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MAGNETIC TAPE REPORTING IS EXPLAINED FOR FORM 8027, EMPLOYER'S TIP REPORTING

OCT. 22, 1984

Rev. Proc. 84-69; 1984-2 C.B. 709

DATED OCT. 22, 1984

DOCUMENT ATTRIBUTES

Institutional Authors
Internal Revenue Service
Code Sections
Section 6053
Language
English
Tax Analysts Electronic Citation
not available

Citations: Rev. Proc. 84-69; 1984-2 C.B. 709

Superseded by Rev. Proc. 86-45

Rev. Proc. 84-69

CONTENTS

PART A. GENERAL

SECTION 1. PURPOSE

SECTION 2. NATURE OF CHANGES

SECTION 3. APPLICATION FOR MAGNETIC MEDIA REPORTING

SECTION 4. FILING OF MAGNETIC MEDIA REPORTS

SECTION 5. FILING DATES

SECTION 6. PROCESSING OF MAGNETIC MEDIA RETURNS

SECTION 7. EFFECT ON PAPER RETURNS

SECTION 8. MAGNETIC MEDIA COORDINATOR CONTACT

SECTION 9. DEFINITIONS

SECTION 10. EFFECT ON OTHER DOCUMENTS

PART B. MAGNETIC TAPE SPECIFICATIONS

SECTION 1. GENERAL

SECTION 2. RECORD LENGTH

SECTION 3. OPTIONS FOR FILING

PART A. GENERAL

SECTION 1. PURPOSE

01 The purpose of this Revenue Procedure is to provide the requirements and conditions for submitting Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, on magnetic tape instead of filing paper returns. Form 8027 information may be filed on magnetic tape and sent annually to the Service. The due date for submission of Form 8027 on magnetic tape to the Internal Revenue Service is the last day of February.

02 This procedure supersedes the following revenue procedure: Rev. Proc. 84-6, 1984-5 I.R.B. 12, Publication 1239 (2-84), Requirements and Conditions for Submitting Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, on Magnetic Tape.

SEC. 2. NATURE OF CHANGES

01 The following changes have been made to Part B, Section 2:

(a) Record length is 372 tape positions.

(b) Block length is 10,044 tape positions.

02 The following changes have been made to Part B, Section 3:

(a) Header labels UHL1 and bLAB have been added as standard labels Service programs can process.

(b) Trailer labels EOV1 and EOV2 have been added as standard labels Service programs can process.

03 The following changes have been made to the record layout of the 8027 Magnetic Tape Record:

(a) The 15 position field Establishment Identification Number has been dropped.

(b) The 1 position field Establishment Type has been added.

(d) The fields Establishment City and Employer City no longer allow the use of hypehns as valid characters.

(e) Due to the fact that money amounts are no longer reported separately for the first quarter and last 3 quarters of the year, the following fields have been consolidated for annual reporting:

(1) Charged Receipts

(2) Charged Tips

(3) Service Charges Less Than 10 Percent

(4) Indirect Tips

(5) Direct Tips

(6) Total Tips

(7) Gross Receipts

(f) The special character fields "BLANK", "HYPHEN", "SLASH", and "AMPERSAND" have been dropped.

(g) The 1 position field Amended 8027 Indicator has been added (see Part A. Sec. 4.08).

SEC. 3. APPLICATION FOR MAGNETIC MEDIA REPORTING

01 For the purposes of this Revenue Procedure, the employer is the organization supplying the information and the transmitter is the organization preparing the magnetic media file. The employer and transmitter may be the same organization. Employers or their transmitters are required to complete Form 4419, Application for Magnetic Media Reporting of Information Returns. Requests for copies of this form or for additional information on magnetic reporting should be addressed to the attention of the Magnetic Media Coordinator of the Service Center listed in PART A, SEC. 8 of this Revenue Procedure.

02 The Service will act on an application and notify the applicant of authorization to file, in writing, within 30 days of receipt of the application. Magnetic media returns may not be filed with the Service until the application has been approved.

03 The Service will assist new filers with their initial magnetic media submission by encouraging the submission of test files for review in advance of the filing season. Approved employers or transmitters who wish to submit a test file should contact the Magnetic Media Coordinator of the Service Center listed in PART A, SEC. 8 of this Revenue Procedure.

