Rev. Proc. 77-43

Section 1. Purpose

This Revenue Procedure restates the requirements of the Internal Revenue Service regarding the acceptance of computer-prepared Form 1040 and substitutes for the related schedules. Revenue Procedure 76-41, 1976-2 C.B. 665 is superseded.

Sec. 2. Specifications

For filing purposes the Service will accept computer-prepared individual income tax returns, Form 1040, and substitutes for the related schedules, provided the forms meet the guidelines prescribed in Sections 3, 4 and 5 below.

Sec. 3. General Instructions

.01 A one-half inch margin must be maintained across the top, bottom and both sides (exclusive of any pin-feed holes) of all computer-prepared substitute Forms 1040 and related schedules. See exception, Section 5.01.

.02 Use the preaddressed Service supplied label on all computer-prepared substitutes that will be filed with the Internal Revenue Service Centers.

.03 File computer-prepared substitute Forms 1040 and related schedules using the envelope enclosed with the taxpayers' return; do not use the Service provided tax package envelope for other correspondence with the Service.

.04 Identify all computer-prepared substitutes clearly; print the Schedule designation one-half inch from the top margin and one and one-half inches from left margin; print the title centered on the first line of print; and print the taxable year on the same line one-half to one inch from right margin.

.05 State tax information must not appear on the Federal tax return which is filed with the Internal Revenue Service Center, except amounts claimed on line 11, Schedule A, (Form 1040) as a State tax deduction.

.06 File only original filled-in Forms 1040 and related schedules. Chemical transfer and carbon bonded papers are prohibited from use concerning forms and schedules being filed with the Service.

.07 Attach all Forms W-2, Employee Wage and Tax Statements, Forms W-2G, Statement for Certain Gambling Winnings, and Forms W-2P, Statement for Recipients of Annuities, Pensions or Retired Pay, to the front of Form 1040.

.08 Attach all schedules in alphabetical order and forms other than W-2, W-2G and W-2P in numbered order to the back of Form 1040.

.09 Attach all payments to the front of Form 1040.

.10 Space must be provided on page 2 of computer-prepared Forms 1040 for a paid preparer's name, business, address, identifying number and signature. If the preparer is an employee of a preparer firm, space should be provided for the preparer's Social Security Number as well as the employer's identification number.

Sec. 4. Conditions

.01 Form 1040.--The weight, size, margins, etc., of the computer-prepared form must meet the requirements specified in Revenue Procedure 77-42, page, this Bulletin, and the format, except for minor deviations, must follow the format of the official return. To make the form suitable for computer preparation, minor format modifications such as eliminating the vertical lines from the area reserved for social security number, changing the dimensions of the check boxes for filing status, etc., are permitted.

.02 Schedules A & B, C, D, E, F, G, R & RP, SE and TC--Computer-prepared substitutes for these forms may be submitted on good quality, standard lined stock machine stationery provided.

(a) The format of each substitute schedule follows the format of the official schedule so far as item caption, line references, sequence, etc., are concerned. With the exception noted below, all line numbers and items must be printed even though they may not have an amount entered.

EXCEPTION. -- In the case of substitutes for Schedule A and/or E, detailed information for any deduction or income category may be omitted from the printout if the category total to be reported is zero. However, the substitute schedule must show the total (zero when applicable) for each category. With regard to Schedule A, lines 33-38 need not be shown on the printout; but, the total of itemized deductions must be shown on line 39.

(b) Lined stock paper must be used; the reference code for the items on a schedule may be printed to the left of the caption. (See example below).

EXAMPLE

Interest Expense

Sec. 5. Additional Instructions

.01 Form 1040. -- Internal control numbers and identifying symbols of the computer preparer may be shown on the facsimile if the use of such numbers or symbols is acceptable to the taxpayer and/or the representative. If shown, such information must not be printed in the top one-half inch clear area, from the center to the right edge, of Forms 1040 and/or Schedules.

.02 Schedules A & B, C, D, E, F, G, R & RP, SE and TC. -- Descriptions for captions, lines, etc., required by the official schedules may be limited to one print line on the substitute by using abbreviations, contractions, and by omitting articles, prepositions, etc. However, sufficient key words must be retained to permit ready identification of the caption, line or item.

(a) Explanatory details for entries shown on a substitute schedule may be included on the substitute, or submitted in the form of a supporting statement at the option of the preparer. If a supporting statement is submitted, it must be referenced to the schedule entry which it supports. The entry on the substitute schedule, in turn, must be cross-referenced to the supporting statement. However, all total lines of all substitutes must have a total printed, carried forward from any supporting statements. Substitutes for Schedule A must have a money entry for each numbered item on the official form. See exception, Section 4.02(a) above.

(b) Text prescribed for the official form, which is solely instructional in nature, e.g., "Attach this schedule to Form 1040," "See instructions," etc., may be omitted from the substitute schedule.

(c) Information for more than one schedule may not be shown on the same printout page. Any schedule may be continued on two or more pages if necessary. When a schedule is continued onto two or more pages, clearly identify at the bottom of each page, including page 1, that it is continued, e.g. "page 1, Schedule C continued."

Sec. 6. Other Information

01. Preparers who desire to file computer prepared substitute Forms 1040 and related schedules must develop such substitutes using these guidelines and must obtain approval of the Service before filing substitutes. Proposed substitutes should be forwarded by letter to the Commissioner of Internal Revenue, Attention: ACTS:T:C, 1111 Constitution Avenue, N.W., Washington, D.C. 20224, no later than January 10, 1978. An approval letter from the Internal Revenue Service must be received before the computer prepared substitutes may be used.

.02 Once an approval is granted for the use of computer-prepared substitute Forms 1040 and related schedules, fifty (50) copies of each approved form, and/or related schedule, must be assembled in sets and submitted to ACTS:T:C, so that our field offices will be properly notified.

Sec. 7. Effect on Other Documents

This Revenue Procedure supersedes Rev. Proc. 76-41.