Rev. Proc. 82-43

                              CONTENTS

SECTION 1. PURPOSE

.01 The purpose of this revenue procedure is to provide the requirements and conditions for filing information returns in the Forms 1099 and 1087 series on disk instead of paper returns. Specifications for filing the following forms are contained in this procedure:

a) Form 1099R, Statement for Recipients of Total Distributions from Profit-Sharing, Retirement Plans, and Individual Retirement Arrangements.

b) Form 1099-DIV, Statement for Recipients of Dividends and Distributions.

c) Form 1099-INT, Statement for Recipients of Interest Income.

d) Form 1099-MISC, Statement for Recipients of Miscellaneous Income.

e) Form 1099-MED, Statement for Recipients of Medical and Health Care Payments.

f) Form 1099-OID, Statement for Recipients of Original Issue Discount.

g) Form 1099-PATR, Statement for Recipients (Patrons) of Taxable Distributions Received from Cooperatives.

h) Form 1099L, U.S. Information Return for Distributions in Liquidation During Calendar Year.

i) Form 1099-NEC, Statement for Recipients of Nonemployee Compensation.

j) Form 1099-UC, Statement for Recipients of Unemployment Compensation Payments.

k) Form 1099-ASC, Statement for Recipients of Interest on All-Savers Certificates.

l) Form 1087-DIV, Statement for Recipients of Dividends and Distributions.

m) Form 1087-INT, Statement for Recipients of Interest Income.

n) Form 1087-MISC, Statement for Recipients of Miscellaneous Income.

o) Form 1087-MED, Statement for Recipients of Medical and Health Care Payments.

p) Form 1087-OID, Statement for Recipients of Original Issue Discount.

q) Form 1087-ASC, Statement for Recipients of Interest on All-Savers Certificates.

r) Agriculture Subsidy Payment Report.

.02 This procedure also provides the requirements and specifications for disk filing under the Combined Federal/State Filing Program.

.03 This procedure supersedes Rev. Proc. 81-55, 1981-2 C.B. 649.

SEC. 2. NATURE OF CHANGES

.01 There are various editorial changes.

.02 Record layouts have been added.

.03 All references to "D" Records have been deleted.

.04 Format changes have been made to Forms 1087-INT and 1099-INT, Statements for Recipients of Interest Income.

.05 Format changes have been made to Form 1099-PATR, Statement for Recipients (Patrons) of Taxable Distributions Received from Cooperatives.

SEC. 3. WAGE AND PENSION INFORMATION

.01 Section 8(b), Pub. L. 94-202, 1976-1 C.B. 503, enacted in January 1976, authorized the combined reporting of FICA detailed information (previously reported quarterly on Form 941, Schedule A and Annual W-2 (Copy A), Wage and Tax Statement) in one consolidated annual W-2 (Copy A) to the Federal Government. As a result, Forms W-2 and W-2P are to be filed with the Social Security Administration (SSA).

.02 SSA will accept magnetic media filing of Forms W-2 and W-2P and has issued TIB-4a, Magnetic Tape Reporting, Submitting Wage and Tax Data to Federal and State Agencies, TIB-4b, Magnetic Tape Reporting, Submitting Annuity, Pension, Retired Pay or IRA Payment to the Federal Government on Magnetic Tape, and TIB-4c, Diskette and Disk Cartridge Reporting, Submitting Wage and Tax Data to the Federal Government on Diskette and Disk Cartridge, for this purpose. Applications for filing Forms W-2 and W-2P on magnetic media appear in TIBs-4a, 4b, and 4c.

.03 Copies of Social Security Administration publications TIB-4a, 4b, and 4c are available from any Internal Revenue Service Center or local Social Security Administration office.

SEC. 4. APPLICATIONS FOR MAGNETIC MEDIA REPORTING

.01 For the purposes of this revenue procedure, the payer is the organization making the payments and the transmitter is the organization preparing the disk file. An organization can be both a transmitter and a payer. Payers or transmitters who decide to file information returns, in the Forms 1099 and 1087 series, on disk, must complete Form 4419, Application for Magnetic Media Reporting Information Returns. Instructions for completing the application appear on the reverse side of the form.

