IRS RELEASES ELECTRONIC AND MAGNETIC MEDIA FILING REQUIREMENTS.

Rev. Proc. 99-29

Use this revenue procedure to prepare Tax Year 1999 and prior year information returns for submission to Internal Revenue Service (IRS) using any of the following:

o Magnetic Tape

o Tape Cartridge

o 8mm, 4mm, and Quarter Inch Cartridges

o 3-1/2-Inch Diskette

o Electronic Filing

Caution to filers: To be in compliance with Year 2000 changes, the bisynchronous electronic filing communications package and the 5 1/4- inch diskette filing have been discontinued.

Please read this publication carefully. Persons orbusinesses required to file information returns magnetically orelectronically may be subject to penalties forfailure to file orinclude correct information if they do not follow the instructions in this revenue procedure.

Table of Contents

Part A. General

Revenue procedures are generally revised annually to reflect legislative and form changes. Comments concerning this revenue procedure, or suggestions for making it more helpful, can be addressed to:

     Internal Revenue Service

.01 The purpose of this revenue procedure is to provide the specifications for filing Forms 1098, 1099, 5498, and W-2G magnetically or electronically, which includes 1/2-inch magnetic tape; IBM 3480, 3490 or AS400 compatible tape cartridges (including 8mm); or 3 1/2-inch diskette with IRS. IRS/MCC has discontinued processing 8-inch, 5 1/4-inch diskette, and the mainframe electronic filing system. The previously used BBS (Bulletin Board System) has also been replaced.This revenue procedure must be used for the preparation of Tax Year 1999 information returns and information returns for tax years prior to 1999 that are required to be filed. This revenue procedure must be used to prepare current and prior year information returns filed beginning January 1, 2000 and received by IRS/MCC or postmarked by December 15, 2000. Specifications for filing the following forms are contained in this revenue procedure.

     (a) Form 1098, Mortgage Interest Statement.

.03 IRS/MCC does not process Forms W-2. Paper and/or magnetic media for Forms W-2 must be sent to SSA. IRS/MCC does, however, process waiver requests (Form 8508), extension of time to file requests (Form 8809) for Forms W-2 and requests for an extension of time to provide the employee copies of Forms W-2.

.04 Generally, the box numbers on the paper forms correspond with the amount codes used to file magnetically/electronically; however, if discrepancies occur, the instructions in this revenue procedure govern.

.05 This revenue procedure also provides the requirements and specifications for magnetic media or electronic filing under the Combined Federal/State Filing Program.

.06 The following revenue procedures and publications provide more detailed filing procedures for certain other information returns.

(a) 1999 "Instructions for Forms 1099, 1098, 5498, and W-2G" provides specific instructions on completing and submitting information returns to IRS.

(b) Publication 1179, Rules and Specifications for Private Printing of Substitute Forms 1096, 1098, 1099, 5498, and W-2G.

(c) Publication 1239, Specifications for Filing Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, Magnetically or Electronically

(d) Publication 1187, Specifications for Filing Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, Magnetically or Electronically

(e) Publication 1245, Specifications for Filing Form W-4, Employee's Withholding Allowance Certificate, Magnetically or Electronically.

.07 This revenue procedure supersedes Rev. Proc. 98-35 published as Publication 1220 (Rev. 5-98) Specifications for Filing Forms 1098, 1099, 5498, and W-2G Magnetically or Electronically.

.08 Refer to Part A, Sec. 17, for definitions of terms used in this publication.

Section 2. Nature of Changes -- Current Year (Tax Year 1999)

.01 In this publication, all pertinent changes for Tax year 1999 are emphasized by the use of italics. Portions of text which require special attention have been bolded. Filers are always encouraged to read the publication in its entirety.

.02 Programming Changes

a. Global Changes Affecting All Records

(1) For all forms -- In all date fields that have a one-digit month (January through September) and a one-digit day (1 through 9), the number must be preceded by a zero. The date fields, in all cases, are numeric; therefore, blanks, alphas, or special characters are not acceptable. Example: January 2, 1999 (19990102). The four-digit year must precede the month and the day to be Y2K compliant.

(2) The following types of media are no longer accepted by IRS/MCC:

     (a) 5 1/4-inch diskettes

(4) Part C (previously Bisynchronous -- Mainframe Electronic Filing Specifications) has been changed to Electronic Filing Specifications.

(a) The new phone number for electronic filing is (1-304-262- 2400).

(5) Part D (previously Asynchronous -- IRP-BBS) has been changed to Magnetic/Electronic Specifications For Extensions of Time.

(6) In Part D, Sec. 3. Record Layout -- Field Position 186; Code 6 has been added for Form 5498-MSA.

(7) Electronic test files only may be submitted beginning November 1, 1999, and as late as January 31, 2000.

(8) The due date of information returns filed electronically has been changed to March 31, 2000. This change does not apply to the Forms 5498 or 5498-MSA nor to magnetic media filing.

(9) Filers who submitted information returns via the Information Reporting Program-Bulletin Board System or Main-frame may submit data via the new electronic filing system. See Part C for filing instructions and specifications.

(10) The following QIC (Quarter-Inch Cartridge) sizes have been deleted from Part B, Section 4:

 Size           Tracks         Density             Capacity

b. Programming Changes -- Transmitter "T" Record

(1) For all forms, Payment Year, Field positions 2-5, must be incremented to reflect the 4 digit report year (1998 to 1999), unless reporting prior year data.

(2) Field positions 296-303, Total Number of Payees, is no longer a required field.

c. Programming Changes -- Payer "A" Record

(1) For all forms, Payment Year, Field Positions 2-5, must be incremented to reflect the 4 digit year (1998 to 1999), unless reporting prior year data.

(2) Form 1098 -- Mortgage Interest Statement, Field Positions 28-39: Amount Code 4 has been added for the use by the interest recipient to provide other information, such as real estate taxes or insurance paid from escrow.

(3) Form 1098-T -- Tuition Payments Statement, Field Positions 28-39: For Tax Year 1999, payers are only required to report entity information (TIN, name, address and the appropriate student indicators).

(4) Form 1099-G -- Certain Government and Qualified State Tuition Program Payments, Field Positions 28-39: Amount Code 5 has been added for Qualified state tuition program earnings.

(5) Form 1099-INT -- Interest Income, Field Positions 28-39: Amount Code 5 has been renamed to represent Investment expenses and Foreign tax paid is now Amount Code 6.

(6) Form 1099-MSA -- Distributions From an MSA or Medicare+ Choice MSA, Field Positions 28-39: Amount Code 4 was added for Fair market value of the account at date of death.

(7) Form 1099-OID -- Original Issue Discount, Field Positions 28-39: Two new amount codes were added:

     Amount Code 6 -- Original issue discount on U. S. Treasury

(9) For Tax Year 1999, Form 1098-E, Student Loan Interest Statement and Form 1098-T, Tuition Payments Statement, may be reported on paper regardless of the 250 return threshold.

d. Programming Changes -- Payee "B" Record

(1) For all forms, Payment Year, Field Positions 2-5 must be incremented to reflect the 4-digit reporting year (1998 to 1999), unless reporting prior year data.

(2) Form 1099-MSA -- Distributions From an MSA or Medicare+ Choice MSA:

     a) Field Position 545, Distribution Code -- Code 6, Death

a) Code B -- May be eligible for death benefit exclusion

b) Code C -- May be eligible for both A and B

c) Code K -- Distribution from a 1998 Roth conversion IRA in first 5 years.

The following code has been added:

a) Code R -- Recharacterized IRA contribution.

The following code has be changed:

a) Code J -- Distribution from a Roth IRA.

(4) Form 5498 -- Field Position 551 has been changed to Recharacterization indicator.

(5) Form 5498-MSA -- Field Positions 544- 750 have been created to accommodate changes to the form.

3. Editorial Changes -- General

(a) Files containing information returns on magnetic media; Form 4804, Transmittal of Information Returns reported Magnetically/ Electronically; Form 4419, Application for Filing Information Returns Magnetically/Electronically, and any correspondence regarding information returns (i.e. suggestions, name and/or address changes) must be sent to the following address:

     Internal Revenue Service

     Internal Revenue Service

(d) In Part A, Sec. 5.14, reference to Operation Allied Force (Yugoslavia) has been added.

(e) In Part A, Sec. 8.04, the statement instructing filers submitting hard copy prints for tests has been deleted. Hard copy print tests are no longer acceptable.

(f) Information has been added to Part A, Sec. 10.01, regarding filing methods and applicable due dates.

(g) The following note has been added to Part A, Sec. 10.01, supporting the changed due date for electronic filing:

As a result of recent legislation, electronically filed Forms 1099, 1098 or W-2G are due to the IRS by March 31, 2000. The due date for magnetically filed Forms 1099, 1098 and W-2G remains unchanged (February 28, 2000).

(h) Due to security regulations at IRS/MCC, a note has been added to Part A, Sec. 10.05 alerting filers to the hours of delivery for PDSs.

(i) Part A, Sec. 11.02 -- A footnote was added in reference to Internal Revenue Code Section 6071(b) which eliminates the neces- sity for electronic filers of information returns to request an extension of the filing date from February 28, 2000, to March 31, 2000, effective for returns required to be filed after December 31, 1999.

(j) Part A, Sec. 11.10 -- Additional information has been added to the note referencing the extension of time to file electronically.

(k) In Part A, Sec. 12.05 -- A note of clarification has been added to the term correction.

(l) Form 1099-G -- The title of the form has been changed to Certain Government and Qualified State Tuition Program Payments.

(m) Form 1099-MSA -- The title of the form has been changed to Distributions From an MSA or Medicare+ Choice MSA.

(n) Form 5498-MSA -- The title of the form has been changed to MSA or Medicatre + Choice MSA Information.

(o) In Part A, Sec. 17, Definition of Terms -- The term bisynchronous and the related definition has been deleted.

(p) In Part A, Sec. 17, Definition of Terms -- The term ISDN (Integrated Services Digital Network) and related definition has been added.

(q) In Part A, Sec. 17, Definition of Terms -- A note has been added under the definition of Payer to identify the eligible educational institution that received the qualified tuition and related expenses in 1999 as the payer.

(r) In Part B, Sec. 4.07.(d), clarification has been added in describing the typical capacity of DDS.

