SERVICE CLARIFIES MAGNETIC MEDIA REPORTING REQUIREMENTS FOR INFORMATION RETURNS.

Notice 90-15

This notice provides guidance with respect to the changes made by section 7713 of the Revenue Reconciliation Act of 1989 (the "Act"), Pub. L. No. 101-239 (1989), 103 Stat. 2106, to the magnetic media reporting requirements for information returns. The legislative history of the Act points out that uniform magnetic media requirements will now apply to all information returns filed for a calendar year. The new rules apply to information returns due after December 31, 1989.

Section 6011(e)(2)(A) of the Code now provides that the Secretary shall not prescribe regulations requiring a person to file returns on magnetic media unless such person is required to file at least 250 returns during the calendar year. Therefore, the 250 threshold that previously applied by regulations to most types of information returns now applies to all information returns.

The special rules, under prior law, for information returns reporting interest, original issue discount, dividends, and patronage dividends have been repealed. Under prior law, a person required to file a total of more than 50 returns on Forms 1099-INT, 1099-OID, 1099-DIV, and 1099-PATR, was required to file on magnetic media. For purposes of determining the number of returns that a person was required to file on magnetic media, all such returns had to be aggregated. In addition, under prior rules, all Forms 1099-B were required to be filed on magnetic media.

Under the new law, all information returns, including those required on Forms 1099-B, 1099-INT, 1099-OID, 1099-DIV, and 1099- PATR, may be filed on the prescribed paper form if fewer than 250 returns are required to be filed. The 250 threshold applies separately to each type of form. Thus, for example, if a person is required to file 200 returns on Form 1099-INT and 350 returns on Form 1099-MISC for a calendar year, the person is not required to file Forms 1099-INT on magnetic media, but is required to file Forms 1099- MISC on magnetic media. Magnetic media filing requirements for the preceding year will no longer be determinative of a person's obligation to file on magnetic media. (See section 301.6011-2(c) (1) and (2) of the Regulations on Procedure and Administration for the rules that applied before the effective date of the Act's amendments to section 6011(e).)

The 250 threshold applies separately to both original and corrected returns. Thus, for example, if a person files 300 returns on Form 1099-DIV and later files 70 corrected returns on Form 1099- DIV, the corrected returns may be filed on the prescribed paper form since they fall under the 250 threshold.

These uniform magnetic media filing requirements apply to the following forms:

      Form W-2, Wage and Tax Statement;

This notice constitutes authority within the meaning of section 6662(d)(2)(B)(i) of the Code and may be relied upon to the same extent as a revenue ruling or a revenue procedure.

DRAFTING INFORMATION

The principal author of this notice is Margaret A. Owens of the Office of the Assistant Chief Counsel (Income Tax and Accounting). For further information regarding this notice, contact Ms. Owens on (202) 566-4430 (not a toll-free call).