04 If there are hardware or software changes that would affect the characteristics of the magnetic media submission, the employer (or its transmitter) is required to submit a new Form 4419.

05 Only employers or transmitters using equipment compatible with the Service's equipment will have their applications approved. Compatible tape characteristics are shown in PART B, SEC. 1.

SEC. 4. FILING OF MAGNETIC MEDIA REPORTS

01 Packaging, shipping, and mailing instructions will be provided by the Service within 45 days of the granting of approval. A magnetic tape reporting package, which includes all necessary transmittals, labels, and shipping instructions will be mailed out between October and December of each year to all approved filers.

02 With the Service's concurrence, employers can submit a portion of their returns on magnetic media and the remainder on paper Forms 8027, provided there is NO DUPLICATE FILING. The magnetic media records and paper forms must be filed at the INTERNAL REVENUE SERVICE CENTER listed in PART A, SEC. 8 of this Revenue Procedure. A Form 8027-T, Transmittal of Employer's Annual Report of Allocated Tips, must accompany paper submissions and a Form 4804, Transmittal of Information Returns Reported on Magnetic Media, must accompany magnetic media submissions.

03 The affidavit which appears on Forms 8027-T and 4804 should be signed by the employer. A transmitter, service bureau, or disbursing agent may, however, sign the affidavit on behalf of the employer if all of these conditions are met:

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

(b) It signs the affidavit and adds: the caption "For: (name of employer)".

04 Although a duly authorized agent signs the affidavit, the employer is held responsible for the accuracy of the Form 8027 and will be liable for penalties for failure to comply with filing requirements.

05 If a portion of the returns are submitted on paper documents, include a statement on the Form 8027-T that the remaining returns are being filed on magnetic media. Please note that Form 8027-T normally applied to the filing of information returns on paper; however, filers of magnetic media must review the Form 8027-T and file Form 8027-T if appropriate.

06 If an allocation of tips is based on a good faith agreement, a copy of the agreement must accompany the submission.

07 If an allocation rate of less than 8% has been granted by the District Director, a copy of the determination letter must accompany the submission. Employers with more than one establishment can receive approval from one district in each Internal Revenue Service region where establishments are located (see section 31.6053-3(h)(4) of the Employment Tax Regulations).

08 If an amended return is being filed, it must be a complete return replacing the original return.

SEC. 5. FILING DATES

01 Magnetic tape reporting to the Service for Form 8027 must be on a calendar year basis. The first due date of either paper or tape Forms 8027 is the last day of February.

SEC. 6. PROCESSING OF MAGNETIC MEDIA RETURNS

01 The Service will copy the information from the original tapes and return the original tapes to the employer. Normally tapes will be returned within three months after the annual due date for submission to the Service, or within three months after actual receipt of acceptable tapes, whichever is later.

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

SEC. 7. EFFECT ON PAPER RETURNS

01 If a portion of the returns is reported on magnetic media and the remainder is reported on paper forms, those returns not submitted on magnetic media must be filed on Form 8027.

SEC. 8. MAGNETIC MEDIA COORDINATOR CONTACT

Requests for additional copies of this revenue procedure or for additional information on magnetic media reporting of Forms 8027 should be addressed to the attention of the Magnetic Media Coordinator of:

Internal Revenue Service Andover Service Center Post Office Box 311 Andover, MA 01810

SEC. 9. DEFINITIONS

Element Description

___________________________________________________________

Employer The organization supplying the

information.

Establishment A food or beverage operation where tipping

of food or beverage employees is

customary.

File For the purpose of this procedure, a file

consists of all magnetic media records

submitted by an Employer or Transmitter.

Transmitter Person or organization preparing magnetic

media file(s). May be Employer or agent of

Employer.

SEC. 10. EFFECT ON OTHER DOCUMENTS

01 Rev. Proc. 84-6, 1984-5 I.R.B. 12, superseded.

Part B. MAGNETIC TAPE SPECIFICATIONS

SECTION 1. GENERAL

01 The magnetic tape specifications contained in this part of the procedure define 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 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.

03 All compatible tape files must have the following characteristics:

(a) 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:

(1) Tape thickness: 1.0 or 1.5 mils

(2) Reel diameter: 10.5 inch (26.67 cm), 8.5 inch (21.59 cm), or 7 inch (17.78 cm)

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

SEC. 2. RECORD LENGTH

01 The tape record defined in this procedure may be blocked or unblocked, subject to the following:

(a) A FIXED RECORD OF 372 POSITIONS IS REQUIRED.

