserved only for official numbered and lettered lines that correspond to the ones on the official form. Generally, you may choose the format for intermediate calculations or subtotals on supporting statements to be submitted.

6.2.4 Instructional Text on the official form, which is solely instructional ( e.g., “Attach this schedule to Form 1040,” “See Text on the Official instructions,” etc.) may be omitted from the substitute form. Form

6.2.5 Mixing Forms on You may not show more than one schedule or form on the same printout page. Both sides of the paper the Same Page may be printed for multi-page official forms, but it is unacceptable to intermix single-page schedules of Prohibited forms except for Schedules A and B (Form 1040), which are printed back to back by the Service.

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For instance, Schedule E can be printed on both sides of the paper because the official form is multi-page, with page 2 continued on the back. However, do not print Schedule E on the front page and Schedule SE on the back, or Schedule A on the front and Form 8615 on the back, etc. Both pages of a substitute form must match the official form. The back page may be left blank if the official form contains only the instructions.

6.2.6 Identifying Identify all computer-prepared substitutes clearly. Print the form designation 1/2 inch from the top marComputer-Prepared gin and 1 1/2 inches from the left margin. Print the title centered on the first line of print. Print the taxSubstitutes able year and, where applicable, the sequence number on the same line 1/2 inch to 1 inch from the right margin. Include the taxpayer’s name and SSN on all forms and attachments. Also, print the OMB number as reflected on the official form.

6.2.7 Negative Negative (or loss) amount entries should be enclosed in brackets or parentheses or include a minus Amounts sign. This assists in accurate computation and input of form data. The Service preprints brackets in negative data fields on many official forms. These brackets should be retained or inserted on affected substitute forms.

Chapter 7 Miscellaneous Forms and Programs

Section 7.1—Paper Substitutes for Form 1042–S

7.1.1 Paper Paper substitutes for Form 1042–S, Foreign Person’s U.S. Source Income Subject to Withholding, that Substitutes totally conform to the specifications contained in this procedure may be privately printed without prior approval from the Internal Revenue Service. Proposed substitutes not conforming to these specifications must be submitted for consideration.

7.1.2 Time Frame The request should be submitted by November 15 of the year prior to the year the form is to be used. For Submission of This is to allow the Service adequate time to respond and the submitter adequate time to make any corForm 1042–S rections. These requests should contain a copy of the proposed form, the need for the specific deviation(s), and the number of information returns to be printed.

7.1.3 Revisions Form 1042–S is subject to annual review and possible change. Withholding agents and form suppliers are cautioned against overstocking supplies of the privately printed substitutes.

7.1.4 Obtaining Copies of the official form for the reporting year may be obtained from most Service offices. The Service Copies provides only cut sheets (no carbon interleaves) of these forms. Continuous fan-fold/pinned forms are not provided.

7.1.5 Instructions For Intructions for withholding agents:

Withholding Agents

• Only original copies may be filed with the Service. Carbon copies and reproductions are not acceptable.

• The term “Recipient’s U.S. TIN” for an individual means the social security number (SSN) or IRS individual taxpayer identification number (ITIN), consisting of nine digits separated by hyphens as follows: 000-00-0000. For all other recipients, the term means employer identification number (EIN) or qualified intermediary employer identification number (QI-EIN). The EIN and QI-EIN consist of nine digits separated by a hyphen as follows: 00-0000000. The taxpayer identification number (TIN) must be in one of these formats.

• Withholding agents are requested to type or machine print whenever possible, provide quality data entries on the forms (that is, use black ribbon and insert data in the middle of blocks well separated from other printing and guidelines), and take other measures to guarantee a clear, sharp image. Withholding agents are not required, however, to acquire special equipment solely for the purpose of preparing these forms.

• The “VOID,” “CORRECTED,” and “PRO-RATA BASIS REPORTING” boxes must be printed at the top center of the form under the title and checked, if applicable.

2001–37 I.R.B. 247 September 10, 2001

• Substitute forms prepared in continuous or strip form must be burst and stripped to conform to the

size specified for a single form before they are filed with the Service. The dimensions are found below. Computer cards are acceptable provided they meet all requirements regarding layout, content, and size.

7.1.6 Substitute

Forms Format

September 10, 2001 248 2001–37 I.R.B.

Property Substitute Forms Format Requirements

Dimensions—continued and free of all printing other than that shown on the official form.

• The depth of a substitute Copy A must be a minimum of

5 1/6 inches and a maximum of 5 1/2 inches.

Other Copies Copies B, C, and D must be furnished for the convenience

of payees who must send a copy of the form with other Federal and State returns they file. Copy E may be used as a withholding agent’s record/copy.

