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IRS ANNOUNCES REQUIREMENTS FOR REPRODUCING PAPER SUBSTITUTES OF FORMS.

MAY 17, 1993

Rev. Proc. 93-24; 1993-1 C.B. 555

DATED MAY 17, 1993
DOCUMENT ATTRIBUTES
Citations: Rev. Proc. 93-24; 1993-1 C.B. 555

Superseded by Rev. Proc. 94-35

Rev. Proc. 93-24

CONTENTS

PART A. GENERAL

SECTION 1. PURPOSE

 

SECTION 2. NATURE OF CHANGES

 

SECTION 3. REQUIREMENTS FOR ACCEPTABLE SUBSTITUTE FORMS 1096, 1098,

 

           1099, 5498, AND W-2G

 

SECTION 4. DEFINITIONS

 

SECTION 5. INSTRUCTIONS FOR PREPARING PAPER FORMS THAT WILL BE FILED

 

           WITH THE IRS (COPY A)

 

SECTION 6. MAGNETIC MEDIA AND ELECTRONIC FILING

 

SECTION 7. SUBSTITUTE STATEMENTS TO RECIPIENTS AND FORM RECIPIENT

 

           COPIES

 

 

PART B. SPECIFICATIONS FOR SUBSTITUTE FORMS TO BE FILED WITH IRS

 

(EXCEPT W-2G)

 

 

SECTION 1. GENERAL

 

SECTION 2. SPECIFICATIONS FOR FORM 1096 AND COPY A OF FORM 1098,

 

           1099, AND 5498

 

 

PART C. SPECIFICATIONS FOR SUBSTITUTE FORMS W-2G TO BE FILED WITH IRS

 

 

SECTION 1. GENERAL

 

SECTION 2. SPECIFICATIONS FOR COPY A FOR FORMS W-2G

 

 

PART D. ADDITIONAL INSTRUCTIONS FOR FORMS 1098, 1099, 5498, AND W-2G

 

 

SECTION 1. OTHER COPIES

 

SECTION 2. OMB REQUIREMENTS

 

SECTION 3. REPRODUCTION PROOFS

 

SECTION 4. EFFECT ON OTHER REVENUE PROCEDURES

 

 

PART E. EXHIBITS

 

 

EXHIBIT A. FORM 1098

 

EXHIBIT B. FORM 1099-A

 

EXHIBIT C. FORM 1099-B

 

EXHIBIT D. FORM 1099-DIV

 

EXHIBIT E. FORM 1099-G

 

EXHIBIT F. FORM 1099-INT

 

EXHIBIT G. FORM 1099-MISC

 

EXHIBIT H. FORM 1099-OID

 

EXHIBIT I. FORM 1099-PATR

 

EXHIBIT J. FORM 1099-R

 

EXHIBIT K. FORM 1099-S

 

EXHIBIT L. FORM W-2G

 

EXHIBIT M. FORM 5498

 

EXHIBIT N. FORM 1096

 

 

PART A. GENERAL

SECTION 1. PURPOSE

.01 The purpose of this revenue procedure is to state the requirements for (1) reproducing paper substitutes of the forms shown below, covering payments made during the 1993 calendar year (for Forms 5498, contributions made for 1993), that are required to be filed with the Internal Revenue Service (IRS), (2) furnishing substitute statements to form recipients (see Section 4.01 for definition), and (3) paper document reporting. This revenue procedure contains specifications for the following:

     (a) Form 1098 Mortgage Interest Statement;

 

     (b) Form 1099-A Acquisition or Abandonment of Secured

 

                         Property;

 

     (c) Form 1099-B Proceeds From Broker and Barter Exchange

 

                         Transactions;

 

     (d) Form 1099-DIV Dividends and Distributions;

 

     (e) Form 1099-G Certain Government Payments;

 

     (f) Form 1099-INT Interest Income;

 

     (g) Form 1099-MISC Miscellaneous Income;

 

     (h) Form 1099-OID Original Issue Discount;

 

     (i) Form 1099-PATR Taxable Distributions Received From

 

                         Cooperatives;

 

     (j) Form 1099-R Distributions From Pensions, Annuities,

 

                         Retirement or Profit-Sharing Plans, IRAs,

 

                         Insurance Contracts, etc.;

 

     (k) Form 1099-S Proceeds From Real Estate Transactions;

 

     (l) Form W-2G Certain Gambling Winnings;

 

     (m) Form 5498 Individual Retirement Arrangement

 

                         Information;

 

     (n) Form 1096 Annual Summary and Transmittal of U.S.

 

                         Information Returns.

 

 

.02 For the purpose of this revenue procedure, a substitute form or statement is one that is not printed by the IRS. For a substitute form or statement to be acceptable to the IRS, it must conform to the official form or the specifications outlined in this revenue procedure. DO NOT SUBMIT ANY SUBSTITUTE FORMS OR STATEMENTS TO IRS FOR APPROVAL. Private printers cannot state "This is an IRS approved form." Only those forms that conform to the official form or comply with the specifications set forth herein are acceptable. See Part A, Section 7, for the specifications that apply to form recipient statements (generally Copy B).

.03 IRS has instituted a centralized call site to answer questions related to information returns. The call site phone number is 304-263-8700. The number for Telecommunication Device for the Deaf (TDD) is 304-267-3367. These are not toll-free numbers. The call site is located at the Martinsburg Computing Center (IRS/MCC).

.04 IRS has established a personal computer based Information Reporting Bulletin Board System (IRP-BBS) at the Martinsburg Computing Center (IRS/MCC). This system provides access to the forms and publications relating to information returns, news of the latest changes, the ability to receive answers to specific questions, access to shareware, and other features. This revenue procedure is available via the IRP-BBS. The IRP-BBS is available for public use and can be reached by dialing 304-263-2749. The IRP-BBS is compatible with most modems. For more information concerning this system, call IRS/MCC at 304-263-8700.

