Rev. Proc. 91-60

NOTE: This revenue procedure may be used to prepare Tax Year 1991 Forms 1042S for submission to Internal Revenue Service (IRS) using any of the following:

Magnetic Tape

5 1/4-inch Diskette

3 1/2-inch Diskette

Electronic Filing (Via the Information Reporting Program Bulletin Board System (IRP-BBS))

This revenue procedure is normally updated for each tax year. Please read this revenue procedure carefully. Persons required to file may be subject to penalties for failure to file or failure to include correct information if they do not adhere to these instructions.

                          Table of Contents

SECTION 1. PURPOSE

The purpose of this revenue procedure is to update and set forth the requirements and conditions under which withholding agents may file Form 1042S, Foreign Person's U.S. Source Income Subject to Withholding, magnetically or electronically. This revenue procedure supersedes Rev. Proc. 91-9, reprinted from IR Bulletin 1991-4.

SEC. 2. NATURE OF CHANGES--CURRENT YEAR (TAX YEAR 1991)

.01 EDITORIAL CHANGES. With the addition of Electronic and Diskette filing of Form 1042S, there have been numerous editorial changes to the publication. IRS recommends that you read this publication in its entirety to ensure that you report properly. The following changes have been made to the revenue procedure:

(a) The title of Publication 1187 has changed from "Specifications for Filing Form 1042S, Foreign Person's U.S. Source Income Subject to Withholding, on Magnetic Tape" to "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 diskettes."

(b) The Information Reporting Program Bulletin Board System (IRP-BBS) is now available to filers. Part A Sec. 3.03 contains information on how to contact the bulletin board system.

(c) The telephone number of the IRS/MCC fax machine is now provided in Part A Sec. 3.05.

(d) Added statement to Part A Sec. 4.02 to explain that filers who wish to file electronically will be considered to have met the magnetic media filing requirement.

(e) Filers will no longer be required to include a copy of their approval letter for an extension of time with their shipments.

(f) Added instruction for obtaining an extension of time to file the recipient copy of the Form 1042S to Part A Sec. 7.05.

(g) Changed the date that waiver request Form 8508 must be filed with IRS/MCC from 90 days before the due date of the return to 45 days. See Part A, Sec. 9.03.

(h) The title of the Forms 4804 and 4802 have been changed to reflect the inclusion of electronic filing as a means of transmitting data.

.02 PROGRAMMING CHANGES

(a) Part B Sec. 3 was added to provide the specifications for filing 5 1/4- and 3 1/2-inch diskettes.

(b) Part B Sec. 4 has been added to provide the specifications for filing Forms 1042S electronically.

(c) Added Part B Sec. 5, Data Sequence Specifications, to clearly define the record sequences if you are filing single or multiple tapes and/or diskettes.

(d) Field Positions 2-3 "Tax Year" of the Transmitter "T" record and the "Payment Year" of the Withholding Agent "W" record must be increased by one (from 90 to 91)

(e) Position 4-5 of the transmitter "T" record has been renamed to "Sequence Number" to better define the information to be provided.

(f) Positions 15-54 of the Transmitter "T" record has been renamed to "Transmitter Name" to better define the information to be provided.

(g) Position 55-94 of the Transmitter "T" record has been renamed to "Transmitter Address" to better define the information to be provided.

(h) Mexico was added to the table of state codes found in Part B Sec. 6, Transmitter "T" record, Field position 115-116.

(i) Changed information on how to report APO and FPO addresses in the "T", "Q" and "W" records to adhere to changes made by the United States Postal Service.

(j) The Country Codes in position 137-138 of the "Q" Record have changed.

(k) Positions 81-100 (City) and 101-102 (State Code) of the Recipient "Q" Record have been renamed to Agent's City and Agent's State Code to be consistent with other fields.

(l) In field position 371, Correction Indicator, of the Recipient "Q" record, the replacement indicator (R) was removed. If a replacement of an entire file is requested by MCC it should be identified as an original submission.

(m) Awaiting Form W-8 Indicator field position 429 of the recipient "Q" record, has been changed from a "Y" or "N" to a "Y" or "blank".

(n) IRS/MCC no longer accepts 7 track tapes; therefore, all references to 7 track specifications have been removed.

(o) The reference to record marks has been removed from the tape specification since they are no longer acceptable.

