Rev. Proc. 72-26

Section 1. Purpose.

The purpose of this Revenue Procedure is to state the requirements of the Internal Revenue Service relating to paper substitutes for Form 1099-DIV, U.S. Information Return for Recipients of Dividends and Distributions; Form 1099-INT, U.S. Information Return for Recipients of Interest Income; Form 1099-MED, U.S. Information Return for Recipients of Medical and Health Care Payments; and Form 1099-MISC, U.S. Information Return for Recipients of Miscellaneous Income; hereinafter collectively referred to as Form 1099.

Sec. 2. Substitutes.

.01 Paper substitutes for Form 1099 which conform to the specifications contained in this procedure may be privately printed without the prior approval of the Internal Revenue Service. Proposed substitutes not conforming to these specifications should be submitted by letter to the Commissioner of Internal Revenue Service, Attention: ACTS:T:P, 1111 Constitution Avenue, N.W., Washington, D.C. 20224, for consideration. These requests should contain an explanation of the need for the specific deviations.

.02 In lieu of furnishing paper documents, the Service encourages payers who have the facility for submitting the information on magnetic tape to use this method of filing. Specifications for the submission of data on magnetic tape are currently contained in Revenue Procedure 71-20, a copy of which may be obtained from any Internal Revenue District Office or Service Center. Payers or agents who desire to file information returns in the form of magnetic tape should apply by letter to the Director of Internal Revenue Service Center in the region in which the payer or agent normally files returns.

Sec. 3. Specifications for Forms Printing.

.01 Basic form--The official Form 1099 for the reporting year should be used as the basis for developing the substitute form. Since Form 1099 is subject to annual review and possible change, payers are cautioned against over-stocking supplies of the privately-printed substitutes. Copies of the official form for the reporting year may be obtained from any Internal Revenue Office.

.02 Color and quality of paper--

(a) Paper for Copy A must be white chemical wood bond, or equivalent, 32- to 40-pound (basis 17 x 22-1000), plus or minus 5% (weight must be inclusive of any coatings or chemical treatments). The paper must consist of principally bleached chemical woodpulp and be free from unbleached or ground woodpulp. It also must be suitably sized for writing on with ink without feathering.

(b) Copies B and C are provided in the official assembly solely for the convenience of the payer (see section 3.10). The payer may choose the color and quality of the paper used for these copies if he elects to include them in an assembly.

0.3 Color and quality of ink.--All printing must be in a high quality black ink. Bar codes should be free from picks and voids.

.04 Quality of printing--Strict observance of printing and trimming tolerances is required. Forms not meeting these specifications may be returned to the payers by the Service Center.

.05 Typography--Type must be substantially identical in size and shape with corresponding type on the official form. All horizontal rules on the document and all vertical rules outside the specified format section must be 1-point (0.015 inch). All vertical rules within the specified format section and format identifier lines must be 3-point (0.045 inch). When present, mailing guides must be less than one-half point (0.0075 inch). A 0.045 inch vertical rule must precede and follow every payment block, as illustrated in Exhibits A and B, irrespective of the number of payment blocks being reported. The format identifier must be printed in a 10-point Roman font. Any normally used 10-point Roman font is acceptable. Vertical rules must be parallel to the left edge of the document; horizontal rules, parallel to the top edge.

.06 Dimensions--The official form is 8 inches wide by 32/3 inches deep, exclusive of a 1/2-inch snap-stub on the left side of the form. The substitute forms may vary in width from 7 inches to 8 inches and in depth from 3 inches to 33/4 inches, although adherence to the size of the official form is preferred. The snap feature is not required on substitutes. If the substitute forms are in continuous or strip form, they must be burst and stripped to conform to the size specified before they are filed.

.07 Clear Area--The back of Copy A must be free of all printing.

.08 Carbonized forms or "spot carbons"--Carbonized forms and "spot carbons" are not permissible. Interleaved carbon, if used, should be black and of good quality to preclude smudging.

.09 Printers' symbols--The Government Printing Office symbol must not be printed on substitute Forms 1099. In place thereof, it is suggested the forms printer print his Employer Identification Number in the same place on such substitute forms.