(b) All records except the Header and Trailer Labels may be blocked.

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

SEC. 3. OPTIONS FOR FILING

For the purposes of this procedure the following conventions must be used:

Header Label:

1. Employers may use standards headers provided they begin with 1HDR, HDR1, VOL1, VOL2, UHL1, or bLAB.

2. Consist of a maximum of 80 positions.

3. Header and Trailer Labels are optional unless more than one reel is being submitted. If more than one reel is being submitted Header and Trailer Labels are REQUIRED.

Trailer Label:

1. Standard trailer labels may be used provided that they begin with IEOR, 1EOF, EOR1, EOF1, EOV1, or EOV2.

2. Consist of a maximum of 80 positions.

3. Header and Trailer Labels are optional unless more than one reel is being submitted. If more than one reel is being submitted. Header and Trailer Labels are REQUIRED.

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

3. May follow the header label and precede and/or follow the trailer label.

RECORD NAME: 8027 MAGNETIC TAPE RECORD

___________________________________________________________

Tape

Position Field Title Length Description and Remarks

___________________________________________________________

1 Establishment 1 REQUIRED. This digit

Type identifies the kind of

establishment. Enter the

number which describes the

type of establishment, as

shown below:

1 for an establishment that

serves evening meals only

(with or without alcoholic

beverages).

2 for an establishment that

serves evening meals and

other meals (with or without

alcoholic beverages).

3 for an establishment that

serves only meals other than

evening meals (with or

without alcoholic beverages).

4 for an establishment that

serves food, if at all, only

as an incidental part of the

business of serving alcoholic

beverages.

2-6 Establishment 5 REQUIRED. These five digits

Serial Number are for identilfying

individual establishments of

an employer reporting under

the same EIN. The employer

numbers the various

establishments uniquely until

each establishment the

employer is required to file

a return for has a number.

NUMERICS ONLY.

7-46 Establishment 40 REQUIRED. Enter the name of

Name the establishment. Left

justify and fill unused

positions with blanks.

ALLOWABLE CHARACTERS ARE

ALPHAS, NUMERICS, BLANKS,

HYPHENS, AMPERSANDS, AND

SLASHES.

47-86 Establishment 40 REQUIRED. Enter the street

Street Address address of the establishment.

Left justify and blank fill.

ALLOWABLE CHARACTERS ARE

ALPHAS, NUMERICS, SLASHES,

HYPHENS, AMPERSANDS, AND

BLANKS.

87-111 Establishment 25 REQUIRED. Enter the city of

City the establishment. Left

justify and blank fill.

ALLOWABLE CHARACTERS ARE

ALPHAS AND BLANKS.

112-113 Establishment 2 REQUIRED. Enter state code of

State the establishment; must be

one of the following:

State Code

Alabama AL

Alaska AK

Arizona AZ

Arkansas AR

California CA

Colorado CO

Connecticut CT

Delaware DE

District of DC

Columbia

Florida FL

Georgia GA

Hawaii HI

Idaho ID

Illinois IL

Indiana IN

Iowa IA

Kansas KS

Kentucky KY

Louisiana LA

Maine ME

Maryland MD

Massachusetts MA

Michigan MI

Minnesota MN

Mississippi MS

Missouri MO

Montana MT

Nebraska NE

Nevada NV

New Hampshire NH

New Jersey NJ

New Mexico NM

New York NY

North Carolina NC

North Dakota ND

Ohio OH

Oklahoma OK

Oregon OR

Pennsylvania PA

Rhode Island RI

South Carolina SC

South Dakota SD

Tennessee TN

Texas TX

Utah UT

Vermont VT

Virginia VA

Washington WA

West Virginia WV

Wisconsin WI

Wyoming WY

114-122 Establishment 9 REQUIRED. Enter the ZIP code

ZIP Code of the establishment. If

using a 5 digit ZIP code,

enter the 5 digits followed

by 4 blanks. If using a 9

digit ZIP code, enter the

number. ALLOWABLE CHARACTERS

ARE NINE NUMERICS or FIVE

NUMERICS AND FOUR BLANKS.