SEC. 3. WHERE TO FILE MAGNETIC MEDIA RETURNS

.01 Copies of this revenue procedure, application Form 4419, waiver request Form 8508, transmittal Forms 4804/4802, media label Form 5064, and additional magnetic media related materials are available from IRS/MCC. Send your magnetic media files, and any inquiries to MCC at the following addresses:

          If by U.S. Postal Service:

.03 Publication 1187 and other IRS publications concerning magnetic and electronic filing of information returns are available through the IRP-BBS as "downloadable" files. Using IRP-BBS as a means of obtaining publications will provide faster access to this information. Additionally, publications will be available from IRP-BBS much earlier than the printed version. The IRP-BBS is operational 24 hours a day, 7 days a week. The telephone number is (304) 263-2749.

.04 The IRP-BBS software provides a menu driven environment which allows filers to access different parts of the bulletin board. Whenever possible, IRS/MCC personnel will provide assistance in resolving communication problems with IRP-BBS.

.05 The telephone number for the IRS/MCC fax machine is (304) 267-3366.

.06 IRS/MCC has installed Telecommunications Devices for the Deaf (TDD). The number is (304) 267-3367.

.07 Requests for paper returns, publications and forms not related to magnetic media processing 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.

SEC. 4. FILING REQUIREMENTS

.01 Withholding agents who are required to file 250 or more Forms 1042S with IRS must submit these forms on magnetic media.

.02 Filers who are required to submit their Forms 1042S on magnetic media may choose to submit their documents electronically instead. Filers who transmit their information electronically are considered to have satisfied the magnetic media filing requirements.

.03 The filing requirement applies individually to each reporting entity as defined by its 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 requirement accordingly.

.04 This requirement applies separately to original and corrected documents. For example, if you file 300 original documents they must be filed magnetically or electronically. If you discover that you must file corrections for 200 of these returns, it is not required that they be filed magnetically or electronically.

.05 These requirements shall not apply if you submit an application for and receive an approved undue hardship waiver. (See Part A, Sec. 9.)

.06 For additional information on filing requirements, please refer to 1991 Instructions for Forms 1042 and 1042S.

SEC. 5. FORM 4419, APPLICATION FOR FILING INFORMATION RETURNS MAGNETICALLY/ELECTRONICALLY

.01 Withholding agents or their agents must complete and submit Form 4419, "Application for Filing Information Returns Magnetically/Electronically," before they may file Forms 1042S magnetically or electronically. Applications may be submitted at any time. However, the Form 4419 should be filed at least 30 days before March 15 in order to allow time to receive a response from IRS/MCC and also to timely file your returns.

.02 A copy of Form 4419 is included in this publication for your convenience. Please read the instructions on the back of the form carefully. This form may be computer generated or photocopied.

.03 You will receive an approval letter that will contain a five-digit Transmitter Control Code (TCC) beginning with the digits 22. DO NOT SUBMIT YOUR FORM 1042S USING A TCC ASSIGNED FOR THE PURPOSE OF FILING OTHER RETURNS. Forms 1042S may not be filed electronically or magnetically with IRS/MCC until an application has been approved and a TCC assigned.

.04 Once a TCC has been assigned, it is not necessary to reapply each year. If you have changes to the information provided on the Form 4419 (for example, if the name of your organization or the contact person changes), please notify IRS/MCC in writing so our files can be updated. In ALL correspondence with IRS/MCC, include your TCC in order to assist IRS personnel in locating your files.

.05 If your files were prepared in the past by a service bureau, but you now wish to prepare your own files, it will be necessary to request a TCC by filing the application Form 4419.

.06 If you have been assigned a TCC to file magnetically and now choose to file electronically, it is not necessary to apply for another TCC.

.07 You must have a TCC to transmit data electronically. When initial contact is made with the IRP-BBS filers will be instructed to assign their own password and do not need prior approval.

SEC. 6. FILING DUE DATES

.01 Magnetic media and electronic reporting to IRS for Forms 1042S must be on a calendar year basis. The date prescribed for filing paper documents will also apply to magnetic media or electronic filing. Files must be submitted to the IRS/MCC postmarked no later than March 15.

.02 Copies of Form 1042S information should also be furnished to the income recipient by March 15.

.03 If the due date falls on a Saturday, Sunday, or a legal holiday, the due date is extended to the next day that is not a Saturday, Sunday, or legal holiday.

SEC. 7. EXTENSIONS OF TIME TO FILE

.01 If a withholding agent is required to submit Forms 1042S magnetically/electronically to IRS/MCC, and is unable to do so by March 15, an extension of time to file may be requested. Submit a letter or Form 2758, Application for Extension of Time To File Certain Excise, Income, Information, and Other Returns, to request an extension of time. If approved, an extension will be granted for a maximum of 30 days.