.10 Other copies--Copies B and C are included in the official assembly for the convenience of the payer. Although there is no requirement that privately-printed substitute forms include these copies, Copy B will satisfy the requirements of law and regulations concerning the statement of information which is required to be furnished the payee and Copy C may be desired by the payer for his records.

Sec. 4. Format Requirements.

.01 Form 1099 is divided into two sections: a specified format section and a variable format section. The specified format section includes the payment blocks, payee name, address, and taxpayer identifying number, the format identifier (sec. 4.03(j)), the format guidelines, and the area within three-eighth inch of the left edge of the document and one-eighth inch to the right of the format identifier. The variable format section consists of the remainder of the document, including the reporting year and payer name, address, and identification number.

.02 Additional data blocks (including additional payment blocks) may be added to substitute Forms 1099 at the option of the payer, or in accordance with State requirements, but these additional data blocks must be contained in the variable format section except as noted in section 4.03(e) below.

.03 Specified format section layout (general)--

(a) The specified format section, including contents, general arrangement and typography, must conform to one of the formats illustrated in Exhibit B, subject to section 4.04. Formats 2, 3, 4 and 5 are preferred; however, formats 6, 7, 8 and 9 are also acceptable. Format 1 is reserved for the official form and may not be used for substitute forms.

(b) If format 8 or 9 is used and the location of the tax identifying number is consistent, a 3-point vertical rule (0.045 inch) should be preprinted immediately to the left of the number. If format 8 or 9 is used and the location of the tax identifying number is not consistent for all returns, due to the nature of the mechanical equipment used by the payer, this number need not be contained in a special box, nor identified. Preferably, it should be printed to the right of and on the same line as the payee name (or first line of the payee name if there is more than one) but it can also be printed one or two lines above or below the first line of payee name.

(c) For purposes of this procedure, the term "tax identifying number" for an individual payee means his social security number, which consists of nine digits separated by hyphens, as follows: 000-00-0000. For all other payees, the term "tax identifying number" means the employer identification number, which consists of nine digits separated by a hyphen, as follows 00-0000000 Spaces may be used in lieu of hyphens.

(d) For accurate identification, the Service uses part of the name of the payee whose tax identifying number is shown as well as the tax identifying number itself. When the entry on the form includes not only the payee name but also descriptive information relating to legal ownership, or when several names are shown, it is often difficult to distinguish the name to which the tax identifying number applies. Accordingly, the following practices must be observed:

(1) The name of the appropriate payee; i.e., the person or organization whose tax identifying number has been provided, must be included in the field labeled "Paid To".

(2) The name of the appropriate payee should be the first entry in the "Paid To" field, preceding all other names and descriptive information, except as noted in (4) below.

(3) When there are multiple payees with different surnames, the tax identifying number shown must be linked to the surname of the payee to which it applies. It is preferred that such linkage be in the form of an asterisk preceding the appropriate surname.

(4) If the "Paid To" field contains the name of two or more individuals and one of these individuals is the payee to whom the tax identifying number applies, it is not necessary that the name of this payee be first. However, all names should precede any descriptive information.

(e) Special precaution must be taken if the printing of an account designation number in the specified format section is unavoidable. In this case, such number must not be on the same line as, or on any line above, the tax identifying number, nor on the same line as payments. When possible, the printing of such numbers in the specified format section should be avoided.

(f) Payee name, street address, and city and state (including ZIP Code) must be on separate lines. City, state and ZIP Code may be on the same line or on separate lines.

(g) The area within three-eighth inch of the left edge of the document (exclusive of stubs) must not contain any prepunched holes and must be free of any printing except for the format identifier and format guidelines appropriate to each permissible alternate format as illustrated in Exhibit B. There must be no intervening data or marks between the left edge of the document and the specified format section. In addition, there must always be a clear space of at least one-eighth inch to the right of and below the format identifier.

(h) There must be a margin of at least one-fourth inch from the top edge of the document to any printing. Variable format section data may be placed between the top or bottom edge of the document and the specified format section. If not more than four payment blocks are used, the specified format section may occupy the entire left side of the substitute form at the option of the payer.

(i) The overall dimensions of the specified format section and the dimensions of the individual data blocks contained therein may be varied from the dimensions shown in Exhibits A and B. However, the general arrangement of data within the section and the typography may not be altered, except that substitute forms may be limited to the payments actually being reported.