Section 3. Where To File and How to Contact the IRS, Martinsburg Computing Center

.01 All information returns filed magnetically or electronically are processed at IRS/MCC. Files containing information returns and requests for IRS magnetic media and electronic filing information should be sent to the following address:

     If by Postal Service, truck or air freight:

    If by Postal Service, truck or air freight:

.04 The telephone numbers for magnetic media inquiries or electronic submissions are:

            304-263-8700 -- Call Site -- Part A, Sec 3.10

.05 The 1999 "Instructions for Forms 1099, 1098, 5498, and W-2G" have been included in the Publication 1220 for your convenience. The Form 1096 is used only to transmit Copy Aof paper Forms 1099, 1098, 5498, and W-2G. If filing paper returns, follow the mailing instructions on the Form 1096 and submit the paper returns to the appropriate IRS Service Center.

.06 Requests for paper Forms 1096, 1098, 1099, 5498, and W-2G, and publications related to magnetic media/electronic filing should be made by calling the IRS toll-free number 1-800-TAX-FORM (1-800- 829-3676) or by using the IRS Web Site at www. irs. ustreas. gov.

.07 Questions pertaining to magnetic media filing of Forms W-2 must be directed to the Social Security Administration (SSA). Filers can call 1-800-SSA-6270 to obtain the phone number of the SSA Magnetic Media Coordinator for their area.

.08 Payers should not contact IRS/MCC if they have received a penalty notice and need additional information or are requesting an abatement of the penalty. A penalty notice contains an IRS representative's name and/or phone number for contact purposes; or, the payer may be instructed to respond in writing to the address provided. IRS/MCC does not issue penalty notices and does not have the authority to abate penalties. For penalty information, refer to the Penalty section of the 1999 "Instructions for Forms 1099, 1098, 5498, and W-2G."

.09 A taxpayer or authorized representative may request a copy of a tax return, including Form W-2 filed with a return, by submitting Form 4506, Request for Copy or Transcript of Tax Form, to IRS. This form may be obtained by calling 1-800-TAX-FORM (1-800-829- 3676).

.10 The IRS Centralized Call Site answers both magnetic media and tax law questions relating to the filing of information returns (Forms 1096, 1098, 1099, 5498, 8027, W-2G, 1042-S, and W-4). The Call Site also answers tax law and paper filing related questions about Forms W-2 and W-3, as well as handling inquiries dealing with backup withholding due to missing and incorrect taxpayer identification numbers. The Call Site is located at IRS/MCC and operates in conjunction with the Information Reporting Program. The Call Site provides service to the payer community (financial institutions, employers, and other transmitters of information returns). Recipients of information returns (payees) should continue to contact 1-800-829-1040 or other numbers specified in the tax return instructions with any questions on how to report information on their tax returns.

The Call Site accepts calls from all areas of the country. The number to call is 304-263-8700 or Telecommunications Device for the Deaf (TDD) 304-267-3367. These are toll calls. Hours of operation for the Call Site are Monday through Friday, 8: 30 a. m. to 4: 30 p. m. Eastern Time. The Call Site is in operation throughout the year to handle the questions of payers, transmitters, and employers. Due to the high demand for assistance at the end of January and February, it is advisable to call as soon as possible to avoid these peak filing seasons.

Section 4. Filing Requirements

.01 The regulations under section 6011(e)(2)(A) of the Internal Revenue Code provide that, any person, including a corporation, partnership, individual, estate, and trust, who is required to file 250 or more information returns must file such returns magnetically/electronically. The 250* or more requirement applies separately for each type of return and separately to each type of corrected return.

Even though as many as 249 information returns may be submitted on paper to the Internal Revenue Service, IRS encourages filers to transmit information returns magnetically or electronically.

.02 All filing requirements that follow apply individually to each reporting entity as defined by its separate Taxpayer Identification Number (TIN) [Social Security Number (SSN), Employer Identification Number (EIN), or Individual Taxpayer Identification Number (ITIN)]. For example, if a corporation with several branches or locations uses the same EIN, the corporation must aggregate the total volume of returns to be filed for that EIN and apply the filing requirements to each type of return accordingly.

.03 Payers who are required to submit their information returns on magnetic media may choose to submit their documents by electronic filing. Payers who submit their information returns electronically by March 31, 2000, are considered to have satisfied the magnetic media filing requirements.

.04 IRS/MCC has one method by which payers may submit their files electronically, which is included in Part C.

.05 The following requirements apply separately to both originals and corrections filed magnetically/electronically:

 1098                250 or more of any of these forms require

.06 The above requirements do not apply if the payer establishes hardship (see Part A, Sec. 5).

Section 5. Form 8508, Request for Waiver From Filing Information Returns on Magnetic Media

.01 If a payer is required to file on magnetic media but fails to do so (or fails to file electronically in lieu of magnetic media filing) and does not have an approved waiver on record, the payer will be subject to a penalty of $50 per return in excess of 250. (For penalty information, refer to the Penalty section of the 1999 "Instructions for Forms 1099, 1098, 5498, and W-2G.")

.02 If payers are required to file original or corrected returns on magnetic media, but such filing would create a hardship, they may request a waiver from these filing requirements by submitting Form 8508, Request for Waiver From Filing Information Returns on Magnetic Media, to IRS/MCC.

.03 Even though a payer may submit as many as 249 corrections on paper, IRS encourages magnetically or electronically submitted corrections. Once the 250 threshold has been met, filers are required to submit any returns of 250 or more magnetically or electronically. However, if a waiver for original documents is approved, any corrections for the same type of returns will be covered under this waiver.

.04 Generally, only the payer may sign the Form 8508. A transmitter may sign if given power of attorney; however, a letter signed by the payer stating this fact must be attached to the Form 8508.

.05 A transmitter must submit a separate Form 8508 for each payer. Do not submit a list of payers.

.06 All information requested on the Form 8508 must be provided to IRS for the request to be processed.

.07 The waiver, if approved, will provide exemption from magnetic media filing for the current tax year only. Payers may not apply for a waiver for more than one tax year at a time; application must be made each year a waiver is necessary.

.08 Form 8508 may be photocopied or computer-generated as long as it contains all the information requested on the original form.

.09 Filers are encouraged to submit Form 8508 to IRS/MCC at least 45 days before the due date of the returns.

.10 File Form 8508 for the W-2 series of forms with IRS/MCC, not SSA.

.11 Waivers are evaluated on a case-by-case basis and are approved or denied based on criteria set forth in the regulations under section 6011(e) of the Internal Revenue Code. The transmitter must allow a minimum of 30 days for IRS/MCC to respond to a waiver request.

.12 If a waiver request is approved, the transmitter should keep the approval letter on file. The transmitter should not send a copy of the approved waiver to the service center where the paper returns are filed. August 2, 1999 144 1999-31 I.R.B.

.13 An approved waiver from filing information returns on magnetic media does not provide exemption from all filing. The payer must timely file information returns on acceptable paper forms with the appropriate service center.

.14 Desert Storm/Operation Joint Guard (OJG), Operation Allied Force (Yugoslavia), (Bosnia Region) Contributions [See Note] -- If a payer is required to file a Form 5498 magnetically/electronically, the payer may request an automatic waiver to file Forms 5498 on paper for participants of Desert Storm or Operation Joint Guard/Operation Allied Force (Yugoslavia). The payer should clearly mark Desert Storm, Operation Joint Guard or Operation Allied Force (Yugoslavia) on the waiver request form.

* NOTE: Military personnel under Operation Joint Guard (OJG) will be treated the same as military personnel under Operation Joint Endeavor (OJE) for purposes of Pub. L. 104-117 and Notice 96-34, 1996-1 C.B. 379. For more information on the reporting for Operation Allied Force (Yugoslavia) see Pub. L. 106-21, 04/19/1999 and Notice 99-30.

Section 6. Vendor List

.01 IRS/MCC prepares a list of vendors who support magnetic media or electronic filing. The Vendor List (Pub. 1582) contains the names of service bureaus that will produce files on the prescribed types of magnetic media or via electronic filing. It also contains the names of vendors who provide software packages for payers who wish to produce magnetic media or electronic files on their own computer systems. This list is compiled as a courtesy and in no way implies IRS/MCC approval or endorsement.

.02 If filers meeting the filing requirements engage a service bureau to prepare media on their behalf, the filers should be careful not to report duplicate data, which may cause penalty notices to be generated.

.03 The Vendor List may be updated in print every other year. The most recently printed copy will be available by contacting IRS/MCC at (304) 263-8700 or by way of a letter (see Part A, Sec. 3).

.04 A vendor, who offers a software package, has the ability to produce magnetic media for customers, or has the capability to electronically file information returns, and would like to be included on the list, must submit a written request to IRS/MCC. The request should include:

(a) Company name

(b) Address (include city, state, and ZIP code)

(c) Telephone number (include area code)

(d) Contact person

(e) Type(s) of service provided (e. g., service bureau and/or software)

(f) Type(s) of media offered (e. g., magnetic tape, tape cartridge, 3 1/2-inch diskettes, or electronic filing)

(g) Type of return

Section 7. Form 4419, Application for Filing Information Returns Magnetically/Electronically

.01 Transmitters are required to submit Form 4419, Application for Filing Information Returns Magnetically/Electronically, to request authorization to file information returns with IRS/MCC. A single Form 4419 should be filed no matter how many types of returns the transmitter will be submitting magnetically/electronically. For example, if a transmitter plans to file Forms 1099-INT, one Form 4419 should be submitted. If, at a later date, another type of form (Forms 1098, 1099, 5498 and W-2G) is to be filed, the transmitter does not need to submit a new Form 4419.

EXCEPTIONS

An additional Form 4419 is required for filing each of the following types of returns: Forms 1042-S, 8027, and W-4.

 FORM      TITLE                                 EXPLANATION

.02 Magnetic tape, tape cartridge, diskette, and electronically- filed returns may not be submitted to IRS/MCC until the application has been approved. Please read the instructions on the back of Form 4419 carefully. AForm 4419 is included in the Publication 1220 for the filer's use. This form may be photocopied. Additional forms may be obtained by calling 1-800-TAX-FORM (1-800-829-3676). The form is also available on the IRS Internet Web Site at www. irs. ustreas. gov.

.03 Upon approval, a five-character alpha/numeric Transmitter Control Code (TCC) will be assigned and included in an approval letter. The TCC must be coded in the Transmitter "T" Record. If a transmitter uses more than one TCC to file, each TCC must be reported on separate media or in separate transmissions if filing electronically.

.04 Annually, a Publication 1220 containing the current revenue procedure, forms, and instructions will be sent to the attention of the contact person indicated on Form 4419.

.05 If any of the information (name, TIN or address) on the Form 4419 changes, please notify IRS/MCC in writing so the IRS/MCC database can be updated. However, a change in the method by which information returns are being submitted is not information which needs to be updated (i. e., tape to disk). The transmitter should include the TCC in all correspondence.