SEC. 2. NATURE OF CHANGES

.01 The text and exhibits were updated for tax year 1993.

.02 Form 1099-R has two new boxes 12 and 15 for state and local distributions; also two boxes were renumbered: 12 and 13 are now 13 and 14 respectively. (The new box 12 is for state distributions an box 15 for local distributions.) A dollar sign ($) has been added to box 8. New codes E, F, G, and H with related instructions have been added. Exhibit J.

.03 Form 1098 has a new box 3 titled "Refund of overpaid interest." Exhibit A.

.04 Form 1099-S has a new box 5 titled "Buyer's part of real estate tax." Exhibit K.

.05 The catalog number shown on the official IRS forms is used for IRS distribution purposes and should not be printed on substitute forms. Part A Section 3.01.

.06 The reference to the Department of the Treasury-Internal Revenue Service should be included on all substitute copies of forms described in this revenue procedure. Part A Section 3.01.

.07 Substitute forms should be labeled as to the disposition of each copy provided to the payee. Part A Section 7.02 (6).

.08 Totaling will be allowed on certain substitute statements to recipients. Part A Section 7.02.

.09 New information on reporting alternatives for a mutual fund complex has been added. Part A Section 7.02, 7.02 (8), and 7.04.

.10 New information on composite Forms 1099-DIV and 1099-B has been added. Part A Section 7.03 and 7.05.

.11 Additional information on allowable composite substitute statements is provided. Part A Section 7.03 (4).

.12 Instructions to payers have been added to the back of Copy A of the 1993 official IRS forms in this revenue procedure (except Form 1096). They must be screened for 70% tone value of 110-line screen so the instructions will not bleed through and interfere with scanning. In lieu of printing these instructions on the back of Copy A, the instructions may be printed on the back of the copy designated for the Payer, Recipient for Form 1098, Lender for Form 1099-A, Filer for Form 1099-S, or Trustee or Issuer for Form 5498 in any ink color or tone. Part B Section 2.03.

.13 When a trustee does not issue a Form 5498 to a participant because no contributions were made to an IRA for the year, a year end statement issued to the participant reporting the fair market value of the account must designate which information is being furnished to IRS. Part A Section 7.04(7)(f).

.14 The tax year 1993 information returns have been printed with the four-digit form identification number in print positions 15 through 19, the void checkbox in print position 25, and the corrected checkbox in print position 33. No change in the spacing between these three items has been made. The Form 1096 is printed with the four-digit identification number in print positions 15 through 19. These measurements are from the left edge of the paper. Part B Section 1.02.

.15 The OCR dropout ink is now "Flint Ink." Part B Section 2.03.

SEC. 3 REQUIREMENTS FOR ACCEPTABLE SUBSTITUTE FORMS 1096, 1098, 1099, 5498 and W-2G

.01 Paper substitutes for Form 1096 and Copy A of Forms 1098, 1099, 5498, and W-2G that totally conform to the specifications contained in this revenue procedure may be privately printed and filed as returns with the IRS. The 1993 official IRS forms in this revenue procedure that require multiple copies contain chemical transfer paper. The reference to the Department of the Treasury -- Internal Revenue Service should be included on all such forms. The Catalog Number (Cat. No.) shown on the 1993 Forms 1096, 1098, 1099, 5498, and W-2G is used for IRS distribution purposes and should not be printed on any substitute forms.

If you are uncertain of any specification set forth herein and want that specification clarified, you may submit a letter citing the specification in question, giving your understanding and interpretation of the specification, and enclosing an example of the form (if appropriate) to:

     Internal Revenue Service

 

     ATTN: R:C:I (IRP Coordinator)

 

     1111 Constitution Avenue, N.W.

 

     Washington, DC 20224

 

 

NOTE: Allow at least 45 days for the IRS to respond.

.02 Copy B (Form 1098 -- For Payer, Form 1099-A- For Borrower, Form 1099-S- For Transferor, other Forms 1099- For Recipient, Form 5498- For Participant, and Forms W-2G and 1099-R- To Be Attached To the Federal Tax Return), and Copy C- (Form 1099-R For Recipient's Records and Form W-2G For Winner's Records), must contain the information specified in Section 7 in order to constitute a "statement" or "official form" under the applicable provisions of the Internal Revenue Code. The format of this information is at the discretion of the filer with the exception of the composite Form 1099 statement specified in Part A Sections 7.03 and 7.05.

.03 Forms 1096, 1098, 1099, 5498, and W-2G are subject to annual review and possible change. The IRS is considering new requirements for private printing of Forms 1096, 1098, 1099, 5498, and W-2G. Filers arc cautioned, therefore, against overstocking supplies of privately printed substitutes. THE SPECIFICATIONS CONTAINED IN THIS REVENUE PROCEDURE APPLY TO 1993 FORMS ONLY.

.04 Copies of the official forms for the reporting year and the instruction booklet may be obtained from most Internal Revenue Service district offices. If these are not available at your local IRS district office, ask that office to order copies for you. You should receive your order within 14 days. If you prefer, you may order them by calling our toll-free telephone number 1-800-TAX-FORM (1-800-829-3676).

.05 Proposed substitutes for Copy A that do not conform to the specifications in this revenue procedure are not acceptable. Further, if you file such forms with IRS, you may be subject to a penalty for failure to file an information return under section 6721 of the Internal Revenue Code (IRC). Generally, the penalty is $50 for each failure to file a form (up to $250,000) that the IRS cannot accept as a return because it does not meet the provisions in this revenue procedure. No IRS office is authorized to allow deviations from this revenue procedure.