Section 7.2—Specifications for Substitute Schedules K-1

7.2.1 Schedule K-1 Prior approval is not required for a substitute Schedule K-1 that accompanies Form 1065 (for partnerRequirements ship), Form 1120S (for small business corporation), or Form 1041 (for fiduciary) when the substitute Schedule K-1 meets all of the following requirements.

• The Schedule K-1 must contain the payer and recipient’s name, address, and SSN/EIN.

• The Schedule K-1 must contain all the items required for use by the taxpayer.

• The line items must be in the same order and arrangement as those on the official form.

• The Schedule K-1 must include the OMB number.

  • Each taxpayer’s information must be on a separate sheet of paper. Therefore, all continuously printed

substitutes must be separated, by taxpayer , before filing with the Service.

• Schedule K-1 for recipients must have instructions for required line items attached.

• You may be subject to penalties if you file Schedules K-1 with the Service and furnish Schedules K-1 to

partners, shareholders, or beneficiaries that do not conform to the specifications of this revenue procedure.

• The amount of each partner’s, shareholder’s, or beneficiary’s share of each line item must be shown.

The furnishing of a total amount of each line item and a percentage (or decimal equivalent) to be applied to such total amount by the partner, shareholder, or beneficiary does not satisfy the law and the specifications of this revenue procedure.

• If you file Schedules K-1 not conforming to the above specifications, IRS may consider these as not

processable and return them to you to be filed correctly. You may also be subjected to a penalty.

Section 7.3—Procedures for Printing IRS Envelopes

7.3.1 Procedures for Organizations are permitted to produce substitute tax return envelopes. Use of substitute return Printing IRS envelopes that comply with the requirements set forth in this section will assist in delivery of mail by Envelopes the U.S. Postal Service and facilitate internal sorting at the Internal Revenue Service Centers.

Use the following five-digit ZIP codes when mailing returns to the IRS Service Centers:

Service Center ZIP Code

Atlanta, GA 39901

Kansas City, MO 64999

Austin, TX 73301

Philadelphia, PA 19255

Memphis, TN 37501

Andover, MA 05501

Cincinnati, OH 45999

Holtsville, NY 00501

Ogden, UT 84201

Fresno, CA 93888

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7.3.2 Sorting Sorting returns by form type is accomplished by the preprinted bar codes on return envelopes included Returns by in each specific type of form or package mailed to the taxpayers. The 32 bit bar code on the left of the Form Type address on each envelope identifies the type of form the taxpayer is filing, and it assists in consolidating like returns for processing. Failure to use the envelopes furnished by the Service results in additional processing time and effort, and possibly delays the timely deposit of funds, processing of returns, and issuance of refund checks.

7.3.3 ZIP+4 or The IRS will not furnish or sell bulk quantities of preprinted tax return envelopes to taxpayers or tax 9-Digit ZIP Codes practitioners. A suitable alternative has been developed that will accommodate the sorting needs of both the IRS and the United States Postal Service (USPS). The alternative is based on the use of ZIP + 4, or 9-digit ZIP codes for mailing various types of tax returns to the IRS Service Centers. The IRS uses the last four digits to identify and sort the various form types into separate groups for processing. The list of 4-digit extensions with the related form designations is provided below.

ZIP + FOUR Package

XXXXX-0002 1040

XXXXX-0005 941

XXXXX-0006 940

XXXXX-0008 943

XXXXX-0011 1065

XXXXX-0012 1120

XXXXX-0013 1120S

XXXXX-0014 1040EZ

XXXXX-0015 1040A

XXXXX-0027 990

XXXXX-0031 2290

XXXXX-0042 945

7.3.4 Guidelines for You may use the preparer company names, addresses, and logos as long as you do not interfere with the Having Envelopes clear areas. The government recommends that the envelope stock have an average opacity of not less Preprinted than 89 percent and contain a minimum of 50 percent waste paper. Use of carbon-based ink is essential for effective address and bar code reading. Envelope construction can be of side seam or diagonal seam design. The government recommends that the size of the envelope should be 5 3/4 inches by 9 inches. Continuous pin-fed construction is not desirable but is permissible if the glued edge is at the top. This requirement is firm because mail opening equipment is designed to open the bottom edge of each envelope.

7.3.5 Envelopes/ The above procedures or guidelines are written for the user having envelopes preprinted. Many practiZIP Codes tioners may not wish to have large quantities of envelopes with differing ZIP codes/form designations preprinted due to low volume, warehousing, waste, etc. In this case, the practitioner can type or machine print the addresses with the appropriate ZIP codes to accommodate sorting. If the requirements/guidelines outlined in this section cannot be met, then use only the appropriate five-digit service center ZIP code.

