Section 1. General - Extensions

Section 2. Specifications for Electronic Filing or Magnetic Media Extensions of Time Section 3. Record Layout - Extension of Time Section 4. Extension of Time for Recipient Copies of Information Returns Section 5. Form 8508, Request for Waiver From Filing Information Returns on Magnetic Media

2002–25 I.R.B. 1207 June 24, 2002

Part A. General

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

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

Sec. 1. Purpose

.01 The purpose of this Revenue Procedure is to provide the specifications for filing Forms 1098, 1099, 5498, and W–2G with IRS electronically through the IRS FIRE System or magnetically, using IBM 3480, 3490, 3490E, 3590, 3590E, or AS400 compatible tape cartridges (including 4mm, 8mm & QIC), or 3 ½-inch diskettes. IRS/MCC no longer accepts ½-inch 9-track magnetic tape for the processing of information returns . This Revenue Procedure must be used for the preparation of Tax Year 2002 information returns and information returns for tax years prior to 2002 filed beginning January 1, 2003, and received by IRS/MCC or postmarked by December 10, 2003 . Specifications for filing the following forms are contained in this Revenue Procedure.

(a) Form 1098, Mortgage Interest Statement

(b) Form 1098–E, Student Loan Interest Statement

(c) Form 1098–T, Tuition Payments Statement

(d) Form 1099–A, Acquisition or Abandonment of Secured Property

(e) Form 1099–B, Proceeds From Broker and Barter Exchange Transactions

(f) Form 1099–C, Cancellation of Debt

(g) Form 1099–DIV, Dividends and Distributions

(h) Form 1099–G, Certain Government Payments

(i) Form 1099–INT, Interest Income

(j) Form 1099–LTC, Long-Term Care and Accelerated Death Benefits

(k) Form 1099–MISC, Miscellaneous Income

(l) Form 1099–MSA, Distributions From an Archer MSA or Medicare+Choice MSA

(m) Form 1099–OID, Original Issue Discount

(n) Form 1099–PATR, Taxable Distributions Received From Cooperatives

(o) Form 1099–Q, Qualified Tuition Program Payments (Under Section 529)

(p) Form 1099–R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.

(q) Form 1099–S, Proceeds From Real Estate Transactions (r) Form 5498, IRA and Coverdell ESA Contribution Information (s) Form 5498–MSA, Archer MSA or Medicare+Choice MSA Information

(t) Form W–2G, Certain Gambling Winnings .02 All data received at IRS/MCC for processing will be given the same protection as individual income tax returns (Form 1040). IRS/MCC will process the data and determine if the records are formatted and coded according to this Revenue Procedure.

.03 Specifications for filing Forms W–2, Wage and Tax Statements, magnetically/electronically are available from the Social Security Administration (SSA) only . Filers can call 1–800–SSA–6270 to obtain the telephone number of the SSA Employer Service Liaison Officer for their area.

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

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

.06 This Revenue Procedure also provides the requirements and specifications for electronic or magnetic media filing under the Combined Federal/State Filing Program.

.07 The following Revenue Procedures and publications provide more detailed filing procedures for certain information returns: (a) 2002 General Instructions for Forms 1099, 1098, 5498, and W–2G and individual form instructions (b) Publication 1179, Rules and Specifications for Private Printing of Substitute Forms 1096, 1098, 1099, 5498, and W–2G

June 24, 2002 1208 2002–25 I.R.B.

(c) Publication 1239, Specifications for Filing Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips, Magnetically or Electronically (d) Publication 1187, Specifications for Filing Form 1042–S, Foreign Person’s U.S. Source Income Subject to Withholding, Magnetically or Electronically (e) Publication 1245, Specifications for Filing Form W–4, Employee’s Withholding Allowance Certificate, Magnetically or Electronically .08 This Revenue Procedure supersedes Rev. Proc. 2001–32 published as Publication 1220 (Rev. 5–2001), Specifications for Filing Forms 1098, 1099, 5498, and W–2G Magnetically or Electronically.

Sec. 2. Nature of Changes—Current Year (Tax Year 2002)

.01 In this publication, all pertinent changes for Tax Year 2002 are emphasized by the use of italics . Portions of text that require special attention have been bolded . Filers are always encouraged to read the publication in its entirety.

.02 Programming Changes

a. General

(1) 9-track magnetic tape is no longer an acceptable type of media for submitting information returns to IRS/MCC. (2) A new field Record Sequence Number was added to Field Positions 500–507 in all records. The Record Sequence Number will be in Field Positions 500–507 of the “T” Record, the “A” Record(s), the “B” Record(s), the “C” Record(s), any applicable “K” Record(s), and the “F” Record. (3) The title of Form 1099–G was changed from Certain Government Payment and Qualified State Tuition Program Payments to Certain Government Payments. (4) The title of Form 5498 was changed from “IRA Contribution Information” to “IRA and Coverdell ESA Contribution Information.” (5) All references to Education IRAs have been changed to Coverdell ESAs. (6) Colorado, Louisiana, Maryland, Nebraska, North Carolina and Virginia were added to the Combined Federal/State Filing Program. See Part A, Sec. 13 for the appropriate state codes.