.02 In order to be considered for an extension of time, the letter or Form 2758 MUST be postmarked by the due date of the return. If you are requesting an extension for magnetic or electronic filing, the request should be sent to IRS/MCC. If submitting a letter, the request should include:

(a) The withholding agent's (or transmitter's, if filing for multiple withholding agents) name and address.

(b) The withholding agent's Taxpayer Identification Number (TIN).

(c) The tax year for which the extension of time is requested (e.g., 1991).

(d) The name and telephone number of a person to contact who is familiar with the request.

(e) The specific type of returns (e.g., Forms 1042S).

(f) The Transmitter Control Code (TCC) assigned to the organization or individual requesting the extension. (Please be sure to use the TCC assigned for Forms 1042S processing ONLY.)

(g) The reason for the delay and the date by which you will be able to file.

(h) If you file for multiple withholding agents, attach a list of all withholding agents and their TINs (EINs or SSN).

.03 Failure to provide a letter including all of the information requested above or a fully completed Form 2758, may result in an automatic denial of your request.

.04 If an additional extension of time is necessary, the withholding agent must submit a second request for an additional 30 day extension of time to file. Only under extreme circumstances will an additional extension of 30 days be granted. This second request must be submitted before the original extension of time has expired.

.05 An approved extension of time for magnetic and electronic filing does not provide additional time for supplying the copy to the recipient. Requests for an extension of time to provide the recipient copy must be sent to the Director of the IRS District in which you reside or in which your business is located.

.06 If an extension of time to file magnetically or electronically is granted, it is no longer necessary to submit a copy of the letter granting the extension with the Form 4804 or computer-generated substitute with the file.

.07 For information on requesting an extension of time to file Forms 1042 and 1042S on paper, refer to the instructions on the back of Form 2758 or the "1991 Instructions for Forms 1042 and 1042S."

.08 Since the Form 1042 is not considered timely filed until the Form 1042S is received by IRS, an extension of time to file Forms 1042S will AUTOMATICALLY provide an extension for filing Form 1042 with the Philadelphia Service Center.

.09 If an extension of time to file the paper Form 1042S with the Philadelphia Service Center is granted by IRS/MCC, a copy of the letter granting the extension MUST be included with the paper Form 1042.

NOTE: IF YOU ONLY NEED AN EXTENSION OF TIME TO FILE FORM 1042, AND NOT THE FORMS 1042S, SEND THAT REQUEST FOR AN EXTENSION OF TIME TO THE DIRECTOR, PHILADELPHIA SERVICE CENTER, PHILADELPHIA PA 19255.

.10 An approved extension grants additional time to file the Forms 1042S with IRS only; any tax due must still be paid timely.

.11 You may only request an extension of time for the tax year of the returns that are due to be filed with IRS.

SEC. 8. TEST FILES

.01 IRS/MCC will assist new filers with their initial submission by reviewing test files. We will check the content of the records and also determine if the files are formatted according to the specifications in the current revenue procedure.

.02 IRS does not require filers to submit test files; however, we do encourage first time filers to submit a test for review prior to the filing season.

.03 Application Form 4419 must be filed with IRS/MCC and a TCC must be assigned before test files are submitted.

.04 Approved withholding agents or their agents may submit test files to IRS/MCC. IRS/MCC requires that all test files be submitted between December 1 and February 15.

.05 Include a completed Form 4804, 4802, or computer-generated substitute marked "TEST DATA." Clearly mark the media label Form 5064 as "TEST DATA," and indicate the total number of Recipient "Q" Records in the block marked "Number of Payees."

.06 If a test is submitted electronically, the filer will receive a prompt asking if this is a test file. The Forms 4804 and 4802 marked as "Test Data" must be submitted to MCC. Transmittals may be faxed to (304) 267-3366. Although faxed transmittals are acceptable, completed Forms 4804 and 4802 or computer-generated substitutes marked as "TEST DATA" must be sent to IRS/MCC within 2 days of the submission of the test file. Faxing the forms will allow MCC the ability to process your data in advance of receipt of the actual forms.

.07 IRS/MCC will send an acknowledgement to indicate the test results. Unacceptable magnetic media files, along with documentation identifying the errors, will be returned to you for replacement. Resubmission of replacement magnetic media test files must be postmarked no later than February 15. Electronic filers will also receive documentation identifying errors. Electronically filed tests may be resubmitted on or before February 15.

.08 IRS/MCC will no longer return your media once it has been successfully processed.