.06 Form 4419 may be submitted anytime during the year; however, it must be submitted to IRS/MCC at least 30 days before the due date of the return(s) for current year processing. This will allow IRS/MCC the minimum amount of time necessary to process and respond to applications. In the event that computer equipment or software is not compatible with IRS/MCC, a waiver may be requested to file returns on paper documents.

.07 IRS/MCC encourages transmitters who file for multiple payers to submit one application and to use the assigned TCC for all payers.

.08 If a payer's files are prepared by a service bureau, the payer may not need to submit an application to obtain a TCC. Some service bureaus will produce files, code their own TCC on the media, and send it to IRS/MCC for the payer. Other service bureaus will prepare magnetic media and return the media to the payer for submission to IRS/MCC. These service bureaus may require the payer to obtain a TCC to be coded in the Transmitter "T" Record. Payers should contact their service bureaus for further information.

.09 Once a transmitter is approved to file magnetically or electronically, it is not necessary to reapply each year unless:

(a) The payer has discontinued filing magnetically or electronically for two years; the payer's TCC may have been reassigned by IRS/MCC. Payers who are aware the TCC assigned will no longer be used are requested to notify IRS/MCC so these numbers may be reassigned; or

(b) The payer's magnetic media files were transmitted in the past by a service bureau using the service bureau's TCC, but now the payer has computer equipment compatible with that of IRS/MCC and wishes to prepare his or her own files. The payer must request a TCC by filing Form 4419.

.10 One Form 4419 may be submitted regardless of how many types of media or methods are used to file the return. Multiple TCCs will only be issued to payers with multiple TINs. Only one TCC will be issued per TIN unless the filer has checked the application for the following forms in addition to the Forms 1098, 1099, 5498 or W-2G; Forms 1042-S, 8027, and/or W-4. A separate TCC will be assigned for each of these forms.

.11 In accordance with Regulations section 1.6041-7(b), payments by separate departments of a health care carrier to providers of medical and health care services may be reported on separate returns on magnetic media. In this case, the headquarters will be considered the transmitter, and the individual departments of the company filing reports will be considered payers. A single Form 4419 covering all departments filing on magnetic media should be submitted. One TCC may be used for all departments.

.12 Approval to file does not imply endorsement by IRS/MCC of any computer software or of the quality of tax preparation services provided by a service bureau or software vendor.

Section 8. Test Files

.01 IRS/MCC does not require test files, except for filers wishing to participate in the Combined Federal/State Filing Program (See Part A, Sec. 16, for further information concerning the Combined Federal/State Filing Program).

.02 IRS/MCC encourages first-time magnetic media or electronic filers to submit a test. The test file must consist of a sample of each type of record:

(a) Transmitter "T" Record (all fields marked required must include transmitter information)

(b) Payer "A" Record (must not be fictitious data)

(c) Multiple Payee "B" Records (at least 11 "B" Records per each "A" Record)

(d) End of Payer "C" Record

(e) State Totals "K" Record, if participating in the Combined Federal/State Filing Program August 2, 1999 146 1999-31 I.R.B.

(f) End of Transmission "F" Record (See Part B for record formats.)

.03 Use the Test Indicator "T" in Field Position 28 of the "T" Record to show this is a test file.

.04 IRS/MCC will check the file to ensure it meets the specifications of this revenue procedure. For current filers, sending a test file will provide the opportunity to ensure their software reflects any programming changes.

.05 Tests should be sent to IRS/MCC between November 1 and December 15. Tests submitted on magnetic media must be received at MCC by December 15 in order to be processed. Magnetic media filers may begin submitting test tapes and diskettes after October 1; however, the data will not be processed until on or after November 1.

Only tests submitted electronically may be submitted and resubmitted through January 31, 2000.

.06 For tests filed electronically, the transmitter must send or fax the signed Form 4804, Transmittal of Information Returns Reported Magnetically/Electronically, the same day the transmission is made. Electronic tests may be submitted November 1, 1999 , through January 31, 2000. For tests filed on magnetic tape, tape cartridge, 8mm, 4mm, and quarter inch cartridge, and 3 1/2-inch diskette, the transmitter must include the signed Form 4804 in the same package with the corresponding magnetic media. Mark the "TEST" box in Block 1 on the form. Also, mark "TEST" on the external media label.

.07 IRS/MCC will send a letter of acknowledgment to indicate the test results for magnetic media only. Unacceptable magnetic media files, along with documentation identifying the errors, will be returned. Resubmission of magnetic media test files must be received by IRS/MCC no later than December 15.

.08 Successfully processed media will not be returned to filers.

Section 9. Filing of Information Returns Magnetically/Electronically and Retention Requirements

.01 Form 4804, Transmittal of Information Returns Reported Magnetically/Electronically, Form 4802, Transmittal of Information Returns Reported Magnetically/Electronically (Continuation), or a computer-generated substitute, must accompany all magnetic media shipments. For electronic transmissions, the Form 4804 and Form 4802, if applicable, must be sent or faxed the same day as the electronic transmission. Form 4802, is a continuation of Form 4804 and should only be used if the filer is reporting more than five types of returns and/or more than five payers. Form 4802 is not a stand-alone form; it can only accompany Form 4804.

.02 IRS/MCC allows for the use of computer-generated substitutes for Form 4804/4802. The substitutes must contain all information requested on the original forms including the affidavit and signature line. Photocopies are acceptable original signatures. When using computer-generated forms, be sure to mark very clearly which tax year is being reported. This will eliminate a phone communication from IRS/MCC to question the tax year.

.03 A transmitter may report for any combination of payers and/ or documents in a submission. Each file must begin with a "T" Record and end with an "F" record for the end of a transmission. For example, if reporting Forms 1099-INT for Bank A, Forms 1099-DIV for Bank B, and Forms 1098 for Bank C, three separate tapes or diskettes need not be created. All three banks and all types of documents can be coded within a file on one tape or diskette as long as each bank or type of return has a separate "A" Record. Multiple tapes or diskettes can be sent in one package. For each separate type of media, the first record on the file must be the Transmitter "T" Record. AForm 4804, Transmittal of Information Returns Reported Magnetically/Electronically, must be submitted for every Transmitter "T" Record. Filers must include Form 4804, 4802, or computer- generated substitute with their shipment.

.04 Multiple types of media may be submitted in a shipment. However, submit a separate Form 4804 for each type of media.

.05 Current and prior year data may be submitted in the same shipment; however, each tax year must be on separate media, and a separate Form 4804 must be prepared to clearly indicate each tax year.

.06 Filers who have prepared their information returns in advance of the due date are encouraged to submit this information to IRS/MCC no earlier than January 1 of the year the return is due.

.07 Do not report duplicate information. If a filer submits returns magnetically/electronically, identical paper documents must not be filed. This may result in erroneous penalty notices.

.08 Form 4804 may be signed by the payer or the transmitter, service bureau, paying agent, or disbursing agent (all hereafter referred to as agent), on behalf of the payer. Failure to sign the affidavit on Form 4804 may delay processing or could result in the files being returned unprocessed. An agent may sign the Form 4804 if the agent has the authority to sign the affidavit under an agency agreement (either oral, written, or implied) that is valid under state law and adds the caption "FOR: (name of payer)."

.09 Although an authorized agent may sign the affidavit, the payer is responsible for the accuracy of the Form 4804 and the returns filed. The payer will be liable for penalties for failure to comply with filing requirements.

.10 A self-adhesive external media label, created by the filer, must be affixed to each piece of magnetic media. (IRS no longer provides self-adhesive labels for this purpose.) For instructions on how to prepare an external media label, refer to Notice 210 in the forms section of this publication. If diskettes are used, be certain that only MS-DOS compatible operating systems were used to prepare the diskettes. Non-MS-DOS diskettes are no longer acceptable at IRS-MCC.

.11 On the outside of the shipping container, affix or attach a label which reads "IRB Box ___ of___" reflecting the number of containers in the shipment. (Filers can create a label with this information or cut out one of the labels on the special label page provided in this publication.) If there is only one container, mark the outside as Box 1 of 1. For multiple containers, include the sequence for example, Box 1 of 3, 2 of 3, 3 of 3).

.12 When submitting files include the following:

(a) A signed Form 4804;

(b) Form 4802, if applicable;

(c) External media label (created by filer) affixed to magnetic media;

(d) IRB Box _____ of ______ outside label.

* NOTE: See Part C for Electronic Submission Requirements.

.13 Do not use special shipping containers for transmitting data to IRS/MCC. Shipping containers will not be returned.

.14 If returns from different locations (using the same name and TIN) are submitted on the same file, IRS encourages the filer to consolidate each type of information return under one "A" Record. For example, all "B" Records for the same type of return should be together under one "A" Record and followed by the End of Payer "C" Record.

.15 IRS/MCC 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.

.16 Payers should retain a copy of the information returns filed with IRS or have the ability to reconstruct the data for at least 3 years from the reporting due date, with the exception of Form 1099-C. A financial entity must retain a copy of Form 1099-C, Cancellation of Debt, or have the ability to reconstruct the data required to be included on the return, for at least 4 years from the date such return is required to be filed. Whenever backup withholding is imposed, a 4 year retention is required.

Section 10. Due Dates

.01 The due dates for filing paper returns with IRS also apply to magnetic media. Filing of information returns is on a calendar year basis, except for Forms 5498 and 5498-MSA, which are used to report amounts contributed during or after the calendar year (but not later than April 15). The following due dates will apply to Tax Year 1999:

                               Due Dates

Legislation amended Internal Revenue Code section 6071(b), which eliminates the necessity for electronic filers of Forms 1099, 1098, and W-2G to request an extension of the filing date from February 28 to March 31, effective for returns required to be filed after December 31, 1999.

                     Electronic/Magnetic Filing

.02 If any due date falls on a Saturday, Sunday or legal holiday, the return or statement is considered timely if filed or furnished on the next business day (i. e., the next day that is not a Saturday, Sunday, or legal holiday).

.03 Information returns filed magnetically for Forms 1098, 1099, and W-2G must be submitted to IRS/MCC postmarked on or before February 28, 2000.

.04 Electronically filed information returns for Forms 1098, 1099 and W-2G must be submitted to IRS/MCC no later than March 31, 2000, and will be considered timely filed if submitted by that date. Electronically filed information returns submitted after March 31, 2000, will be considered late unless an extension has been applied for and approved.

