Rev. Proc. 75-12

Section 1. Purpose

.01 The purpose of this Revenue Procedure is to provide a means whereby Reporting Agents preparing Form 941, Employer's Quarterly Federal Tax Returns and/or Form 1041, U.S. Fiduciary Income Tax Returns for groups of taxpayers can furnish the required information in the form of magnetic tape instead of paper documents.

Sec. 2. Application for Tape Reporting.

.01 Agents who desire to file authorized Federal Tax Returns on magnetic tape must first file a letter of application. The letter should be addressed to the Director, Internal Revenue Service Center, in the Service Center service area in which the Reporting Agent normally files returns. Addresses of the Internal Revenue Service Centers are shown in Section 7 of this Revenue Procedure. The letter of application must contain the following:

1. Name, address, and EI (Employer Identification) number of person, organization or firm making the application. If the Reporting Agent desires to submit tape for returns prepared at more than one location, each location must be included.

2. Name, title, and telephone number of person to contact regarding the application.

3. Type and nature of equipment to be used to prepare the tape file, i.e., manufacturer and model of main frame and tape drives, tape width (1/2", 3/4", etc.), density (characters per inch), and recording code (BCD, Excess 3, Octal, etc.).

4. List of the taxpayers to be included on the file, showing each taxpayer's name, complete address (including ZIP Code), and EI number; sorted into EI number sequence.

5. Internal Revenue Service Center where paper tax returns were filed last year.

6. Statement that the Service Center either SHOULD or SHOULD NOT furnish blank Form 501 FTD's (Federal Tax Deposits) with keypunch instructions to the Reporting Agent. Reporting Agents may receive and prepare blank Form 501 FTD's for Form 941 taxes only if they are currently authorized and are satisfactorily filing Forms 941 on magnetic tape.

7. Signature of the agent or agent's employee authorized to prepare Federal Tax Returns for taxpayers.

8. An agreement by the Reporting Agent to keep copies of the powers of attorney on file at his principal place of business for examination by the Internal Revenue Service upon request. Such copies must be retained until the statute of limitations for the last return filed under its authority expires.

9. A copy of the Power of Attorney for each filer on the list. The Power of Attorney may be submitted on an IRS Form 2848, Power of Attorney, available on request; or any other instrument which clearly states that the Reporting Agent is granted the authority to file and sign the return. The Power of Attorney will remain in effect until such time as it is revoked by the taxpayer, terminated by written notification from the Reporting Agent, or expires under its own terms.

.02 The scope of the Power of Attorney for Magnetic Tape Filing will be governed according to the following:

1. The Power of Attorney will delegate to the Reporting Agent the power to sign and file appropriate Federal Tax Returns.

2. The Power of Attorney becomes effective for the tax period the agent notifies the Service that the employer or filer is being added to the Magnetic Tape Filing System and remains in effect for subsequent periods until revoked, terminated or expired.

3. The Power of Attorney is automatically revoked when the Reporting Agent notifies the Service that a taxpayer is no longer included in the Magnetic Tape Filing System.

4. The receipt of a Power of Attorney for Magnetic Tape Filing has no effect on prior Powers of Attorney on file for other purposes for a given taxpayer.

5. The Power of Attorney for Magnetic Tape Filing will be a limited Power of Attorney, i.e., notices, refunds and other output resulting from filing on magnetic tape will be mailed to the taxpayer.

6. Requests from a Reporting Agent for information or adjustments on an account for which the taxpayer has authorized Magnetic Tape Filing will be honored by the Service Center.

7. Requests for address changes may not be made by the Reporting Agent. Requests for address changes for taxpayers that are reported under Magnetic Tape Filing will be processed only if they originate with one of the following:

(a) The Taxpayer

(b) An employee of the Internal Revenue Service

(c) An Attorney in fact if the attorney has a full Power of Attorney for all tax matters concerning a taxpayer and has filed a copy of the full Power of Attorney with the Internal Revenue Service Center.

.03 Generally, Reporting Agents using equipment compatible with the Service's can presume that tape filing will be approved. Compatible tape characteristics are shown in Attachment 1, Section 1.01. If the Reporting Agent has the capability to prepare several types of tapes, the Service prefers that compatible tapes be prepared.

.04 If Reporting Agents propose to submit convertible tapes, i.e., tapes requiring translation, the Service will either translate these tapes or provide translation thru other government agencies. Magnetic Tape Filing will be disapproved only when the Service is unable to obtain facilities to translate a Reporting Agent's file to a compatible form.

.05 Once authorization to file tax data on magnetic tape has been granted to a Reporting Agent, such approval will continue in effect in succeeding tax periods so long as the requirements of this Revenue Procedure are met, and there are no equipment changes by the Reporting Agent. However, new applications are required if users change from compatible tapes to equipment producing tapes that require translation, or if they discontinue Magnetic Tape Filing for one or more periods, then decide to resume this method of reporting.

.06 The Service will act on applications and notify applicants of authorization or disapproval within 30 days of receipt of applications. This authorization does not stop the filing of paper returns, but merely initiates Magnetic Tape Filing of such forms.

.07 The initial filing of tax returns on magnetic tape will be necessarily a trial tape. Therefore, the Reporting Agent, in addition to the magnetic tape, must file Federal Tax Returns on paper for each taxpayer included on the magnetic tape until authorized by IRS to discontinue filing returns on paper. The paper returns will be arranged in the same order as the returns reported on the magnetic tape and filed at the same location and in the same shipment. This procedure will continue until the Reporting Agent is authorized by IRS to discontinue filing of the paper returns. In general, the Service will be able to notify the Reporting Agent to discontinue filing paper returns within one quarter after the initial filing of magnetic tape. The notification will depend upon the performance standard of the magnetic tape.

.08 Duplicate returns or duplicate tape and paper returns should never be submitted, after Agent is authorized to discontinue filing paper returns.

.09 Once authorization is received by Reporting Agent for individual requested magnetic tape filers, IRS will then expect a tape return to be submitted for those filers until Agent formally notifies IRS that specific individuals are being deleted from their current magnetic tape filing inventory.

Sec. 3. Filing Tax Data Tape Returns.

.01 Packaging, shipping, and mailing instructions will be provided in the letter granting initial approval issued by the Service in response to the letter of application for magnetic tape filing.

.02 Upon approval, the Reporting Agent will be provided with a validated copy of Agents Listing for taxpayers authorized to file on magnetic tape. This authorization will contain each taxpayer's EI number, four position alpha Name Control, the DO (District Office) code and the Tax Class. This will be the source of the EI number and Name Control to be used on magnetic tape by the Reporting Agent as an identification of each taxpayer.

.03 The Service must receive a listing of each taxpayer's complete name, address and EI number for taxpayers the Reporting Agent subsequently proposes to add to the initial Magnetic Tape Filing system. The Service will provide a validated copy of the Agents Listing establishing filers for Magnetic Tape Filing. Under no circumstances is a new filer to be included on the Magnetic Tape Filing system until a validated copy of the Agents Listing from the Service is received by the Reporting Agent.

.04 Reporting Agents submitting magnetic tape for records prepared at more than one location must identify the records from each location by use in the Agent "A" Record of the DO code from the validated copy of the Agents Listing. Each location will be indicated by a separate Agent "A" Record on the tape file. All the Tax Data "B" Records following the Agent "A" Record for a given location must be followed by an End of Location "D" Record.

.05 The due dates prescribed for filing paper returns with the Service will also apply to magnetic tape filing of Federal Tax Returns.

.06 In no case should returns with more than one due date be included on one tape file.

.07 Reporting Agents submitting returns on magnetic tape must agree to fully pay the tax by Federal Tax Deposits in the case of Forms 941, and by composite bank draft in the case of Forms 1041.

.08 Different returns (Forms 941 and Forms 1041) are never to be intermixed on the same tape file.

.09 Enclose a transmittal in quadruplicate in the first box of the tape shipment with the following:

1. The complete name, address and EI number of the person, organization or firm submitting the tape file.

2. Name, address, title, and telephone number of person to contact regarding tape files.

3. Name and address to be used for returning tape file if different from person to contact in regard to tape files.

4. Manufacturer and model of main frame and tape drives, tape width (1/2", 3/4", etc.), density (characters per inch), and recording code (BCD, Excess 3, Octal, etc.).

5. Type of document (Form 941 or Form 1041).

6. Total number of tape reels in file.

7. Statement of whether or not the Reporting Agent is filing Schedule A information direct with Social Security Administration.

8. Total number of Forms 941c and other supporting schedules and/or documents included in shipment.

9. A control listing identifying actual taxpayers previously approved by IRS for magnetic tape filing that are contained on the current tape file being submitted, in EI number sequence; showing each taxpayer's name, address, and EI number.

.10 Note on the address side of the magnetic tape shipments, "EXPEDITE. FORM 941 (or Form 1041) TAX RETURNS ON MAGNETIC TAPE. DELIVER UNOPENED TO TAPE LIBRARY."

Sec. 4. Adding and Removing Filers from Magnetic Tape Filing

.01 When the Reporting Agent sends a list of filers to be added to the Magnetic Tape Filing system, he must include a Power of Attorney authorization for each taxpayer on the list.

.02 The Reporting Agent should indicate on the last magnetic tape return he submits for a filer if it is either the "Final Return" or a "Discontinued Employer" in the Tax Data "B" Record.

.03 The Reporting Agent may not always know that he is submitting the final magnetic tape return for a particular taxpayer at the time he sends in the tape. When the Reporting Agent determines that his previous tape will be the last one that he will prepare for an individual filer, he should notify the service center where he is authorized to file magnetic tape of one of the following conditions:

1. That the taxpayer is out of business (state the effective date) and will no longer be liable for filing returns (Final Return).

2. That the Reporting Agent will no longer be submitting returns on magnetic tape for the taxpayer who is still in business and is still liable for such returns (Discontinued Filer).

.04 Lists of proposed quarterly filer additions, deletions, etc. from Reporting Agents must be received in the Service Center 2 working days prior to the end of the 2nd month of a quarter, while lists for annual filer changes must be received 2 working days and one month prior to end of the tax year. This will permit the Service to properly validate applications and to respond to the Agent within 30 days of receipt.

Sec. 5. Corrected Returns

.01 Adjustments may be made on returns submitted on magnetic tape.

.02 If an off-setting entry is required to FICA taxes because there is a difference between the total amount of employee tax included in item 16 (Total FICA Taxes) of Forms 941 and the total amounts actually deducted from the remuneration of employees, due to fractions of cents added or dropped in collecting employee tax from employees, this difference should be reported as a "Fractions Only" adjustment to FICA taxes on the magnetic tape.

.03 If employee FICA tax is not applicable to amounts included in item 14 (Taxable FICA Wages Paid) report this amount as "FICA-TIP" adjustments (item 15) on the magnetic tape.

.04 All other adjustments, including adjustments to Income Tax Withheld and combinations of "Fractions Only" and "FICA-TIP" adjustments must be reported as "Other" adjustments on the magnetic tape.

.05 All returns with "Other" type adjustments must be explained in detail by an appropriate statement on paper which should be included in the magnetic tape shipment, for approval and subsequent adjustment action.

Sec. 6. Effect of Form 941, Schedule A, Quarterly Employee Earning Record

.01 The Reporting Agents who file Forms 941 on magnetic tape for employers must continue to file Schedule A (Wage Information for the Social Security Administration (SSA)).

.02 IRS recommends filing Form 941 Schedule A on magnetic tape directly to SSA. Information on Magnetic Tape Filing can be secured from the following address:

     Social Security Administration

Sec. 7. Additional Information

.01 Requests for additional copies of this Revenue Procedure, applications for magnetic tape filing, requests for copies of appropriate input record element specifications, and requests for tape filing information should be addressed to the Director, Internal Revenue Service Center, Magnetic Tape Coordinator, at one of the following addresses:

     1. North-Atlantic Region

This Revenue Procedure supersedes Revenue Procedure 72-37, 1972-2 C.B. 800.

Attachment 1--Magnetic Tape Specifications

SECTION 1. GENERAL

.01 These specifications prescribe the required format and content of the records to be included in the file, but not the methods or equipment to be used in their preparation. Usually the Service will be able to process, without translation, any compatible tape file. A compatible tape file must conform to all of the following:

 Type of tape            1/2 inch Mylar base, oxide coated

1. 9 channel EBCDIC (Extended Binary Coded Decimal Interchange Code)

2. 9 channel ASCII (American Standard Coded Information Interchange); see Bureau of Standards FIPS (Federal Information Processing Standards Publications)

3. Odd parity

4. 200 CPI

5. 1600 CPI

The Service will attempt to find conversion facilities for any other characteristics listed by the Reporting Agent that differ from the above specifications.

.03 An acceptable file will contain, for each Reporting Agent, the following:

(1) An Agent "A" Record,

(2) A series of Tax Data "B" Records,

(3) A series of Checkpoint "C" Records,

(4) An End of Location "D" Record and

(5) An End of File "E" Record.

In addition, multiple reel files will have an End of Reel "F" Record.

All records including headers and trailers, if used, must be written at the same density.

.04 Affix an external label to each tape with the following information:

(1) Name of Reporting Agent

(2) Number of tax returns transmitted on this reel of tape.

(3) Payment period in YYMM (Year, year, month, month) format. For example, 7209

(4) Density (200, 556, 800, 1600, etc.)

(5) Channel (7 or 9)

(6) Parity (Odd or even)

(7) Name of computer manufacturer

(8) Tape Drive

(9) Main Frame

(10) Sequence number of reel and total number of reels in file (for example, 1 of 3).

SECTION 2. CONVENTIONS AND DEFINITIONS

.01 Certain conventions may be required by the programming system or equipment used by the Reporting Agent, with respect to header and trailer labels record marks and tape marks. Their use is optional, but if present they must adhere to the following:

 Header Label            1. Can only be the first record on a reel.

 Element                 Description

SEC. 3. RECORD LENGTH

.01 The tape records prescribed in the specifications may be blocked or unblocked subject to the following:

1. A block may not exceed 4,000 tape positions.

2. If the use of blocked records would result in a short block at the end of a Tax Data Record (B, G, H, or I records) and the next record is too large to include in the block, the remaining positions of the block should be filled with 9's. No other digits or characters other than 9's are specified or acceptable for filling (or padding) any tape input data blocks.

3. Two forms of blocking are acceptable:

(a) Only Tax Data "B" Records are blocked; all other records are unblocked.

(b) All records, except Header and Trailer labels, if used, are blocked. In this case, if employers from more than one DO code are reported on the same tape, the Agent "A" Record cannot be in the middle of a block, but must be the first record in a block.

SEC. 4. AGENT "A" RECORD

Identifies the Reporting Agent who prepares and transmits the tape file. When multiple reels are required for a single file, the Agent "A" Record must be repeated as the first record (second record if header labels are used) on every succeeding reel in the file, and the reel number must be incremented by 1 for each tape reel after the first reel. A Reporting Agent may include "B" Records prepared at more than one location or with more than one DO code; however, the "B" Records prepared at each location or with a DO code change must be preceded by an Agent "A" Record. An Agent "A" Record with a new DO code in ascending numeric order is required for a DO code change. The DO code for each employer is present from the validated Agent Filers Listing.

                                   Agent Data Record

Contains tax information for each filer reported by the Reporting Agent. The number of "B" Records appearing on one tape reel will depend on the number of taxpayers represented (only one Tax Return for each EIN). A Checkpoint Totals "C" Record and then an End of Location "D" Record must follow the last Tax Data "B" Record for a location or DO Code change. In addition, the "B" Records must be arranged in ascending order EIN sequence within DO code. The DO code for each employer is present on the validated agents filer listing. "B" Records may be blocked together with Record Types A, C, D, E, and F or the "B" Records may be blocked alone with Record Types A, C, D, E, and F unblocked. Records should have a blocking factor for which blocks will not exceed 4,000 tape positions. All money amount fields contain dollars and cents. All records must be fixed length and for the current tax periods. All liability amounts must be full paid.

SEC. 6. SUBSIDIARY TAX DATA (Schedules and Related Documents)

Subsidiary Tax Data Records should be included on the tape record directly following the Tax Data "B" Records for a Form 1041 Return.

SEC. 7. CHECKPOINT TOTALS "C" RECORD

.01 Write this record after each 100 or fewer "B" Records. Additionally, write this record after the last "B" Record for a DO Code or location of an Agent "A" Record has been written. Each Checkpoint Totals "C" Record must contain a count of Tax Data "B" Records, the sum of total taxes, the total number of FTD's made and the sum of the total amount of FTD's for all Form 941 "B" Records which have not been summarized in preceding Checkpoint Totals "C" Records.

.02 The Checkpoint Totals "C" Record must be followed by a "B" Record or an End of Location "D" Record. If the Checkpoint Totals "C" Record is at the end of the reel, it will be followed by an End of Reel "F" Record.

.03 All Checkpoint Totals "C" Records must be fixed length. All money amounts fields will contain dollars and cents. The Checkpoint Totals "C" Records cannot be followed by a Tape Mark.

                                       Checkpoint Totals "C" Record

.01 Write this record after the last Checkpoint Totals "C" Record has been written for a DO Code or a Reporting Agent's location contained the Agent "A" Record. Each End of Location "D" Record must contain a count of Tax Data "B" Records, the sum of total taxes, the total number of FTD's made and the sum of the total amount of FTD's for all Form 941 "B" Records for the preceding Agent "A" Record.

.02 The End of Location "D" Record must be followed by an Agent "A" Record or an End of Reel "F" Record. If the End of Location "D" Record is at the end of the reel, it will be followed by an End of Reel "F" Record.

.03 All End of Location "D" Records must be fixed length. All money amounts will contain dollars and cents. The End of Location "D" Record cannot be followed by a Tape Mark.

                                        End of Location "D" Record

Write this record after the last End of Location "D" Record in the file. All money amounts will contain dollars and cents. All End of File "E" Records must be fixed length. This record can be followed only by a Tape Mark or Tape Mark and Trailer Label.

                                          End of File "E" Record

.01 Write this record when the end of the normal writing area of each reel has been reached, but all records in the file have not been written. This record indicates that there are additional reels in the file. Each End of Reel "F" Record must contain a count of "B" Records, the sum of total taxes, the total number of FTD's made and the sum of the total amount of FTD's for all Checkpoint Totals "C" Records not summarized in previous End of Location "D" Records.

.02 The End of Reel "F" Record cannot be followed by an Agent "A" Record, Checkpoint Totals "C" Record, End of Location "D" Record or End of File "E" Record. A Tape Mark or Tape Mark and Trailer Label only can follow this record.

.03 DO NOT use this record on the Final Reel of the file being transmitted.

                                         End of Reel "F" Record

Enter the official two position Post Office State Code abbreviations for States and Territories in the Agent "A" Records and Tax Data "B" Records according to the following:

 STATE                                                           CODE

The following chart shows by type of file, the sequence of the Record Types according to the complexity of the tape file(s).

                                            3rd   2nd    Next