SEC. 9. FORM 8508, REQUEST FOR WAIVER FROM FILING INFORMATION RETURNS ON MAGNETIC MEDIA

.01 Withholding agents required to file Form 1042S magnetically or electronically may receive a waiver if the requirement would create an undue hardship. The withholding agent may request a waiver by submitting Form 8508, Request for Waiver From Filing Information Returns on Magnetic Media, with the IRS/MCC.

.02 A separate Form 8508 must be submitted by each withholding agent.

.03 ALL WAIVER REQUESTS MUST BE SUBMITTED AT LEAST 45 DAYS BEFORE THE DUE DATE OF THE RETURN. OTHERWISE, THE REQUEST WILL NOT BE PROCESSED.

.04 In approximately 30 days you will receive confirmation of approval or denial of your waiver request. Maintain a copy of the request and the response from IRS for your records.

.05 Failure to provide all of the information requested on the Form 8508 and/or the cost estimates if applicable, may result in an automatic denial of the waiver request.

.06 An approved waiver will only provide exemption from magnetic or electronic filing for one tax year. A waiver may not be requested for more than one tax year at a time. If needed, you must apply each year for a waiver.

.07 A copy of Form 8508 is included in this publication; it may also be obtained from IRS/MCC and other IRS offices. Form 8508 may be photocopied, or computer generated as long as it contains all the information requested on the original form.

.08 An approved waiver from filing information returns magnetically or electronically does not provide exemption from filing; you must still file your information returns on acceptable paper forms with the Philadelphia Service Center. Do not include a copy of the approved waiver with your paper forms.

SEC. 10. FILING FORMS 1042S MAGNETICALLY OR ELECTRONICALLY

.01 When submitting your files, include the following:

(a) A signed Form 4804, Transmittal of Information Returns Reported Magnetically/Electronically, or computer-generated substitute. Form 4804 contains an affidavit that must be signed by the withholding agent, or an agent who has the authority to sign on behalf of the withholding agent. The authorization may be either oral, written, or implied, and must be valid under state law. Form 4804 must contain the caption "For: (name of withholding agent)." Failure to sign the affidavit on Form 4804 will result in the file being returned to you as unprocessed. Although a duly authorized agent signs the affidavit, the withholding agent is held responsible for the accuracy of the Form 4804, and the withholding agent will be liable for penalties for failure to comply with filing requirements.

(b) A Form 4802, Transmittal of Information Returns Reported Magnetically/Electronically (Continuation), or computer-generated substitute, if you transmit for multiple withholding agents and have the authority to sign the affidavit on Form 4804.

(c) The magnetic media with an external identifying label Form 5064. Be sure to include your Form 1042S TCC, number of Recipient "Q" Records, and type of documents (Form 1042S).

(d) A Form 4801, or a substitute, on the outside of the container 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, use the sequence Box 1 of 3, 2 of 3, 3 of 3.

.02 MAIL THE MAGNETIC MEDIA AND THE TRANSMITTAL FORMS 4804 AND 4802 TOGETHER.

.03 If you are filing by way of the IRP-BBS you may fax the transmittal forms to (304) 267-3366. However, the actual Form 4804, 4802 or computer-generated substitutes must be sent to IRS/MCC within 2 days of the date of submission or the due date of the return, whichever comes first.

.04 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.

.05 IRS/MCC will not return filers' magnetic media after it has been successfully processed. Should filers wish to know if their media was received by IRS/MCC, a delivery service that provides certification of delivery is recommended.

.06 DO NOT REPORT DUPLICATE INFORMATION. If you report part of your returns on paper and part magnetically or electronically, be sure that the same information is not included on both. This does NOT mean that corrected documents are not to be filed. If a return has been prepared and submitted improperly, you must file a corrected return as soon as you are aware that a correction is necessary.

.07 IRS will prepare the appropriate statements for transmittal to treaty countries.

SEC. 11. RETENTION REQUIREMENTS

Withholding agents are required to retain a copy of the information returns filed with IRS or have the ability to reconstruct the data, for at least three years.

SEC. 12. REPLACEMENT FILES

.01 Files are returned because of coding or format errors. THESE FILES ARE TO BE RETURNED TO IRS/MCC WITHIN 45 DAYS FROM THE DATE OF NOTICE OR THE WITHHOLDING AGENT MAY BE SUBJECT TO A FAILURE TO FILE PENALTY. Therefore, returned files should receive prompt attention.