SEC. 4. DEFINITIONS

.01 The term "form recipient" means the person to whom you are required by law to furnish a copy of the official form or information statement: i.e., for Form 1098 the recipient is the "payer/borrower"; Form 1099-A, the "borrower"; Form 1099-S, the "transferor"; Form 5498, the "participant"; and Form W-2G, the "winner".

.02 The term "filer" means the person or organization required by law to file a form listed in Part A Section 1.01 with the IRS. Thus, a filer may be a payer, a recipient of mortgage interest payments, a broker, parties involved in a barter exchange, a person reporting real estate transactions, a trustee or issuer of an individual retirement arrangement (including an IRA or SEP), or a lender who acquires an interest in secured property or who has reason to know that the property has been abandoned.

.03 A corrected (or amended) return is one that corrects information previously reported to IRS. (A voided return will not correct previously reported information.)

.04 The term "substitute form" means a paper substitute of Copy A of an official form listed in Part A

Section 1.01 that totally conforms to the provisions in this revenue procedure.

.05 The term "form recipient statement" means a paper statement of the information reported on a form listed in Part A Section 1.01 that must be furnished to a person (form recipient), as so defined under the applicable provisions of the Internal Revenue Code and the applicable regulations.

.06 A composite substitute statement is one in which two or more required statements (e.g. Form 1099-INT and 1099-DIV) are furnished to the recipient on one document. However, each statement must be separately designated and must contain all the requisite Form 1099 information except as provided in Part A Section 7.03(3). A composite statement CANNOT be filed with the IRS. See Part A Section 7.03 and 7.05 for more information on composite statements.

SEC. 5. INSTRUCTIONS FOR PREPARING PAPER FORMS THAT WILL BE FILED WITH THE IRS (Copy A)

.01 The form recipient's name, street address, city, state, and ZIP code information should be TYPED OR MACHINE PRINTED IN BLACK INK on separate lines. Carbon copies and photocopies are not acceptable. The city, state, and ZIP code must be on the same line.

.02 The name of the appropriate form recipient must be shown on the first or second name line in the area on the form provided for the form recipient's name and address. No descriptive information or other name should precede the form recipient's name. Only ONE form recipient's name should appear on the first line of the form. If more than one form recipient's name must be entered on the form, place the responsible form recipient's name (that is, the name and taxpayer identification number (T1N) used for information reporting purposes) on the first line. Place the other form recipient's name on the succeeding name line (up to 2 name lines are allowable). Because certain states require that trust accounts be provided in a different format, generally filers should provide information returns reflecting payments to trust accounts with (1) the trust's employer identification number [EIN] in the recipient's TIN area, (2) the trust's name on the recipient's first name line, and (3) the name of the trustee on the recipient's second name line.

.03 You should use the account number box for an account number designation. This number must not appear anywhere else on the form, and this box may not be used for any other item. Showing the account number is optional. However, it may be to your benefit to include the recipient's account number or designation on paper documents if your system of records uses the account number or designation in conjunction with, or rather than, the name, social security number, or employer identification number for identification purposes. If you furnish the account number, the IRS will include it in future notices to you about backup withholding. If you use window envelopes and reduced rate mail to mail statements to recipients, be sure the account number does not appear in the window otherwise the Postal Service may not accept them for mailing.

.04 Filers should TYPE OR MACHINE PRINT data entries on the forms, insert data in the middle of blocks well separated from other printing and guidelines, and take other measures to guarantee a clear, dark black, sharp image.

.05 Machine printed forms should be printed using a 6 lines/inch option.

.06 Machine printed forms should be printed in 10 pitch pica (i.e., 10 print positions per inch) or 12 pitch elite (i.e., 12 print positions per inch). Proportional spaced fonts are unacceptable.

.07 To correct returns, enter an "X" within the checkbox located at the top of the form making the correction, to the left of the word "CORRECTED." DO NOT type the words CORRECTED RETURN on the Form 1096, 1098, 1099, 5498, or W-2G. See "Corrected and Void Returns" located in the 1993 "Instructions for Forms 1099, 1098, 5498, and W- 2G".

.08 If you make an error while typing or printing a Form 1098, 1099, or 5498, enter an "X" in the "VOID" box at the top of the form. An entry in the "VOID" box will not correct previously filed information returns.

.09 Use only computer print or a typewriter. Do NOT use a felt tip marker. The machine used to "read" paper forms generally cannot "read" this ink type.

.10 Substitute forms prepared in continuous or strip form must be burst and stripped to conform to the size specified for a single sheet before they are filed with IRS. The size specified does not include pinfeed holes. Pinfeed holes MUST NOT be present on forms filed with the IRS.

.11 Use decimal points to indicate dollars and cents. DO NOT use dollar signs ($), ampersands (&), asterisks (*), commas (,), or other special characters in the numbered money boxes. Example: 200.00 is acceptable.

.12 DO NOT FOLD Form 1096, 1098, 1099, or 5498 being mailed to IRS. Mail these forms flat in an appropriately sized envelope or box. Folded documents cannot be readily moved through the scanner transport used in IRS processing.

.13 DO NOT STAPLE Forms 1096 to the returns being transmitted. Staple holes in the vicinity of the return code number reduce our ability to machine scan the type of document being processed.

.14 MAIL completed paper forms to the IRS service center specified on the back of Form 1096 and in the 1993 "Instructions for Forms 1099, 1098, 5498, and W-2G." Specific information needed to complete the forms in this revenue procedure is given in those instructions. A chart is included in those instructions giving a quick guide to which form must be filed to report a particular payment.

SEC. 6. MAGNETIC MEDIA AND ELECTRONIC FILING

.01 All forms listed in Section 1.01 (except Form 1096) may be filed magnetically or electronically. The IRS encourages all filers including nominees (hereafter collectively referred to as filers) to file information returns on magnetic media or electronically instead of on paper forms.

