IRS UPDATES PROCEDURES FOR FILING ANNUAL INFORMATION RETURNS FOR WINDFALL PROFIT TAX ON MAGNETIC TAPE

Rev. Proc. 84-81

PART A--GENERAL

SECTION 1. PURPOSE AND NATURE OF CHANGES

The purpose of this revenue procedure is to update Rev. Proc. 84-31, 1984-1 C.B. 487, concerning the requirements and conditions for filing annual information returns for windfall profit tax on magnetic tape instead of on paper returns. Specifications for filing Form 6248, Annual Information Return of Windfall Profit Tax, are contained in this procedure. For tax year 1984 the following changes have been included in this revenue procedure:

.01 In Part B, Section 4, Table 3, the Zip Code range for Maryland and Virginia has been changed to no longer accept "200nn" as valid, and the Zip Code range for Puerto Rico has been changed from "007nn-009nn" to "006nn-009nn".

.02 In Part B, Section 4, the "Corrected Indicator" in position 127 of the Filer/Transmitter "G" record has been changed to "Type of Filing Indicator". The meaning has been expanded as follows:

               Code

.04 In Part B, Section 6, a new paragraph .02 has been inserted which reads: "Each field must contain data (dollars, barrels, etc.) covering only the interest of the producer/recipient for whom the Form 6248 is prepared." The old paragraphs .02, .03, and .04 have been renumbered.

.05 In part B, Section 6, the "NOTE" preceding the Producer's 8 Name Lines in the Producer/Recipient "H" Record has been expanded to include the range of valid characters.

.06 In Part B, Section 6, for the description of Exempt Tier Two Oil in positions 365 to 374 of the Producer/Recipient "H" record, the clause has been added "... (not to include Exempt Stripper Well Oil)".

.07 In Part B, Section 6, for Type of Exempt Oil in positions 415 to 419 of the Producer/Recipient "H" record, reference to "RESERVED" and the coded entry of "5" has been deleted. This was intended as a reserve code for future use, but was being misinterpreted as "Reserved Oil" and used inappropriately.

.08 In Part B, Section 6, all Barrel and Liability fields in the Producer/Recipient "H" Record have their data contents definition expanded to include the word "taxable" and "..., right justified and zero filled," to further clarify that these fields should be totally numeric and not blank filled when data is present.

.09 In Part B, Section 6, for the Number of Barrels Newly Discovered field in positions 965-976 of the Producer/Recipient "H" record and for the Tax Liability Newly Discovered Oil field in positions 1013-1024 of the Producer/Recipient "H" record, the rate in the title has been changed from 25% to 22 1/2%.

Note that this new rate will remain in effect through and including tax year 1987. In tax year 1988 the tax rate is scheduled to be changed to 20%. In Tax year 1989 and beyond, the tax rate is to be 15%.

SEC. 2 APPLICATION FOR MAGNETIC MEDIA REPORTING

.01 For the purpose of this revenue procedure only, the first purchasers, filers, and payers are equivalent to each other, and are considered to be the person making the payments. The producer, recipient, or payee is the receiver of the payments. The transmitter is the organization preparing the tape file. Payers or transmitters who decide to file information returns on magnetic tape must complete Form 4419, Application for Magnetic Media Reporting of Information Returns. Instructions for completing the application appear on the reverse side of the form.

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

.03 The Service will assist new filers with their initial magnetic tape submission by reviewing test tapes in advance of the filing season. Approved payers or transmitters who wish to submit test tapes should contact the magnetic media coordinator at the service center where the application was filed. A list of the service center addresses is provided in Section 10.

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

SEC. 3. FILING OF TAPE REPORT

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

.02 Payers may submit a portion of their information returns on magnetic tape and the remainder on paper forms provided there is no duplicate filing. The magnetic tape records and paper forms must be filed at the same location, but in separate shipments. A Form 6248-T, Summary and Transmittal of Windfall Profit Tax, must accompany paper submission and a Form 4804, Transmittal of Information Returns Reported on Magnetic Media, must accompany magnetic tape submissions.

.03 The affidavit which appears on Forms 6248-T and Form 4804 must be signed by the payer. However, one of the following, the transmitter, service bureau, or disbursing agent may sign the affidavit on behalf of the payer if three conditions are met. The conditions are that the agent must:

1. have the authority to sign the affidavit under an agency agreement (either oral, written, or implied) that is valid under state law;

2. have the responsibility (either oral, written or implied) conferred on it by the payer to request the taxpayer identifying numbers of payees reported on magnetic tape or paper returns; and

3. sign the affidavit and add the caption "From: (name of payer)".