.05 Magnetic media returns postmarked by the United States Postal Service (USPS) on or before February 28, 2000, and delivered by United States mail to the IRS/MCC after the due date, are treated as timely under the "timely mailing as timely filing" rule. Asimilar rule applies to items delivered by private delivery services (PDSs) designated by the IRS. APDS must be designated by the IRS before it will qualify for the timely mailing rule. (See Note.) Notice 98-47, 1998-37, I.R.B. 8, provides the list of designated PDSs. Designation is effective until the IRS issues a revised list. Notice 97-26 1997-1 C.B. 413, provides rules for determining the date that is treated as the postmark date. For items delivered by a nondesignated PDS, the actual date of receipt by IRS/MCC will be used as the filing date. For items delivered by a designated PDS, but through a type of service not designated in Notice 98-47, the actual date of receipt by IRS/MCC will be used as the filing date. The timely mailing rule also applies to furnishing statements to recipients and participants and filing Forms 5498 and 5498-MSA.

* NOTE: Due to security regulations at MCC, the Internal Revenue police officers will not accept media from PDSs or couriers between the hours of 3:00 p.m. to 11:00 p.m., seven days a week, and 11:00 p.m. to 7:00 a.m., Saturday and Sunday.

.06 Statements to recipients must be furnished on or before January 31, 2000, for TY 1999. Form 5498 statements to the participants must be furnished on or before January 31, 2000, for TY 1999 for the fair market value of the account and for contributions to an education IRA and by May 31, 2000, for TY 1999 for contributions made to all other types of IRAs for the prior calendar year.

.07 Forms 5498 and 5498-MSA filed magnetically or electronically must be filed with IRS/MCC on or before May 31, 2000, for TY 1999. Forms 5498 and 5498-MSA are filed for contributions to be applied to 1999 that are made January 1, 1999 through April 17, 2000, and/or to report the fair market value of any IRA/SEP/SIMPLE (Form 5498) or medical savings account (Form 5498-MSA).

.08 Use this revenue procedure to prepare information returns filed magnetically or electronically beginning January 1, 2000, and received by IRS/MCC no later than December 15, 2000.

Section 11. Extensions of Time

.01 An extension of time to file may be requested for Forms 1099, 1098, 5498, 5498-MSA, W-2G, W-2 series of forms, 8027 and 1042-S.

.02 Form 8809, Request for Extension of Time to File Information Returns, should be submitted to IRS/MCC at the address listed in .06 of this section. This form may be used to request an extension of time to file information returns submitted on paper, magnetically or electronically.

.03 Requesting an extension of time for multiple payers (50 or less) may be done by submitting Form 8809 and attaching a list of the payer names and associated TINs (EIN or SSN). The listing must be attached to ensure an extension is recorded for all payers. Form 8809 may be computer-generated or photocopied. Be sure that all the pertinent information is included. For Forms 1098, 1099 and W-2G that will be filed electronically, Form 8809 must be submitted on or before March 31, 2000.

.04 Requests for an extension of time to file for more than 50 payers are required to be submitted magnetically or electronically. Requests for an extension of time for 10 to 50 payers are encouraged to be filed magnetically or electronically. (See Part D, Sec. 3, for the record format.) The request may be filed on tape, tape cartridge, 3 1/2-inch diskette, or electronically.

.05 If a filer does not have an IRS/MCC assigned Transmitter Control Code (TCC), a Form 4419, Application for Filing Information Returns Magnetically/Electronically, must be submitted to obtain a TCC. This number must be used to submit an extension request magnetically/electronically.

.06 All requests for an extension of time filed on Form 8809 or filed magnetically on tape, tape cartridge, or 3 1/2-inch diskettes should be sent using the following address:

     If by Postal Service, truck or air freight:

.08 As soon as it is apparent that a 30-day extension of time to file is needed, Form 8809 may be submitted. It will take a minimum of 30 days for IRS/MCC to respond to an extension request. Under certain circumstances, a request for an extension of time could be denied. When a denial letter is received, any additional or necessary information may be resubmitted within 20 days.

.09 Form 8809 must be postmarked no later than the due date of the return for which an extension is requested. If requesting an extension of time to file several types of forms, use one Form 8809; however, the Form 8809 must be postmarked no later than the earliest due date. For example, if requesting an extension of time to file both Forms 1099-INT and 5498, submit Form 8809 post-marked on or before February 28, 2000. (See NOTE: ) Complete more than one Form 8809 to avoid this problem.

* NOTE: For Tax Year 1999, if you will be filing Forms 1098, 1099, or W-2G electronically, the Form 8809 is not required unless an extension beyond March 31, 2000.

Internal Revenue Code Section 6071(b) eliminates the necessity for electronic filers of the information returns to which this provision applies (Forms 1098, 1099, W-2G) to request an extension of the filing date from February 28 to March 31, effective for returns required to be filed after December 31, 1999.

.10 If an additional extension of time is needed, a second Form 8809 must be filed by the initial extended due date. Check line 7 on the form to indicate that an additional extension is being requested. A second 30-day extension will be approved only in cases of extreme hardship or catastrophic event. If requesting a second 30-day extension of time, submit the information return files as soon as prepared. Do not wait for MCC's response to your second extension request.

.11 If an extension request is approved, the approval letter should be kept on file. The approval letter or copy of the approval letter for an extension of time should not be sent to IRS/MCC with the magnetic media file or to the service center where the paper returns are filed.

.12 Request an extension for only one tax year.

.13 The extension request must be signed by the payer or a person who is duly authorized to sign a return, statement or other document for the payer.

.14 Failure to properly complete and sign the Form 8809 may cause delays in processing the request or result in a denial. Carefully read and follow the instructions on the back of the Form 8809.

.15 Form 8809 may be obtained by calling 1-800-TAX-FORM (1-800- 829-3676). The form is also available on the IRS Internet Web Site www. irs. ustreas. gov . A copy of the Form 8809 is also provided in the back of the Publication 1220.

.16 Request an extension of time to furnish the statements to recipients of Forms 1098, 1099, 5498, W-2G, W-2 series of forms, and 1042-S by submitting a letter to IRS/MCC at the address listed in .06 of this section. The letter should contain the following information:

(a) Payer name

(b) TIN

(c) Address

(d) Type of return

(e) Specify that the extension request is to provide statements to recipients.

(f) Reason for delay

(g) Signature of payer or person duly authorized

Requests for an extension of time to furnish the statements to recipients for Forms 1098, 1099, 5498, W-2G, W-2 series of forms, and 1042-S are not automatically approved; however, if approved, generally an extension will allow a maximum of 30 additional days from the due date to furnish the statements to the recipients. The request must be postmarked by the date on which the statements are due to the recipients.

Section 12. Processing of Information Returns Magnetically/Electronically

.01 All data received at IRS/MCC for processing will be given the same protection as individual income tax returns (Form 1040). IRS/MCC will process the data and determine if the records are formatted and coded according to this revenue procedure.

.02 If the data is formatted incorrectly, the magnetic media will be returned for replacement accompanied by a Media Tracking Slip (Form 9267). When media is returned, it is because IRS/MCC encountered errors (not limited to format) and was unable to process the media, therefore, requiring a replacement. Open all packages immediately.

.03 Magnetic media files must be corrected and returned with the Media Tracking Slip (Form 9267) to IRS/MCC within 45 days from the date of the letter IRS/MCC included with the returned files. Refer to Part C, Section 6, for procedures for correcting files submitted electronically. A penalty for failure to file correct information returns by the due date will be assessed if the files are not corrected and returned within the 45 days or if the incorrect files are returned by IRS/MCC for replacement more than two times. A penalty for intentional disregard of filing requirements will be assessed if a replacement file is not received. (For penalty information, refer to the Penalty section of the 1999 "Instructions for Forms 1099, 1098, 5498, and W-2G.")

.04 Sample records identifying errors encountered will be provided with the returned media. It is the responsibility of the transmitter to check the entire file for similar errors.

.05 The following definitions have been provided to help distinguish between a correction and a replacement:

o A correction is an information return submitted by the transmitter to correct an information return that was previously submitted to and processed by IRS/MCC, but contained erroneous information.

* NOTE: Corrections should only be made to records that have been submitted incorrectly, not the entire file.

o A replacement is an information return file that IRS/MCC has returned to the transmitter due to errors encountered during processing. After necessary changes have been made, the file must be returned for processing along with the Media Tracking Slip Form 9267) which was included in the shipment from IRS/MCC. (See Note ).

* NOTE: Filers should never send anything to IRS/MCC marked "Replacement" unless IRS/MCC returned media to them.

.06 IRS/MCC will not return media after successful processing. Therefore, if the transmitter wants proof that IRS/MCC received a shipment, the transmitter should select a service with tracking capabilities or one that will provide proof of delivery. Do not use special shipping containers for transmitting data to IRS/MCC. Shipping containers will not be returned.

.07 IRS/MCC will work with filers as much as possible to assist with processing problems. If the filer is contacted by IRS/MCC, a prompt response is important. IRS/MCC may have information that the filer needs to correct his or her file.

.08 IRS/MCC contacts payers who have submitted payee data with missing TINs in an attempt to prevent errors that could result in penalties. Payers who submit data with missing TINs and have taken the required steps to obtain this information are encouraged to attach a letter of explanation to the required Form 4804. This will prevent unnecessary contact from IRS/MCC. This letter, however, will not prevent backup withholding notices (CP2100 or CP2100A) or penalties for missing or incorrect TINs.

Section 13. Corrected Returns

.01 The magnetic media filing requirement of information returns of 250 or more applies separately to both original and corrected returns.

          If a payer has 100 Forms 1099-A to be corrected, they can

.03 There are numerous types of errors, and in some cases, more than one transaction may be required to correct the initial error. If the original return was filed as an aggregate, the filers must consider this in filing corrected returns.

.04 Corrected returns may be included on the same medium as original returns; however, separate "A" Records are required. Corrected returns must be identified on the Form 4804 and the external media label by indicating "Correction." If filers discover that certain information returns were omitted on their original file, they must not code these documents as corrections. The file must be coded and submitted as originals.

.05 If a payer discovers errors for prior years that affect a large number of payees, in addition to sending IRS the corrected returns and notifying the payees, a letter containing the following information should be sent to IRS/MCC:

(a) Name and address of payer

(b) Type of error (please explain clearly)

(c) Tax year

(d) Payer TIN

(e) TCC

(f) Type of Return

(g) Number of Payees

This information will be forwarded to the appropriate office in an attempt to prevent erroneous notices from being sent to the payees. The correction must be submitted on an actual information return document or filed magnetically/electronically. Provide the correct tax year in Block 2 of the Form 4804 and on the external media label.