Section 7.4—Changes Involving EPMF Forms

7.4.1 Changes All Forms 5500 and 5500-EZ are now processed by the Pension and Welfare Benefits Administration Involving Forms (PWBA), an agency of the Department of Labor. 5500 and 5500–EZ Under the computerized ERISA Filing Acceptance System (EFAST) filers can choose between two computer scannable formats: “machine print” and “hand-print”. Machine print forms can be filed electronically or by mail using computer software from EFAST approved vendors. Hand-print forms cannot be filed electronically.

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Forms 5500 and 5500–EZ for plan year 2000 are printed in black ink with gray shading in response to requests from Form 5500 software vendors who wanted to develop computer software for a hand-print version. The hand-print version for 2000 permits completion by hand, typewriter, or computer software from EFAST approved vendors.

Additional information is available on the PWBA web site, http://www.efast.dol.gov .

7.4.2 EFAST To reduce the possibility of correspondence and penalties, Processing Tips

• Paper forms must be obtained from the IRS or printed using software from an EFAST approved software developer.

• Original forms are preferable. Photocopies may be rejected or cause correspondence requiring additional information.

• All information should be in the specific fields or boxes provided on the forms and schedules or the information may not be processed.

• Do not use felt tip pens or other writing instruments that can cause signatures or data to bleed through to

the other side of the paper. One-sided documents should have no markings on the blank side.

• Paper should be clean without glue or other sticky substances.

• Do not staple the forms. Use binder clips or other fasteners that do not perforate the paper.

• Do not submit extraneous material or information such as arrows used to indicate where to sign, notes

between preparers of the report, notations on the form, e.g., “DOL copy,” etc.

• Do not submit unnecessary or blank schedules. Except for certain Schedule SSA filings specifically permitted by the instructions, schedules should be submitted only with a Form 5500 or in response to correspondence from the PWBA regarding processing your return/report.

• Manual entries on the machine print forms are not permitted.

Section 7.5—Procedures for Substitute Forms 5471 and 5472

7.5.1 Forms 5471 This section covers instructions for producing substitutes for: and 5472

• Form 5471, Information Return of U.S. Persons With Respect to Certain Foreign Corporations, and accompanying Schedules J, M, N, and O.

• Form 5472, Information Return of a 25% Foreign-Owned U.S. Corporation or a Foreign Corporation

Engaged in a U.S. Trade or Business .

7.5.2 Paper and Paper and computer-generated substitutes for Form 5471 and the accompanying Schedules J, M, N, and Computer-Generated O, and Form 5472 that totally conform to the specifications contained in this procedure may be privateSubstitutes ly printed, but must have prior approval and are subject to annual review from the Internal Revenue Service.

7.5.3 Where To Get Copies of the official Forms 5471 and 5472 for the reporting year may be obtained from most IRS offices. the Official Forms The IRS provides only cut sheets of these forms. Continuous fan-folded/pin-fed forms are not provided.

7.5.4 Quality The Service will accept quality substitute tax forms that are consistent with the official forms they repSubstitute Forms resent AND that do not have an adverse impact on our processing. Therefore, only those substitute forms that conform to, and do not deviate from, the corresponding official forms are acceptable.

7.5.5 Computer- If the substitute returns and schedules meet the guidelines in this revenue procedure, the Service will Prepared Tax Forms (for filing purposes) accept computer-prepared Forms 5471 and 5472 filled in by a computer, word processing, or similar automated equipment. The IRS will also accept a combination of computer-prepared/generated and filled-in information. They may be filed separately or attached to individual or business income tax returns.

7.5.6 Format The specifications for Forms 5471 and 5472 are as follows: Arrangement

• The substitute must follow the design of the official form as to format, arrangement, item caption, line numbers, line references, and sequence. It must be an exact textual and graphic mirror image of the official form.

2001–37 I.R.B. 251 September 10, 2001

• The filer must use one of the official ten character amount formats. All entries in the amount column

should have a decimal point following the whole dollar amounts whether or not the vertical line that separates the dollars from the cents is present. It must follow a consistent format.

• The reference code must be printed to the left of the corresponding captioned line and also immediately

preceding the data entry field even if there is no reference code preceding the data entry field on the official form. The reference code that is immediately before the data field must either be followed by a period or enclosed in parentheses. There also must be at least two blank spaces between the period or the right parenthesis and the first digit of the data field.

• The size of the page must be the same as the official form (8 1/2� x 11�).