123-131 Employer 9 REQUIRED. Enter the 9-digit

Identification number assigned to the

Number employer by IRS. DO NOT ENTER

HYPHENS, ALPHA CHARACTERS,

ALL 9's, or ALL ZEROES.

132-171 Employer Name 40 REQUIRED. Enter the name of

the employer as it appears on

your tax forms (e.g., Form

941). Any extraneous

information must be deleted.

Left justify and blank fill.

ALLOWABLE CHARACTERS ARE

ALPHAS, BLANKS, NUMERICS,

AMPERSANDS, HYPHENS, AND

SLASHES.

172-211 Employer 40 REQUIRED. Enter street and

Street Address address of employer. Left

justify and blank fill.

ALLOWABLE CHARACTERS ARE

ALPHAS, NUMERICS, HYPHENS,

AMPERSANDS, SLASHES AND

BLANKS.

212-236 Employer City 25 REQUIRED. Enter the city of

the employer. Left justify

and blank fill. ALLOWABLE

CHARACTERS ARE ALPHAS, AND

BLANKS.

237-238 Employer State 2 REQUIRED. Enter state code of

employer. Must be one of the

abbreviations shown above in

the state abbreviation table

for Establishment State (Tape

Positions 112-113).

239-247 Employer ZIP 9 REQUIRED. Enter ZIP code of

Code employer. If using a 5 digit

ZIP code, enter the 5 digits

followed by 4 blanks. If

using a 9 digit ZIP code,

enter the number. ALLOWABLE

CHARACTERS ARE NINE NUMERICS

or FIVE NUMERICS AND FOUR

BLANKS.

248-259 Charged Tips 12 REQUIRED. Enter the total

amount of tips that are shown

on charge receipts for the

calendar year. Field is in

dollars and cents. Right

justify and zero fill.

NUMERICS ONLY. DO NOT ENTER

DECIMAL POINTS, DOLLAR SIGNS,

OR COMMAS.

260-271 Charged Receipts 12 REQUIRED. Enter the total

sales for the calendar year

other than carryout sales or

sales with an added service

charge of 10 percent of more,

that are on charge receipts

and a charged tip

shown. This includes credit

card charges, other credit

arrangements, and charges to

a hotel room unless the

employer's normal accounting

practice consistently

excludes charges to a hotel

room. Do not include any

state or local taxes in the

amount reported. Right

justify and zero fill. Field

is in dollars and cents. If

no entry zero fill. NUMERICS

ONLY. DO NOT INCLUDE DOLLAR

SIGNS, DECIMAL POINTS, OR

COMMAS.

272-283 Service Charges 12 REQUIRED. Enter the total

Less than 10 amount of service charges

Percent less than 10 percent that

have been added to customer's

bills and have been

distributed to your employees

for the calendar year. In

general, service charges

added to the bill are not

tips since the customer does

not have a choice. These

service charges are treated

as wages and are included on

Form W-2. For a more detailed

explanation, see Rev. Rul.

69-28, 1969-1 C.B. 270. Right

justify and zero fill. Field

is in dollars and cents. If

no entry zero fill. NUMERICS

ONLY. DO NOT ENTER DOLLAR

SIGNS, DECIMAL POINTS, OR

COMMAS.

284-295 Indirect Tips 12 REQUIRED. Enter the total

amount of tips reported by

indirectly tipped employees

(e.g., busboys, service

bartenders, cooks) for the

calendar year. Do not include

tips received by employees in

December of the prior ;year

but not reported until

January. Include tips

received by employees in

December but not reported

until January of the

subsequent year. Right

justify and zero fill. Field

is in dollars and cents. If

no entry zero fill. NUMERICS

ONLY. DO NOT ENTER DOLLAR

SIGNS, DECIMAL POINTS, OR

COMMAS.

296-307 Direct Tips 12 REQUIRED. Enter the total

Reported amount of tips reported by

directly tipped employees

(e.g., waiters, waitresses,

bartenders) for the calendar

year. Do not include tips

received by employees in

December of the prior year

but not reported until

January. Include tips

received by employees in

December but not reported

until January of the

subsequent year. Right

justify and zero fill. Field

is in dollars and cents. If

no entry zero fill. NUMERICS

ONLY. DO NOT ENTER DOLLAR

SIGNS, DECIMAL POINTS, OR

COMMAS.