.02 Any person who is required to file 250 or more information returns (of any one type of form) for one calendar year MUST file on magnetic media unless an undue hardship waiver is requested and received. To request a one year waiver of the magnetic media filing requirements, for the current tax year only, submit Form 8508, Request for Waiver From Filing Information Returns on Magnetic Media. See Publication 1220 Part A, Sec. 5, for more information. Specifications for filing information returns on magnetic media are contained in Publication 1220 "Specifications for Filing Forms 1098, 1099, 5498, and W-2G Magnetically or Electronically." Copies of this publication may be obtained by calling 1-800-TAX-FORM (1-800-829- 3676). Payers who do not comply with the magnetic media filing requirements and who are not granted a waiver may be subject to certain penalties. Note: Filing electronically will satisfy the magnetic media filing requirements.

SEC. 7. SUBSTITUTE STATEMENTS TO FORM RECIPIENTS AND FORM RECIPIENT COPIES

(If you are not using the official IRS form to furnish statements to recipients, your substitute statements must comply with the rules in this section.)

.01 FURNISHING STATEMENTS TO RECIPIENTS -- FORMS 1099-INT, DIV, OID, PATR, and CERTAIN FORMS 1099-MISC and 1099-S. For payments of interest and dividends reportable on Forms 1099-DIV (only for dividends reportable under section 6042 of the IRC), 1099-INT (only for interest reportable under section 6049 of the IRC), 1099-OID (for original issue discount reportable under section 6049 of the IRC), and 1099-PATR (for patronage dividends reportable under section 6044 of the IRC), an official Form 1099 must be furnished to a form recipient either in a statement mailing by first-class mail, a separate mailing, or in person. For payments of royalties reported on Form 1099-MISC or timber royalties reported on Form 1099-S, the statement must be furnished in person or in a statement mailing by first-class mail, but the statement need not be the official form.

For a statement mailing, the form may be mailed or provided in person with (1) other Forms 1098, 1099, W-2, or 5498 form recipient statements, (2) a check, (3) a letter explaining why no check is enclosed, (4) a statement of the person's specific account, (5) Forms W-8, Certification of Foreign Status, and W-9, Request for Taxpayer Identification Number and Certification, and (6) a letter limited to an explanation of the tax consequences of the information shown on the enclosed form recipient statements. The legend "Important Tax Return Document Enclosed" must appear in a bold and conspicuous manner on the outside of the envelope and on each letter, or check or account statement that is not perforated to a recipient statement.

A form recipient statement may be perforated to a check with respect to the account reported on the recipient statement or to a statement of the recipient's specific account if payments on such account are reflected on the form recipient statement. The enclosure to which the form recipient statement is perforated must contain, in a bold and conspicuous type, the legend "Important Tax Return Document Attached."

If you mail the statements separately from nontax information, you are not required to include the legend "Important Tax Return Document Enclosed" on the envelope. NOTE: No other information, such as advertising, promotional material, or a quarterly or annual report, may be mailed with the form recipient statement or provided in person with the form recipient statement without violating these requirements. See Notice 87-17, 1987-1 C.B. 454, and Notice 87-70, 1987-2 C.B. 380, for more information. (The statement mailing requirements do not apply to the forms listed in Section 7.04 except as explained in this Section 7.01.)

.02 SUBSTITUTE STATEMENTS TO RECIPIENTS -- 1099-INT, DIV, OID, and PATR ONLY. -- The requirement to furnish form recipients with an official Form 1099-INT, DIV, OID, or PATR may be met by furnishing Copy B of the official form or by furnishing a substitute Form 1099 (form recipient statement) if it contains the same language as that of the official IRS form, (such as aggregate amounts paid to the form recipient, any Federal income tax withheld under section 3406 of the IRC, the name, address, and TIN of the person making the return, and any other information required by the official form). Generally, information not required by the official form should not be included on the form because it may violate the statement mailing requirements (see .01 above). However, applicable state tax withholding information may be included. You may enter a total of the individual accounts listed on the form only if they have been paid by the same payer. For example, if you are listing interest paid on several accounts in one financial institution on Form 1099-INT, you may also enter the total interest amount.

A mutual fund complex may separately state on one document (e.g., one piece of paper) the dividend income earned by a recipient from each fund as required by Form 1099-DIV. Each fund and the earnings from each must be separately stated. The form must contain an instruction to the recipient that each fund name, not the name of the mutual fund complex, must be reported on the recipient's tax return. The form cannot contain an aggregate total of all funds.

The form recipient statement, i.e., Copy B of a substitute form for interest, dividends, patronage dividends, and original issue discount, must contain the information listed below.

(1) Box captions and numbers that are applicable must be clearly identified, using the same wording and numbering as on the official form. However on Form 1099-INT, if box 3 is not on your substitute form, you may drop "not included in box 3" from the box 1 caption.

(2) The form recipient statement must contain all applicable form recipient instructions provided on the front and back of the official IRS form. Those instructions may be provided on a separate sheet of paper.

(3) The form recipient statement must contain the following statement in bold and conspicuous type, "This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it has not been reported."

(4) The caption "Federal income tax withheld" should be in bold face type on the form recipient statement.

(5) The form recipient statement must contain the Office of Management and Budget (OMB) number as shown on the official IRS form. See Part D, Section 2.

(6) The form recipient statement must show the title and number of the official IRS Form 1099 for which it substitutes (such as Form 1099-INT, Interest Income), each copy must be appropriately labeled (such as Copy B, For Recipient) (sec Part D Section 1.02 for applicable labels of forms). The year for which the payment is reported must be shown in a prominent location. IRS would prefer the words "Substitute for" or "In lieu of" not appear on the form recipient statement.