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

.05 The preceding requirements also apply to paper filers submitting Form 6248-T. The failure of duly authorized "agents" of paper filers to comply with filing requirements for Form 6248-T and attachments does not relieve the payers of any penalties that may arise as a result of such failure to comply.

.06 If a portion of the returns is submitted on paper documents, include a statement on the Form 6248-T that the remaining returns are being filed on magnetic tapes. Please note that Form 6248-T instructions normally apply to filing of information returns on paper; however, filers of magnetic tape must review the Form 6248-T instructions and file Form 6248-T if appropriate.

SEC. 4 FILING DATES

.01 Magnetic tape reporting to the Service for Forms 6248 is on a calendar year basis.

.02 The dates prescribed for filing paper returns with the Internal Revenue Service will also apply to magnetic tape filing. Tapes must be submitted to the service center by April 30. Copies required to be furnished to the producer or other recipients must be furnished by March 31.

SEC. 5 EXTENSIONS OF TIME TO FILE

.01 If a payer or transmitter is unable to submit the tape file by the date prescribed in Section 4.02 above, a letter requesting an extension must be filed before April 30. The letter should be sent to the attention of the magnetic media coordinator at the service center which will receive the tape file (see Part A, Section 10, below). The request should include the estimated number of returns which will be filed late, the reason for the delay, and the date by which the returns will be filed.

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

SEC. 6. PROCESSING OF TAPE RETURNS

01 The Service will process tax information from the tapes. Tapes which are timely received by the Service will be returned to the filer within six months of receipt.

02 All tapes submitted must conform totally to this revenue procedure. If tapes are unprocessable, they will be returned to the filer for correction. Corrected tapes must be filed with the Service as soon as possible. Corrected files will be returned by the Service within six months of receipt.

SEC. 7. CORRECTED RETURNS, SUBSTITUTE FORMS AND COMPUTER-GENERATED FORMS

01 If returns must be corrected or amended, approved magnetic media filers should make every attempt to provide such corrections on tape. The filer must contact the magnetic media coordinator for format and shipping instructions. A corrected Form 4804 must accompany the shipment and be marked "Magnetic Media Correction" on the top margin of the form. Corrected or amended Form 6248 data must be filed in accordance with Revenue Procedure 83-86.

02 If corrections are not submitted on tape, payers must submit them on official Forms 6248 (Copy A). Approved substitutes or computer-generated forms that are exact facsimiles of the official form (except for minor page size or print style deviations) may be submitted without obtaining prior Service approval before using the form. In all other cases, Service approval must be obtained before the substitute or computer-generated form can be used. Revenue procedures containing specifications for paper returns are available from most Service offices.

03 Requests for approval of computer-generated or substitute form should be sent to the following address with a copy of the proposed form:

     Internal Revenue Service

SEC. 8. TAXPAYER IDENTIFICATION NUMBERS

01 Under Section 6109 of the Internal Revenue Code, recipients of income are required to furnish Taxpayer Identification Numbers (TINs) to the payer whether or not the payee is required to file a tax return.

02 Payers are expected to keep to a minimum those statements submitted without TINs. It is particularly important that correct Social Security and Employer Identification Numbers for payees be provided on magnetic media or paper forms submitted to the IRS.

03 For each omission of a required TIN, Section 6676 of the Internal Revenue Code imposes a $50 penalty, unless the payer or payee responsible for furnishing the number establishes reasonable cause for not having done so.

04 The TIN to be furnished depends primarily upon the manner in which the account is maintained or set up on the record of the payer. The number to be provided must be that of the owner of record. If the account is recorded in more than one name, furnish the TIN and name of one of the holders of the record. For those engaged in a trade or business (including employee trusts, retirement systems, etc.) the TIN is the Employer Identification Number (EIN), without hyphens. For individuals, it is a Social Security Number (SSN), without hyphens.

05 Sole proprietors who are payers should show their Employer Identification Number and/or their Social Security Number in the Filer/Transmitter "G" Record. The tables provided in .06 below should help to determine the number to be furnished to the Service.