.02 When the magnetic media is returned to the transmitter for replacement, a listing identifying the type of errors and frequency of such errors will be provided. The transmitter must correct the problems and submit a replacement file to IRS/MCC.

.03 Some problems may not require corrective action. For example, certain recipients should have had tax withheld at a particular rate, but the withholding agent withheld at a different tax rate. The transmitter should verify that the tax rates in question are in fact the rates at which tax was withheld. Once verified, a letter must accompany the replacement file stipulating that the tax rates are accurate.

SEC. 13. HOW TO FILE CORRECTED RETURNS

.01 Forms 1042S are required to be filed magnetically or electronically if you file 250 or more returns. THIS REQUIREMENT APPLIES SEPARATELY TO BOTH ORIGINAL AND CORRECTED RETURNS.

.02 To distinguish between a correction and a replacement:

A correction is media submitted by the payer to correct records that were successfully processed by IRS/MCC, but contained erroneous information.

A replacement is media that IRS/MCC has returned due to format errors encountered during processing. After necessary changes have been made, the media must be returned to IRS/MCC for re-input.

.03 If you file Forms 1042S magnetically or electronically, and later determine that corrections are necessary, you may file the corrections on paper if you have less than 250 corrected returns.

.04 If you have 250 or more corrections, they MUST be submitted to IRS/MCC magnetically or electronically unless you have a waiver. If you have received a waiver for original Forms 1042S, the waiver applies to the corrections as well.

.05 CORRECTED RETURNS MUST NOT BE INCLUDED ON THE SAME MEDIA OR SENT IN THE SAME ELECTRONIC TRANSMISSION WITH ORIGINAL RETURNS.

.06 Since corrected statements supersede information previously supplied, all required data fields must be completed. If you submit corrections magnetically or electronically, code an "A" in Position 371 of the Recipient "Q" Record.

.07 If you submit corrections on paper documents, mark each form "Corrected" at the top. Corrected documents must be bundled separately and sent to the Philadelphia Service Center.

.08 WHEN CORRECTING FORMS 1042S, AN AMENDED FORM 1042 MARKED "CORRECTED" MUST BE SENT TO THE PHILADELPHIA SERVICE CENTER, PHILADELPHIA PA 19255.

SEC. 14. MAJOR PROBLEMS ENCOUNTERED

.01 Before submitting your files, we encourage you to verify the format and content of each type of record to ensure the accuracy of your data submission. This preliminary review may eliminate the need for IRS/MCC to return your file for replacement, and therefore reduce the likelihood of a penalty assessment for incorrect submissions. If due to unavoidable circumstances your data would be unacceptable to IRS/MCC, (e.g., math or tax rate errors), include a letter of explanation with your submission.

.02 Failure to format your records correctly will result in files being returned for replacement.

.03 A Transmitter Control Code (TCC) is a five-digit code assigned by the Internal Revenue Service (IRS) Martinsburg Computing Center (MCC) to magnetic media filers of information returns in the Form 1099 series, Form 8027, Form W-4, and Form 1042S. Each of these returns requires a separate TCC; i.e., Form 1042S requires a TCC of its own. You cannot use the TCC assigned for Forms 1099, Form 8027, or Form W-4. To obtain a TCC, you must file Form 4419, Application for Filing Information Returns Magnetically/Electronically, with the IRS/MCC. (See Part A, Sec. 5.)

.04 The only documents that will be submitted with your magnetic or electronic file to IRS/MCC are the transmittal Forms 4804/4802. DO NOT SEND PAPER FORMS 1042, 1042S, 8233, or MONEY OWED TO THE IRS/MCC. These forms and monies owed must be sent to the Philadelphia Service Center, Philadelphia PA 19255.

.05 Form 4804, Transmittal of Information Returns Reported Magnetically or Electronically, must accompany your magnetic media shipment. If you are filing electronically the Form 4804 may be faxed to (304) 267-3366. However, the original Forms 4804 and 4802 must be submitted within 2 days of the transmission or before the due date of the return whichever comes first. We will not process your file until a Form 4804 has been received from your organization.

.06 Recipient surnames are used to sort the recipient "Q" Records. Submit the recipient data with the surname first. However, if you prefer not to enter the surname first, use an asterisk to indicate the beginning of the surname for this purpose. If the surname is the first name on the line, the asterisk MUST be omitted, since the asterisk cannot be the first, leftmost character of the name.

.07 To be acceptable your records must be in a specific sequence. If this correct sequence is not adhered to, your file will be returned for replacement. (Refer to Part B, Sec. 5)

SEC. 15 EFFECT ON PAPER DOCUMENTS

.01 Magnetic or electronic reporting eliminates the need to submit paper Forms 1042S to IRS.