(7) If the form recipient statement contains all the information listed in (1) through (6) above, layout and format of the form is at the discretion of the filer. However, IRS encourages the use of statements with boxes so that the statement has the appearance of a form and can be easily distinguished from other nontax statements. IRS is moving toward uniformity of all tax forms to reduce taxpayer con- fusion on reporting tax information.

(8) With respect to mutual funds furnishing a statement as a single filer each fund and the earnings from each must be separately stated. The form must contain an instruction to the recipient that each fund name, not the name of the mutual fund complex, is to be reported on the shareholder's tax return. The form cannot contain an aggregate total of all funds.

.03 COMPOSITE SUBSTITUTE STATEMENTS -- FORMS 1099-INT, DIV, OID, AND PATR ONLY. -- A composite form recipient statement is permitted for reportable payments of interest, dividends, original issue discount, and/or patronage dividends (Form 1099-INT, DIV, OID or PATR) when one payer is reporting more than one of these payments during a calendar year to the same form recipient. Generally, do not include any other Form 1099 information (e.g., 1098, 1099-A), on a composite statement with the forms listed above. Exception: A filer may include Form 1099-B information on a composite form with the forms listed above. Although the composite form recipient statement may be on one sheet, the format of the composite form recipient statement must satisfy the following requirements in addition to the requirements listed in Section 7.01 and .02 above.

(1) All information pertaining to a particular type of payment must be located and blocked together on the form and must be separate from any information covering other types of payments included on the form. For example, if you are reporting interest and dividends, the Form 1099-INT information must be presented separate from the Form 1099- DIV information.

(2) The titles and numbers of the official IRS forms for which the composite form recipient statement substitutes must be shown at the beginning of each appropriate block of information.

(3) Any information required by the official IRS forms that would otherwise be repeated in each information block is only required to be listed once in the first information block on the composite form. For example, there is no requirement to report the name of the filer in each information block. This rule does not apply to any money amounts, e.g., Federal income tax withheld, or to any other information that applies to money amounts.

(4) Further, a composite statement shall be considered an acceptable substitute of a required statement only if the type of payment and the recipient's tax obligation with respect to the payment are no less clear than if such statement were furnished separately on an official form.

.04 SUBSTITUTE STATEMENTS TO RECIPIENTS -- FORMS 1098, 1099-A, 1099-B, 1099-G, 1099-M1SC, 1099-R, 1099-S, 5498, W-2G, AND CERTAIN FORMS 1099-INT AND 1099-DIV. Statements to form recipients of payments reportable on Forms 1098, 1099-A, 1099-B, 1099-G, 1099-MISC, 1099-R, 1099-S, 5498, 1099-DIV only for section 404(k) dividends reportable under section 6047, and 1099-INT only for payments of $600.00 or more made in the course of a trade or business reportable under section 6041 can be, but are not required to be, copies of the official forms. If you do not use the official form as the form recipient statement, the substitute form recipient statement must meet the following requirements:

(1) The filer and form recipient identifying information required on the official IRS form must be included.

(2) All applicable money amounts and information, including box numbers, required to be reported to the form recipient must be titled on the form recipient statement in substantially the same manner as those on the official IRS form. Exception: If any payment falls into the "etc." category of box 3, Form 1099-MISC, "Prizes, awards, etc.," you may substitute appropriate explanatory language for the box title. For example, for payments of accrued wages and leave to a beneficiary of a deceased employee (required by Rev. Rul. 86-109 to be reported on Form 1099-MISC), you might change the title of box 3 to "Beneficiary payments" or something similar.

(3) Appropriate instructions to the form recipient, similar to those on the official IRS form, must be provided to aid in the proper reporting of the items on the form recipient's income tax return. For payments reported on Form 1099-B, the requirement to include instructions that are substantially similar to those on the official IRS form may be satisfied by providing form recipients with a single set of instructions with respect to all statements required to be furnished in a calendar year.

(4) A mutual fund complex may separately state on one document (e.g., one piece of paper) the Form 1099-B information for a recipient from each fund as required by Form 1099-B. Each fund and the gross proceeds, etc., from each must be separately stated. The form must contain an instruction to the recipient that each fund name, not the name of the mutual fund complex, must be reported on the recipient's tax return. The form cannot contain an aggregate total of all funds.

(5) For payments of royalties reportable on Form 1099-MISC or timber royalties reportable on Form 1099-S, you are required to furnish the statement in person or in a statement mailing by first-class mail (as explained in Section 7.01), but the statement need not be the official form. Other form recipient statements specified in .04 above are not subject to the statement mailing requirements of Section 7.01 and may contain information other than that required by the official IRS form. However, if other information is included, such statements cannot be mailed with Forms 1099- DIV, INT, OID, PATR, MISC (for royalty payments), S (for timber royalties), or their substitutes as specified in Section 7.01 without violating the statement mailing requirements.

(6) For Form 1099-S, Proceeds From Real Estate Transactions, you may use a Uniform Settlement Statement under the Real Estate Settlement Procedures Act of 1974 (RESPA), as the written statement to the transferor if it is conformed by including on the statement the legend described in (7)(e) and by designating which information on the Uniform Settlement Statement is being reported to IRS on Form 1099-S.

(7) Form recipient statements must contain the following:

(a) Form 1098 -- (i) "The information in boxes 1, 2 and 3 is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if the IRS determines that an underpayment of tax results because you overstated a deduction for this mortgage interest or for these points or because you did not report this refund of interest on your return." (ii) "The amount shown may not be fully deductible by you on your Federal income tax return. Limitations based on the cost and value of the secured property may apply. In addition, you may only deduct an amount of mortgage interest to the extent it was incurred by you, actually paid by you, and not reimbursed by another person."