06 Any person required to file an information return that is based, in whole or in part, upon information received from another person MUST include the Taxpayer Identifying Number of that person on the return. The tables below will help determine the number to be furnished to the Service.

       TABLE 1. GUIDELINES FOR SOCIAL SECURITY NUMBERS

01 Magnetic tape reporting of the information return listed in Section 1 above applies only to the original (Copy A).

02 Payers are permitted considerable flexibility in designing the copy of the information return to be furnished to the payee. The payer may combine the information return data with other reports or financial or commercial notices, or expand them to include other information. This is permissable so long as all required information present on the official form is included nad the payees' copies are conducive to proper reporting of income on tax returns. Payers must include the message "This information is being furnished on Form 6248 to the Internal Revenue Service" on the recipients' copies.

03 If a portion of the returns are reported on magnetic tape and the remainder are reported on paper forms, those returns not submitted on magnetic tape must be filed on official Forms 6248.

SEC. 10. ADDITIONAL INFORMATION

Requests for additional copies of this revenue procedure or for additional information on tape reporting should be addressed to the attention of the magnetic media coordinator of one of the following:

     (a) Internal Revenue Service

SECTION 1. GENERAL

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

02 In most instances, the Service will be able to process any compatible tape files. Compatible tape files must meet any one set of the following:

(a) 7 channel BCD (binary coded decimal) with

(1) Either Even or Odd Parity and

(2) A density of 556 or 800 BPI

(b) 9 channel EBCDIC (Extended Binary & Coded Decimal Interchange Code) with

(1) Odd Parity and

(2) A density of 800, 1600, or 6250 BPI

(c) 9 channel ASCII (American Standard Coded Information Interchange) with

(1) Odd Parity and

(2) A density of 800, 1600, or 6250 BPI

03 All compatible tape files must have the following characteristics:

(a) Type of tape--1/2 inch Mylar base, oxide coated: and

(b) Interrecord Gap--3/4 inch.

04 Internal Revenue Service programs are capable of accommodating some minor deviations. Filers who can substantially conform to these specifications, but do require some minor deviations, must contact the magnetic media coordinator at the service center where the file will be submitted. Under no circumstances may tapes deviating from the specifications in this revenue procedure be submitted without prior written approval from the Service.

SEC. 2. RECORD LENGTH

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

(a) A block must not exceed 14,500 tape positions.

(b) If the use of blocked records would result in a short block, all remaining positions of the block must be filed with 9's. Do not pad a block with blanks.

(c) All records except the Header and Trailer Label, may be blocked.

02 All records, other than Header and Trailer records, must be 1450 characters long.

SEC. 3. OPTIONS FOR FILING

01 For filing convenience, this procedure contains two options for using header Labels and Filer/Transmitter "G" Records. For the purposes of this procedure the following conventions must be used:

Header Label:

1. Payers may use standard headers, however they must begin with 1HDR, HDR1, HDR2, VOL1 or VOL2.

2. Consist of either 80 or 120 positions each.

Trailer Label:

1. Standard trailer labels may be used, however they must begin with 1EOR, 1EOF, EOR1, or EOF1.

2. Consist of either 80 or 120 positions each.

Record Mark:

1. Special character used to separate blocked records on tape.

2. Can be written only at the end of a record or block.

3. For odd parity tapes, use BCD bit configuration 011010 ("A82").

Tape Mark:

1. Used to signify the physical end of the recording on tape.

2. Must be even parity, BCD configuration 001111 ("8421").

3. May follow the leader label(s) and precede and/or follow the trailer label(s).

Option 1: When using this option, a correct Filer/Transmitter "G" Record, described in Sec. 4 below, is required as the first record on each reel. Filers using this option may have Header Labels preceding the "G" Record, however, headers are not required. The reel sequence number must appear in positions 3-5 of each "G" Record and must be incremented by 1 on each tape reel of the file after the first reel.

Option 2: Requires a header Label as the first record on each reel. The Header Label must contain the reel sequence number and it must be incremented by 1 on each reel. The "G" Record will contain the location of the reel sequence number in the Header Label. If your system generates a four digit reel sequence number, ignore the first digit when determining the location of the reel sequence in the "G" Record.

Example 1: If your header label real sequence is four digits (e.g. 0001) and is in positions 28-31, enter 29 as the location in positions 3 and 4 of the "G" Record and also enter an "X" in position 5 of the "G" Record.