.02 The Service will act on an application and notify the applicant of authorization to file within 30 days of receipt of the application. No disk returns may be filed with the Service until authorization to file is received.

.03 The Service will assist new filers with their initial disk submission by encouraging the submission of test disks for review in advance of the filing season. Approved payers or transmitters who wish to submit a test disk should contact the magnetic media coordinator at the Service Center where the application was filed.

.04 Once authorization to file on disk has been granted to a payer or transmitter, it will remain in effect in succeeding years, provided that all the requirements of this revenue procedure are met and there are no hardware or software changes by the filer which would cause the disk to become unprocessable. If a filer discontinues filing on disk, a new application must be filed before this method of filing may be resumed.

.05 In accordance with Section 1.6041-7 of the Income Tax Regulations, medical payments from separate departments of a health care carrier may be reported as separate returns on disk. In this case, the headquarters office will be considered to be the transmitter and the individual departments of the company filing reports will be considered to be payers. A single application form covering all the departments which will be filing on disk should be submitted.

SEC. 5. FILING OF DISK REPORTS

.01 A disk reporting package, which includes all the necessary transmittals, labels, and instructions, will be mailed to all approved filers between October and December of each year.

.02 Payers may submit a portion of their information returns on disk and the remainder on paper forms, provided there is NO DUPLICATE FILING. The disk records and paper forms must be filed at the same location, but in separate shipments. A Form 1096, Annual Summary and Transmittal of U.S. Information Returns, must accompany paper submissions and a Form 4804. Transmittal of Information Returns Reported on Magnetic Media, must accompany disk submissions.

.03 The affidavit which appears on Forms 1096 and 4804 must be signed by the payer. A transmitter, service bureau, or disbursing agent may, however, sign the affidavit on behalf of the payer if all of these conditions are met:

a. It has the authority to sign the affidavit under an agency agreement (either oral, written, or implied) that is valid under the State law; and

b. It has the responsibility (either oral, written, or implied) conferred on it by the payer to request the taxpayer identifying numbers of payees reported on disk or paper returns; and

c. It signs the affidavit and adds the caption "For: (name of payer)".

.04 Although a duly authorized agent signs the affidavit, the payer is held responsible for the accuracy of the Form 4804 and will be liable for penalties for failure to comply with filing requirements.

.05 These requirements also apply to paper filers submitting Form 1096. Paper filers are responsible for the filing of a correct, complete, and timely Form 1096. The failure of duly authorized "agents" of paper filers to comply with the filing requirements of Form 1096 and attachments does not relieve the payers of any penalties that may arise as a result of such failure to comply.

.06 If a portion of the returns are submitted on paper documents, include a statement on the Form 1096 that the remaining returns are being filed on disk. Please note that Form 1096 instructions normally apply to the filing of information returns on paper; however, filers of disk must review the Form 1096 instructions and file Form 1096 if appropriate.

.07 Health care carriers, or their agents, filing Form 1099-MED per Section 4.05 above, may submit part of their returns on paper documents and part on disk if the records of some departments are not maintained on computer files. However, an information return is required if the aggregate amount paid to a health care service provider from all departments equals $600 or more. For example, Department A pays $200, Department B pays $300, and Department C pays $100 to the same health care service provider. The aggregate amount paid from all departments equals $600. The health care carrier or agent must submit either one information return for the aggregate amount of $600 or three separate returns, one from each department, indicating the amount paid by each department.

.08 Reports for different branches of one payer, or for different types of accounts, should be consolidated under one Payer/Transmitter "A" Record.

SEC. 6. FILING DATES

.01 Disk reporting to the Service for all types of Forms 1099 and 1087 must be on a calendar year basis.

.02 The dates prescribed for filing paper returns with the Service will also apply to disk filing. Disks must be submitted to the Service Center by February 28. The copies of this information required to be furnished to recipients must be furnished by January 31.