(b) Form 1099-A -- "This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if taxable income results from this transaction and the IRS determines that it has not been reported."

(c) 1099-B, 1099-DIV, 1099-G, 1099-INT, 1099-MISC, and W-2G (Copy C) -- "This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it has not been reported." Copy B of Form W-2G must state "This information is being furnished to the Internal Revenue Service. Report this income on your Federal tax return. If this form shows tax was withheld, attach this copy to your return."

(d) Form 1099-R -- "Report this income on your Federal tax return. If this form shows Federal income tax withheld in box 4, attach this copy to your return. This information is being furnished to the Internal Revenue Service."

NOTE: If Federal income tax withheld is shown on Form 1099- R, Copy B (to be attached to the tax return) and Copy C (for taxpayers records) must be furnished to the recipient. If Federal income tax withheld is not shown on Form 1099-R, only Copy C is required to be furnished, but the instructions similar to those contained on the back of the official Copy B must be furnished to the recipient in another manner. For convenience, you may choose to provide both Copies B and C to the recipient.

(e) Form 1099-S -- "This is important tax information and is being furnished to Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanctions may be imposed on you if this item is required to be reported and the IRS determines that it has not been reported."

(f) Form 5498 -- "The information in boxes 1, 2, 3, and 4 is being furnished to the Internal Revenue Service." Note: If the trustee does not issue Form 5498 to a participant because no contributions were made to an IRA for the year, a year-end statement issued to the participant reporting the fair market value of the account must contain a similar legend designating which information is being furnished to IRS.

.05 COMPOSITE SUBSTITUTE STATEMENT -- FORMS SPECIFIED IN 7.04 ONLY. -- A composite form recipient statement for forms specified in .04 is permitted when one filer is reporting more than one of these payments during a calendar year to the same form recipient. A composite statement is not allowable for a combination of forms listed in 7.01 above and forms listed in 7.04 except that a filer may report Form 1099-B information on a composite form with the forms as described in 7.03 above. A composite statement of Forms 1098 and 1099-INT (for interest reportable under section 6049) is not allowable. Although the composite form recipient statement may be on one sheet, the format of the composite form recipient statement must satisfy the requirements listed in items (1), (2), and (3) of 7.03 above in addition to the requirements specified in 7.04. Further, a composite statement shall be considered an acceptable substitute of a required statement only if the type of payment and the recipient's tax obligation with respect to the payment are no less clear than if such statements were furnished separately.

PART B -- SPECIFICATIONS FOR SUBSTITUTE FORMS TO BE FILED WITH IRS (EXCEPT FORM W-2G)

SECTION 1. GENERAL

.01 The following specifications prescribe the format requirements of Forms 1098 (Copy A), 1099 (Copy A), 5498 (Copy A), and 1096.

.02 The form identifying number (e.g., 9191 for Form 1099-DIV) must be printed in non-reflective black carbon-based ink in print positions 15 through 19 using an OCR A font. The checkboxes located to the right of the form identifying number must be 10-point boxes, the void checkbox is in print position 25 and the void checkbox in position 33. These measurements are from the left edge of the paper.

SECTION 2. SPECIFICATIONS FOR FORMS 1096 AND COPY A OF FORMS 1098, 1099 AND 5498

.01 The substitute form must be an exact replica of the official IRS reproduction proof with respect to layout and contents. "Spot carbons" are not permitted for Copy A. Use of chemical transfer paper for Copy A is acceptable. The Government Printing Office (GPO) symbol must be deleted. Specifications for Copy A are provided in Exhibits A through M. Specifications for Form 1096 are provided in Exhibit N.

.02 Color and quality of paper for Copy A (cut sheets and continuous pinfeed forms) as specified by JCP Code 0-25, dated November 29, 1978, must be white 100% bleached chemical wood, optical character recognition (OCR) bond produced in accordance with the following specifications:

NOTE: Reclaimed fiber in any percentage is permitted provided the requirements of this standard are met.

(1) Acidity: Ph value, average, not less than -- 4.5

(2) Basis Weight 17 x 22 -- 500 cut sheets -- 18-20 Metric equivalent -- g/m2 -- 75 A Tolerance of +5 pct. shall be allowed.

(3) Stiffness: Average, each direction, not less than -- milligrams -- 50

(4) Tearing strength: Average, each direction, not less than -- grams -- 40

(5) Opacity: Average, not less than -- percent -- 82

(6) Thickness: Average -- inch -- 0.0038

Metric equivalent -- mm -- 0.097

A tolerance of + 0.0005 inch (0.0127 mm) shall be allowed.

Paper shall not vary more than 0.0004 inch (0.0102 mm) from one edge to the other.

(7) Porosity: Average, not less than -- seconds -- 10

(8) Finish (smoothness): Average, each side -- seconds -- 20-55 For information only, the Sheffield equivalent -- units 170- 100

(9) Dirt: Average, each side, not to exceed -- parts per million -- 8

.03 All printing on Forms 1098, 1099, and 5498 must be in red OCR dropout ink Flint (formerly Sinclair-Valentine) J-6983 or an exact match, except for the 4-digit form identifying numbers, which must be printed in non-reflective carbon-based black ink. The shaded area of any substitute form should generally correspond to that present on the official form. Printing on Form 1096 above the statement "Please return this entire page to the Internal Revenue Service. Photocopies are NOT acceptable" will be in red OCR dropout ink (except for the 4 digit form identifying numbers 6969). All printing below this statement may be in any shade or tone of black ink. Black ink should only appear on the lower portion of the reverse side of Form 1096 where it would not bleed through and interfere with scanning. Instructions to payers when printed on the back of Copy A, must be screened for 70% tone value of 110-line screen so the instructions will not bleed through and interfere with scanning. In lieu of printing these instructions on the back of Copy A, the instructions may be printed on the back of the copy designated for the Payer, Recipient for 1098, Lender for Form 1099-A, Filer for 1099-S, or Trustee or Issuer for Form 5498 in any ink color or tone. Separation between fields must be 0.1 inch. The numbered captions are printed as a solid with no shaded background. Other printing requirements are discussed below.