Example 2: If your Header Label reel sequence number is 3 digits (e.g., 001) and is in position 10-12, enter 10 as the location in positions 3 and 4 of the "G" Record. This option requires a Trailer Label at the end of each reel. Also, ignore the "J" Record instructions in this part if you use option 2.

SEC. 4. STANDARD STATE ABBREVIATIONS AND ZIP CODES

The following table gives the list of valid state abbreviations and zip codes to be used in the "G" and (in the case of zip codes) "H" records. The valid abbreviations for the U.S. territories American Samoa, Guam, Puerto Rico and the Virgin Islands are also included. If the producer lives in a foreign country, then a period followed by a blank (".b") should be entered in the two position state field and blanks should be entered for Zip Code. The table lists the only valid data entries for state information.

         TABLE 3. STATE ABBREVIATIONS AND ZIP CODES

This record identifies the filer and the transmitter of the tape file and provides parameters for the processing of the succeeding records. The IRS computer programs rely on the parameters supplied in this record in the processing of the tape file.

The number of "G" Records, appearing on a tape reel will depend on the number of Filers for whom data is present. A transmitter may include Producer "H" Records for more than one Filer on a tape reel, however, each series of separate Filer/Producer "H" Record(s) must be preceded by a "G" Record. All "G" Records must be 1,450 characters in length.

          RECORD NAME: FILER/TRANSMITTER "G" RECORD

01 This record is used to provide the information contained in Parts I, II, III, IV, and V of Form 6248. All "H" Records must be of the same fixed length. Records may be blocked or unblocked. A block may not exceed 14,500 positions. Do not pad unused blocks with blank records, fill with 9's. Blank fill any field for which a data entry is not present. Zero fill any band or liability field for which data is present.

02 Each field must contain data (dollars, barrels, etc.) covering only the interest of the producer/recipient for whom the Form 6248 is prepared.

03 All amount fields in this section should be expressed in whole dollars without decimals. All quantities of oil should be expressed in whole barrels without decimals or fractions.

04 Amount fields and barrel fields may be signed or unsigned. Unsigned fields will always be considered positive. If signed decimal data is used, the rightmost (units) position of the field must be used to carry the sign of the field (negative or positive) as an overpunch character. This is the ONLY format permissable for the entry of signed decimal data. If your computer system cannot conform to this standard, or if you have any questions about entering data in this format, please contact the magnetic media coordinator at the Internal Revenue service center in which you intend to file (See Part A, Section 10).

05 All "H" Records must be 1450 characters long.

         RECORD NAME: PRODUCER/RECIPIENT "H" RECORD

01 The end of Filer "I" Record is a summary record for a given Filer. This record must be 1450 characters long.

02 The "I" Record will contain the number of documents transmitted for each individual Filer. The "I" Record must be written after the last Producer "H" Record for each Filer. For each "G" Record on the file there must be a corresponding "I" Record.

03 The "I" Record cannot be followed by a Tape Mark.

            RECORD NAME: END OF FILER "I" RECORD

01 The End of Reel "J" Record will be present for option 1 only. It must be 1450 characters long.

02 Write this record when the end of the normal writing area of the reel has been reached, but all the records of the file have not been written. This record indicates that there are additional reels in the file.

03 Each "J" Record must contain a count of Forms 6248 reported on all "H" Records not summarized in the preceding "I" Record on the Reel.

04 If you do not wish to use a "J" Record, or your system is unable to generate it, you may delete it; however, the last "H" Record on the tape 'MUST' be followed by a Tape Mark.

             RECORD NAME: END OF REEL "J" RECORD

O1. The "K" Record is a summary of the number of Filers and the number of tapes in the entire file.

02. This record should be written after the last "I" Record in the file.

03. Only a Tape Mark or a Tape Mark and Trailer Labels may follow the "K" Record.

04. The "K" Record must be 1450 characters long.

         RECORD NAME: END OF TRANSMISSION "K" RECORD

(Reel Sequence Number is in the "G" Record)

The following chart shows, by type of file, the record types to be used in the first two and the last three records to be written on a tape.

 ___________________________________________________________

(Reel Sequence Number is in the Header Label)

Where the Header Label is the first record, the following chart shows, by type of file, the record types to be used in the 2nd and 3rd records, where the header label is the first record, and the last three records written on a tape reel prior to the Trailer label.

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Rev. Proc. 84-31 is superseded.

                                                   OMB No. 1545-0224