• The acceptable type is Helvetica.

• The spacing of the type must be 6 lines per inch vertically, 10 or 12 print characters per inch horizontally.

• A 1/4 inch to 1/2 inch margin must be maintained across the top, bottom, and both sides (exclusive of

any pin-fed holes).

• The substitute form must be the same number of pages as the official one.

• The preprinted brackets in the money fields should be retained.

• The filer must completely fill in all the specified numbers or referenced lines as they appear on the official form (not just totals) before attaching any supporting statement.

  • Supporting statements are never to be used until the required official form they support are completely

filled-in. A blank or incomplete form that refers to a supporting statement, in lieu of completing a tax return, is unacceptable.

• Descriptions for captions, lines, etc., appearing in the substitute forms may be limited to one print line

by using abbreviations and contractions, and by omitting articles, prepositions, etc. However, sufficient key words must be retained to permit ready identification of the caption, line, or item.

• Text prescribed for the official form, which is solely instructional ( e.g ., “Attach this schedule to Form

1120”, “See instructions”, etc.) may be omitted from the form.

7.5.7 Filing Instructions for filing substitute forms are the same as for filing official forms. Instructions

Chapter 8 Alternative Methods of Filing

Section 8.1—Forms for Electronically Filed Returns

8.1.1 Electronic Electronic filing is a method by which qualified filers transmit tax return information directly to an IRS Filing Program Service Center over telephone lines in the format of the official Internal Revenue Service forms. The Service accepts both refund and balance due individual tax returns that are filed electronically.

8.1.2 Applying for Anyone wishing to participate in the IRS e-file program for individual income tax returns must submit a the Electronic Filing Form 8633, Application To Participate in the IRS e-file Program. Program

Note: For business returns, prospective participants must submit a Form 9041, Application For Elec- tronic/Magnetic Media Filing of Business and Employee Benefit Plan Returns.

8.1.3 Mailing Instructions IF an application filed is... THEN mail it to...

Form 8633 for individual Internal Revenue Service income taxes (regular mail) Andover Submission Processing Center Attn: EFU Acceptance - Testing Stop 983 P.O. Box 4099 Woburn, MA 01888-4099

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8.1.4 Obtaining the The taxpayer signature does not appear on the electronically transmitted tax return and is obtained by Taxpayer Signature the qualified electronic filer on Form 8453, U. S. Individual Income Tax Declaration for an IRS e-file Return, for Forms 1040, 1040A, and 1040EZ. Form 8453, which serves as a transmittal for the associated non-electronic (paper) documents, such as Forms W–2, W–2G, and 1099–R, is a one-page form and can only be approved through the Substitute Forms Program in that format. Forms 8453–OL and 8453–NR serve the same purpose for taxpayers filing through online services and Form 1040–NR filers, respectively. For specific information about electronic filing, refer to Publication 1345, Handbook for Electronic Filers of Individual Income Tax Returns.

Note: For business returns, the electronic/magnetic media participants must use the official Form 8453–E, F, or P, or an approved substitute that duplicates the official form in language, format, content, color, and size .

8.1.5 Guidelines for A participant in the electronic filing program, who wants to develop a substitute form should follow the Preparing Substitute guidelines throughout this publication and send a sample form for approval to the Substitute Forms Forms in the Electronic Unit at the address in Chapter 2. If you do not prepare Substitute Form 8453 using a font in which all Filing Program IRS wording fits on a single page, the form will not be accepted. This applies primarily to dot-matrix printers, although forms prepared similarly on laser and ink-jet printers will also be rejected.

Note: Use of unapproved forms could result in suspension of the participant from the electronic filing program.

Section 8.2—FTD Magnetic Tape Payments

8.2.1 Instructions Publication 1315 provides the requirements and instructions for reporting agents who submit Federal for Reporting Tax Deposit (FTD) payment information on magnetic tape. Magnetic tape submissions for FTD can be Agents made for Forms 940, 941, 942, 943, 720, CT–1, 990–PF, 990–T, 990–C, 1042, and 1120.

8.2.2 Instructions Revenue Procedure 89–49 (Pub. 1374) provides the requirements and instructions for certain banks and for Banks and fiduciaries to submit quarterly Form 1041–ES payments on magnetic tape through the system. Fiduciaries

Section 8.3—Effect on Other Documents

8.3.1 Effect on This revenue procedure supersedes Revenue Procedure 2000–19, I.R.B. 2000–12, 785. Other Documents 2001–37 I.R.B. 253 September 10, 2001

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Exhibit D - List of Forms Referred to in the Revenue Procedure

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