OCR Specifications

The contractor must have or initiate a quality control program to assure OCR ink density. In addition, the contractor must have access to either a MacBeth PCM-II tester or a Kidder 082A tester to evaluate at regular intervals throughout a shift.

Paper and Ink

Readings will be made when printed on approved 20 lb. White OCR bond with a reflectance of not less than 80%. Black ink used must not have a reflectance greater than 15%. These readings are based on requirements of the "REI Input 80 Model C1 & D" Optical Scanner using Flint Ink (formerly known as Sinclair-Valentine J-6983 red ink) or equal.

MacBeth PCM II Tester

The tested Print Contrast Signal (PCS) values when using the MacBeth PCM-II tester on the "C" scale must range from .01 minimum to .06 maximum.

Kidder 082A Tester

The tested Print Contrast Signal (PCS) values when using the Kidder 082A tester on the Infra Red (IR) scale must range from .12 minimum to .21 maximum. White calibration disc must be 100%, sensitivity must be set at one (1).

Alternative Tester

If an alternative tester is used it must be approved by the Government so that tested (PCS) values can be established with this equipment. Approval may be obtained by writing to the following address:

     Commissioner of Internal Revenue

 

     Attn: HR:F:P:P Room 1237

 

     Tax Forms Procurement Analyst

 

     1111 Constitution Avenue, N.W.

 

     Washington, DC 20224

 

 

Printing exceeding the maximum screen density will cause the forms to be nonprocessable. If this happens, the filer may be subject to a $50 penalty under section 6721 of the Internal Revenue Code for each such form submitted in a nonprocessable format. Thus, the filer should resubmit acceptable forms promptly to reduce or avoid the penalty.

.04 Typography -- Type must be substantially identical in size and shape with corresponding type on the official form. All rules are either 1/2-point or 3/4-point. Rules must be identical to that on the official IRS form. NOTE: The form identifying number must be nonreflective carbon-based black ink in OCR A Font.

.05 Dimension -- Three Forms 1098, 1099, or 5498 (Copy A) are contained on a single page, except Form 1099-R which contains two documents per page, which is 8 inches wide (exclusive of any snap- stubs and/or pinfeed holes) by 11 inches deep. There is a .33 inch top margin from the top of the corrected box, and there is a .25 inch right margin. Because these measurements are constant for all Forms 1098, 1099 and 5498, they will be shown only once in the exhibit section of this publication, on the Form 1098. Only exceptions to these measurements will be shown on the remainder of exhibits. If the right and top margins are properly aligned, the left margin for all forms will be correct. All margins must be free of all printing. See Exhibits A through N in this publication for the correct form measurements.

.06 The depth of the individual trim size of each form on a page must be (3-2/3 inches or 5-1/2 inches for Form 1099-R) the same as that of the official form.

.07 Perforations are required between forms on all copies except Copy A to enable the separation of individual forms.

.08 The words "For Paperwork Reduction Act Notice and instructions for completing this form, see Instructions for Forms 1099, 1098, 5498, and W-2G" must be printed on Copy A (and Copy C).

.09 The OMB Number must be printed on Copies A in the same location as that on the official form.

.10 Privately printed continuous substitute forms (Copy A) must be perforated at each 11" (3 per page, or 2 per page for 1099-R) page depth. No perforations are allowed between the 3-2/3" forms (or 5- 1/2" for Form 1099-R) on a single copy page of Copy A.

.11 The words "Do NOT Cut or Separate Forms on This Page" must be printed in red dropout ink (as required by form specifications) between the three, or two for Forms 1099-R forms. NOTE: Perforations are required between all the other individual copies (Copies B and C, and Copies 1 and 2 for Form 1099-R and Form 1099-MISC, and Copy D for Form 1099-R) included in the set.

.12 Carbonized "Chemical transfer paper" is used on official IRS forms for 1993. "Spot carbons" are not permitted for Copy A. Interleaved carbon must be of good quality to assure legibility of information on all parts to preclude smudging and should be black.

.13 Printer's symbol -- The GPO symbol must not be printed on substitute Copy A. Instead, the employer identification number (EIN) of the forms printer must be entered in the bottom margin on the face of each individual form of Copy A, or the bottom margin on the reverse side of each Form 1096. The form must not contain the statement "IRS approved."

.14 A postal indicia may be used (if it meets the following criteria:) a) it is printed in the OCR ink color prescribed for the form; and b) no part of the indicia is within 1 print position of the scannable area.

PART C. SPECIFICATIONS FOR SUBSTITUTE FORMS W-2G TO BE FILED WITH IRS

SECTION 1. GENERAL

.01 The following specifications prescribe the format requirements for Form W-2G -- COPY A ONLY.

.02 A filer may file a substitute Form W-2G with the IRS (hereinafter referred to as substitute Copy A). The substitute form (submitted to IRS) must be an exact replica of the official form with respect to layout and contents.

SECTION 2. SPECIFICATIONS FOR COPY A FOR FORMS W-2G

.01 Color and Quality of Paper -- Paper for Copy A must be white chemical wood bond, or equivalent, 20 pound (basis 17 X 22-500), plus or minus 5 percent. The paper must consist substantially of bleached chemical wood pulp and be free from unbleached or ground wood pulp or recycled printed paper. It also must be suitably sized to accept ink without feathering.

.02 Color and Quality of Ink -- All printing must be in a high quality non-gloss black ink. Bar codes should be free from picks and voids.