SEC. 7. EXTENSIONS TO FILE

.01 If a payer or transmitter is unable to submit its disk file by the date prescribed in Section 6.02 above, a letter requesting an extension must be filed before February 28. The letter should be sent to the attention of the magnetic media coordinator at the Service Center which will receive the disk file. The request should include the estimated number of returns which will be filed late and the reason for the delay.

.02 If an extension is granted by the Service, a copy of the letter granting the extension must be attached to the transmittal Form 4804 when the file is submitted.

SEC. 8. PROCESSING OF DISK RETURNS

.01 The Service will process tax information from disks. Disks which are received timely by the Service will be returned to the filers by August 15 of the year in which submitted.

.02 All disks submitted must conform totally to this revenue procedure. IF DISKS ARE UNPROCESSABLE, THEY WILL BE RETURNED TO THE FILER FOR CORRECTION. Corrected disks must be filed with the Service Center as soon as possible. If the delay will be more than two weeks, contact the Service Center Magnetic Media Coordinator for instructions. Corrected files will be returned by the Service within six months of receipt.

SEC. 9. CORRECTED RETURNS

.01 If a large volume of corrected returns is necessary, and the payer or transmitter possesses the capability to provide such corrections on disk, they are encouraged to do so. The filer must contact the magnetic media coordinator for format and shipping instructions. A corrected Form 4804 must accompany the shipment and be marked "MAGNETIC MEDIA CORRECTION" on the upper portion of the form.

.02 If corrections are not submitted on disk, payers must submit them on official Form 1099 or 1087 (Copy A) or on paper substitutes. Some paper substitutes approved for submission to payees as originals are not acceptable. Revenue procedures containing specifications for paper returns are available from most Internal Revenue Service offices.

.03 Form 1096 instructions are to be followed when paper returns are filed to correct returns previously submitted on magnetic media. An "X" must be entered in the box in the left margin and the caption "MAGNETIC MEDIA CORRECTION" must appear on the top of the form to the left of "FOR OFFICIAL USE ONLY". Corrections must be sent to the attention of the magnetic media coordinator where the original disk file was filed.

.04 Combined Federal/State Filers who submit paper corrections must file directly with the affected state. The service will not transship paper corrections to the states.

SEC. 10. TAXPAYER IDENTIFICATION NUMBERS

.01 Under Section 6109 of the Internal Revenue Code, recipients of dividends, interest, or other payments are required to furnish Taxpayer Identification Numbers (TINs) to the payer. The number must be furnished to the payer whether or not the payee is required to file a tax return or is covered by Social Security.

.02 The Service expects that payers will keep to a minimum those statements submitted without TINs. It is particularly important that correct social security and employer identification numbers for payees be provided on magnetic media or paper forms submitted to the Service.

.03 For each omission of a required TIN, Section 6676 of the Internal Revenue Code provides that the Service charge a $5 penalty unless the payer or payee responsible for furnishing the number supplies an explanation, upon request from the Service, that establishes reasonable cause for not having done so.

.04 The TIN to be furnished to the Service depends primarily upon the manner in which the account is maintained or set up on the payer's record. The TIN to be provided must be that of the owner of the account. If the account is recorded in more than one name, furnish the TIN and name of one of the owners of the account. The TIN provided must be associated with the name of the payee provided in the first name line of the Payee Record ("B" Record). (For individuals, including those individuals operating a business, the payee TIN is the payee's Social Security Number. For other entities, the payee TIN is the payee's Employer Identification Number.)

.05 Sole proprietors who are payers should show their employer identification number in the Payer/Transmitter "A" Record. However, the payer should use the social security number of a sole proprietor in the Payee "B" Record.

.06 The charts below will help you determine the number to be furnished to the Service.

            CHART 1. Guidelines for Social Security Numbers

.01 Disk reporting of the information returns listed in Section 1 above applies only to the original (Copy A).

.02 Payers are permitted considerable flexibility in designing the copy of the information return to be furnished to the payee. The payer may combine the information return data with other reports or financial or commercial notices, or expand them to include other information of interest to a depositor, patron, or shareholder. This is permissible so long as all required information present on the official form is included and the payee's copies are conducive to proper reporting of income on tax returns. Payers must include a message similar to "This information is being furnished on Form 1099 (or 1087) to the Internal Revenue Service" on the recipients' copies.