.06 Prior year data, original and corrected, must be filed according to the requirements of this revenue procedure. If submitting prior year corrections, use the record format for the current year and submit on separate media. However, use the actual year designation of the correction in Field Positions 2-5 of the "T", "A", and "B" Records. If filing electronically, a separate transmission must be made for each tax year.

.07 In general, filers should submit corrections for returns filed within the last 3 calendar years [4 years if the payment is a reportable payment subject to backup withholding under section 3406 of the Code and also for Form 1099-C, Cancellation of Debt under section 1.6050P-1(e)(7)].

.08 All paper returns, whether original or corrected, must be filed with the appropriate service center.

.09 Form 4804 and Form 4802 (if applicable), must be submitted with corrected files submitted magnetically or electronically.

.10 The "B" Record provides a 20-position field for the Payer's Account Number for the Payee. This number will help identify the appropriate incorrect return if more than one return is filed for a particular payee. Do not enter a TIN in this field. A payer's account number for the payee may be a checking account number, savings account number, serial number, or any other number assigned to the payee by the payer that will distinguish the specific account. This number should appear on the initial return and on the corrected return in order to identify and process the correction properly. 1999-31 I.R.B. 151 August 2, 1999

.11 The record sequence for filing corrections is the same as for original returns.

.12 Review the chart that follows. Errors normally fall under one of the two categories listed. Next to each type of error made is a list of instructions on how to file the corrected return.

                    Guidelines for Filing Corrected

Name/TINs. The publication may be obtained by calling 1-800- TAX-FORM (1-800-829-3676) or from the IRS Internet Web Site www.irs.ustreas.gov.

One transaction is required to make the following corrections properly (See Note 2).

2. Original return was filed with one or more of the following errors:

(a) Incorrect payment the Payer "A" Record the Payer "A" Record

(b) Incorrect payment amounts in the Payer "B" Record

(c) Incorrect code in the Distribution Code field in the Payee "B" Record

(d) Incorrect payee address

(e) Incorrect Direct sales indicator

A. Prepare a new Form 4804/4802 that includes information relating to this new file.

B. Mark "Correction" in Block 1 of Form 4804.

C. Prepare a new file. The first record on the file will be the Transmitter "T" Record.

D. Make a separate "A" Record for each type of return and each payer being reported. Information in the "A" Record may be the same as it was in the original submission. However, the Correction File Indicator (Field Position 50) must set to "1" (one).

E. The Payee "B" Records must show the correct record information as well as a Corrected Return Indicator Code of "G" Field Position 6.

F. Corrected returns submitted to IRS/MCC using "G" coded "B" Records may be on the same file as those returns submited without the "G" coded "B" Records; however, separate "A" Records are required.

G. Prepare a separate "C" Record for each type of return and each payer being reported.

H. The last record on the file will be the End of Transmission "F" Record.

I. Indicate "Correction" on the external media label.

* NOTE 2: If a filer is correcting the name and/or TIN in addition to any errors listed in item 2 of the chart, two transactions will be required. If a filer is reporting "G" coded, "C" coded, and/or "Non- coded" (original) returns on the same media, each category must be reported under separate "A" Records.

Section 14. Taxpayer Identification Number (TIN)

.01 Section 6109 of the Internal Revenue Code requires a person to furnish his/her TIN to the person obligated to file the information return.

.02 The payee's TIN and name combination is used to associate information returns reported to IRS/MCC with corresponding information on tax returns. It is imperative that correct Taxpayer Identification Numbers (TINs) for payees be provided to IRS/MCC. Do not enter hyphens or alpha characters. Entering all zeros, ones, twos, etc., will have the effect of an incorrect TIN.

.03 The payer and payee names with associated TINs should be consistent with the names and TINs used on other tax returns.

Also, the name and TIN provided must belong to the owner of the account. If the account is recorded in more than one name, furnish the name and TIN of one of the owners of the account. The TIN provided must be associated with the name of the payee provided in the first name line of the "B" Record. For individuals, the payee TIN is generally the payee's Social Security Number (SSN). For other entities, the payee TIN is the payee's Employer Identification Number (EIN). The payee TIN may also refer to an Individual Taxpayer Identification Number (ITIN) or Adoption Taxpayer Identification Number (ATIN). For sole proprietors, the payee TIN may be either an SSN or EIN but the sole proprietor's name (not the business name) must be used on the first name line and the SSN is preferred.

.04 Failure to provide the correct name and corresponding TIN could result in a penalty and/or backup withholding notice (sometimes referred to as a "B" Notice).

.05 The following charts will help payers determine the TIN to be furnished to IRS/MCC for those persons for whom they are reporting information (payees).

            CHART 1. GUIDELINES FOR SOCIAL SECURITY NUMBERS

Section 15. Effect on Paper Returns and Statements to Recipients

.01 Magnetic/electronic reporting of information returns eliminates the need to submit paper documents to the IRS. CAUTION: Do not send Copy A of the paper forms to IRS/MCC for any forms filed on magnetic media or electronically. This will result in duplicate filing; therefore, erroneous notices could be generated.

.02 Payers are responsible for providing statements to the payees as outlined in the 1999 "Instructions for Forms 1099, 1098, 5498, and W-2G." Refer to those instructions for filing information returns on paper with the IRS and furnishing statements to recipients.

.03 Statements to recipients should be clear and legible. If the official IRS form is not used, the filer must adhere to the specifications and guidelines in Publication 1179, "Rules and Specifications for Private Printing of Substitute Forms 1096, 1098, 1099, 5498, and W-2G."

Section 16. Combined Federal/State Filing Program

.01 The Combined Federal/State Filing (CF/SF) Program was established to simplify information returns filing for the taxpayer. IRS/MCC will forward this information to participating states free of charge for approved filers. Separate reporting to those states is not necessary. The following information returns may be filed under the Combined Federal/State Filing Program:

Form 1099-DIV -- Dividends and Distributions

Form 1099-G -- Certain Government and Qualified State Tuition Program Payments

Form 1099-INT -- Interest Income

Form 1099-MISC -- Miscellaneous Income

Form 1099-OID -- Original Issue Discount

Form 1099-PATR -- Taxable Distributions Received from Cooperatives

Form 1099-R -- Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc.

Form 5498 -- IRA Contribution Information

The following information returns may not be filed under this program:

Form 1098 -- Mortgage Interest Statement

Form 1098-E -- Student Loan Interest Statement

Form 1098-T -- Tuition Payments Statement

Form 1099-A -- Acquisition or Abandonment of Secured Property

Form 1099-B -- Proceeds From Broker and Barter Exchange Transactions

Form 1099-C -- Cancellation of Debt

Form 1099-LTC -- Long-Term Care and Accelerated Death Benefits

Form 1099-MSA -- Distributions From an MSA or Medicare+ Choice MSA

Form 1099-S -- Proceeds From Real Estate Transactions

Form 5498-MSA -- MSA or Medicare+ Choice MSA Information

Form W-2G -- Certain Gambling Winnings

.02 To request approval to participate, a magnetic media test file coded for this program must be submitted to IRS/MCC between November l, 1999, and December 15, 1999. Electronic test files must be submitted between November 1, 1999, and January 31, 2000.

.03 Attach a letter to the Form 4804 submitted with the test file to indicate a desire to participate in the Combined Federal/ State Filing Program.

.04 A test file is only required for the first year. Each record, both in the test and the actual data file, must conform to this revenue procedure.

.05 If the test file is acceptable, IRS/MCC will send the filer an approval letter, and a Form 6847, Consent for Internal Revenue Service to Release Tax Information, which the payer must complete, sign, and return to IRS/MCC before any tax information can be released to the state. Filers must write their TCC on Form 6847.

.06 If the test file is not acceptable, IRS/MCC will return the media with a letter indicating the problems. The new test file must be returned to IRS/MCC no later than December 15.

.07 A separate Form 6847 is required for each payer. A transmitter may not combine payers on one Form 6847 even if acting as Attorney-in-Fact for several payers. Form 6847 may be computer- generated as long as it includes all information that is on the original form or it may be photocopied. If the Form 6847 is signed by an Attorney-in-Fact, the written consent from the payer must clearly indicate that the Attorney-in-Fact is empowered to authorize release of the information.

.08 Only code the records for participating states and for those payers who have submitted Form 6847.

.09 Some participating states require separate notification that the payer is filing in this manner. Since IRS/MCC acts as a forwarding agent only, it is the payer's responsibility to contact the appropriate states for further information.

.10 All corrections properly coded for the Combined Federal/ State Filing Program will be forwarded to the participating states.

.11 Participating states and corresponding valid state codes are listed in Table 1 of this section. The appropriate state code must be entered for those documents that meet the state filing requirements; do not use state abbreviations.

.12 To simplify filing, some of the participating states have provided their information return reporting requirements (see Table 2). Each state's filing requirements are subject to change by the state. It is the payer's responsibility to contact the participating states to verify the criteria provided in this table.

.13 Upon submission of the actual files, the transmitter must be sure of the following:

(a) All records should be coded exactly as required by this revenue procedure.

(b) The "C" Record must be followed by a State Totals "K" Record for each state being reported.

(c) Payment amount totals and the valid participating state code must be included in the State Totals "K" Record.

(d) The last "K" Record must be followed by an "A" Record or an End of Transmission "F" Record (if this is the last record of the entire file).

             TABLE 1. PARTICIPATING STATES AND THEIR CODES

NR = No filing requirement.

/b/ Amounts are for aggregates of several types of income from the same payer.

/c/ Missouri would prefer those returns filed with respect to non-Missouri residents to be sent directly to its state agency. Section

17. Definition of Terms

 Element                              Description

01 The following state and U. S. territory abbreviations are to be used when developing the state code portion of address fields. This table provides state and territory abbreviations only, and does not represent those states participating in the Combined Federal/ State Filing Program.

 State               Code    State          Code   State          Code

.03 For foreign country addresses, filers may use a 51 position free format which should include city, province or state, postal code, and name of country in this order. This is allowable only if a "1" (one) appears in the Foreign Country Indicator, Field Position 247 of the "B" Record.

.04 When reporting APO/FPO addresses use the following format:

                               EXAMPLE:

Section 19. Major Problems Encountered

IRS/MCC encourages filers to verify the format and content of each type of record to ensure the accuracy of the data. This may eliminate the need for IRS/MCC to return files for replacement. This may be important for those payers who have either had their files prepared by a service bureau or who have purchased preprogrammed software packages.