.02 THE ADDRESS FOR FILING PAPER FORMS 1042S, 1042 OR 8233 (Exemption from Withholding on Compensation for Independent Personal Services of a Nonresident Alien Individual) IS:

    Internal Revenue Service Center

.03 Form 1042 (Annual Withholding Tax Return for U.S. Source Income of Foreign Persons) is used to verify the number of Forms 1042S filed on paper or magnetically/electronically. In certain cases, a withholding agent may be required to attach a remittance to Form 1042.

SEC. 16. DEFINITION OF TERMS

 Element                  Description

SEC. 1. GENERAL

.01 These specifications prescribe the required format and content of the records to be included in the file. Usually, IRS/MCC will be able to process, without translation, any compatible file. Deviations cannot and will not be permitted in any of the data fields.

.02 An external label, Form 5064, must appear on each tape and diskette submitted. If diskettes are used and the operating system is not MS/DOS compatible, the operating system and hardware information MUST be provided. The following information is needed on the label:

(a) The transmitter's name.

(b) The five digit Transmitter Control Code (TCC).

(c) The tax year of the data (i.e., 1991).

(d) Operating system software and hardware used to create the file (e.g., Apple MacIntosh/MacWrite V2.2).

(e) Returns-1042S.

(f) The total number of "Q" records in the file.

(g) Transmitter's media number. The number assigned to the media by the transmitter.

(h) The sequence of each tape or diskette (e.g., 001 of 008, 002 of 008, ..., 008 of 008).

Information provided on the Form 5064 will assist IRS in identifying information that is reported and in locating a specific file if it is necessary to return the file to the transmitter.

.03 IRS advises that special shipping containers not be used since they will not be returned to you.

.04 Regardless of the type of media used or if you are filing electronically, the record length must be 500 positions.

SEC. 2. TAPE SPECIFICATIONS

.01 In most instances, IRS can process any compatible magnetic tape file. Tapes must be EBCDIC or ASCII and must meet the following criteria:

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

(1) Odd parity

(2) Recording density -- 1600 or 6250 BPI

(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) Recording density -- 1600 or 6250 BPI

NOTE: Beginning in TY91, IRS/MCC will no longer accept 7-track tapes.

.02 All tape files must have the following characteristics:

(a) 0.5 inch (12.7 mm) wide computer grade magnetic tape,

(b) Tape thickness: 1.0 or 1.5 mils,

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

(d) Tape reels of up to 2400 feet (731.52 m).

.03 The tape records may be blocked or unblocked, subject to the following:

(a) Records must be a fixed length of 500 positions.

(b) Records may be blocked or unblocked, except header and trailer labels which must be unblocked.

(c) A block may not exceed 15,000 characters, although shorter blocks may be written as desired. If records are being blocked, but sufficient records are not available to fill a complete block, the block may either be "padded" with 9s to fill all unused positions or truncated after the last data record to create a "short block". Do NOT pad the block with blanks or create blank records (for example, Q followed by 499 blanks, etc.).

(d) Records may not span blocks.

(e) Two forms of blocking are acceptable:

(1) Only "Q" Records are blocked; all other records are unblocked.

(2) Header and trailer labels, if used, are unblocked.

SEC. 3. 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.

(c) Records must be a fixed length of 500 bytes per record.

(d) Delimiter character commas (,) must not be used.

(e) Positions 499 and 500 of each record have been reserved for carriage return/line feed (cr/lf) characters.

(f) Filename of 1042TAX must be used. Do not enter any other data in this field. If a file will consist of more than one diskette, the filename 1042TAX will contain a 3 digit extension. This extension will indicate the sequence of the diskettes within the file. For example, the first diskette will be named 1042TAX.001, the second diskette will be 1042TAX.002, etc.

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

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

 Capacity       Tracks       Sides/Density       Sector Size

SEC. 4. ELECTRONIC FILING SPECIFICATIONS

.01 Electronic filing is being offered as an alternative to magnetic media or paper filing, but is not a requirement. Electronic filing will fulfill the magnetic media requirements for filers who are required to file magnetically.

.02 All inquiries concerning the electronic filing of Forms 1042S should be directed to IRS/MCC.

.03 Filers participating in the electronic filing program will submit their returns to IRS/MCC by way of modems, in lieu of magnetic media or paper filing. The Forms 1042S will be transmitted through the Information Reporting Program Bulletin Board System (IRP-BBS) using asynchronous protocols.