.03 If a portion of the returns is reported on disk and the remainder is reported on paper forms, those returns not submitted on disk must be filed on official forms or on paper substitutes meeting specifications in the revenue procedure on the reproduction of Forms 1099, 1087, and W-2G. Forms 1099-BCD, 1099-F, and W2-G cannot currently be filed on disk.

SEC. 12. MAGNETIC MEDIA COORDINATOR CONTACTS

Requests for additional copies of these revenue procedures or for additional information on disk reporting should be addressed to the attention of the magnetic media coordinator of one of the following:

           (a) Internal Revenue Service

.01 The Service will accept, upon prior approval, disk files containing State reporting information for those states listed in Part B, Section 6.06. The Service will then forward the information to the State indicated at no charge to the filers.

.02 Those filers wishing to participate in the program must submit a Consent for Internal Revenue Service to Release Tax Information.

.03 Those filers who are participating in the Combined Federal/State Filing Program MUST submit a test disk prior to receiving permission to file their actual data. Additionally, each record in the file MUST be 360 positions in length. The file MUST conform exactly to the specifications detailed in this procedure. The Service will make no attempt to process files with any deviations and will revoke the filing authorization of any filer who submits files that do not totally conform.

.04 The Service is acting as a forwarding agent to simplify information return filing. Some participating states may require separate notification that you are filing in this manner. You should contact the appropriate State for further information.

.05 To simplify filing several states have provided lists of their information return reporting requirements. See the following list. This cumulative list is for information purposes only. For complete information on State filing requirements you may want to contact the appropriate State tax agencies.

                       STATE FILING REQUIREMENTS

SECTION 1. GENERAL

.01 The disk specifications contained in this part prescribe the required format and contents of the records to be included in the file. These specifications must be adhered to unless deviations have been specifically granted by the Service in writing.

.02 To be compatible, a disk file must meet any set of the following specifications in total:

                       SET 1--SPECIFICATIONS /*/

 Element                                 Description

SEC. 3. RECORD LENGTH

.01 The disk records prescribed in these specifications may be blocked or unblocked.

(a) If the use of blocked records would result in a short block at the end of the file representing all payments made by the payer, all remaining positions of the block must be filled with 9's. However, filling with 9's is allowable only in the last block of returns for a payer.

(b) If payments from more than one payer are reported on the same disk pack, a Payer/Transmitter "A" Record cannot be in the middle of a block, but must be the first record in a block.

.02 Provision has been made for a special data entries field in the Payee "B" Record. These entries are optional. If the field is used, it must be present in all Payee "B" Records of a Payer. The field is intended to serve one or both of these purposes:

(a) Carry information required by state or local governments in connection with reporting on disk pack to those jurisdictions when authorized by them.

(b) Facilitate making all records the same length.

SEC. 4. PAYER/TRANSMITTER "A" RECORD

.01 Identifies the payer and transmitter of the disk file and provides the parameters for the succeeding Payee "B" Records. The Service's computer programs rely on the absolute relationship between the parameters in the "A" Record and the data fields in the "A" Record and the data fields in the "B" Records to which they apply.

The number of "A" Records appearing on one disk pack will depend on the number of payers and the different types of returns being reported. A transmitter may include Payee "B" Records for more than one payer on a disk pack, however, each payer's Payee "B" Records must be preceded by an "A" Record. Separate disk files on separate disk packs MUST be submitted if the payer is reporting payment data for more than one type of return (Forms 1099-DIV and 1099-INT, for instance). When multiple disk packs are required for a single file, the correct Payer/Transmitter "A" Record MUST be repeated as the first record on every succeeding disk pack in the file to which it applies, and the disk pack sequence number MUST be incremented by 1 on each pack after the first disk pack. Any "A" Record in the same block as a "B" Record must appear only at the beginning of that block.

               RECORD NAME: PAYER/TRANSMITTER "A" RECORD

.01 Contains payment record from individual statements. A block may not exceed one track. Do not pad unused blocks with blank records.