.03 Typography -- The type must be substantially identical in size and shape with that on the official form. All rules on the document are either 1/2 point (.007 inch), 1 point (0.015 inch), or 3 point (0.045). Vertical rules must be parallel to the left edge of the document; horizontal rules, parallel to the top edge.

.04 Dimensions -- The official form is 8 inches wide x 3-2/3 inches deep, exclusive of a 2/3 inch snap stub on the left side of the form. The snap feature is not required on substitutes. The top and right margins must be 1/4 inch plus or minus .0313. If the top and right margins are properly aligned, the left margin for all forms will be correct. All margins must be free of any printing. If the substitute forms are in continuous or strip form, they must be burst and stripped to conform to the size specified for a single form.

(1) The width of a substitute Copy A must be 8 inches. The left margin must be free of all printing other than that shown on the official form.

(2) The depth of a substitute Copy A must be 3-2/3 inches.

.05 Carbonized forms or "spot carbons" -- Carbonized forms and "spot carbons" are not permitted. Interleaved carbons, if used, should be black and good quality to preclude smudging.

.06 Printer's Symbol -- The Government Printing Office (GPO) symbol must not be printed on substitute Forms W-2G. Instead the employer identification number (EIN) of the forms printer must be printed in the bottom margin on the face of each individual form of Copy A of such substitute forms. The form must not contain the statement "IRS approved."

PART D. ADDITIONAL INSTRUCTIONS FOR FORMS 1098, 1099, 5498, AND W-2G

SECTION 1. OTHER COPIES

.01 Copies B, C, and in some cases D, 1, and 2, are included in the official assembly for the convenience of the filer. Although there is no requirement that privately printed substitute forms include all these copies, Copies B, and in some cases Copies C, will satisfy the requirement of the law and regulations concerning the statement of information that is required to be furnished to the form recipient. NOTE: If Federal income tax withheld is shown on Form W-2G or 1099-R, Copy B (to be attached to the tax return) and Copy C must be furnished to the recipient. Copy D (Forms 1099-R and W-2G) may be desired as a filer record copy. Only Copy A should be filed with the IRS.

.02 Arrangement of Assembly -- The parts of the assembly must be arranged, from top to bottom, as follows: (a) All forms -- Copy A "For Internal Revenue Service Center." (b) Form 1098 -- Copy B "For Payer"; Copy C "For Recipient." (c) Form 1099-A -- Copy B "For Borrower"; Copy C "For Lender." (d) Forms 1099-B, 1099-DIV, 1099-G, 1099-INT, 1099-OID, and 1099-PATR -- Copy B "For Recipient"; Copy C "For Payer." (e) Form 1099-MISC -- Copy 1 "For State Tax Department"; Copy B "For Recipient"; Copy 2 "To be filed with recipient's state income tax return, when required."; Copy C "For Payer." (f) Form 1099-R -- Copy 1 "For State, City, or Local Tax Department"; Copy B "Report this income on your Federal tax return. If this form shows Federal income tax withheld in box 4, attach this copy to your return."; Copy C "For Recipient's Records"; Copy 2 "File this copy with your state, city, or local income tax return, when required."; Copy D "For Payer." (g) Form 1099-S -- Copy B "For Transferor"; Copy C "For Filer." (h) Form 5498 -- Copy B "For Participant"; Copy C "For Trustee or Issuer." (i) Form W-2G -- Copy 1 "For State Tax Department"; Copy B "Report this income on your Federal tax return. If this form shows tax was withheld, attach this copy to your return." Copy C "For Winner's Records"; Copy 2 "To be filed with winner's state income tax return, if required."; Copy D "For Payer."

SECTION 2. OMB REQUIREMENTS

.01 Office of Management and Budget (OMB) Requirements for Substitute Forms -- Public Law 96-511 requires: (1) that OMB approve Internal Revenue Service tax forms, (2) that each form show (in the upper right corner) the OMB approval number, and (3) that the form (or its instructions) state why IRS is collecting the information, how it will be used and whether it must be given to IRS. The official IRS forms or instructions contain this information and any substitute must contain it also.

.02 The OMB requirements for substitute IRS forms are:

(1) All substitute forms, including substitute statements to recipients, must show the OMB number as it appears on the official IRS form;

(2) For Copy A, the OMB number must appear exactly as shown on the official IRS form;

(3) For any copy other than Copy A, the OMB number must use one of the following formats:

(a) OMB No. XXXX-XXXX (preferred) or;

(b) OMB #XXXX-XXXX.

(4) All substitute forms must set forth the reasons for IRS collection, use, and requirements, as stated in the Instructions for Forms 1099, 1098, 5498, and W-2G.

.03 The official OMB numbers may be obtained from reproduction proofs or official IRS printed forms.

SECTION 3. REPRODUCTION PROOFS

.01 Reproduction Proofs -- IRS Publication 1192 Catalog of Reproducible Forms and Instructions, containing order blanks and a list of items available for reproduction proofs are mailed annually to requesters of record and to other users upon request. Printers and others wishing to obtain reproduction proofs may send their requests to:

     Internal Revenue Service

 

     Attn: Repro Coordinator

 

     4300 Carolina Ave

 

     Richmond, VA 23222

 

 

.02 Pub. 1192 states the appropriate charge for each form, instruction, and publication. Order blanks must be filled out and submitted along with a total payment for all items ordered. Orders will be filled as the reproduction proofs become available. Orders without the correct payment will be returned.

SEC. 4. EFFECT ON OTHER REVENUE PROCEDURES

Revenue Procedure 92-30, 1992-1 C.B. 754, covering paper returns and statement for payments made during the 1992 calendar year is hereby superseded.

[Editor's note: Exhibits A through N illustrate physical specifications of the forms discussed. These illustrations are not suitable for electronic reproduction.]

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