b. Programming Changes — Transmitter “T” Record

(1) For all forms, Payment Year, Field Positions 2–5, must be incremented to update the four-digit report year ( 2001 to 2002 ), unless reporting prior year data. (2) Contact Email Address was added to Field Positions 359–393. (3) Cartridge Tape File Indicator was moved to Field Positions 394–395. (4) Electronic File name for a Replacement File was moved to Field Positions 396–410. (5) Transmitter’s Media Number was added to Field Position 411–416. (6) Vendor Indicator was moved to Field Position 518. (7) Vendor Name was moved to Field Positions 519–558. (8) Vendor Mailing Address was moved to Field Positions 559–598. (9) Vendor City was moved to Field Positions 599–638. (10) Vendor State was moved to Field Positions 639–640. (11) Vendor ZIP code was moved to Field Positions 641–649. (12) Vendor Contact Name was moved to Field Positions 650–689. (13) Vendor Contact Phone Number and Extension was moved to Field Positions 690–704. (14) Vendor Contact Email Address was moved and expanded to 35 positions in Field Positions 705–739.

c. Programming Changes — Payer “A” Record

(1) For all forms, Payment Year, Field Positions 2–5, must be incremented to update the four-digit report year ( 2001 to 2002 ), unless reporting prior year data. (2) For Form 1099–G, Certain Government Payments, amount code 5, Qualified State Tuition Program Earnings is no longer valid. (3) A new Form 1099–Q, Qualified Tuition Program Payments (under Section 529), was added to list of Type of Return. The code for 1099–Q is Q. (4) The Amount Codes, Field Positions 28–39, for 1099–Q are 1 (one), Gross Distribution, 2 (two), Earnings, and 3 (three), Basis. (5) For Form 5498, Amount Codes, Field Positions 28–39, code “B” was changed to Coverdell ESA Contributions.

2002–25 I.R.B. 1209 June 24, 2002

d. Programming Changes — Payee “B” Record

(1) For all forms, Payment Year, Field Positions 2–5, must be incremented to update the four-digit report year ( 2001 to 2002 ), unless reporting prior year data. (2) For 1099–Q, Field Position 547, Trustee to Trustee Rollover, will have a 1 (one) indicator if the reporting is a trustee to trustee rollover or a blank if it is not a trustee to trustee rollover. (3) For 1099–Q, Field Position 548, Type of Tuition Payment, will have a 1 (one) to indicate a private payment and a 2 (two) to indicate a state payment. (4) For 1099–Q, Field Position 549, Designated Beneficiary, will have a blank or a 1 (one) to indicate if the recipient is not the designated beneficiary. (5) For Form 1099–R, the title for Distribution Code M, Field Positions 545–546, was changed to Distribution from a Coverdell ESA. (6) For Form 5498, Education IRA Indicator, Field Position 552, was changed to Coverdell ESA Indicator.

e. Programming Changes — End of File “F” Record

(1) Total Number of Payees was added to Field Positions 50–57.

.03 Editorial Changes

a. In an effort to eliminate redundancy and improve clarity and organization, the Publication 1220 has undergone a major rewrite. Parts and Sections of the publication have been moved, added, deleted and/or rearranged. New information or additions to the publication have been italicized. The title of the publication was changed to Specifications for Filing Forms 1098, 1099, 5498 and W–2G Electronically or Magnetically. Actual programming changes are minor and are listed above. b. The Information Reporting Program (IRP) Call Site was reorganized and is now the IRP Customer Service Section. The IRP Customer Service Section continues to assist filers via a toll-free number and email with information return issues. See Part A, Sec. 3.09. c. A First Time Filers Quick Reference Guide was added to the inside cover of the publication. d. Bullets were added to the beginning of Part A, Sec. 11, Corrected Returns to emphasize important points. A record layout was added illustrating both the two step and one step correction process. e. Bullets were added to the beginning of Part A, Sec. 13, Combined Federal/State Filing Program to emphasize important points. A record layout was added to illustrate a file with Combined Federal/State Filing. f. A 1099–R Distribution Code Chart which shows acceptable combinations of distribution codes was added to Part D, Sec. 6 (16). g. Part A, Sec. 10, Replacement Media is new. h. Part A, Sec. 14, Penalties Associated With Information Returns is new. i. Part A, Sec. 16, Major Problems Encountered was revised. j. Part A, Sec. 17, Definition of Terms was deleted. k. Extension and waiver information is in Part E. l. Beginning in calendar year 2004 for Tax Year 2003, IRS/MCC will no longer accept 8mm, 4mm, and Quarter Inch Cartridges (QIC).

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

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

IRS-Martinsburg Computing Center Information Reporting Program 230 Murall Drive Kearneysville, WV 25430

.02 All requests for an extension of time to file information returns with IRS/MCC, or to the recipients and requests for undue hardship waivers filed on Form 8508 should be sent to the following address:

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

June 24, 2002 1210 2002–25 I.R.B.

.03 The telephone numbers for magnetic media inquiries or electronic submissions are: