IRS PROVIDES SPECIFICATIONS FOR MAGNETIC MEDIA FILING OF 1992 INFORMATION REPORTING FORMS.

Rev. Proc. 92-46

NOTE: Use this revenue procedure to prepare tax year 1992 information returns for submission to Internal Revenue Service (IRS) using any of the following:

-- Magnetic Tape

-- Tape Cartridge

-- 5 1/4-inch Diskette

-- 3 1/2-inch Diskette

-- Electronic Filing

-- (Asynchronous)

-- (Bisynchronous)

-- 8-inch Diskette

Please read this publication carefully. Persons required to file may be subject to penalties for failure to file or failure to include correct information if they do not follow the instructions in this revenue procedure.

                          TABLE OF CONTENTS

SECTION 1. PURPOSE

.01 The purpose of this revenue procedure is to provide the specifications for filing Forms 1098, 1099, 5498, and W-2G electronically or on magnetic media which includes 1/2-inch magnetic tape; IBM 3480/3490 compatible tape cartridges; or 5 1/4-, 3 1/2-, and 8-inch diskettes, with IRS. THIS REVENUE PROCEDURE MUST BE USED FOR THE PREPARATION OF TAX YEAR 1992 INFORMATION RETURNS ONLY. Specifications for filing the following forms are contained in this revenue procedure:

          (a) Form 1098, Mortgage Interest Statement.

.03 Specifications for filing Forms W-2 on magnetic media are available from the Social Security Administration (SSA) ONLY.

.04 In most cases, the box numbers on the paper forms correspond with the amount codes used to file magnetically/electronically; however, if discrepancies occur, the instructions in this revenue procedure govern.

.05 The Internal Revenue Service Martinsburg Computing Center (IRS/MCC) has the responsibility for processing information returns filed magnetically or electronically. These information returns include Forms 1098, 1099, 5498, and W-2G.

IRS/MCC does NOT process Forms W-2. Paper AND/OR magnetic media returns must be sent to SSA.

IRS/MCC does, however, process magnetic media waiver requests and extension of time requests for filing Forms W-2.

.06 This revenue procedure also provides the requirements and specifications for magnetic media or electronic filing under the Combined Federal/State Filing Program.

.07 The following revenue procedures and publications provide more detailed filing procedures for certain information returns:

(a) 1992 "Instructions for Forms 1099, 1098, 5498, and W-2G" provides specific instructions on completing and submitting information returns to IRS. IRS/MCC includes this publication in the magnetic media reporting packages that are mailed to the transmitters who participate in the Information Reporting Program (IRP). These instructions can be obtained by contacting your local IRS office or by calling 1-800-829-3676.

(b) Rev. Proc. 84-33, 1984-1 C.B. 502, regarding the optional method for agents to report and deposit backup withholding.

(c) Publication 1179, Specifications for Paper Document Reporting and Paper Substitutes for Forms 1096, 1098, 1099 Series, 5498, and W-2G.

(d) Publication 1239, Specifications for Filing Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, on Magnetic Tape and 5 1/4- or 3 1/2-Inch Diskettes.

(e) Publication 1187, Specifications for Filing Form 1042S, Foreign Person's U.S. Source Income Subject to Withholding, Electronically or on Magnetic Tape, and 5 1/4-, or 3 1/2-Inch Magnetic Diskettes.

(f) Publication 1245, Specifications for Filing Form W-4, Employee's Withholding Allowance Certificate, on Magnetic Tape, and 5 1/4- or 3 1/2-Inch Magnetic Diskette.

(g) Publication 1527 (8-91), IRP-BBS (Information Returns Program Bulletin Board System).

.08 This revenue procedure supersedes:

(a) Rev. Proc. 91-33 published as Publication 1220 (Rev. 6-91), Specifications for Filing Forms 1098, 1099, 5498 and W-2G Electronically or on Magnetic Tape, Tape Cartridge, and 5 1/4-, 3 1/2-, and 8-Inch Magnetic Diskettes.

(b) Rev. Proc. 92-15, 1992-3 I.R.B. 35.

.09 Refer to Part A, Sec. 18, for definitions of terms used in this publication.

SEC. 2. NATURE OF CHANGES -- CURRENT YEAR (TAX YEAR 1992)

.01 PROGRAMMING CHANGES

A. Payer/Transmitter "A" Record:

(1) Field positions 2-3 (pos. 3-4 for 8" diskette) "Payment Year" must be incremented by one (from 91 to 92).

(2) Field position 20 (pos. 21 for 8" diskette) "Last Filing Indicator" has been added, to inform IRS that this will be the last year an information return will be filed under this payer name and TIN.

(3) 1099-MISC, field positions 23-31 (pos. 24-32 for 8" diskettes) "Amount Codes" indicator 9 has been changed from "Direct Sales Indicator" to "Excess Golden Parachute Payments" which was previously reported as Amount Code 7. (See B(5) below.)

(4) 1099-PATR, field positions 23-31 (pos. 24-32 for 8" diskettes) "Amount Codes" indicator 9 "Low Income Housing Credit" has been removed. This information is no longer required.

(5) Field position 32 (pos. 33 for 8" diskette), the title has been changed from "Test/Correction Indicator" to "Test Indicator." It is only necessary to use this indicator if you are submitting a test file.

(6) Additional information was added to positions 42-43, "Magnetic Tape Filer Indicator" field. This field is used by IRS to help determine the computer language used to create the file. If this field is used by other than tape or tape cartridge filers, it will not be read.

B. Payee "B" Record changes:

(1) Field positions 2-3 (pos. 3-4 for 8" diskette) "Payment Year" must be incremented by one (from 91 to 92).

(2) 1099-MISC, Field position 4-5 (pos. 5-6 for 8" diskette) "Document Specific/Distribution Code" is only used to identify payments made for "Crop Insurance Proceeds" in conjunction with Payment Amount field 7. "Excess Golden Parachute Payments" is now reported in Payment Amount Field 9 and no "Document Specific/Distribution Code" is needed.

(3) Field position 6 (pos. 7 for 8" diskette) "2nd TIN Notice" has been changed from a "1" to a "2" at the request of payers. This would allow payers to use a 1 in their recordkeeping systems to denote first year of notice.

(4) The use of position 7 "Corrected Return Indicator" has been expanded to include a "C" code to identify the second transaction of a two transaction correction.

(5) 1099-MISC, field position 12 (pos. 13 for 8" diskette) "Direct Sales Indicator" has been added to indicate sales of $5,000 or more of consumer products to a person on a buy-sell, deposit-commission, or any other commission basis for resale. This information was previously reported by reporting $1.00 in Payment Amount Field 9 of the Payee "B" Record.

(6) 1099-PATR, Payment Amount 9, "Low Income Housing Credit" is no longer required and has been deleted from the record. Payment Amount 9 must be zero filled.

(7) 1099-R, "IRA/SEP Indicator" position 44 (pos. 45 for 8" diskette) extra instruction was added to this field. When reporting a distribution from an IRA or SEP, in addition to this indicator, generally, the amount of the distribution should be reported in Payment Amount Field 2 "Taxable Amount" of the Payee "B" Record.

C. End of Payer "C" Record -- No changes.

D. State Totals "K" Record -- No changes.

E. End of Transmission "F" Record -- No changes.

F. The record format for requesting an extension of time to file magnetically or electronically has been expanded from 205 to 206 positions. An indicator, Foreign Entity Indicator, was added to identify foreign corporations that may not be required to have a Taxpayer Identification Number.

.02 EDITORIAL CHANGES -- "GENERAL"

There have been numerous editorial changes. IRS recommends that you read this publication in its entirety to ensure proper reporting.

(A) The title of Publication 1220 has changed from "Specifications for Filing Forms 1098, 1099, 5498, and W-2G Electronically or on Magnetic Tape, Tape Cartridge, and 5 1/4-, 3 1/2-, and 8-Inch Magnetic Diskettes" to "Specifications for Filing Form 1098, 1099, 5498, and W-2G Magnetically or Electronically."

(B) The title of Part A. Sec. 3 was changed from "How to Contact the Martinsburg Computing Center" to "Where to File and How to Contact the IRS Martinsburg Computing Center" to better identify the information contained in that section.

(C) The IRS/MCC Tax number (Part A, Sec. 3.04) has been changed to (304) 264-5196.

(D) Information was added (Part A, Sec. 3.08) to inform taxpayers on how to request a copy of tax returns or Form W-2 filed with a return.

(E) Instructions were added to Part A, Sec. 11, Extensions of Time to File, on how to request an extension of time to furnish the statement to recipient copy of the information return. In the past, an extension for statements to recipients copies could only be requested from the IRS District Director for your area.

(F) If your request is approved, MCC will grant a 30 day extension of time to file information returns. If needed, additional time may be requested. Refer to Part A, Sec. 11 for more information.

(G) Information was added to the chart in Part A, Sec. 14, Corrected Returns, providing guidance as to when it would be in the best interest of the payer to make a correction to a name and/or TIN.

(H) Instruction was added (Part A, Sec. 14.06) on how to make prior-year corrections and how far back a payer must go when making corrections. You are only required to submit corrections for returns filed within the last 3 years (4 years if the return was subject to Backup Withholding). If submitting prior-year corrections, you may use the format of the current year or the format for the year the original return was filed.

(I) The guidelines for the payee taxpayer identification number in Part A, Sec. 15.03, for sole proprietors was changed to indicate that sole proprietors may use either a SSN or EIN. However, the owner's name not the business name must always appear in the record.

(J) Information was added in Part A, Sec. 16 to inform payers that when using a substitute form (any form other than the official IRS copy) guidelines in Publication 1179, Specifications for Paper Document Reporting and Paper Substitutes for Forms 1096, 1098, 1099 Series, 5498, and W-2G, must be followed.

(K) Part A, Sec. 19.04 was changed to reflect the method of reporting APO and FPO addresses and is the result of a change in procedure made by the U.S. Postal Service.

(L) Created a separate section, Part B, Sec. 3 Tape Cartridge Specifications, to identify specifications that are unique to tape cartridge filing.

(M) Technical assistance is available between 8:30 a.m. and 6:00 p.m. Eastern Time Zone for electronic filers using the Information Reporting Program Bulletin Board System (IRP-BBS).

(N) The Field Title of position 23-31 (pos. 24-32 of 8" diskettes) of the "A" Record was changed from "Amount Indicators" to "Amount Codes" to be consistent throughout the publication.

(O) The dates to file electronically have been changed in Part C, Sec. 4.03. Electronically transmitted data may be filed between January 18 and October 15, 1993.

(P) Information was added to Part C, Sec. 7, IRP-BBS First Logon Procedures, giving instructions to filers using the IRP-BBS for the first time.

(Q) Part D, Sec. 2 and Part E, Sec. 2 -- positions 46-47 of the Header Label, Number Sequence field was added. For Copyfiles only enter the sequence number of the file.

(R) Part D, Sec. 1.03 and Part E, Sec. 1.03, added information on commands to be used to write data to 8" diskettes. Use of the Copyfile command is preferred by MCC.

(S) Part E, Sec. 2, Diskette Header Label, was added to eliminate the need to refer back to other sections of the publication.

(T) The title of Part F, Sec. 3, was changed to "Format of Record Used to Request an Extension of Time Magnetically or Electronically" to better describe the purpose of the section.

(U) Transmitters requesting an extension of time to file for more than 1 payer are encouraged to file the request magnetically or electronically. See Part F, Miscellaneous Information.

(V) Specifications were added to Part F allowing the use of Tape Cartridges to file for an extension of time to file.

.03 EDITORIAL CHANGES -- MAGNETIC MEDIA SPECIFICATIONS:

(A) Magnetic tapes created using 800 BPI will no longer be acceptable.

(B) Field position 32 of the Payer "A" Record was changed from "Test/Correction Indicator" to "Test Indicator." Enter a "T" in this field for a test. It is no longer required to indicate correction data is being filed.

(C) For Form 5498, additional information was added to the note in Part B, Sec. 5, "A" Record layout explaining how to report contributions for Desert Storm Participants.

(D) For 1099-R, additional information was added to "NOTE 3" in Part B, Sec. 5, "A" Record layout to provide further instruction on how to report distributions for an IRA or SEP.

(E) The title of field position 4-5 of the "B" Record was changed from "Document Specific Code" to "Document Specific/Distribution Code" to clearly reflect the use of this field for various forms.

(F) In the past, two numeric codes were not allowed for Form 1099-R in the Document Specific/Distribution Code field. It is now acceptable to use codes 8 and 1 or 8 and 2 in this field.

(G) An example of a name control for names that contain numerics (e.g. 11th Street Inc.) was added to the chart in the "B" Record layout, field position 8-11.

(H) Payment Amount Field 9, for 1099-MISC, was changed from "Direct Sales Indicator" to "Excess Golden Parachute Payments."

(I) Data submitted on tape cartridges must NOT be in a compressed format.

SEC. 3. WHERE TO FILE AND HOW TO CONTACT THE IRS MARTINSBURG COMPUTING CENTER

.01 All information returns filed magnetically or electronically are processed at IRS/MCC. Files containing information returns and all requests for IRS magnetic media and electronic filing publications/forms, information, undue hardship waivers, or requests for extensions of time to file with IRS or furnish the statements to recipients are to be sent to the following addresses:

If by Postal Service:

.03 The telephone number for the Telecommunication Device for the Deaf (TDD) is (304) 267-3367.

.04 The telephone number for the IRS/MCC fax machine is (304) 264-5196.

.05 Requests for 1099 and W-2 paper forms, publications or forms not related to magnetic media/electronic filing MUST be requested by calling the "Forms Only Number" listed in your local telephone directory or by calling the IRS toll-free number 1-800-829-FORM.

.06 Questions pertaining to magnetic media filing of Forms W-2 MUST be directed to SSA.

.07 Do NOT contact IRS/MCC if you have received a penalty notice and need additional information, or are requesting an abatement of the penalty. Penalty notices contain an IRS representative's name and/or phone number to contact, or you may be instructed to respond in writing to the address provided. This person will be most familiar with your particular case. IRS/MCC does NOT issue penalty notices and does not have the authority to abate penalties.

.08 A Taxpayer or authorized representative may request a copy of a tax return or a Form W-2 filed with a return by submitting Form 4506, Request for Copy of Tax Form to IRS. This form may be obtained from a local IRS office or by calling 1-800-829-3676.

.09 CENTRALIZED INFORMATION REPORTING CALL SITE

In 1991, IRS instituted a centralized call site to answer tax law questions related to information returns (Forms 1096, 1098, 1099, 1042S, 5498, 8027, W-2, W-2G, W-3, and W-4). The call site is located at IRS/MCC and operates in conjunction with the information reporting program. The site provides service to financial institutions, employers, and other payers who file information returns. It is being phased in over a two-year period.

The site is currently operating as a pilot accepting inquiries from payers calling from Maine, Vermont, New Hampshire, Massachusetts, Rhode Island, Connecticut, and New York. Beginning in October 1992, the site will accept inquiries from payers in those states as well as the following: Ohio, Indiana, Michigan, West Virginia, and Kentucky. The numbers to call are (304) 263-8700 or TDD (304) 267-3367. This is a toll call.

Payers in other areas of the country should continue to call 1-800-829-1040. Remaining states will be phased in by October 1, 1993, when the call site will be available nationwide. Hours of operation for the call site are 8:30 a.m. to 6:00 p.m. Eastern Time.

SEC. 4. FILING REQUIREMENTS

.01 Under section 6011(e)(2)(A) of the Internal Revenue Code any person, including corporations, partnerships, individuals, estates, and trusts, who is required to file 250 or more information returns must file such returns magnetically/electronically. The 250-or-more requirement applies separately for each type of form. Even though you may not be required to file magnetically/electronically, IRS encourages you to do so.

.02 All filing requirements that follow apply individually to each reporting entity as defined by its separate Taxpayer Identification Number (TIN), (Social Security Number (SSN), or Employer Identification Number (EIN)). For example, if you are a corporation with several branches or locations and each uses the same EIN, you must aggregate the total volume of returns to be filed for that EIN and apply the filing requirements to each type of return accordingly.

.03 Filers who are required to submit their information returns on magnetic media may choose to submit their documents by electronic filing instead. Filers who submit their information returns electronically are considered to have satisfied the magnetic media filing requirements.

.04 The following requirements apply separately to both originals and corrections filed magnetically/electronically:

1098 250 OR MORE OF ANY of these forms require magnetic

SEC. 5. FORM 8508, REQUEST FOR WAIVER FROM FILING INFORMATION RETURNS ON MAGNETIC MEDIA

.01 If you are required to file on magnetic media but fail to do so (or fail to file electronically in lieu of magnetic media filing) and you do not have an approved waiver on record, you may be subject to a failure-to-file penalty of $50 per return. The penalty applies to each failure to file.

.02 If you are required to file original or corrected returns on magnetic media but such filing would create an undue hardship, you may request a waiver from these filing requirements by submitting Form 8508, Request for Waiver From Filing Information Returns on Magnetic Media, to IRS/MCC.

.03 If a waiver for original documents is approved, any corrections for the same types of returns will be covered under this waiver request. However, if you submit your original returns on magnetic media but not your corrections, then a waiver must be requested for corrections only if they exceed the filing threshold of 250 returns.

.04 Generally, only the payer may sign the Form 8508. A transmitter may sign if given power-of-attorney; however, a letter stating this fact must be attached to the Form 8508.

.05 A separate Form 8508 must be submitted for each payer. Do not submit a list of payers.

.06 All information requested on the Form 8508 must be provided to IRS for the request to be processed.

.07 The waiver, if approved, will provide exemption from magnetic media filing for the current tax year only. Filers may not apply for a waiver for more than one tax year at a time; application must be made each year a waiver is necessary.

.08 Form 8508 is included in the back of this publication. It may be photocopied or computer generated as long as it contains all the information requested on the original form.

.09 Form 8508 must be submitted to IRS/MCC at least 45 days before the due date of the returns. IF A REQUEST IS NOT POSTMARKED AT LEAST 45 DAYS BEFORE THE DUE DATE OF THE RETURNS, IT WILL BE DENIED. However, new brokers and new barter exchanges may request an undue hardship waiver by the end of the second month following the month in which they became a broker or barter exchange.

.10 File Form 8508 for Forms W-2 with IRS/MCC, NOT SSA.

.11 Waivers are evaluated on a case-by-case basis and are approved or denied based on regulation criteria set forth under section 6724 of the Internal Revenue Code. You must allow a minimum of 30 days for IRS/MCC to respond to a waiver request.

.12 If your waiver request is approved, keep the approval letter for your records. DO NOT send a copy of the approved waiver to the service center where you file your paper returns.

.13 An approved waiver from filing information returns on magnetic media does not provide exemption from all filing; you must still timely file your information returns on acceptable paper forms with the appropriate service center.

.14 Desert Storm Contributions -- If you file Forms 5498 magnetically/electronically, you may request an automatic waiver from filing Desert Storm Forms 5498 on magnetic media.

SEC. 6. VENDOR LIST

.01 IRS/MCC prepares a list of vendors who support magnetic media or electronic filing. This list contains the names of service bureaus that will produce your files for you on the prescribed types of magnetic media or via electronic filing. It also contains the names of vendors who provide software packages for filers who wish to produce magnetic media or electronic files on their own computer systems or personal computers. THIS LIST IS PROVIDED TO FILERS AS A COURTESY AND IN NO WAY IMPLIES IRS APPROVAL OR ENDORSEMENT OF THEIR PRODUCTS OR SERVICES.

.02 You may contact IRS/MCC via telephone or letter to acquire the vendor list. INDIVIDUAL VENDOR NAMES WILL NOT BE PROVIDED OVER THE TELEPHONE.

.03 If you are a vendor who offers a software package, has the ability to produce magnetic media for your customers, or has the capability to electronically file information returns, and you would like to be included on the list, you MUST submit a written request to IRS/MCC. The request should be submitted by March 15 and must include:

(a) Company name

(b) Address (include city, state, and ZIP code)

(c) Telephone number (include area code)

(d) Contact person

(e) Type of service provided (e.g., service bureau and/or software)

(f) Type(s) of magnetic media offered (e.g., 1/2-inch magnetic tape; tape cartridge; 8-inch, 5 1/4-inch, and/or 3 1/2-inch magnetic diskettes; electronic filing).

.04 The vendor list is updated annually. New applicants or changes to information already on the vendor list must be received by MCC no later than March 15 to be included on the most current vendor list. At this time, a letter will be sent to anyone on the current vendor list to ensure we have current and correct information on file.

SEC. 7. FORM 4419, APPLICATION FOR FILING INFORMATION RETURNS MAGNETICALLY/ELECTRONICALLY

.01 Payers/transmitters are required to submit Form 4419, Application for Filing Information Returns Magnetically/Electronically, to request authorization to file information returns to IRS/MCC. A single Form 4419 should be filed no matter how many types of returns the payer/transmitter will be submitting magnetically/electronically. For example, if you plan to file Forms 1099-INT, submit one Form 4419. If you later wish to file another type of Form 1099, 1098, 5498, or W-2G, it is not necessary to submit a new Form 4419. If you wish to file both electronically and magnetically, you need only submit one Form 4419.

.02 Form 4419 is included in the back of this publication. Magnetic tape, diskette, and electronically filed returns may not be submitted to IRS until the application has been approved. Please read the instructions on the back of the form carefully. This form may be photocopied. Additional forms may be requested from IRS/MCC.

.03 Upon approval, a five character alpha/numeric Transmitter Control Code (TCC) will be assigned and included in an approval letter. The TCC must be coded in the Payer/Transmitter "A" Record. If you file using more than one TCC, each TCC must be reported on separate media or in separate transmissions if filing electronically.

A magnetic media reporting package containing the current revenue procedure, transmittals, forms, labels, and instructions will be sent to the attention of the contact person indicated on Form 4419. This package will be sent annually.

If any of the information on the form changes, please notify IRS/MCC in writing so that our database can be updated. Be sure to include your TCC in all correspondence.

.04 Form 4419 can be submitted at any time during the year; however, it should be submitted to IRS/MCC at least 30 days before the due date of the return(s). For documents to be filed electronically using IBM 3780 bisynchronous protocols, Form 4419 must be submitted at least 45 days prior to the due date of the return (see Part C, Sec. 2). This will allow IRS/MCC the minimum amount of time necessary to process your application. In the event your computer equipment or software is not compatible with IRS, a waiver may be requested to file your returns on paper documents.

.05 IRS encourages transmitters who file for multiple payers to submit one application and to use their TCC for all payers. Include a list of all payers and their TINs with the Form 4419. If you file for additional payers in later years, notify IRS in writing providing the names and TINs. Do not submit a new application for these additional payers.

.06 If you have your files prepared by a service bureau, you may not need to submit an application to obtain a TCC. Some service bureaus will produce your file for you, code their own TCC on the media, and send it to IRS/MCC.

Other service bureaus will prepare your magnetic media files and send them back to you to submit to IRS/MCC. These service bureaus may require you to obtain your own TCC to be coded in the "A" Record. Contact your service bureau for further information.

.07 Once approved to file magnetically or electronically, you do not need to reapply each year unless:

(a) You discontinue filing magnetically or electronically for a year; your TCC may have been reassigned by IRS/MCC.

(b) Your magnetic media files were transmitted in the past by a service bureau using the service bureau's TCC. You now have computer equipment compatible with that of IRS and wish to prepare your own files. You must request your own TCC by filing an application Form 4419.

.08 Submit only one Form 4419 regardless of how many types of media or methods used to file the return. If you already have more than one TCC, you may choose any of the TCCs to be coded into the "A" Record. Code only one TCC per medium. Notify IRS/MCC of any TCCs you have that will not be used so that we can reassign the number.

.09 In accordance with section 1.6041-7(b) of the Income Tax Regulations, payments by separate departments of a health care carrier to providers of medical and health care services may be reported on separate returns on magnetic media. In this case, the headquarters will be considered the transmitter, and the individual departments of the company filing reports will be considered payers. A single Form 4419 covering all departments filing on magnetic media should be submitted. One TCC may be used for all departments.

.10 Approval to file does not imply endorsement by IRS of the computer software or of the quality of tax preparation services provided.

SEC. 8. TEST FILES

.01 IRS/MCC does not require test files, except for filers wishing to participate in the Combined Federal State Filing Program (see Part A, Sec. 17 for further information concerning combined federal/state filing).

.02 IRS encourages first time magnetic media or electronic filers to submit a test. The test file should consist of a sample for each type of record:

(a) "A" Record (must not be fictitious data)

(b) Multiple Payee "B" Records

(c) End of Payer "C" Record

(d) State Totals "K" Record, if participating in the Combined/Federal State Filing Program

(e) End of Transmission "F" Record

It is not necessary to send a voluminous file; you may choose to submit a single file OR multiple files for your test.

.03 Use the indicator in the "A" Record to show that this is a test file.

.04 IRS will check your file to ensure it meets the specifications of this revenue procedure. For current filers, sending a test file will provide the opportunity to ensure that their software reflects any programming changes.

.05 Tests should be sent to IRS/MCC during these periods:

(a) Magnetic Media 10/01 -- 12/15

(b) Hardcopy printout 12/16 -- 01/15

(c) Electronic 10/01 -- 01/15

If unable to submit a magnetic media test file by the due date, a hardcopy printout that shows a sample of each record type (A, B, C and F) may be submitted. The media or hardcopy printout must be postmarked on or before the last day of the test period.

.06 Form 4804, Transmittal of Information Returns Reported Magnetically/Electronically, must accompany your magnetic media test file. Mark the "TEST" checkbox in block 1 on the form. Also, check "TEST" on the external media label, Form 5064.

If submitting a hardcopy printout, mark the printout as "TEST" and include name, telephone number, and address of a person who can be contacted to discuss its acceptability.

.07 IRS/MCC will send a letter of acknowledgement to indicate the test results. Unacceptable magnetic media files, along with documentation identifying the errors, will be returned. Resubmission of files must be postmarked no later than December 15.

.08 Successfully processed media will not be returned to filers.

SEC. 9. FILING OF INFORMATION RETURNS MAGNETICALLY/ELECTRONICALLY AND RETENTION REQUIREMENTS

.01 Form 4804, Transmittal of Information Returns Reported Magnetically/Electronically, must accompany ALL magnetic media and electronic submissions.

Form 4802. Transmittal of Information Returns Reported Magnetically/Electronically (Continuation) is a continuation of Form 4804 and should only be used if you are reporting more than four types of returns and/or more than four payers. Form 4802 is not a stand-alone form; it can only accompany Form 4804.

.02 The forms are included at the back of this publication. IRS encourages the use of computer-generated substitutes for Form 4804/4802. The substitutes must contain all information requested on the original forms including the affidavit and signature line. Photocopies are acceptable.

.03 A payer/transmitter may code any combination of payers and/or documents in a submission. For example, if you are reporting Forms 1099-INT for Bank A, Forms 1099-DIV for Bank B, and Forms 1098 for Bank C, you need not create three separate tapes or diskettes. All three banks and all types of documents can be coded on one tape or diskette as long as you have separate "A" Records. Multiple tapes or diskettes can be sent in one package. INCLUDE FORM 4804, 4802, OR COMPUTER-GENERATED SUBSTITUTE WITH YOUR SHIPMENT.

.04 You may submit multiple types of media in your shipment. However, submit a separate Form 4804 for each type of media.

.05 Paper information returns must be submitted to the appropriate service centers.

.06 Do not report duplicate information. If you submit returns on paper documents, do not submit identical information magnetically/electronically. This may result in erroneous penalty notices.

.07 Form 4804 MUST be signed by the payer or the transmitter, service bureau, paying agent, or disbursing agent (all hereafter referred to as agent), on behalf of the payer if the agent has the authority to sign the affidavit under an agency agreement (either oral, written, or implied) that is valid under state law and adds the caption "FOR: (name of payer)."

NOTE: Failure to sign the affidavit on Form 4804 may delay processing or will result in your file being returned to you unprocessed.

.08 Although a duly authorized agent may sign the affidavit, the payer is responsible for the accuracy of the Form 4804 and the returns filed. The payer will be liable for penalties for failure to comply with filing requirements.

.09 An external label, Form 5064, must be affixed to each tape and diskette. If diskettes are used, and the operating system is not MS/DOS compatible, the operating system and hardware information MUST be provided. Failure to provide this information may result in the diskette being returned to the filer.

For instructions on how to complete Form 5064, refer to Notice 210, Preparation Instructions for Media Label, Form 5064. Notice 210 is included in the back of this publication, or may be obtained by calling IRS/MCC or 1-800-829-FORM.

.10 On the outside of the shipping container, include a Form 4801, or a substitute for the form, which reads "DELIVER UNOPENED TO TAPE LIBRARY -- MAGNETIC MEDIA REPORTING -- BOX ____ of ____". If there is only one container, mark the outside as Box 1 of 1. For multiple containers, include the sequence (for example, Box 1 of 3, 2 of 3, 3 of 3)

.11 When submitting your files, include the following:

(a) A signed Form 4804 (or computer-generated substitute)

(b) Form 4802, if applicable

(c) Form 5064, Media Label affixed to the magnetic media

(d) Form 4801, outside label

NOTE: See Part C, Sections 4 and 5 for electronic submission requirements.

.12 If returns from different locations (using the same name and TIN) are submitted on the same file, IRS encourages you to consolidate each type of information return under one "A" Record. For example, all "B" Records for the same type of return should be together under one "A" Record and followed by the End of Payer "C" Record.

.13 IRS will not pay for or accept "Cash-on-Delivery" or "Charge to IRS" shipments of tax information that an individual or organization is legally required to submit.

.14 Payers are required to retain a copy of the information returns filed with IRS or to have the ability to reconstruct the data for at least 3 years from the reporting due date. Whenever backup withholding was imposed, a 4 year retention is required.

SEC. 10. DUE DATES

.01 The dates for filing paper returns with IRS also apply to magnetic media or electronic filing. Filing of information returns is on a calendar year basis, except for Form 5498 which is used to report amounts contributed during or after the calendar year but not later than April 15.

.02 Information returns filed magnetically/electronically for Form 1098, 1099, and Form W-2G must be submitted to IRS/MCC postmarked no later than February 28. The due date for furnishing statements to recipients is January 31.

.03 Form 5498 filed magnetically/electronically must be submitted to IRS postmarked no later than May 31. Trustees or issuers of IRAs or SEPs must provide participants with a statement of the value of the participant's account by January 31, in any written format. Statements are due to the participants by May 31 for contributions made to IRAs for the prior calendar year. Form 5498 is filed for contributions to be applied to 1992 that are made between January 1, 1992 and April 15, 1993 and/or to report the fair market value of the IRA/SEP.

.04 If any due date falls on a Saturday, Sunday, or legal holiday, the return or statement is considered timely if it is filed or furnished on the next day that is not a Saturday, Sunday, or legal holiday. If the date to furnish the statement to recipient falls on a Saturday, Sunday, or legal holiday the statement is considered timely if it is furnished on the next day that is not a Saturday, Sunday, or legal holiday.

SEC. 11. EXTENSIONS OF TIME TO FILE

.01 A payer/transmitter may request an extension of time to file by submitting Form 8809.--Request for Extension of Time To File Information Returns to IRS/MCC. This form may be used to request an extension of time to file information returns submitted on paper, magnetic media, electronically, or for all three types of submissions.

.02 A transmitter may request extensions of time for multiple payers by submitting Form 8809 and attaching a list of their names, addresses, and TINs (EIN or SSN). Form 8809 may be computer generated or photocopied. Be sure that all the pertinent information is included.

.03 If requesting extensions of time for more than one payer, IRS encourages you to submit the request on tape, tape cartridge, 5 1/4- or 3 1/2-inch diskette, or electronically through IRP-BBS. The record format is in Part F, Sec. 3, of this revenue procedure. Transmitters who submit requests for multiple payers will receive one approval letter with an attached list of payers covered under that approval.

.04 You may request an extension of time for 30 days AS SOON AS YOU ARE AWARE that an extension is necessary but no later than the due date of the return. It will take a minimum of 30 days for IRS/MCC to respond to an extension request.

.05 If an additional extension of time is needed, you must submit another Form 8809 and include a copy of the letter from IRS approving your first request. Additional time must be requested before the end of the initial extension period.

.06 Form 8809 must be postmarked no later than the due date of the return for which you are requesting an extension of time. If you are requesting an extension of time to file several types of forms, you may use one Form 8809, but you must submit Form 8809 to IRS/MCC postmarked no later than the earliest due date. For example, if you are requesting an extension of time to file both Forms 1099-INT and 5498, you must submit Form 8809 postmarked on or before February 28. You may complete more than one Form 8809 to avoid this problem.

.07 You can request an extension for only one tax year.

.08 The extension request must be signed by the payer or a duly authorized representative.

.09 Failure to properly complete and sign the Form 8809 may cause delays in processing the request or result in a denial. Please read the instructions on the back of Form 8809 carefully.

.10 Copies of Form 8809 may be obtained from IRS/MCC or by calling 1-800-829-3676.

.11 You may request an extension of time to provide the STATEMENT TO RECIPIENT by submitting a letter to IRS/MCC or to your local District Director containing the following information:

(a) Payer Name

(b) TIN

(c) Address

(d) Type of Return

(e) Reason for Delay

(f) Signature of payer or authorized agent

All requests submitted to district directors will be forwarded to MCC for determination.

Requests for an extension of time to furnish the statements to recipients are not automatically approved; however, if approved, an extension will allow an extra 15 days to furnish the statement to the recipient. The request must be postmarked by the date on which the statements are due to be furnished to the recipients.

SEC. 12. PROCESSING OF INFORMATION RETURNS MAGNETICALLY/ELECTRONICALLY

.01 All data received at IRS/MCC for processing will be given the same protection as individual returns (Forms 1040). IRS/MCC will process the data and determine if the records were formatted and coded according to this revenue procedure.

.02 If your data is formatted incorrectly, the file will be returned to you for replacement.

.03 The following definitions have been provided to help distinguish between a correction and a replacement:

A correction is an information return submitted by the payer to correct an information return that was successfully processed by IRS, but contained erroneous information.

A replacement is an information return file that IRS has returned to the payer/transmitter due to errors encountered during processing. After necessary changes have been made, the file must be returned for processing.

.04 IRS/MCC no longer returns media after successful processing. Therefore, if you want proof that IRS/MCC received your shipment, you may either choose to send your submission using a service with tracing capabilities or a service that will provide proof of delivery.

If your media is returned to you, it is because a replacement is needed. Open all packages immediately.

.05 Files returned must be corrected and returned to IRS/MCC within 45 days from the date of the letter included with the files to avoid a failure-to-file penalty. When possible, IRS/MCC may only return the portion of your file that needs replacement.

.06 IRS/MCC will work with filers as much as possible to assist with processing problems. If IRS/MCC calls your office, please respond promptly because we may have information that you need to correct your file.

.07 Do not use special shipping containers for transmitting data to IRS/MCC since they cannot be returned.

SEC. 13. PENALTIES

.01 Sections 6721 through 6724 of the Internal Revenue Code contain the penalty provisions for most information returns. The penalty for failure to file correct information returns is "time sensitive" in that prompt correction of failures to file, or prompt correction of errors on returns that were filed, can lead to reduced penalties.

-- The penalty generally is $50 for each information return that is not filed, or is not filed correctly, by the prescribed filing date, with a maximum penalty of $250,000 per year ($100,000 for certain small businesses with average annual gross receipts, over the most recent 3-year period, not in excess of $5,000,000). The penalty generally is reduced to:

-- $30 for each failure to comply if the failure is corrected more than 30 days after the return was due, but on or before August 1 of the calendar year in which the return was due, with a maximum penalty of $150,000 per year ($50,000 for certain small businesses with average annual gross receipts, over the most recent 3-year period, not in excess of $5,000,000).

-- $15 for each failure to comply if the failure is corrected within 30 days after the date the return was due (March 30 if the due date is February 28), with a maximum penalty of $75,000 per year ($25,000 for certain small businesses with average annual gross receipts, over the most recent 3-year period, not in excess of $5,000,000).

.02 Penalties can be waived if failures were due to reasonable cause and not to willful neglect. In addition, a de minimis rule provides that if:

(a) information returns have been filed but were filed with incomplete or incorrect information, and

(b) the failures are corrected on or before August 1 of the calendar year in which the returns were due, then the penalty for filing incorrect returns (but not the penalty for filing late) will not apply to the greater of 10 returns or one-half of 1% of the total number of information returns you are required to file for the calendar year.

.03 Intentional Disregard of Filing Requirements -- If any failure to file a correct information return is due to intentional disregard of the filing and correct information requirements, the penalty is at least $100 per information return with no maximum penalty.

.04 Forms 1099-R -- The penalties under sections 6721 and 6722 do not apply to Form 1099-R, which is filed under section 6047. The penalty for failure to timely file Form 1099-R is $25 for days during which such failure continues but the total amount imposed under this subsection on any person for failure to file a return should not exceed $1500. See section 6652(e) of the Internal Revenue Code.

.05 Forms 5498 -- The penalties under sections 6721 and 6722 do not apply to Form 5498, which is filed under section 408(i). The penalty for failure to timely file Form 5498 is $50 per return with no maximum. See section 6693.

CAUTION: At the time this revenue procedure was published, Congress was considering legislation that would apply the penalties under sections 6721 and 6722 to Forms 1099-R and 5498.

SEC. 14. CORRECTED RETURNS

.01 The 250 magnetic media filing requirement applies separately to both original and corrected returns.

EXAMPLE: If you have 100 Forms 1099-A to be corrected, they can be filed on paper since they fall under the 250 threshold. However, if you have 300 Forms 1099-B to be corrected, they must be filed magnetically/electronically since they exceed the 250 threshold. If for some reason you cannot file the 300 corrections on magnetic media, you must request a waiver before filing on paper, or you may be subject to a penalty. No waiver is required for corrections that fall under the required threshold.

.02 Corrections should be aggregated and filed as soon as possible, but no later than August 1 of the year the return is due, in order to avoid the maximum $50 penalty. However, if you discover errors after August 1, you are still required to file corrections so that you will not be subject to a penalty for intentional disregard of the filing requirements. Failure to correct information returns may result in penalties for failure to provide correct information. ALL FIELDS MUST BE COMPLETED WITH THE CORRECT INFORMATION, NOT JUST THE DATA FIELDS NEEDING CORRECTION. Submit corrections only for the returns filed in error, not the entire file. If your entire file is in error, contact IRS/MCC immediately. Furnish corrected statements to recipients as soon as possible.

.03 There are numerous types of errors, and in some cases, more than one transaction may be required to correct the initial error. If the original return was filed as an aggregate, you must consider this in filing corrected returns.

You are strongly encouraged to read this ENTIRE section before attempting to make ANY correction.

.04 Corrected returns may be included on the same medium as original returns; however, separate "A" Records are required. Corrected returns must be identified on the Form 4804 and the Form 5064 by marking the correction box provided.

NOTE: If you discover that certain information returns were omitted on your original file, do not submit those documents as corrections. Submit them as originals.

.05 If a payer discovers errors for prior years that affect a large number of payees, in addition to sending IRS the corrected return and notifying the payee, a letter containing the following information should be sent to IRS/MCC:

(a) Name and address of payer

(b) Type of error. (Please explain clearly.)

(c) Tax year

(d) Payer TIN

(e) TCC

(f) Number of Payees

This information will be forwarded to the appropriate office in an attempt to prevent erroneous notices from being sent to the payees. The correction must be submitted on an actual information return document or filed magnetically/electronically.

Provide the correct tax year in Box 2 of the Form 4804 and on Form 5064. Prior year corrections may not be included on the same media as current year data. If filing electronically, a separate transmission must be made for each tax year.

.06 You are only required to submit corrections for returns filed within the last three years (4 years if the return was subject to Backup Withholding). If submitting prior year corrections, you may use the format of the current year or the format used in the year the return was originally due to be filed.

.07 All paper returns, whether original or corrected, must be filed with the appropriate service center.

.08 Form 4804 and Form 4802 (if applicable), must be submitted with corrected files.

.09 The "B" Record provides a 20-position field for the Payer's Account Number for the Payee. This number will help identify the appropriate incorrect return if more than one return is filed for a particular payee. Do not enter a TIN in this field. A payer's account number for the payee may be a checking account number, savings account number, serial number, or any other number assigned to the payee by the payer that will distinguish the specific account. This number should appear on the initial return and on the corrected return in order to identify and process the correction properly.

.10 Use of the Corrected Return Indicator has been expanded. In cases where two transactions are required, enter a "C" in position 7 (position 8 for 8" diskettes) of the second "B" Record. In the past, it was not necessary to identify the second transaction as part of the correction procedure.

.11 The record sequence for filing corrections will be the same as for original returns.

.12 Review the chart that follows. Errors normally fall under one of the two categories listed. Next to each type of error made, you will find a list of instructions on how to file the corrected return.

                Guidelines for Filing Corrected Returns

.01 Section 6109 of the Internal Revenue Code, and the regulations thereunder, require a person to furnish his or her TIN to the person required to file the information return.

.02 The payee's TIN and name combination is used to associate information returns reported to IRS with corresponding information on tax returns. It is imperative that CORRECT social security and employer identification numbers for payees be provided to IRS. DO NOT ENTER HYPHENS or ALPHA CHARACTERS. Entering all zeroes, ones, twos, etc. will have the effect of an incorrect TIN.

.03 The payer and payee names with associated TINs should be consistent with the names and TINs used on other tax returns. Also, the name and TIN provided must belong to the owner of the account. If the account is recorded in more than one name, furnish the name and TIN 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 "B" Record. For individuals the payee TIN is generally the payee's social security number. For other entities, the payee TIN is the payee's Employer Identification Number. For sole proprietors the payee TIN may be either a SSN or EIN and the owners name must be used.

.04 Failure to provide the correct name and corresponding TIN could result in a backup withholding notice (sometimes referred to as a "B" notice).

.05 The following charts will help you determine the TIN to be furnished to IRS for those persons for whom you are reporting information (payees).

            CHART 1. Guidelines for Social Security Numbers

.01 Magnetic/electronic reporting of information returns eliminates the need to submit paper documents to IRS. CAUTION! DO NOT SEND COPY A OF THE PAPER FORMS TO IRS IN ADDITION TO MAGNETIC MEDIA AND ELECTRONIC FILING. This will result in duplicate filing, therefore, notices could be generated.

.02 Payers are responsible for providing statements to the payees as outlined in the 1992 "Instructions for Forms 1099, 1098, 5498 and W-2G." Refer to these instructions for filing information returns on paper with IRS and furnishing statements to recipients.

.03 Statements to the recipient should be clear and legible. If the official IRS form is not used, you must adhere to the specifications and guidelines in Publication 1179, Specifications for Paper Document Reporting and Paper Substitutes for Forms 1096, 1098, 1099 Series, 5498, and W-2G.

SEC. 17. COMBINED FEDERAL/STATE FILING PROGRAM

.01 The Combined Federal/State Program was established to simplify information returns filing for the taxpayer. IRS/MCC will forward this information to participating states free of charge for approved filers so separate reporting to those states is not necessary. FORMS 1098, 1099-A, 1099-B, 1099-S, and W-2G cannot be filed under this program.

.02 To request approval to participate, a test file coded for this program MUST be submitted to IRS/MCC between October 1 and December 15 for magnetic media and between October 1 and January 15 for electronic files. A hardcopy print is not acceptable as a test for this program.

.03 Attach a letter to the Form 4804 submitted with the test file which indicates that you wish to participate in this program.

.04 A test file is only required for the first year. Each record, both in the test and the actual data file, must conform to this revenue procedure.

.05 If your test file is acceptable, we will send you an approval letter, and a Form 6847, Consent for Internal Revenue Service to Release Tax Information, which the payer MUST complete, sign, and return to IRS/MCC before any tax information can be released to the state. Be sure to write your TCC on Form 6847. If your test file is not acceptable, we will return your media with a letter indicating what the problems are, and your replacement test file must be returned to IRS/MCC postmarked on or before December 15 (or sent electronically by January 15).

.06 A separate Form 6847 is required for each payer. A transmitter may not combine payers on one Form 6847 even though acting as Attorney-in-Fact for several payers. Form 6847 may be computer generated as long as it includes all information that is on the original form or it may be photocopied. If the Form 6847 is signed by an Attorney-in-Fact, the written consent from the payer must clearly indicate that the Attorney-in-Fact is empowered to authorize release of the information.

.07 If you file for multiple payers, code the records only for participating states for those payers who have submitted Form 6847.

.08 Some participating states require separate notification that you are filing in this manner. Since IRS acts as a forwarding agent only, it is your responsibility to contact the appropriate states for further information.

.09 It is the payer's responsibility to notify the state of corrections to an information return.

.10 Participating states and corresponding valid state codes are listed in TABLE 1 of this section. The appropriate state code MUST be entered for those documents that meet the state's filing requirements; do not use state abbreviations.

.11 To simplify filing, some of the participating states have provided their information return reporting requirements (see TABLE 2). It is your responsibility to contact the participating states to verify the criteria provided in this table.

.12 Upon submission of the actual files, be sure of the following:

(a) All records should be coded exactly as required by this revenue procedure.

(b) The "C" Record must be followed by a state total "K" Record for each state.

(c) Payment amount totals and the valid participating state code must be included in the State Totals "K" Record.

(d) The last "K" Record is followed by an "A" Record or an End of Transmission "F" Record (if this is the last record of the entire file).

             TABLE 1. PARTICIPATING STATES AND THEIR CODES

 Element         Description

.01 You MUST use the following state abbreviations when developing the state code portion of address fields. This table provides state abbreviations only and does not represent those states participating in the Combined Federal/State Filing Program.

 State                                                           Code

.03 For foreign country addresses you may use a 40-position free format which should include city, province or state, postal code, and name of country in this order. This is allowable only if a "1" appears in the Foreign Country Indicator Field of the "B" Record.

.04 Payers who require minor format deviations for the address field MUST contact IRS/MCC in writing. Records deviating from the specifications in this revenue procedure, and submitted without prior approval from IRS will be returned for replacement.

.05 When reporting APO/FPO addresses use the following format:

 EXAMPLE:

SEC. 20. MAJOR PROBLEMS ENCOUNTERED

IRS encourages filers to verify the format and content of each type of record to ensure the accuracy of the data. This may eliminate the need for IRS/MCC to return files for replacement. This may be important for those filers who have either had their files prepared by a third party service bureau or who have purchased pre-programmed software packages. If you purchased your software package for a previous tax year, it may no longer be valid for reporting your current tax year information returns. Following are some of the most frequently encountered problems with magnetic/electronic files submitted to IRS/MCC.

1. Discrepancy between IRS totals and totals in Payer "C" Records.

The "C" Record is a summary record for a type of return for a given payer as reported in the "B" Records. IRS balances the total number of payees and payment amounts and compares them with totals in the "C" Records. Payers should verify the accuracy of the records because imbalances may necessitate return of files for replacement.

2. The Payment Amount Fields in the "B" Record do not correspond to the amount codes in the "A" Record.

If codes 2, 4, and 7 appear in the Amount Codes Field of the "A" Record, then the "B" Record must show payment amounts in Fields 2, 4, and 7, right-justified and unused positions zero filled.

          EXAMPLE: "A" RECORD 247bbbbbb -- (b = blank)

Money amounts must be right-justified and zero (0) filled. DO NOT USE BLANKS.

4. Incorrect TIN in Payer "A" Record.

The Payer's TIN reported in position 7-15 (positions 8-16 for 8" diskettes) of the "A" Record must be correct in order for IRS to process the media. The TIN provided in the "A" Record should correspond with the name provided in the first payer name line.

5. Bad Format.

We receive magnetic tape formatted using 8-inch diskette specifications and vice versa. BE SURE TO USE THE PROPER SECTION OF THIS REVENUE PROCEDURE FOR FORMATTING YOUR DATA.

6. The City/State/ZIP Code in the Payee "B" Record is in wrong format.

The Payee City, State, and ZIP Code in the "B" Record MUST be coded in the correct positions. If you cannot code this information in the correct fields, you MUST request a deviation in writing from IRS/MCC, and explain how your address information will be reported.

7. Form W-2 information submitted on same media as Form 1099 information.

Form W-2 information is submitted to the Social Security Administration (SSA), and NOT to IRS/MCC. The Social Security Administration has its own magnetic media reporting program for wage information, and the media containing Forms W-2 is submitted to SSA. Any media received at IRS/MCC that contains Form W-2 information will be returned to the filer. Contact your local SSA office for information concerning filing Forms W-2 on magnetic media.

8. Excessive withholding credits.

For most information returns, other than Form 1099-R, withholding credits should NOT exceed 20 percent of the income reported. Validate the total reported in the withholding field against the total income reported.

9. Incorrect format for TINs in the Payee "B" Record.

A check of your "B" records should be made to ensure the Taxpayer Identification Numbers (TINs) are formatted correctly. There should be nine digits, no alpha characters, no hyphens or commas. Incorrect formatting of TINs may result in a penalty.

10. Distribution Codes for Form 1099-R reported incorrectly.

A numeric Distribution Code must always be used in conjunction with Distribution Codes A, B, or C. The numeric code must be reported in position 4, and the A, B, or C must be in position 5. (Positions 5 and 6, respectively, for 8" diskettes.)

PART B. MAGNETIC MEDIA SPECIFICATIONS

SEC. 1. GENERAL

.01 The specifications contained in this part of the revenue procedure define the required format and contents of the records to be included in the magnetic media file. These specifications must be adhered to unless deviations have been specifically granted by IRS.

.02 A provision is made in the "B" Records for Special Data Entries. These entries are optional. If the field is not utilized, enter blanks to maintain a fixed record length of 420 positions. The field is intended to serve one or both of these purposes:

(a) Contain information required by state or local governments. Filers who wish to use this option for satisfying state or local reporting requirements should contact their state or local department of revenue for filing instructions. (Also refer to Part A, Sec. 17.)

(b) Contain information for the filer's own personal use and used at the discretion of the filer to include information related to each individual return. IRS will not use the information supplied in this field. The length of this field will vary depending on the type of return.

.03 Use "K" Records only if you are an approved Combined Federal/State filer.

SEC. 2. TAPE SPECIFICATIONS

.01 IRS can process most magnetic tape files if the following specifications are followed:

(a) 9 track EBCDIC (Extended Binary Coded Decimal Interchange Code) with:

(1) Odd Parity

(2) A density of 1600, or 6250 BPI. 800 BPI is no longer acceptable.

(3) If you use UNISYS Series 1100, you must submit an interchange tape.

(b) 9 track ASCII (American Standard Coded Information Interchange) with:

(1) Odd Parity

(2) A density of 1600 or 6250 BPI.

(c) MCC will no longer process data received on 9 track tape with a density of 800 BPI.

Please be consistent in the use of recording codes and density on your files.

.02 All compatible tape files must have the following characteristics: Type of tape -- 0.5 inch (12.7 mm) wide, computer grade magnetic tape on reels of up to 2400 feet (731.52 m) within the following specifications:

(a) Tape thickness: 1.0 or 1.5 mils and

(b) Reel diameter: 10.5 inch (26.67 cm), 8.5 inch (21.59 cm), 7 inch (17.78), or 6 inch.

.03 The tape records defined in this revenue procedure may be blocked subject to the following:

(a) A block must not exceed 25,200 tape positions.

(b) If the use of blocked records would result in a short block, all remaining positions of the block must be filled with 9s; however, the last block of the file may be filled with 9s or truncated. Do not pad a block with blanks.

(c) All records, except the header and trailer labels, may be blocked.

(d) Records may not span blocks.

.05 Labeled or unlabeled tapes may be submitted.

.06 For the purposes of this revenue procedure the following must be used.

Tape Mark:

(a) Used to signify the physical end of the recording on tape.

(b) For even parity, use BCD configuration 001111 ("8421").

(c) May follow the header label and precede and/or follow the trailer label.

SEC. 3. TAPE CARTRIDGE SPECIFICATIONS

.01 In most instances the IRS can process tape cartridges that meet the following specifications:

(a) must be IBM 3480 or 3490 compatible.

(b) must meet American National Standard Institute (ANSI) standards, and have the following characteristics:

(1) Tape cartridges will be 1/2 inch tape contained in plastic cartridges which are approximately 4 inches by 5 inches by 1 inch in dimension.

(2) Magnetic tape will be chromium dioxide particle based 1/2 inch tape.

(3) Cartridges will be 18-track parallel.

(4) Cartridges will contain 14,907 bytes/mm (37,871 bytes/in).

(5) Mode will be full function.

(6) THE DATA MUST NOT BE COMPRESSED.

(7) Either EBCDIC (Extended Binary Coded Decimal Interchange Code) or ASCII (American Standard Coded Information Interchange).

.02 The tape cartridge records defined in this revenue procedure may be blocked subject to the following:

(a) A block must not exceed 25,200 tape positions.

(b) If the use of blocked records would result in a short block, all remaining positions of the block must be filled with 9s; however, the last block of the file may be filled with 9s or truncated. Do not pad a block with blanks.

(c) All records, except the header and trailer labels, may be blocked.

(d) Records may not span blocks.

.03 Tape cartridges may be labeled or unlabeled.

.04 For the purposes of this revenue procedure the following must be used.

Tape Mark:

(a) Used to signify the physical end of the recording on tape.

(b) For even parity, use BCD configuration 001111 ("8421").

(c) May follow the header label and precede and/or follow the trailer label.

Please be consistent in the use of recording codes and density on your files. If your tape cartridge does not meet these specifications, you are encouraged to submit a test prior to submitting your actual file. Contact IRS/MCC for further information.

SEC. 4. 5 1/4-INCH AND 3 1/2-INCH DISKETTE SPECIFICATIONS

.01 To be compatible, a diskette file must meet the following specifications:

(a) 5 1/4 or 3 1/2 inches in diameter.

(b) Data must be recorded in standard ASCII code. For 5 1/4-inch diskettes, data may be recorded using EBCDIC if the diskette is created on an IBM Systems 36.

(c) Records must be fixed length of 420 bytes per record.

(d) Delimiter character commands must not be used.

(e) Positions 419 and 420 of each record has been reserved for use as carriage return/line feed (cr/lf) character if applicable.

(f) Filename of IRSTAX must be used. Do not enter any other data in this field. If a file will consist of more than one diskette, the filename IRSTAX will contain a three-digit extension. This extension will indicate the sequence of the diskettes within the file. For example, the first diskette will be named IRSTAX.001, the second diskette will be IRSTAX.002, etc.

(g) A diskette file may consist of multiple diskettes as long as the file name conventions are adhered to.

(h) Diskettes must meet one of the following specifications:

 Capacity            Tracks            Sides/Density      Sector Size

.03 Deviations from the prescribed formats will not be acceptable. Diskettes deviating from the specifications in this revenue procedure must not be submitted without prior approval from IRS.

SEC. 5. PAYER/TRANSMITTER "A" RECORD -- GENERAL FIELD DESCRIPTIONS

.01 The Payer/Transmitter "A" Record identifies the payer and transmitter of the magnetic media file and provide parameters for the succeeding "B" Records. IRS computer programs rely on the absolute relationship between the parameters and data fields in the "A" Record and the data fields in the "B" Records to which they apply.

.02 The number of "A" Records depends on the number of payers and the different types of returns being reported. The payment amounts for one payer and for one type of return should be consolidated under one "A" Record if submitted on the same file.

.03 Do not submit separate "A" Records for each payment amount being reported. For example, if you are filing Form 1099-DIV to report Amount Codes 1, 2, and 3, all three amount codes must be reported under one "A" Record, not three separate "A" Records. For "B" Records that do not contain payment amounts for all three amount codes, enter zeros for those which have no payment to be reported.

.04 The first record on the file must be an "A" Record. A transmitter may include "B" Records for more than one payer on a tape or diskette; however, each GROUP of "B" Records must be preceded by an "A" Record and followed by an End of Payer "C" Record. A single tape or diskette may contain different types of returns but the types of returns MUST NOT be intermingled.

.05 ALL RECORDS MUST BE A FIXED LENGTH OF 420 POSITIONS.

.06 An "A" Record may be blocked with "B" Records; however, the initial record on a file must be an "A" Record. IRS will accept an "A" Record after a "C" Record.

.07 Do not begin any record at the end of a block or diskette and continue the same record into the next block.

.08 All alpha characters entered in the "A" Record must be upper-case.

.09 When reporting Form 1098, Mortgage Interest Statement, the "A" Record will reflect the name of the recipient of the interest (the filer) referred to as the payer in these instructions. The "B" Record will reflect the individual paying the interest (borrower/payer of record) and the amount paid.

               RECORD NAME: PAYER/TRANSMITTER "A" RECORD

 Amount Codes                           For Reporting Mortgage

 Amount Codes                           For Reporting Payments on Form

 Amount Codes                           For Reporting Payments on Form

NOTE 2: Amount code "7" is normally used to report nonemployee compensation. However, Amount code "7" may also be used to report Crop Insurance Proceeds. See positions 4-5 of the "B" Record for instructions. If Nonemployee Compensation and Crop Insurance Proceeds are being paid to the same payee, a separate "B" Record for each transaction is required.

NOTE 3: In the past, Amount Code "9" was used to indicate direct sales of $5000 or more. A one position Direct Sales Indicator has been added to the Payee "B" Record for this purpose (Position 12 (position 13, Sector 1, if using 8" diskettes)). Amount Code 9 may only be used to report Excess Golden Parachute Payments.

 Amount Codes                           For Reporting Payments on Form

 Amount Codes                           For Reporting Payments on Form

NOTE 2: If the payment shown for Amount Code 1 is a total distribution, enter a "1" in position 47 of the "B" Record.

NOTE 3: If a distribution is a loss, do not enter a negative amount. For example, if stock is distributed but the value is less than the employee's after-tax contributions, enter the value of the stock in Amount Code 1, enter zero (0) in Amount Code 2, and enter the employee's contribution in Amount Code 5.

If taxable amount cannot be determined, enter a "1" in position 48 of the "B" Record.

If you are reporting an IRA/SEP distribution, generally include the amount of the distribution in the Taxable Amount (Payment Amount field 2, positions 61-70) and enter a "1" in the IRA/SEP Indicator field (position 44) (a "1" may be entered in the Taxable Amount Not Determined field (position 48)) of the Payee "B" Record. See the explanation for Box 2a of Form 1099-R in the 1992 "Instructions for Forms 1099, 1098, 5498, and W-2G" for exceptions to reporting the taxable amount.

NOTE 4: See the 1992 "Instructions for Forms 1099, 1098, 5498, and W-2G" for further information concerning the definition of Federal income tax withheld for Form 1099-R.

NOTE 5: State income tax withheld has been added for the convenience of the payer but need not be reported to IRS.

 Amount Codes                           For Reporting Payments on Form

 Amount Codes                           For Reporting Payments on Form

If reporting IRA contributions for a Desert Shield/Storm participant for other than 1992, enter "DS," the year for which the contribution was made, and the amount of the contribution in the Special Data Entries field of the "B" Record.

For further information concerning Inherited IRAs or Desert Shield/Storm participant reporting refer to the 1992 "Instructions for Forms 1099, 1098, 5498, and W-2G," and Notice 91-17, 1991-1 C.B. 319.

 Amount Codes                           For Reporting Payments on Form

 32         Test Indicator     1        REQUIRED. Enter "T" if this is

 50-89      First Payer        40       REQUIRED. Enter the name of

 90-129     Second Payer       40       If the Transfer Agent

[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.]

SEC. 7. PAYEE "B" RECORD ("B" Record) GENERAL FIELD DESCRIPTIONS AND RECORD LAYOUTS

.01 The "B" Record contains the payment information from the individual returns. When filing information returns, the format for the "B" Records will remain constant and is a fixed length of 420 positions. The record layout for positions 1 through 321 is the same for all "B" Records. Positions 322 through 420 vary for Forms 1099-A, 1099-B, 1099-OID, 1099-S and W-2G to accommodate variations within these forms. In the "A" Record, the Amount Codes that appear in tape or diskette positions 23 through 31 will be left-justified and blank filled. In the "B" Record, you will allow for all nine payment amount fields. For those fields not used, enter zeros (0). For example, if you are reporting on Form 1099-PATR, you will enter a "7" in tape position 22 of the "A" Record, Type of Return. If you are reporting payments for Amount Codes 2, 4, and 7, then media positions 23 through 31 of the "A" Record will be "247bbbbbb" (b = blanks). In the "B" Record:

Positions 51 through 60 for Payment Amount 1 will be zeros.

Positions 61-70 will reflect the actual payment amount to be reported for "Nonpatronage distributions."

Positions 71-80 for Payment Amount 3 will be zeros.

Positions 81-90 will reflect the actual payment amount to be reported for "Federal income tax withheld."

Positions 91-110 for Payment Amounts 5 and 6 will be zeros.

Positions 111-120 will reflect the actual payment amount to be reported for "Energy investment credit."

Positions 121-140 for Payment Amounts 8 and 9 will be zeros.

.02 The following specifications include a field in the payee records called "Name Control" in which the first four characters of the payee's surname are to be entered by the payer.

.03 If payers are unable to determine the first four characters of the surname, the Name Control Field may be left blank; however, compliance with the following will facilitate IRS computer programs in generating the Name Control.

(a) The surname of the payee whose SSN is shown in the "B" Record should always appear first. If, however, your records have been developed using the first name first, you must leave a blank space between the first and last names.

(b) In the case of multiple payees, only the surname of the payee whose TIN (SSN or EIN) is shown in the "B" Record must be present in the First Payee Name Line. Surnames of any other payees in the record may be entered in the Second Payee Name Line.

.04 See Part A, Sec. 15 for further information concerning Taxpayer Identification Numbers (TINs).

.05 A field is also provided in these specifications for Special Data Entries. This field may be used to record information required by state or local governments, or for the filer's own personal use. IRS does not use the data provided in the Special Data Entries field; therefore, the IRS program doesn't check the content or format of the data entered in this field. It is the filer's choice whether or not this field is used. If this field is coded, it will not affect the processing of the "B" Records.

.06 Those filers participating in the Combined Federal/State Filing Program must adhere to all of the specifications in Part A, Sec. 17 in order to participate in this program. FORMS 1098, 1099-A, 1099-B, 1099-S, AND W-2G CANNOT BE FILED UNDER THE COMBINED FEDERAL/STATE FILING PROGRAM.

.07 All alpha characters entered in the "B" Record should be upper-case.

.08 Do NOT use decimal points (.) to indicate dollars and cents. Ten dollars must appear as 0000001000 in the payment amount field.

.09 IRS strongly encourages filers to review their data for accuracy before submission to prevent issuance of erroneous notices to persons for whom reports are filed. Filers should be especially careful that the names, TINs, account numbers, types of income, and income amounts are correct.

.10 When reporting Form 1098, Mortgage Interest Statement, the "A" Record will reflect the name and TIN of the recipient of the interest (the filer). The "B" Record will reflect the individual paying the interest (Borrower/Payer of Record) and the amount paid. For Form 1099-S, the "A" Record will reflect the person responsible for reporting the transaction. The "B" Record will reflect the seller/transferor.

                     RECORD NAME: PAYEE "B" RECORD

            Type of Wager               For Form W-2G, enter the

 8-11       Name Control       4        If determinable, enter the

 The following examples may be helpful to you in developing the Name

/**/ For Hispanic names, when two last names are shown for an individual, derive the name control from the first last name.

 12         Direct Sales       1        1099 MISC only. Enter a "1" to

 45-46      Percentage of      2        FORM 1099-R ONLY. Use this

 48         Taxable Amount Not 1        FORM 1099-R-ONLY. Enter a "1"

 141-160    Blank              20       Enter blanks.

For Form 5498 Inherited IRAs, enter the beneficiary's name followed by the word "beneficiary." For example, "Brian Young as beneficiary of Joan Smith" or something similar that signifies that the IRA was once owned by Joan Smith. You may abbreviate the word "beneficiary" as, for example, "benef." Refer to the 1992 "Instructions for Forms 1099, 1098, 5498, and W-2G." The beneficiary's TIN should be reported in positions 15-23 of the "B" Record.

 202-241    Second Payee       40       If there are multiple payees,

 282-310    Payee City         29       REQUIRED. Enter the city, town

[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.]

THE FOLLOWING SECTIONS DEFINE THE FIELD POSITIONS FOR THE DIFFERENT TYPES OF RETURNS IN THE PAYEE "B" RECORD (POSITIONS 322-420):

     (1) Forms 1098, 1099-DIV, 1099-G, 1099-INT, 1099-MISC,

.01 The End of Payer "C" RECORD IS A FIXED RECORD LENGTH OF 420 POSITIONS. The Control Total fields are each 15 positions in length.

.02 The "C" Record consists of the total number of payees and the totals of the payment amount fields filed by a given payer and/or a particular type of return. The "C" Record MUST be written after the last "B" Record for each type of return for a given payer. For each "A" Record and group of "B" Records on the file, there must be a corresponding "C" Record.

.03 In developing the "C" Record, for example, if you used Amount Codes 1, 3 and 6 in the "A" Record, the totals from the "B" Records will appear in Control Totals 1, 3 and 6 of the "C" Record. In this example, positions 26-40, 56-85, and 101-145 would be zero filled. Positions 146-420 would be blank filled.

.04 Payers/Transmitters should verify the accuracy of the totals since data with missing or incorrect "C" Records will be returned for replacement.

                 RECORD NAME: END OF PAYER "C" RECORD

.01 THE STATE TOTALS "K" RECORD IS A FIXED RECORD LENGTH OF 420 POSITIONS. The Control Total fields are each 15 positions in length.

.02 The "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.

.03 The "K" Record will contain the total number of payees and the totals of the payment amount fields 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.

.04 In developing the "K" Record, for example, if you used Amount Codes 1, 3, and 6 in the "A" Record, the totals from the "B" Records coded for this state will appear in Control Totals 1, 3, and 6 of the "K" Record.

.05 There MUST be a separate "K" Record for each state being reported.

.06 Refer to Part A, Sec. 17 for the requirements and conditions that MUST be met to file on this program.

                 RECORD NAME: STATE TOTALS "K" RECORD

.01 THE END OF TRANSMISSION "F" RECORD IS A FIXED RECORD LENGTH OF 420 POSITIONS. The "F" Record is a summary of the number of payers in the entire file.

.02 This record should be written after the last "C" Record (or last "K" Record, when applicable) of the entire file.

              RECORD NAME: END OF TRANSMISSION "F" RECORD

SEC. 1. GENERAL

.01 Electronic filing of information returns is offered as an alternative to magnetic media (tape, tape cartridge, or diskette) or paper filing, but is not a requirement. Electronic filing will fulfill the magnetic media requirements for those filers who are required to file magnetically. It may also be used by those payers who are under the filing threshold requirement, but would prefer to file their information returns this way. Forms 1098, 1099, 5498, and W-2G, originals and corrections, may be filed electronically.

.02 The electronic filing of information returns is not affiliated with the Form 1040 electronic filing program. These two programs are totally independent, and you must obtain separate approval to participate in each of them. All inquiries concerning the electronic filing of information returns should be directed to IRS/MCC. IRS/MCC personnel cannot answer questions or assist taxpayers in the filing of Form 1040 tax returns. Filers with questions of this nature will be directed to the Taxpayer Service toll-free number (1-800-829-1040) for assistance.

.03 There are two methods of filing information returns electronically. One method is to submit information returns through the Information Reporting Program Bulletin Board System (IRP-BBS) using asynchronous protocols. Another method of filing electronically is by using IBM 3780 bisynchronous protocols. Part A, Sec. 18 contains a definition of asynchronous and bisynchronous protocols. The specifications for both of these methods are given in this section. There are differences between these two methods so please read this section carefully. Any questions can be directed to IRS/MCC.

.04 Filers participating in the electronic filing program for information returns will submit their returns to IRS/ MCC by way of modems, and not through magnetic media or paper filing.

.05 Upon request, payers/transmitters who file electronically will be granted an extension of 30 days to file. Part A, Sec. 11 explains procedures for requesting extensions of time. Filers are encouraged to file their data as soon as possible.

.06 The formats of the "A," "B," "C," "K," and "F" Records are the same for electronically filed records as they are for 5 1/4- and 3 1/2-inch diskettes. For electronically filed documents, each transmission is considered a separate file; therefore, each transmission MUST have an End of Transmission "F" Record.

SEC. 2. ELECTRONIC FILING APPROVAL PROCEDURE

.01 Filers must obtain or already have a Transmitter Control Code (TCC) assigned to them prior to submitting their files electronically. Refer to Part A, Sec. 7 for information on how to obtain a TCC.

.02 Once a TCC is obtained, filers using IRP-BBS assign their own passwords and do not need special approval.

.03 Filers using bisynchronous protocols must obtain an IRS/MCC-assigned password prior to submitting test or actual data files. To obtain a password the following steps must be taken:

(a) Bisynchronous filers who already have a TCC must submit either Form 4419 or a letter to indicate that they wish to file information returns electronically. Another TCC will NOT be assigned. If a letter is submitted, it must contain the following:

1) Name and address of transmitter.

2) Transmitter Control Code.

3) Name and phone number of a contact person within your organization to whom a password will be assigned.

(b) Within 30 days of receiving the application or letter, IRS/MCC will send Form 6086, TSO Password Assignment, to the filer which will contain the password to be used for electronic submissions.

(c) Upon receipt of Form 6086, the user (person who will actually transmit the data) will separate the acknowledgement from the password. Both the user and the user's manager MUST sign the acknowledgement and mail to:

         Chief, Security and Disclosure

(e) For security reasons, all bisynchronous passwords will be obsoleted, periodically, and a new password will automatically be assigned. If you have any questions relating to the security procedures, and/or you need to report that your password was compromised, contact IRS/MCC as soon as possible.

.04 With all passwords, either for IRP-BBS or bisynchronous protocols, it is the user's responsibility to remember the password and not allow the password to be compromised.

SEC. 3. TEST FILES

.01 Filers are not required to submit a test file. The purpose of test files is to resolve any data or communication problems prior to the filing season. If you wish to submit an electronic test file for Tax Year 1992, it MUST be submitted to IRS/MCC between October 1, 1992, and January 15, 1993.

.02 If problems are encountered while transmitting your electronic test file, contact IRS/MCC for assistance.

.03 Filers using IRP-BBS can verify the status of their transmitted test data by calling the IRP-BBS. This information will be available within 48 hours after their transmission is received by IRS/MCC.

.04 If bisynchronous protocols are used, obtain a password before submitting an electronic test file. Bisynchronous electronic test files will be processed and filers will be notified as to the acceptability of their data within 10 workdays of the date the data is received by IRS/MCC.

SEC. 4. ELECTRONIC SUBMISSIONS

.01 Electronically, Asynchronous (IRP-BBS) and Bisynchronous (mainframe), filed information may be submitted to IRS/MCC 24 hours a day, 7 days a week. Technical assistance will be available Monday through Friday between 8:30 a.m. and 6:00 p.m. Eastern Time Zone.

.02 Long transmissions are not encouraged since the transmission may be interrupted by line noise problems.

.03 Actual information returns data may be electronically transmitted to IRS/MCC between January 18 and October 15, 1993 (for Tax Year 1992 submissions). However, the due date(s) for electronically filed returns are not extended.

SEC. 5. TRANSMITTAL REQUIREMENTS

.01 All data submitted electronically is verified by transmittal Form 4804. Form 4804 must be submitted to IRS/MCC postmarked on or before the due date of the return or within two (2) workdays of the electronic transmission, whichever is earlier. No return is considered filed until a Form 4804 is received by IRS/MCC.

.02 Form 4804 can be ordered from IRS/MCC or it may be computer generated. A copy of the form is available in the back of this publication. If you choose to computer generate Form 4804, all of the information contained on the original form, including the affidavit, must also be contained on the computer-generated form.

.03 The filer whose TCC is used in the "A" Record is responsible for submitting the transmittal Form 4804.

.04 Forms 4804 may be mailed to the following addresses.

     If by Postal Service:

SEC. 6. INFORMATION REPORTING PROGRAM BULLETIN BOARD SYSTEM (IRP-BBS) SPECIFICATIONS

.01 The IRP-BBS is an electronic bulletin board system available to filers of information returns. In addition to filing information returns electronically, the IRP-BBS provides other capabilities. Some of the advantages of IRP-BBS are as follows:

1) Notification within 24 to 48 hours as to the acceptability of the data transmitted.

2) Immediate access to the latest changes and updates that affect the Information Reporting Program at IRS/MCC (program, legislative, etc.).

3) Access to publications such as the Publication 1220 as soon as they are available.

4) Capability to communicate with IRS/MCC personnel.

5) Ability to retrieve information and files applicable to the IRP-BBS.

.02 The IRP-BBS is available for public use and accessible using various personal computer communications equipment; however, electronic submission of information returns is limited to holders of valid TCCs. A TCC is not needed to access those portions of the BBS that contain forms and publications or to leave questions or messages for IRS/MCC personnel.

.03 Passwords for IRP-BBS are made up of 8 alpha/numerics and are user-assigned. Precautions should be taken to ensure that the password is not compromised. If compromised, it should be changed immediately by way of the IRP-BBS main menu.

.04 Passwords are case sensitive, therefore, you must be consistent in entering the password.

.05 Filers using IRP-BBS can determine the acceptability of files submitted by checking the file status area of the bulletin board. These reports are not immediately available but will be available within 24 to 48 hours of successful processing of the file.

.06 Contact the IRP-BBS by dialing (304) 263-2749. The setup parameters for IRP-BBS are: 8 data bits, no parity, 1 stop bit and full duplex mode. The communication software should be setup to use the fastest speed allowed by your modem.

.07 Due to the large number of communication products available, it is impossible to provide specific information on a particular software package or hardware configuration. Contact your software or hardware supplier for assistance.

.08 IRP-BBS software provides a menu driven environment allowing access to different parts of IRP-BBS. Whenever possible, IRS/MCC personnel will provide assistance in resolving any communication problems with IRP-BBS.

.09 IRP-BBS can be accessed at speeds from 300 to 14,400 bps. The speed is automatically negotiated for connection at the speed of the calling modem. The communication standards supported include Bell 212A, V.22bis, V.32, and V.32bis. Point-to-point error control is supported using the V.42 CCITT standard or MNP 2-4. Data compression is supported using V.42bis CCITT standard or MNP5. Throughput speeds of 28,800 bps can be achieved with MNP5 and 57,600 bps with V.42bis.

.10 Data compression is encouraged when submitting information returns by way of the IRP-BBS. MCC has the ability to decompress files created using several popular software compression programs. Software data compression can be done alone or in conjunction with V.42bis hardware compression. Transmission time can be reduced by as much as 80% when data compression is used, therefore it is highly recommended.

.11 Files submitted to IRP-BBS must have a unique filename. The BBS will build the filename that must be used. The name will consist of your TCC, submission type (T = Test, P = Production, C = Correction, and R = Replacement) and a sequence number. Record the upload date, time, and filename. This information will be needed by MCC in order to identify the file if assistance is required.

.12 If the original submission was filed magnetically and was returned for replacement, the replacement may be filed electronically. Be sure to indicate at the prompt that this is a replacement for information filed magnetically.

SEC. 7. IRP-BBS FIRST LOGON PROCEDURES

.01 The following information will be requested to set up your user profile when logging onto the IRP-BBS for the first time.

(A) # Chars per line on screen (10-132)? (most computers have 80 character screen display)

(B) Enter the letter, that corresponds to your terminal, from the following:

               < A > IBM PC < B > IBM w/ANSI  < C > Atari

(C) Upper/Lower case, line feed needed, O nulls after each < CR >, do you wish to modify this? (Most users answer no)

(D) Do you wish to have a pause after each display page (Y/N)? (Most users answer yes)

(E) How many lines per display page (10-80)? (Most computers have a 24 line screen display)

SEC. 8. IBM 3780 BISYNCHRONOUS COMMUNICATION SPECIFICATIONS

.01 Transmissions using IBM 3780 bisynchronous protocols must be in EBCDIC character code. Modems must be compatible with either Bell 208B for 4800 bps transmissions, or AT&T 2296A for 9600 bps transmissions. Both modems are dial-up type modems using the Public Switched Telephone Network. IBM 3780 data compression is acceptable for any bisynchronous transmission.

.02 IRS/MCC will accept information returns filed electronically over switched telecommunications network circuits. For 4800 bps, the circuit will be (304) 267-0807. For 9600 bps, the circuit will be (304) 267-9572. Both circuits are equipped for bisynchronous transmission, using the IBM 3780 protocol.

.03 The 4800 bps line terminates at a Bell 208B modem. The Bell 208B modem uses phase-shift keying and 8-phase modulation to transmit binary serial data signals over the telephone line in half-duplex mode. The following options have been selected:

-- Transmit Level set to -4 dBm

-- Compromise Equalizer in (4-dB Slope)

-- DSR off in Analog Loop Mode

-- Automatic Answer

-- Transmitter Internally Timed

-- RS-CS Interval of 50 ms

.04 The 9600 bps line terminates at an AT&T Dataphone II 2296A modem. The AT&T 2296A modem is a full-duplex, CCITT V.32 compatible unit which operates at 9600 bps or 4800 bps (fall-back). The following options have been selected:

-- Receiver Responds to Remote Loopback

-- Loss-of-Carrier Disconnect

-- Received-Space Disconnect

-- Send-Space Disconnect

-- Automatic Answer

-- Answer on Ring 1

-- DTR Interlock

-- Retrain Enable

-- Internal Timing

-- CTS Controlled by RTS

-- 0-1 ms RTS to CTS Delay

-- CTS Dependent on Carrier

-- RR Indicates Carrier

-- 9600 Trellis Coding

-- 4800 bps Fallback

-- 4 dB Compromise Equalization

SEC. 9. BISYNCHRONOUS ELECTRONIC FILING RECORD SPECIFICATIONS

.01 For bisynchronous filing there are two additional identifier records which must be used to transmit data. These records are 420 positions in length and are the first ($$REQUEST) and second ($$ADD) records sent in an electronic transmission. The purpose of these records is to provide the password and identity of the transmitter. The $$REQUEST, $$ADD and the data file should be transmitted as one file. In some cases, filers have attempted to send the $$REQUEST and $$ADD as separate files. Doing this will result in a failed transmission.

.02 With the exception of these additional records, the file format for electronic filing is the same as for magnetic media filing. The format of each of these records is as follows:

                        RECORD NAME: $$REQUEST

.04 Upon receiving a data file and transmittal Form 4804, IRS/MCC will release the data for further processing. If the data is found to be unprocessable, the filer will be contacted by either letter or telephone, and notified that the data must be re-transmitted. For re-transmitted files, the filer will be assigned a replacement file name to be used during the retransmission. This file name will be provided by IRS/MCC either by letter or telephone, and is to be placed in positions 45-51 of the $$ADD record when the file is re-transmitted.

                          RECORD NAME: $$ADD

SEC. 1. GENERAL

.01 The specifications contained in this part of the revenue procedure define the required format and contents of the records to be included in a single density diskette file and must be strictly adhered to unless deviations have been specifically granted by IRS.

.02 To be compatible, a single density diskette file must meet the following specifications in total:

(a) 8 inches in diameter.

(b) Recorded in EBCDIC.

(c) Contain 77 tracks of which:

(1) Track 0 is the index track (the operating system reserves track 0 for the directory information and writes the file name and location in the directory; data cannot be written in track 0).

(2) Tracks 1 through 73 are data tracks.

(3) Track 74 is unused.

(4) Tracks 75 and 76 are alternate data tracks.

(d) Each Track must contain 26 sectors.

(e) Each Sector must contain 128 bytes.

(f) Data must be recorded on only one side of the diskette.

(g) IRS can process single sided, single density, soft sectored diskettes as well as double sided, double density, soft sectored diskettes. Part E provides specifications for double density diskettes which have sectors of 256 bytes.

(h) An IBM 5360 compatible diskette would meet the above specifications.

(i) Hard sectored diskettes are not compatible.

(j) A diskette should be clearly marked as to type of data (single sided/single density), and the entire file should consist of all single sided/single density diskettes.

.03 Exchange files are created through the Transfer Output command and Copyfile files are created through the Copy Output command. When possible, use the Transfer Output command rather than the Copy Output command to write data to diskettes. In order to do this, initialize the diskettes using the FORMAT parameter in the INIT procedure.

.04 Form 5064, Media Label, must be affixed to each diskette submitted for processing.

SEC. 2. DISKETTE HEADER LABEL

The following header label format applies to both single and double density diskettes.

The header label on the diskette must be located in track 0, sector 8 and must be formatted as shown in the following layout. If your system automatically creates a header label, this is not necessary. If the file will consist of multiple diskettes, the Multi-Volume indicator (pos. 45) in the diskette header label must contain a "C".

[Pictorial Record Layouts depicting specifications discussed in

.01 The Payer/Transmitter "A" Record identifies the payer and transmitter of the diskette and provides parameters for the succeeding Payee "B" Records. IRS computer programs rely on the absolute relationship between the parameters and data fields in the "A" Record and the data fields in the "B" Records to which they apply.

.02 The number of "A" Records depends on the number of payers and the different types of returns being reported. The payment amounts for one payer for one type of return should be consolidated under one "A" Record if submitted on the same file.

.03 Do not submit separate "A" Records for each payment amount being reported. For example, if you are filing Form 1099-DIV to report Amount Codes 1, 2, and 3, all three amount codes must be reported under one "A" Record, not three separate "A" Records. For "B" Records that do not contain payment amounts for all three amount codes, enter zeros for those which have no amount to be reported.

.04 After the header label on the diskette, the first record in the file must be an "A" Record. When a single density diskette is used, each "A" Record will consist of at least 2 sectors of 128 positions each. If transmitting for someone other than yourself, 4 sectors are required in order to identify both the payer and transmitter.

.05 A transmitter may include "B" Records for more than one payer on a diskette; however, each GROUP of "B" Records must be preceded by an "A" Record and followed by an End of Payer "C" Record.

.06 A single diskette may also contain different types of returns, but the returns MUST NOT be intermingled. A separate "A" Record is required for each payer and each type of return being reported.

.07 An "A" Record may be blocked with "B" Records; however, the initial record on a file must be an "A" Record. IRS will accept an "A" Record after a "C" Record.

.08 All alpha characters entered in the "A" Record should be upper-case.

.09 WHEN REPORTING FORM 1098, MORTGAGE INTEREST STATEMENT, THE "A" RECORD WILL REFLECT THE NAME OF THE RECIPIENT OF THE INTEREST (THE FILER), REFERRED TO AS THE "PAYER" IN THESE INSTRUCTIONS. THE "B" RECORD WILL REFLECT THE INDIVIDUAL PAYING THE INTEREST (BORROWER/PAYER OF RECORD) AND THE AMOUNT PAID.

               RECORD NAME: PAYER/TRANSMITTER "A" RECORD

If reporting IRA contributions for a Desert Shield/Storm participant for other than 1992, enter "DS," the year for which the contribution was made, and the amount of the contribution in the Special Data Entries field of the "B" Record.

For further information concerning Inherited IRAs or Desert Shield/Storm participant reporting, refer to the 1992 "Instructions for Forms 1099, 1098, 5498, and W-2G," and Notice 91-17, 1991-1 C.B. 319.

 Amount                                 For Reporting Payments on Form

[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.]

SEC. 5. PAYEE "B" RECORD -- GENERAL INFORMATION FOR ALL FORMS

.01 This section contains the general information concerning the Payee "B" Record for all information returns filed on single sided/single density soft-sectored diskettes. For a detailed description of the record refer to the following in Part D.

(a) Sec. 6. PAYEE "B" RECORD -- FIELD DESCRIPTIONS FOR SECTORS 1 THROUGH 4 OF FORMS 1098, 1099-DIV, 1099-G, 1099-INT, 1099-MISC, 1099-PATR, 1099-R, 5498 AND SECTORS 1 THROUGH 3 OF FORMS 1099-A, 1099-B, 1099-OID, 1099-S AND W-2G.

(b) Sec. 7. PAYEE "B" RECORD LAYOUTS FOR SECTORS 1 THROUGH 4 OF FORMS 1098, 1099-DIV, 1099-G, 1099-INT, 1099-MISC, 1099-PATR, 1099-R, 5498 AND SECTORS 1 THROUGH 3 OF FORMS 1099-A, 1099-B, 1099-OID, 1099-S AND W-2G.

(c) Sec. 8. PAYEE "B" RECORD -- FIELD DESCRIPTIONS AND RECORD LAYOUT FOR SECTOR 4 OF FORM 1099-A.

(d) Sec. 9. PAYEE "B" RECORD -- FIELD DESCRIPTIONS AND RECORD LAYOUT FOR SECTOR 4 OF FORM 1099-B.

(e) Sec. 10. PAYEE "B" RECORD -- FIELD DESCRIPTIONS AND RECORD LAYOUT FOR SECTOR 4 OF FORM 1099-OID.

(f) Sec. 11. PAYEE "B" RECORD -- FIELD DESCRIPTIONS AND RECORD LAYOUT FOR SECTOR 4 OF FORM 1099-S.

(g) Sec. 12. PAYEE "B" RECORD -- FIELD DESCRIPTIONS AND RECORD LAYOUT FOR SECTOR 4 OF FORM W-2G.

All "B" Records must consist of at least 3 sectors of 128 positions each. If you are not a Combined Federal/State filer or utilizing the Special Data Entries field. Sector 4 can be eliminated for Forms 1098, 1099-DIV, 1099-G, 1099-INT, 1099-MISC, 1099-PATR, 1099-R, and 5498.

The "B" Record will always consist of 4 Sectors for Forms 1099-A, 1099-B, 1099-OID, 1099-S, and W-2G.

In the "A" Record, the Amount Codes that appear in diskette positions 24 through 32 of Sector 1 will be left-justified and blank filled. In the "B" Record, allow for all nine payment amount fields. For those fields not used, enter zeros. For example, if you are reporting on Form 1099-PATR, enter a "7" in diskette position 23 of Sector 1 of the "A" Record, Type of Return field. If you are reporting payments for Amount Codes 2, 4, and 7, then diskette positions 24 through 32 of Sector 1 of the "A" Record will be "247bbbbbb" (b = blanks). In the "B" Record:

- Positions 52 through 61 of Sector 1 for Payment Amount 1 will be zeros.

- Positions 62-71 of Sector 1 will reflect the actual payment amount to be reported for "Nonpatronage distributions."

- Positions 72-81 of Sector 1 for Payment Amount 3 will be zeros.

- Positions 82-91 of Sector 1 will reflect the actual payment amount to be reported for "Federal income tax withheld."

- Positions 92-111 of Sector 1 for Payment Amounts 5 and 6 will be zeros.

- Positions 112-121 of Sector 1 will reflect the actual payment amount to be reported for "Energy investment credit."

- Positions 3-22 of Sector 2 for Payment Amounts 8 and 9 will be zeros.

.02 The record layout for Sectors 1, 2 and 3 is the same for all "B" records. Sector 4, however, will be different for Forms 1099-A, 1099-B, 1099-OID, 1099-S and W-2G. Refer to Part D, Sec. 8, 9, 10, 11 or 12, respectively for the layout of Sector 4 of these records.

.03 The following specifications include a field in the payee records called "Name Control" in which the first four characters of the payee's surname are to be entered by the payers.

.04 If payers are unable to determine the first four characters of the surname, the Name Control Field may be left blank; however, compliance with the following will facilitate IRS computer programs in generating the Name Control.

(a) The surname of the payee whose SSN is shown in the "B" Record should always appear first. If you enter the first name first, you must leave a blank space between the first and last names.

(b) In the case of multiple payees, only the surname of the payee whose TIN (SSN or EIN) is shown in the "B" Record must be present in the First Payee Name Line. Surnames of any other payees in the record may be entered in the Second Payee Name Line.

.05 See Part A, Sec. 15 for further information concerning Taxpayer Identification Numbers (TINs).

.06 A field is also provided in these specifications for Special Data Entries. This field may be used to record information required by state or local governments or for the filer's own personal use. IRS does not use the data provided in the Special Data Entries field; therefore, the IRS program does not check the content or format of the data entered in this field. It is the filer's choice whether or not this field is used. If this field is coded, it will not affect the processing of the "B" Records.

.07 Those filers participating in the Combined Federal/State Filing Program must adhere to specifications in Part A, Sec. 17, in order to participate in this program. FORMS 1098, 1099-A, 1099-B, 1099-S AND W-2G CANNOT BE FILED UNDER THE COMBINED FEDERAL/STATE FILING PROGRAM.

.08 All alpha characters entered in the "B" Record should be upper-case.

.09 Do NOT use decimal points (.) to indicate dollars and cents. Ten dollars must appear as 0000001000 in the payment amount field.

.10 IRS STRONGLY ENCOURAGES FILERS TO REVIEW THEIR DATA FOR ACCURACY BEFORE SUBMISSION TO PREVENT ISSUANCE OF ERRONEOUS NOTICES TO PERSONS FOR WHOM REPORTS ARE FILED. FILERS SHOULD BE ESPECIALLY CAREFUL THAT THE NAMES, TINS, ACCOUNT NUMBERS, TYPES OF INCOME, AND INCOME AMOUNTS ARE CORRECT.

.11 When reporting Form 1098, Mortgage Interest Statement, the "A" Record will reflect the name and TIN of the recipient of the interest (the filer). The "B" Record will reflect the individual paying the interest (Borrower/Payer of Record) and the amount paid. For Forms 1099-S, the "A" Record will reflect the person responsible for reporting the transaction and the "B" Record will reflect the seller/transferor.

SEC. 6. PAYEE "B" RECORD -- FIELD DESCRIPTIONS FOR SECTORS 1 THROUGH 4 OF FORMS 1098, 1099-DIV, 1099-G, 1099-INT, 1099-MISC, 1099-PATR, 1099-R, 5498 AND SECTORS 1 THROUGH 3 OF FORMS 1099-A, 1099-B, 1099-OID, 1099-S AND W-2G.

For Forms 1099-A, 1099-B, 1099-OID, 1099-S, and W-2G, see Part D, Secs. 8, 9, 10, 11 and 12, respectively for the field descriptions and record layouts for Sector 4 of these records.

NOTE: For all fields marked REQUIRED, you must provide the information described under Description and Remarks. For those fields not marked REQUIRED, you must allow for the field but may be instructed to enter blanks or zeros in the indicated position(s) and for the indicated length.

                     RECORD NAME: PAYEE "B" RECORD

NOTE: For detailed explanations of the distribution codes, see the 1992 "Instructions for Forms 1099, 1098, 5498, and W-2G."

            Type of Wager               For Form W-2G, enter the

 9-12       Name Control       4        If determinable, enter the

The following examples may be helpful to you in developing the name control:

                         NAME                            NAME CONTROL

/**/ For Hispanic names, when two last names are shown for an individual, derive the name control from the first last name.

 13         Direct Sales       1        1099-MISC only. Enter a "1" to

 46-47      Percentage of      2        FORM 1099-R only. Use this

 49         Taxable Amount     1        FORM 1099-R ONLY. Enter a "1"

 23-42      Blank              20       Enter blanks.

For Form 5498 Inherited IRAs, enter the beneficiary's name followed by the word "beneficiary." For example, "Brian Young as beneficiary of Joan Smith" or something similar that signifies that the IRA was once owned by Joan Smith. You may abbreviate the word "beneficiary" as, for example, "benef." Refer to the 1992 "Instructions for Forms 1099, 1098, 5498, and W-2G." The beneficiary's TIN should be reported in Sector 1, position 16-24 of the "B" Record.

 84-123     Second Payee       40       If there are multiple payees,

 43-71      Payee City         29       REQUIRED. Enter the city,

THE FOLLOWING FIELD DESCRIPTIONS DESCRIBE THE RECORD POSITIONS FOR SECTOR 4 OF THE "B" RECORD FOR FORMS 1098, 1099-DIV, 1099-G, 1099-INT, 1099-MISC, 1099-PATR, 1099-R, AND 5498. IF YOU ARE NOT A COMBINED FEDERAL/STATE FILER, OR IF YOU ARE NOT UTILIZING THE SPECIAL DATA ENTRIES FIELD, SECTOR 4 CAN BE ELIMINATED FOR ALL "B" RECORDS EXCEPT FORMS 1099-A, 1099-B, 1099-OID, 1099-S, AND W-2G. SEE PART D, SECS. 8, 9, 10, 11 and 12 FOR THE FIELD DESCRIPTIONS FOR SECTOR 4 OF FORMS 1099-A, 1099-B, 1099-OID, 1099-S AND W-2G.

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[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.]

SEC. 8. PAYEE "B" RECORD -- FIELD DESCRIPTIONS AND RECORD LAYOUT FOR SECTOR 4 OF FORM 1099-A

.01 This section contains information pertaining to Sector 4 of Form 1099-A.

.02 See Part D, Sec. 6 for field descriptions of Sectors 1, 2 and 3 of the "B" Record for Form 1099-A.

.03 FORM 1099-A CANNOT BE FILED UNDER THE COMBINED FEDERAL/STATE FILING PROGRAM.

                RECORD NAME: PAYEE "B" RECORD-Continued