Part 2 General Guidelines for Submissions and Approvals

Section 2.1 — General Specifications for Approval

2.1.1 Overview If you produce any tax 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 IRS 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 Examples of Schedules That Must be Submitted With the Return

2.1.4 Examples of Schedules That Can be Submitted Separately

2.1.5 Use and Distribution of Unapproved Forms

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

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

The IRS is continuing a program to identify and contact tax return preparers, forms developers, and software publishers who use or distribute unapproved forms that do not conform to this revenue procedure. The use of unapproved forms, hinders the processing of the returns.

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Section 2.2 — Highlights of Permitted Changes and Requirements

2.2.1 Methods of Reproducing Internal Revenue Service Forms

Section 2.3 — Vouchers

Official IRS tax forms are supplied by the IRS. These forms are provided in the taxpayer’s tax package, over-the-counter, and are printed in the revenue procedures. Forms can also be picked up at many IRS offices, post offices, libraries, and are available on CD-ROM and on-line via the Internet.

There are methods of reproducing IRS printed tax forms suitable for use as substitutes without prior approval.

substitute form, including entries, must be legible.

pin-fed forms as long as you use an official IRS version as the master copy.

returns) have a taxpayer signature requirement as part of the form layout. The jurat/per- jury statement/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.

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 Specifications NNNNNNNNN AA AAAA NN N NNNNNN NNN

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.

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2.3.3 MFT Code Code Number for Forms:

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

Section 2.4 — Restrictions on Changes

2.4.1 What You CANNOT Do to Forms Suitable for Substitute Tax Forms

You cannot, without prior IRS approval, change any IRS tax form or use your own (nonapproved) versions including graphics, unless specifically permitted by this revenue procedure.

You cannot adjust any of the graphics on Forms 1040, 1040A, and 1040EZ (except in those areas specified in Part 5 of this revenue procedure) without prior approval from the IRS Substitute Forms 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 the use of preaddressed IRS labels.

Section 2.5 — Guidelines for Obtaining IRS Approval

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

2.5.2 Conditional Approval Based on Advanced Drafts

The IRS cannot grant final approval of your substitute form until the official form has been published. However, the IRS has established a location on the Internet for posting advance draft forms. This site can be reached in the “Tax Professionals” area at:

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www.irs.gov/bus_info/tax_pro/dftform.html

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 Procedures Please follow these general guidelines when submitting substitute forms for approval:

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.

tion 1.2 - IRS Contacts) is desired, a sample of the proposed substitute form should be forwarded for consideration by letter to the Substitute Forms Unit at the address shown in Section 1.2.

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 Offices Because only the Substitute Forms Unit is authorized to approve substitute forms, unnecessary delays may occur if forms are sent to the wrong office. The Substitute Forms Unit may then coordinate the response with the initiator responsible for revising that particular form. Such coordination may include allowing the initiator to officially approve the form. No IRS office is authorized to allow deviations from this revenue procedure.

2.5.5 IRS Review of Software Programs, etc.

2.5.6 When To Send Proposed Substitutes

2.5.7 Accompanying Statement

The IRS does not review or approve the logic of specific software programs, nor does the IRS confirm the calculations on the forms produced by these programs. The accuracy of the program remains the responsibility of the software package developer, distributor, or user.

The Substitute Forms Unit 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 these, you should submit forms without including any taxpayer information such as names, addresses, monetary amounts, etc.

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

When submitting sample substitutes, you should include an accompanying statement that lists each 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.

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2.5.8 Approval/Non- Approval Notice

2.5.9 Duration of Approval

2.5.10 Limited Continued Use of an Approved Change

2.5.11 When Approval Is Not Required

When requesting approval, please include a checklist. Checklists expedite the approval process. The checklist may look like example Exhibit D displayed in the back of this procedure or may be one of your own design. Please include your fax number on the checklist.

The Substitute Forms Unit will fax the checklist or an approval letter to the originator if a fax number has been provided, unless:

Notice of approval may contain qualifications for use of the substitutes. Notices of unapproved 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.

Most signature tax returns and many of their schedules and related forms have the tax (liability) 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 940 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.

Limited changes approved for one tax year may be allowed for the same form in the following tax year. Examples of such limitations and requirements are the use of abbreviated words, revised form spacing, compressed text lines, and 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 for a specific change on a form last year, such as deleting the vertical 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.

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.

have eliminated, added to, or otherwise changed the guideline(s) that affected the change approved last year.

to a current tax year substitute form.

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

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2.5.12 Continuous Use Forms

2.5.13 Internet Program Chart

Forms without preprinted tax years are called “continuous use” forms. Continuous use forms are revised 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.

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

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

2.5.15 Requestor’s Responsibility

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

tion Act Notice, which is generally found in the instructions for the official IRS forms.

2.5.16 Source Code The Substitute Forms Unit, W:CAR:MP:T:T:SP, will assign a unique source code to each firm that submits substitute paper forms for approval. This source code will be a permanent identifier that should be used on every submission by a particular firm.

The source code:

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

2.6.1 OMB Requirements for All Substitute Forms

2.6.2 Application of the Paperwork Reduction Act

There are legal requirements of the Paperwork Reduction Act of 1995 (The Act). Public Law 104–13 requires that:

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.

On forms that have been assigned OMB numbers:

(Acceptable).

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2.6.3 Required Explanation to Users

2.6.4 Finding the OMB number and Paperwork Reduction Act Notice

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

tain 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).

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 Reduction Act Notice (or Disclosure, Privacy Act, and Paperwork Reduction Act Notice) must be furnished separately or on the form.

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