.04 The Form 4804 must be sent within 2 days after the file has been submitted electronically, or by the due date of the return, whichever comes first.

.05 The format of the "T," "Q," "W," and "Y" records are the same for electronically filed records as it is for 5 1/4- and 3 1/2-inch diskettes. When filing electronically, each transmission is considered a separate file; therefore, each transmission MUST adhere to the data sequence guidelines provided in Part B, Sec. 5.

.06 The IRP-BBS can be accessed at speeds up to 9600 bps. The modulation speed is automatically negotiated so that users with slower modems should encounter no problems connecting with the BBS. The communication standards supported include 212A, V.22bis, and V.32. Point-to-point error control is supported using the V.42 standard backward compatibility with MNP class 2-4 modems.

.07 Data compression is encouraged for filers who submit information returns using the IRP-BBS. Data compression is supported using V.42bis with MNP class 5 compatibility. Data compression will result in throughput speeds up to 38,400 bps. IRS/MCC has the ability to decompress files created using several software compression programs. Data compression can be done alone or in conjunction with V.42bis hardware compression. The size of files transmitted electronically can be reduced by as much as 80% when data compression is used. Therefore, data compression is highly recommended.

.08 The setup parameters for IRP-BBS are: 8 data bits, no parity, 1 stop bit and full duplex mode.

.09 Filers using IRP-BBS will be required to assign their own password. Users should take the necessary precautions to assure that their password is not compromised. If a password is compromised, contact the Systems Operator (SYSOP) or the Electronic Filing Coordinator at IRS/MCC immediately.

.10 The IRP-BBS is available 24 hours a day, 7 days a week and may accessed by dialing (304) 263-2749.

SEC. 5. DATA SEQUENCE SPECIFICATIONS

.01 The first position of each record indicates the record type:

    Transmitter                                         T

(a) Single tape or diskette:

(1) A Transmitter "T" Record; then

(2) one or more Recipient "Q" Records followed by a corresponding Withholding Agent "W" Record then;

(3) additional "Q" and "W" Record sequences for other withholding agents as needed; then

(4) an End of Transmission "Y" Record.

(b) Multiple tapes: (see NOTE)

(1) A Transmitter "T" Record at the beginning of each tape; then

(2) sequences of Recipient "Q" Records followed by corresponding Withholding Agent "W" Records; then

(3) A sequence of Recipient "Q" Records may be continued from one tape to the next if they apply to the same withholding agent, without the necessity of repeating the "W" Record. The sequence might be, for example, QQQQ (end of one tape); TQQQQW (beginning of next tape); then

(4) An End of Transmission "Y" Record ending the last tape.

(c) Multiple diskettes: (see NOTE)

(1) A Transmitter "T" Record; then

(2) one or more Recipient "Q" Records followed by a corresponding Withholding Agent "W" Record; then

(3) additional "Q" and "W" Record sequences for other withholding agents as needed; then

(4) a sequence of Recipient "Q" Records may be continued from one diskette to the next if they apply to the same withholding agent, without the necessity of repeating the "W" Record. The sequence might be, for example, QQQQ (end of one diskette); QQQQW (beginning of next diskette); then

(5) an End of Transmission "Y" Record ending the last diskette.

NOTE: Due to differences in the of processing 1042S information filed on tapes and diskettes, it is required that there be a "T" record at the beginning of each tape, but not at the beginning of each diskette in a shipment.

.03 Tape header and trailer labels, record marks, and tape marks are all optional. If used, they must conform to the following standards:

(a) Header labels must begin with VOL1, VOL2, HDR1, HDR2, or 1HDR. They must be the first record(s) on the reel immediately before the Transmitter "T" Record. Header labels may not exceed 80 characters in length.

(b) Trailer labels must begin 1EOR, 1EOF, EOF1, or EOR1. They must be the last record(s) on the reel, after the "Y" record and tape mark (if a tape mark is used). Trailer labels may not exceed 80 characters in length.

(c) Tape marks must be IBM 001111 (Octal 17) in even parity. They always appear immediately after the "Y" record. If both header and trailer labels are used, the tape mark must follow the header label and must precede and/or follow the trailer label(s).

.04 The minimum file transmitted must consist of a Transmitter "T" Record, a Recipient "Q" Record, and Withholding Agent "W" Record, and an End of Transmission "Y" Record.