308-319 Total Tips 12 REQUIRED. Enter the total

Reported amount of tips reported by

all employees (both

indirectly tipped and

directly tipped) for the

calendar year. Do not include

tips received in December of

the prior year but not

reported until January.

Include tips received in

December but not reported

until January of the

subsequent year. Right

justify and zero fill. Field

is in dollars and cents. If

no entry zero fill. NUMERICS

ONLY. DO NOT ENTER DOLLARS

SIGNS, DECIMAL POINTS, OR

COMMAS.

320-331 Gross Receipts 12 REQUIRED. Enter the total

gross receipts from the

provision of food and/or

beverages for this

establishment for the

calendar year. Do not include

receipts for carryout sales

or sales with an added

service charge of 10 percent

or more. Do not include

receipts for carryout sales

or sales with an added

service charge of 10 percent

or more. Do not include in

gross receipts charged tips

shown on charged sales (tape

positions 248-259) unless you

have reduced the cash sales

amount because you have paid

cash to tipped employees for

tips they earned that were

charged. Do not include state

or local taxes in gross

receipts. If you do not

charge separately for food or

beverages along with other

services (such as a package

deal for food and lodging),

make a good faith estimate of

the gross receipts

attributable to the food or

beverages. This estimate must

reflect the cost of providing

the food or beverages plus a

reasonable profit factor.

Include the retail value of

complimentary food or

beverages served to customers

if tipping for them is

customary and they are

provided in connection with

an activity engaged in for

profit whose receipts would

not be included as gross

receipts from the provision

of food or beverages (e.g.,

complimentary drinks served

to customers at a gambling

casino). Right justify and

zero fill. Field is in

dollars and cents. If no

entry zero fill. NUMERICS

ONLY. DO NOT ENTER DOLLAR

SIGNS, DECIMAL POINTS, OR

COMMAS.

332-343 Tip Percentage 12 REQUIRED. Enter the amount

Rate Times determined by multiplying

Gross Receipts Gross Receipts for the year

(tape positions 320-331) by

the Tip Percentage Rate (tape

positions 344-347). Right

justify and zero fill. For

example, if the value of

Gross Receipts if

"000045678900" and Tip

Percentage Rate is "0800",

multiply $456,789.00 by .0800

to get $36,543.12 and enter

"000003654312". If tips are

allocated using other than

the calendar year, enter

zeros; this may occur if you

allocated tips based on the

time period for which wages

were paid or allocated on a

quarterly basis. Field is in

dollars and cents. NUMERICS

ONLY. DO NOT ENTER DOLLAR

SIGNS, DECIMAL POINTS, OR

COMMAS.

344-347 Tip Percentage 4 REQUIRED. Enter 8 percent

(0800) unless a lower rate

has been granted by the

District Director. The

determination letter must

accompany the magnetic media

submission. NUMERICS ONLY. DO

NOT ENTER DECIMAL POINT.

348-359 Allocated Tips 12 REQUIRED. If Tip Percentage

Rate Times Gross Receipts

(tape positions 332-343) is

greater than Total Tips

Reported (tape positions

308-319), then the difference

becomes Allocated Tips.

Otherwise, enter all zeros.

Right justify and zero fill.

If tips are allocated using

other than the calendar year,

enter the amount of allocated

tips from your records. Field

is in dollars and cents.

NUMERICS ONLY. DO NOT ENTER

DOLLAR SIGNS, DECIMAL POINTS,

OR COMMAS.

360 Allocation Method 1 REQUIRED. Enter the

allocation method used if

Allocated Tips (tape

positions 348-359) is greater

than zero as follows:

1 for allocation based on

hours worked.

2 for allocation based on

gross receipts.

3 for allocation based on a

good faith agreement. The

good faith agreement must

accompany the magnetic media

submission.

If Allocated Tips is equal to

zero, enter 0 (zero).

361-364 Number of 4 REQUIRED. Enter the total

Directly Tipped number of directly tipped

Employees employees employed by the

establishment for the

calendar year. Right justify

and zero fill. NUMERICS ONLY.

365-369 Transmitter Control 5 REQUIRED. Enter the 5-digit

Code (TCC) Transmitter Control Code

assigned by the IRS.

370 Amended 8027 1 REQUIRED. Enter blank for

Indicator original return. Enter "G"

for amended return. An

amended return must be a

complete new return replacing

the original return.

371-372 IRS USE 2 Blanks.

Copy RID