Filers who engage a service bureau to prepare media on their behalf should be careful not to report duplicate data which may generate penalty notices.

The Major Problems Encountered lists some of the most frequently encountered problems with magnetic/electronic files submitted to IRS/MCC. These problems may result in media being returned for replacement. Some of the problems resulted from not referring to the publication for instructions.

1. Incorrect Format

"READ" the Publication 1220 carefully.

* NOTE: Due to major format changes in the Tax Year 1998 Publication 1220, IRS/MCC strongly encourages transmitters, vendors, and filers to read the Revenue Procedure in its entirety. See problem examples below:

o Transmitter "T" Record -- These files began with Payer "A" Record. All files must begin with a Transmitter "T" Record

o Incorrect year format -- In order to be Y2K compliant, any date field in the information transmitted that does not reflect the 4 position year in the date field will result in media being returned. Date fields having the year/month/day are 8 characters (YYYYMMDD). Also, if the month and/or day is one position, i. e.; January through September or 1 through 9 for the day of the month, precede the month and/or day with a zero. All date fields are numeric, therefore, blanks, alphas, or special characters are not acceptable.

EXAMPLE: January 2, 1999 (19990102)

o Invalid record length -- Records not 750 Positions in length.

o Multiple Files on diskettes -- Filers sending multiple files on diskettes. Please refer to Part B, Section 5. A file consists of one Transmitter "T" Record followed by a Payer "A" Record, Payee "B" Records, End of Payer "C" Record, State Totals "K" Record (if applicable for CF/SF Program), and the End of Transmission "F" Record. A file can contain multiple Payer "A" Records, but, only one Transmitter "T" Record.

IRS/MCC continues to receive prior year data in prior year format instead of current year format. Never send prior year data in prior year format. Be sure to use the current revenue procedure (Publication 1220) for formatting data for prior years.

2. No Form 4804, Transmittal of Information Returns Reported Magnetically/Electronically

Each shipment of media sent to IRS/MCC must include a Form 4804. More than one type of media may be sent in the same shipment, (i. e., a tape, a diskette, or a tape cartridge) but must have a separate Form 4804 to accompany each type of media. In the following example, three separate Forms 4804 would be required in the total shipment However, multiples of one type of media (i. e., 6 diskettes) may be covered by one Form 4804. For electronically transmitted information returns, the Form 4804 must be mailed or faxed to IRS/MCC the same day as the transmission. Often, electronic files are transmitted and no Form 4804 is sent to MCC. A Form 4804 must be mailed or faxed immediately after the submission.

EXAMPLE:

      A & B Company sends in the one shipment of the following

3. Discrepancy Between IRS/MCC Totals and Totals in Payer "C" Records

The "C" Record is a summary record for a type of return for a given payer as reported in the "B" Records. IRS balances the total number of payees and payment amounts and compares them with totals in the "C" Records. Filers should verify the accuracy of the records because imbalances may necessitate return of files for replacement.

4. The Payment Amount Fields in the "B" Record Do Not Correspond to the Amount Codes in the "A" Record

If codes 2, 4, and 7 appear in the Amount Codes Field of the "A" Record, then the "B" Record must show payment amounts in only Payment Amount Fields 2, 4, and 7, right-justified and unused positions must be zero (0) filled.

 EXAMPLE: "A" RECORD 247 b/b/b/b/b/b/b/b/b/ c b/ -- (`b/' denotes a

Money amounts must be right-justified and zero (0) filled. (Do not use blanks.)

6. Incorrect TIN in Payer "A" Record

The Payer's TIN reported in positions 12-20 of the "A" Record must be nine numeric characters (no alphas or special characters) in order for IRS/MCC to process the media. The TIN provided in the "A" Record must correspond with the name provided in the first payer name line.

7. Incorrect Tax Year in the Transmitter "T" Record, Payer "A" Record and the Payee "B" Record

The tax year in the transmitter, payer and payee records should reflect the year of the information being reported. Filers need to check their files to ensure this information is correct.

* Note: Due to Year 2000 compliance changes, the year format has been expanded to four (4) positions.

8. Incorrect Reporting of Form W-2 Information to IRS

Form W-2 information is submitted to SSA, and not to IRS/MCC. SSA has its own magnetic media reporting program and specifications for wage information, and the media containing Forms W-2 is submitted to SSA. Any media received at IRS/MCC that contains Form W-2 information will be forwarded to SSA. The filer will be notified of this action by letter. To inquire about filing Form W-2 information magnetically, call 1-800-SSA-6270.

9. Excessive Withholding Credits

Generally, for most information returns, other than Forms 1099- MISC, 1099-R, and W-2G, Federal withholding amounts should not exceed 31 percent of the income reported. Validate the total reported in the withholding field against the total income reported.

10. Incorrect Format for TINs in the Payee "B" Record

A check of "B" Records should be made to ensure the Taxpayer Identification Numbers (TINs) are formatted correctly. There should be nine numerics, no alphas, hyphens, commas, or blanks. Incorrect formatting of TINs may result in a penalty.

IRS/MCC contacts filers who have submitted payee data with missing TINs in an attempt to prevent errors that could result in penalties. Payers/transmitters who submit data with missing TINs, and have taken the required steps to obtain this information are encouraged to attach a letter of explanation to the required Form 4804. This will prevent unnecessary contact from IRS/MCC. This letter, however, will not prevent backup withholding notices (CP2100 and CP2100A) or penalties for missing or incorrect TINs. For penalty information, refer to the Penalty section of the " 1999 Instructions for Forms 1099, 1098, 5498, and W-2G."

11. Distribution Codes for Form 1099-R Reported Incorrectly

Distribution codes for Form 1099-R are being reported incorrectly or not being reported. See valid distribution codes for Form 1099-R in the Payee "B" Record layout, Field Positions 545-546.

12. Incorrect Record Totals Listed on Form 4804

The Combined Total Payee Records listed on the Form 4804 (Block 9) are used in the verification process of information returns. The figure in this block should be the total number of Payee "B" Records contained on the media submitted with the Form 4804. The figures on the Form 4804 are compared against the total number of Payee "B" Records processed on the media. Imbalances may necessitate the return of the files for replacement.

13. Invalid Use of IRA/SEP/SIMPLE Indicator (Form 1099-R)

The IRA/SEP/SIMPLE indicator for Form 1099-R should be used for the reporting of a distribution from a traditional IRA/SEP/ SIMPLE or a Roth conversion. It may be used at your option for a distribution from a Roth or Ed IRA or for an IRA recharacterization. The total amount distributed from a traditional IRA/SEP/SIMPLE should be reported in Payment Amount Field A (IRA/SEP/SIMPLE Distribution) as well as Payment Amount Field 1. The amount reported in this payment amount field is the amount from Box 2a of Form 1099- R.

14. Failure To Identify the Rollover Contributions and/or Fair Market Value of the Account for Form 5498.

Rollover contributions (Amount Code 2 of the "A" Record) and/or fair market value of the account (Amount Code 4 of the "A" Record) for Form 5498 must be identified as an IRA (position 547 of the "B" Record), SEP (position 548 of the "B" Record), SIMPLE (position 549 of the "B" Record), Roth IRA (position 550 of the "B" Record) Recharacterization (position 551 of the "B" Record), or Education IRA (position 552 of the "B" Record).

15. Media Received Without Data

Transmitters/filers should verify the presence of Form 1099 information returns on the media before sending the shipment to IRS/MCC.

Part B. Magnetic Media Specifications

Section 1. General

.01 The specifications contained in this part of the revenue procedure define the required format and contents of the records to be included in the magnetic media/electronic file.

.02 A provision is made in the "B" Records for entries which are optional. If the field is not utilized, enter blanks to maintain a fixed record length of 750 positions. Each field description explains the intended use of specific field positions.

.03 Transmitters should be consistent in the use of recording codes and density on files. If the media does not meet these specifications, it will be returned to the transmitter for replacement. Filers are encouraged to submit a test prior to submitting the actual file. Contact IRS/MCC for further information at 304-263-8700.

Section 2. Tape Specifications

.01 IRS/MCC can process most magnetic tape files if the following specifications are followed:

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

(1) Odd parity.

(2) A density of 1600 or 6250 BPI.

(3) If transmitters use UNISYS Series 1100, they must submit an interchange tape.

(b) 9 track ASCII (American Standard Coded Information Interchange) with:

(1) Odd parity.

(2) A density of 1600 or 6250 BPI.

Transmitters should be consistent in the use of recording codes and density on files.

.02 All compatible tape files must have the following characteristics: Type of tape 1/2-inch (12.7 mm) wide, computer-grade magnetic tape on reels of up to 2,400 feet (731.52 m) within the following specifications:

(a) Tape thickness: 1.0 or 1.5 mils and

(b) Reel diameter: 10 1/2-inch (26.67 cm), 8 1/2-inch (21.59 cm), 7-inch (17.78 cm), or 6-inch.

.03 The tape records defined in this revenue procedure may be blocked subject to the following:

(a) A block must not exceed 32,250 tape positions.

(b) If the use of blocked records would result in a short block, all remaining positions of the block must be filled with 9s; however, the last block of the file may be filled with 9s or truncated. Do not pad a block with blanks.

(c) All records, except the header and trailer labels, may be blocked or unblocked.

A record may not contain any control fields or block descriptor fields which describe the length of the block or the logical records within the block. The number of logical records within a block (the blocking factor) must be constant in every block with the exception of the last block which may be shorter (see item (b) above). The block length must be evenly divisible by 750.

(d) Records may not span blocks.

.04 Labeled or unlabeled tapes may be submitted.

.05 For the purposes of this revenue procedure the following must be used:

Tape Mark:

(a) Signifies the physical end of the recording on tape.

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

(c) May follow the header label and precede and/or follow the trailer label.

.06 IRS/MCC can only read one data file on a tape. Adata file is a group of records which may or may not begin with a tapemark, but must end with a trailer label. Any data beyond the trailer label cannot be read by IRS programs.

Section 3. Tape Cartridge Specifications

.01 In most instances, IRS/MCC can process tape cartridges that meet the following specifications:

(a) Must be IBM 3480, 3490, 3490E, or AS400 compatible.

(b) Must meet American National Standard Institute (ANSI) standards, and have the following characteristics:

(1) Tape cartridges will be 1/2-inch tape contained in plastic cartridges which are approximately 4-inches by 5-inches by 1-inch in dimension.

(2) Magnetic tape will be chromium dioxide particle based 1/2-inch tape.

(3) Cartridges must be 18-track or 36-track parallel (See Note).

(4) Cartridges will contain 37,871 CPI or 75,742 CPI (characters per inch).

(5) Mode will be full function.

(6) The data may be compressed using EDRC (Memorex) or IDRC (IBM) compression.

(7) Either EBCDIC (Extended Binary Coded Decimal Interchange Code) or ASCII (American Standard Coded Information Interchange) may be used.

.02 The tape cartridge records defined in this revenue procedure may be blocked subject to the following:

(a) A block must not exceed 32,250 tape positions.

(b) If the use of blocked records would result in a short block, all remaining positions of the block must be filled with 9s; however, the last block of the file may be filled with 9s or truncated. Do not pad a block with blanks.

(c) All records, except the header and trailer labels, may be blocked or unblocked. A record may not contain any control fields or block descriptor fields which describe the length of the block or the logical records within the block. The number of logical records within a block (the blocking factor) must be constant in every block with the exception of the last block which may be shorter [see item (b) above]. The block length must be evenly divisible by 750.

(d) Records may not span blocks.

.03 Tape cartridges may be labeled or unlabeled.

.04 For the purposes of this revenue procedure, the following must be used:

Tape Mark:

(a) Signifies the physical end of the recording on tape.

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

(c) May follow the header label and precede and/or follow the trailer label.

* Note: Filers should indicate on the external media label and transmittal Form 4804 whether the cartridge is 18-track or 36-track.

Section 4. 8mm, 4mm, and Quarter Inch Cartridge Specifications

.01 In most instances, IRS/MCC can process 8mm tape cartridges that meet the following specifications:

      (a) Must meet American National Standard Institute (ANSI)

(a) A block must not exceed 32,250 tape positions.

(b) If the use of blocked records would result in a short block, all remaining positions of the block must be filled with 9's; however, the last block of the file may be filled with 9's or truncated. Do not pad a block with blanks.

(c) All records, except the header and trailer labels, may be blocked or unblocked. A record may not contain any control fields or block descriptor fields which describe the length of the block or the logical records within the block. The number of logical records within a block (the blocking factor) must be constant in every block with the exception of the last block which may be shorter [see item (b) above]. The block length must be evenly divisible by 750.

(d) Various COPY commands have been successful; however, the SAVE OBJECT COMMAND is not acceptable.

(e) Extraneous data following the "F" Record will result in media being returned for replacement.

(f) Records may not span blocks.

(g) No more than 250,000 documents per cartridge and per file.

.03 For faster processing, IRS/MCC encourages transmitters to use header labeled cartridges. IRSTAX may be used as a suggested filename.

.04 For the purposes of this revenue procedure, the following must be used:

Tape Mark:

(a) Signifies the physical end of the recording on tape.

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

(c) May follow the header label and precede and/or follow the trailer label.

.05 If extraneous data follows the End of Transmission "F" Record, the file will be returned for replacement. Therefore, IRS/MCC encourages transmitters to use blank tape cartridges, rather than cartridges previously used, in the preparation of data when submitting information returns.

.06 IRS/MCC can only read one data file on a tape. Adata file is a group of records which may or may not begin with a tapemark, but must end with a trailer label. Any data beyond the trailer label cannot be read by IRS programs.

.07 4mm (.157-inch) cassettes are now acceptable with the following specifications:

(a) 4mm cassettes will be 2 1/2-inch by 3-inch.

(b) The tracks are 1 (one).

(c) The density is 19 (61000 BPI).

(d) The typical capacity is DDS (DAT data storage) at 1.3 Gb (60 meter) or 2 Gb (90 meter), or DDS-2 at 4Gb (120 meter).

(e) The general specifications for 8mm cartridges will also apply to the 4mm cassettes.

.08 Various Quarter Inch Cartridges (QIC) (1/4-inch) are also acceptable.

      (a) QIC cartridges will be 40 by 60.

IRS/MCC has discontinued processing 5 1/4-inch diskettes. Filers must use other methods by which to submit information returns magnetically/electronically.

.01 To be compatible, a diskette file must meet the following specifications:

(a) 3 1/2-inches in diameter.

(b) Data must be recorded in standard ASCII code.

(c) Records must be a fixed length of 750 bytes per record.

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

(e) Positions 749 and 750 of each record have been reserved for use as carriage return/line feed (CR/LF) characters, if applicable.

(f) Filename of IRSTAX must be used. Do not enter any other data in this field. If a file will consist of more than one diskette, the filename IRSTAX will contain a three-digit extension. This extension will indicate the sequence of the diskettes within the file. For example, if the file consists of three diskettes, the first diskette will be named IRSTAX. 001, the second will be IRSTAX. 002, and the third will be IRSTAX. 003. The first diskette, IRSTAX. 001 will begin with a "T" Record and the third diskette, IRSTAX. 003 will have an "F" Record at the end of the file.

(g) A diskette will not contain multiple files as defined in Part A, Section 17. A file may have only ONE Transmitter "T" Record.

(h) Failure to comply with instructions will result in media being returned for replacement.

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

 Capacity         Tracks          Sides/Density       Sector Size

.03 IRS/MCC will only accept 3 1/2-inch diskettes created using MS-DOS.

* NOTES: IRS/MCC has discontinued processing 5 1/4-inch diskettes.

IRS no longer has the capability to process non-MS-DOS compatible diskettes.

3 1/2-inch diskettes created on a System 36 or AS400 are not acceptable.

.04 Transmitters should check media for viruses before submitting it to IRS/MCC. Section

6. Transmitter "T" Record -- General Field Descriptions

.01 The Transmitter "T" Record identifies the entity transmitting the magnetic media/electronic file and contains information which is supplied on the Form 4804, Transmittal of Information Returns reported Magnetically/Electronically. The "T" Record has been created to facilitate current magnetic/electronic processing of information returns at IRS/MCC.

.02 The Transmitter "T" Record is the first record on each file and is followed by a Payer "A" Record. See Part A, Sec. 17, Definition of Terms for the definition of file. A file will be returned to the transmitter for replacement if the "T" Record is not present. For transmitters with multiple diskettes, refer to Sec. 5. 3 1/2-Inch Diskette Specifications.

.03 No money or payment amounts are reported in the Transmitter "T" Record.

.04 For all fields marked "Required" , the transmitter must provide the information described under Description and Remarks. For those fields not marked "Required" , a transmitter must allow for the field, but may be instructed to enter blanks or zeros in the indicated field positions and for the indicated length.

.05 All records must be a fixed length of 750 positions.

.06 The Transmitter "T" Record must be followed by the Payer "A" Record, which must be followed with Payee "B" Records; however, the initial record on each file must be a Transmitter "T" Record.

.07 All alpha characters entered in the "T" Record must be uppercase.

.08 When transmitting information on magnetic media or electronically, the Transmitter "T" Record must precede the first Payer "A" Record and reflect the person actually transmitting the information to IRS/MCC.

                  Record Name: Transmitter "T" Record

 110-149    Company            40   Required. Enter the name of the

If you are sending an original, correction or test file, then enter blanks.

 376-748    Blank              373  Enter blanks.

 ____________________________________________________________________

.01 The Payer "A" Record identifies the institution or person making payments, a recipient of mortgage interest payments, a broker, a person reporting a real estate transaction, a barter exchange, a creditor, a trustee, or issuer of an IRA, SEP, or SIMPLE, or a lender who acquires an interest in secured property or who has reason to know that the property has been abandoned. The payer will be held responsible for the completeness, accuracy, and timely submission of magnetic/electronic files. The Payer "A" Record also provides parameters for the succeeding Payee "B" Records. IRS computer programs rely on the absolute relationship between the parameters and data fields in the "A" Record and the data fields in the "B" Records to which they apply.

.02 The number of "A" Records depends on the number of payers and the different types of returns being reported. The payment amounts for one payer and for one type of return should be consolidated under one "A" Record if submitted on the same file.

.03 Do not submit separate "A" Records for each payment amount being reported. For example, if a payer is filing Form 1099-DIV to report Amount Codes 1, 2, and 3, all three amount codes should be reported under one "A" Record, not three separate "A" Records. For "B" Records that do not contain payment amounts for all three amount codes, enter zeros for those which have no payment to be reported.

.04 The second record on the file must be an "A" Record. A transmitter may include "B" Records for more than one payer on a tape or diskette. However, each group of "B" Records must be preceded by an "A" Record and followed by an End of Payer "C" Record. A single tape or diskette may contain different types of returns but the types of returns must not be intermingled. A separate "A" Record is required for each payer and each type of return being reported.

.05 All records must be a fixed length of 750 positions.

.06 The initial record on a file must be a "T" Record followed by an "A" Record. IRS/MCC will accept an "A" Record after a "C" Record to report an additional payer or a different type of return. An "A" Record may be blocked with "B" Records.

.07 Do not begin any record at the end of a block or diskette and continue the same record into the next block or diskette.

.08 All alpha characters entered in the "A" Record must be uppercase.

.09 When filing Form 1098, Mortgage Interest Statement, Form 1098-E, Student Loan Interest Statement, and Form 1098-T, Tuition Payments Statement, the "A" Record will reflect the name of the recipient of the interest referred to as the payer in these instructions. The "B" Record will reflect the individual paying the interest (borrower/payer of record) and the amount paid.

.10 For all fields marked "Required" , the transmitter must provide the information described under Description and Remarks. For those fields not marked "Required" , a transmitter must allow for the field, but may be instructed to enter blanks or zeros in the indicated media position(s) and for the indicated length.

                     Record Name: Payer "A" Record

* NOTE: A type of return and an amount code must be present in every Payer "A" Record even if no money amounts are being reported. For a detailed explanation of the information to be reported in each amount code, refer to the 1999 "Instructions for Forms 1099, 1098, 5498, and W-2G."

 Amount Codes Form 1098 --                For Reporting Mortgage

 Amount Codes Form 1098-E --              For Reporting Interest on

PAYER: For Form 1098-T, payer refers to the eligible educational institution that received qualified tuition and related expenses in 1999. The payer is not the student or the parent/ guardian of the student.

* NOTE: Until regulations are adopted, no penalties will be imposed under section 6721 or 6722 for failure to file or furnish correct Forms 1098-T if you made a good faith effort to file and furnish them.

 Amount Codes Form 1099-A --              For Reporting the

 Amount Codes Form 1099-B                 For Reporting on Form 1099-

* NOTE 2: Payment Amount Fields 6, 7, 8, and 9 are to be used for the reporting of regulated futures or foreign currency contracts.

 Amount Codes Form 1099-C --              For Reporting Cancellation

* NOTE 2: Amount Code 7 will be used only if a combined Form 1099-A and 1099-C is being filed.

 Amount Codes Form 1099-DIV --            For Reporting Payments on

 Amount Codes  Form 1099-G --             For Reporting Payments on

* NOTE 2: Do not report timber royalties under a "payascut" contract; these must be reported on Form 1099-S.

 Amount Codes Form 1099-MSA --            For Reporting Distributions

* NOTE 2: If the taxable amount cannot be determined, enter a "1" (one) in position 547 of the "B" Record. For a traditional IRA, SEP, or SIMPLE distribution, generally enter in Payment Amount Field A the same amount entered in Payment Amount Field 1.

* NOTE 3: See the "l999 Instructions for Forms 1099, 1098, 5498, and W-2G" for information concerning Federal income tax withheld for Form 1099-R.

* NOTE 4: For Form 1099-R, report the total amount distributed from a Traditional IRA, SEP, or SIMPLE in Payment Amount Field A (IRA/SEP/SIMPLE Distribution), Field Positions 163-174 of the Payee "B" Record, and generally, the same amount in Payment Amount Field 1 (Gross Distribution), Field Positions 55-66 of the Payee "B" Record. Amount Code A was created to identify the distribution as a Traditional IRA/SEP/SIMPLE. The IRA/SEP/SIMPLE Indicator should be set in Field Position 548 of the Payee "B" Record and the money should be reported in Payment Field A as well as Payment Field 1 of the Payee "B" Record; but, not in Payment Amount Field 2. The purpose for Payment Field A is to identify the amount of money reported is a Traditional IRA/SEP/SIMPLE distribution. Refer to the "1999 Instructions for Forms 1099, 1098, 5498, and W-2G" for exceptions.

 Amount Codes Form 1099-S --              For Reporting Payments on

If reporting IRA contributions for a Desert Storm/Shield participant for other than 1999 or an Operation Joint Guard (OJG) (Bosnia Region) or Operation Allied Force (Yugoslavia) participant, enter "DS" for Desert Storm or Joint Endeavor or "JG" for Joint Guard, the year for which the contribution was made, and the amount of the contribution in the Special Data Entries Field of the "B" Record. Do not enter the contributions in Amount Code 1. For information concerning Desert Storm/Shield participant reporting, refer to the "1994 Instructions for Forms 1099, 1098, 5498, and W- 2G," or Notice 91-17, 1991-1 C.B. 319. The instructions for filing Form 5498 for Desert Storm/Shield participants will also apply to participants of Joint Endeavor or Operation Joint Guard (OJG) (Bosnia Region) and Operation Allied Force (Yugoslavia).

* NOTE 2: Also include employee contributions to an IRA under a SEP plan but not salary reduction contributions. DO NOT include EMPLOYER contributions, these are included in Amount Code 7.

 Amount Codes Form 5498-MSA               For Reporting Information on

* NOTE 2: This is the fair market value (FMV) of the account on December 31, 1999.

 Amount Codes Form W-2G --                For Reporting Payments on

 50            Correction        1        Required for correction

 93-132        Second Payer      40       If the Transfer (or Paying)

For foreign addresses, filers may use the payer city, state, and ZIP Code as a continuous 51 position field. Enter information in the following order: city, province or state, postal code, and the name of the country. When reporting a foreign address, the Foreign Entity Indicator in position 52 must contain a "1" (one).

 174-213       Payer City        40       Required. If the Transfer

.01 The "B" Record contains the payment information from the information returns. When filing information returns, the format for the "B" Records will remain constant and is a fixed length of 750 positions. The record layout for field positions 1 through 543 is the same for all types of returns. Field positions 544 through 750 vary for each type of return to accommodate special fields for individual forms. In the "A" Record, the amount codes that appear in field positions 28 through 39 will be left-justified and filled with blanks. In the "B" Record, the filer must allow for all twelve Payment Amount Fields. For those fields not used, enter "0" (zero). For example, a payer reporting on Form 1099-MISC should enter "A" in field position 27 of the "A" Record, Type of Return. If reporting payments for Amount Codes 1, 2, 4, 7, A and C, the payer would report field positions 28 through 39 of the "A" Record as "1247AC /b/b/b/b/b./" (In this example, "b/" denotes blanks. Do not enter the letter "b/".) In the "B" Record:

Positions 55 through 66 for Payment Amount 1 will represent rents.

Positions 67-78 for Payment Amount 2 will represent royalties.

Positions 79-90 for Payment Amount 3 will be "0" (zeros).

Positions 91-102 for Payment Amount 4 will represent Federal income tax withheld.

Positions 103-126 for Payment Amounts 5 and 6 will be "0" (zeros).

Positions 127-138 for Payment Amount 7 will represent nonemployee compensation.

Positions 139-162 for Payment Amounts 8 and 9 will be "0" (zeros).

Positions 163-174 for Payment Amount A will represent crop insurance proceeds.

Positions 175-186 for Payment Amount B will be "0" (zeros).

Positions 187-198 for Payment Amount C will represent gross proceeds paid to an attorney in connection with legal services.

.02 The following specifications include a field in the payee records called "Name Control" in which the first four characters of the payee's surname are to be entered by the filer;

(a) If filers are unable to determine the first four characters of the surname, the Name Control Field may be left blank. Compliance with the following will facilitate IRS computer programs in identifying the correct name control:

(1) The surname of the payee whose TIN is shown in the "B" Record should always appear first. If, however, the records have been developed using the first name first, the filer must leave a blank space between the first and last names.

(2) In the case of multiple payees, only the surname of the payee whose TIN (SSN, EIN, ITIN, or ATIN) is shown in the "B" Record must be present in the First Payee Name Line. Surnames of any other payees may be entered in the Second Payee Name Line.

.03 See Part A, Section 14, for further information concerning Taxpayer Identification Numbers (TINs).

.04 For all fields marked "Required" , the transmitter must provide the information described under Description and Remarks. For those fields not marked "Required", the transmitter must allow for the field, but may be instructed to enter blanks or zeros in the indicated field position(s) and for the indicated length.

.05 All records must be a fixed length of 750 positions.

.06 Afield is also provided in these specifications for Special Data Entries. This field may be used to record information required by state or local governments, or for the personal use of the filer. IRS does not use the data provided in the Special Data Entries Field; therefore, the IRS program does not check the content or format of the data entered in this field. It is the filer's option to use the Special Data Entry Field. This field will not affect the processing of the "B" Records.

.07 Following the Special Data Entries Field in the "B" Record, payment fields have been allocated for State Income Tax Withheld and Local Income Tax Withheld. These fields are for the convenience of the filers. The information will not be used by IRS/MCC.

.08 Those payers participating in the Combined Federal/State Filing Program must adhere to all of the specifications in Part A, Sec. 16, to participate in this program. Filers may not file Forms 1098, 1098-E, 1098-T, 1099-A, 1099-B, 1099-C, 1099-LTC, 1099-MSA, 1099-S, 5498-MSA, and W-2G under the Combined Federal/State Filing Program.

.09 All alpha characters in the "B" Record must be uppercase.

.10 Do not use decimal points (.) to indicate dollars and cents. Ten dollars must appear as 000000001000 in the payment amount field.

.11 IRS strongly encourages transmitters to review the data for accuracy before submission to prevent issuance of erroneous notices. Transmitters should be especially careful that the names, TINs, account numbers, types of income, and income amounts are correct.

.12 When reporting Form 1098, Mortgage Interest Statement and Form 1098-E, Student Loan Interest Statement, the "A" Record will reflect the name and TIN of the recipient of the interest or payment, the filer of the Forms 1098 and 1098-E (the payer). The "B" Record will reflect the individual paying the interest (borrower/payer of record) and the amount paid. For Form 1099-S, the "A" Record will reflect the person responsible for reporting the transaction (the filer of the Form 1099-S) and the "B" record will reflect the seller/transferor. When reporting Form 1098-T, Tuition Payments Statement, the "A" Record will reflect the name and TIN of the educational institution receiving tuition payments. The "B" Record will reflect the name and TIN of the student on whose behalf the tuition is being paid.

                     Record Name: Payee "B" Record

* NOTE 2: End the First Payee Name Line with a full word. Do not split words.

* NOTE 3: When reporting Form 1098, Mortgage Interest Statement, and Form 1098-E, Student Loan Interest Statement, the "A" Record will reflect the name and TIN of the recipient of the interest or payment, the filer of Forms 1098 and 1098-E (the payer). The "B" Record will reflect the individual paying the interest (the borrower/ payer of record) and the amount paid. For Form 1099-S, the "A" Record will reflect the person responsible for reporting the transaction (the filer of the Form 1099-S) and the "B" Record will reflect the seller/transferor. When reporting Form 1098-T, Tuition Payments Statement, the "A" Record will reflect the name and TIN of the educational institution receiving tuition payments. The "B" Record will reflect the name and TIN of the student on whose behalf the tuition is being paid.

* NOTE 4: For Form 5498, Inherited IRAs, enter the beneficiary's name followed by the word "beneficiary." For example, "Brian Young as beneficiary of Joan Smith" or something similar that signifies that the IRA was once owned by Joan Smith. Filers may abbreviate the word "beneficiary" as, for example, "benef." Refer to the " 1999 Instructions for Forms 1099, 1098, 5498, and W-2G." The beneficiary's TIN must be reported in positions 12-20 of the "B" Record.

* NOTE 5: When reporting Form 1099-LTC, Long-Term Care and Accelerated Death Benefits, the Payee Name Line of the "B" Record will reflect the policyholder. The name of the insured will be reported in Field Positions 557-596 of the Payee "B" Record.

 288-327       Second Payee      40       If there are multiple

For foreign addresses, filers may use the payee city, state, and ZIP Code as a continuous 51 position field. Enter information in the following order: city, province or state, postal code, and the name of the country. When reporting a foreign address, the Foreign Country Indicator in position 247 must contain a "1" (one).

 408-447       Blank             40       Enter blanks.

     (1) Forms 1098, 1098-E

 (1) Payee "B" Record -- Record Layout Positions 544-750 for Forms

 (2) Payee "B" Record -- Record Layout Positions 544-750 for Form

For foreign addresses, filers may use the insured's city, state, and ZIP Code as a continuous 51 position field. Enter information in the following order: city, province or state, postal code, and the name of the country. When reporting a foreign address, the Foreign Country Indicator in position 247 must contain a "1" (one).

 637-676       City of           40       Required. Enter the city,