SEC. 6. THE TRANSMITTER "T" RECORD

This record identifies the entity preparing and transmitting the file. The Transmitter and the withholding agents may be the same, but they need not be. The Transmitter "T" Record MUST be the first data record of a file, MUST be the first record on a tape (preceded only by header labels, if any), and MUST appear on each tape in the file. FOR TAPE FILES ONLY, the Sequence Number, position 4-5 of the "T" record must be increased by 1 (one) for each tape. The "T" Record is a fixed length of 500 positions.

ALL DATA SUBMITTED TO IRS/MCC WITHOUT THE TRANSMITTER "T" RECORD AS THE FIRST RECORD WILL BE RETURNED TO THE FILER FOR REPLACEMENT.

NOTE: All fields are required. If you do not have information to enter or the field is not applicable, you must still allow for the field by entering spaces, blanks or zeros as instructed.

                  RECORD NAME: TRANSMITTER "T" RECORD

.01 The "Q" Record contains complete name and address information for both Withholding Agent and Recipient of Income, together with all the particulars of the income paid and tax withheld. Complete Withholding Agent data is required because each Recipient "Q" Record is treated as if it were a separate Form 1042S, and is processed independently of other records.

.02 Since the "Q" Record is restricted to one type of income, and one tax rate, under certain circumstances it would be necessary to write more than one "Q" Record. Following are some of the circumstances when more than one "Q" record for a payee would be required:

(a) Different sources of income. For example, Recipient X derived income from Capital Gains (Income Code 09) and Industrial Royalties (Income Code 10). A separate "Q" record must be reported for each income code; providing Gross Income Paid and Tax Withheld pertaining to the corresponding code.

(b) Change in Country Code during the year. For example, the withholding agent received notification via Form 1001 that the recipient changed from country X to country Y. A separate "Q" record must be reported for each country code; providing Gross Income Paid, Tax Rate and Tax Withheld. The amounts reported must be based on each country code and the period of time under that country code.

(c) Change in a country's tax treaty rate during the year. For example, effective April 1, country X changes its tax treaty rate from 10% to 20%. A separate "Q" record must be reported for each of the tax rates. Provide the Tax Rate, Gross Income Paid, and Tax Withheld for the period of time under that tax rate.

.03 Failure to provide multiple recipient "Q" records when necessary will generate math computation errors during processing and therefore, result in the file being returned for replacement.

.04 All recipient "Q" Records for a particular Withholding Agent must be written before the corresponding Withholding Agent "W" Record, and before "Q" Records for another Withholding Agent may begin.

NOTE: All fields are required. If you do not have information to enter or the field is not applicable, you must still allow for the field by entering spaces, blanks or zeros as instructed.

                   RECORD NAME: RECIPIENT "Q" RECORD

.01 Enter a "W" Record after the last "Q" Record submitted for a particular Withholding Agent. The "W" Record serves as a summary of the preceding "Q" Record data, and enables IRS to cross-check the correctness of information received.

.02 Several "W" Records for different withholding agents may appear on the same Transmitter's file. Also, the "W" Record may refer to "Q" Records on more than one reel, provided all of the preceding "Q" Records are for the same withholding agent.

.03 A "W" Record may only be followed by new Recipient "Q" Records for the next Withholding Agent, if any, or by a tape mark and/or trailer label when more reels follow this reel, or by an End of Transmission "Y" Record, when this is the last reel of the file. The "W" Record cannot be the last record on the FILE.

.04 Each "W" Record has a fixed length of 500 positions.

NOTE: All fields are required. If you do not have information to enter or the field is not applicable, you must still allow for the field by entering spaces, blanks or zeros as instructed.

               RECORD NAME: WITHHOLDING AGENT "W" RECORD

.01 The "Y" Record is a fixed record length of 500 positions and all positions and all positions listed are required. The "Y" Record is a summary of the number of withholding agents and total number of tape reels in the entire file.

.02 This record will be written after the last "W" Record of the entire file. End the LAST reel ONLY of a file with an End of Transmission "Y" Record. The "Y" Record may only be preceded by a "W" Record. It may only be followed by a tape mark, or a tape mark and a trailer label (if trailer labels are used), or a trailer label.

.03 PLEASE NOTE THAT IF SUBMITTING A MULTI-REEL FILE, THERE WILL ONLY BE ONE END OF TRANSMISSION "Y" RECORD. THE END OF TRANSMISSION "Y" RECORD WILL BE THE LAST RECORD IN THE FINAL BLOCK ON THE LAST REEL IN YOUR FILE.

              RECORD NAME: END OF TRANSMISSION "Y" RECORD

Revenue Procedure 91-9 is superseded.