.02 All payee records must contain correct payee name and address information entered in the fields prescribed in this section.

.03 The Service must be able to identify the surname associated with the taxpayer identifying number (SSN or EIN) furnished on a statement. The specifications below include a field in the payee records called "Name Control" in which the first four alphabetic characters of the payee's surname are to be entered by the payers. In addition, a blank must precede the identifying surname in the first name line of all Payee "B" Records unless the surname begins in the first position of the field.

.04 If payers are unable to provide the first four characters of the surname, the specifications permit the submission of statements on disk with the Name Control Field left blank; however, the following will help the Service generate the Name Control.

(a) The surname of the payee whose taxpayer identifying number (SSN or EIN) is shown in the Payee "B" Record, must be the only name in the first name line.

(b) A blank must precede the surname unless the surname begins in the first position of the field.

(c) In the case of multiple payees, only the surname of the payee whose taxpayer identifying number (SSN or EIN) is shown in the Payee "B" Record, must be present in the first name line. Surnames of any other payees in the record must be entered in the second name line.

.05 Provision is also made in these specifications for data entries required by state or local governments. This should minimize the Payer/Transmitter's programming burden should payers desire to report on disk to state or local governments.

.06 Those filers participating in the Combined Federal/State Filing Program must have 360 position records. Positions 359 and 360 in the Payee "B" Records must contain the state code for the state to receive the information. Do not code for the states unless prior approval to participate has been granted by the service.

The codes for the participating states are:

 State                                                            Code

.01 Write this record after the last Payee "B" Record following the last preceding Payer/Transmitter "A" Record. A disk pack will contain more than one End of Payer "C" Record if the last Payee "B" Record for MORE THAN ONE PAYER is reported on the same disk pack.

.02 Each End of Payer "C" Record must contain a count of the number of Payee "B" Records as well as a total of the payment amounts for all the Payee "B" Records immediately preceding the End of Payer "C" Record and following the preceding Payer/Transmitter "A" Record under which a Payer is reporting payments for a type of return.

To illustrate:

(a) Single disk pack;

Where all of the records of a Payer for a particular type of return are reported on a single disk pack, the last preceding Payer/Transmitter "A" Record would be the "A" Record immediately preceding the Payer's Payee "B" Records for which the End of Payer "C" Record has been written.

(b) Multiple disk packs;

Where the reporting of a Payer for a particular type of return begins on one disk pack and ends on another disk pack, the last preceding Payer/Transmitter "A" Record immediately preceding all the Payee "B" Records on the disk pack on which the Payer "C" Records has been written.

.03 The End of Payer "C" Record must be followed by a State Totals "K" Record, a new Payer/Transmitter "A" Record for the next Payer, if any, or an End of Transmission "F" Record.

                 RECORD NAME: END OF PAYER "C" RECORD

.01 The State Totals "K" Record is a summary for a given payer and a given state in the Combined Federal/State Filing Program used only when State Reporting approval has been granted. It must be 360 positions in length.

.02 The "K" Record will contain the totals of the payment amount fields and the payees filed by a given payer for a given state. The "K" Record(s) must be written after the "C" Record for the related "A" Record.

.03 There must be a separate "K" Record for each state being reported.

                 RECORD NAME: STATE TOTALS "K" RECORD

.01 The "F" Record is a summary of the number of payers and packs in the entire file.

.02 This record should be written after the last "C" Record or "K" Record, whichever is applicable.

.03 The "F" Record must be the same length as the "B" Records.

              RECORD NAME: END OF TRANSMISSION "F" RECORD

.01 The following charts show, by type of file, the record types to be used in the first two and the last three records written on a disk pack when only one type of document (file) is reported on a pack or series of packs. /*/

.02 When reporting under the Combined Federal/State Filing program the State Total's "K" Record(s) will follow the "C" Records regardless of the Type of File.

                                              2nd from Next to

Rev. Proc. 81-55 is superseded.

SEC. 11. RECORD LAYOUTS

[Editor's note: These record layouts are graphic representations of the file specifications described above. They have been omitted because they provide no additional information and are not suitable for clear on-screen presentation.]