(j) The appropriate format identifier (2, 3, 4, 5, 6, 7, 8, or 9) must be shown in the upper left corner of Copy A, as illustrated in Exhibits A and B, one-fourth inch from the top and left edges. In addition, the appropriate format guidelines must also be shown on Copy A. The identifier and guidelines need not be shown on the other copies of the form.

(k) In using any of the formats, care should be taken to prevent disclosure of payment information if a window envelope is used for mailing.

.04 Specified format section layout (payment blocks and payment identifiers)--

(a) Substitutes for Forms 1099 need contain only the payment blocks needed by the payer. If less than the actual number of payment blocks are shown on the substitute forms, an additional 3-point (0.045 inch) vertical rule must appear between the number and the title of each block.

(b) When substitutes for Form 1099-INT are used by a payer making only one type of payment, the source code may be used to serve the dual purpose of identifying both the type and source of the amount reported. For example, XYZ Bank reports only interest on bank deposits (source code number 4). Thus the "4" would be substituted for the payment block number "2" used on the official form and only that payment block would be shown on the substitute. In addition, a 3-point (0.045-inch) vertical rule must appear between the source code number and title of the block, i.e., the 3-point rule must appear between the "4" and the title "Other Interest".

(c) The number of payments reported and the sequence of payments may vary from the number and sequence on the official form. However, payment blocks must always be on one line, and the wording and position within the block of the captions must conform to the official form. There must never be any non-payment data between any payment block and the left margin of the document.

(d) The tax identifying number may be on the same line as the payment entries. In this case, a payment identifier 0 (Zero) must be shown in the block in which the tax identifying number is to be entered. A 3-point (0.045 inch) vertical rule must be shown after the 0 and preceding the title of the block.

.05 Variable format section layout--The arrangement of data in the variable format section may be varied on substitute forms to fit the requirements of State law or to accommodate the needs of the data processing system used by the payer, except that the payment year must always be in the upper right corner of the form.

Sec. 5. Additional Instructions.

.01 Arrangement of assembly--Except as provided in paragraph .02 below, the parts of the assembly shall be arranged, from top to bottom, as follows: Copy A, "For Internal Revenue Service Center", Copy B, "For Payee", Copy C, "For Payer's Record".

.02 Additional copies--Additional copies may be prepared by payers for states requiring the report. When this is done, one such copy may be inserted between Copies A and B. Forms for delivery to state or local taxing authorities should be clearly labeled to indicate the purpose for which they are intended and should not bear the Internal Revenue Service form number or the designation, "Department of the Treasury, Internal Revenue Service".

.03 The instructions in the block "Paid To" must be shown on the form.

.04 Instructions for payers--

(a) Only originals or ribbon copies may be filed with the Service. Carbon copies are not acceptable.

(b) The Service requests the cooperation of payers in typing or machine printing whenever possible and in providing good quality data entries on the forms; i.e., using black ribbon, inserting data in the middle of blocks, well separated from other printing and guidelines, and taking any other measures that will guarantee a clear, sharp image. However, payers are not required to acquire special equipment solely for the purpose of preparing these forms.

(c) On corrected returns for Form 1099, an "X" must follow the format identifier number and the words "Corrected Return" (in upper case letters) must be centered in the top one-quarter inch of the form. All required data blocks must be completed on a corrected return since it supersedes the information previously reported.

Sec. 6. Reproduction Proofs.

Order blanks for reproduction proofs are mailed annually to requesters of record, and on request, to other users. Printers and other wishing to obtain reproduction proofs may send their requests to the Commissioner of Internal Revenue, Attention: A:FM:P, 1111 Constitution Avenue, N.W., Washington, D.C. 20224.

A charge of $0.75 per page will be made for each reproduction proof regardless of page size. Invoices will be mailed after orders have been filled.

Sec. 7. Effect on Other Documents.

This Revenue Procedure supersedes Revenue Procedure 68-39, C.B. 1968-2, 933.

[Editor's note: Exhibits A and B illustrate physical specifications of the forms discussed. These illustrations are not suitable for electronic reproduction.]