Rev. Proc. 68-39

SECTION 1. PURPOSE.

The purpose of this Revenue Procedure is to state the requirements of the Internal Revenue Service relating to substitutes for Form 1099, U.S. Information Return.

SEC. 2. SUBSTITUTE FORMS.

Substitutes for Form 1099 which adhere to the specifications contained in this procedure may be privately printed without the prior approval of the Internal Revenue Service. Proposed substitutes not meeting these specifications should be submitted to the Service for approval. Requests for approval should contain an explanation of the need for the specific deviations sought.

SEC. 3. PAYMENTS.

All of the payment blocks contained on the official forms need not be shown on the substitute form. Only the payments actually needed by the user are necessary on the substitute. Payment blocks in addition to those on the official form may be added to substitute forms in accordance with section 4.02. The arrangement of payment blocks on substitute forms is covered in section 4.05.

SEC. 4. FORMAT SPECIFICATIONS.

.01 For purpose of format specifications, the Form 1099 is divided into two sections: a specified format section and a variable format section. The specified format section includes all payment blocks, payee name, address, and taxpayer identifying number, the format identifier (sec. 4.04(j)) and payment identifier (sec. 4.05(b) and (d)), the format guidelines, and the area within three-eighths inch of the left edge of the document and one-eighth inch to the right of the format or payment identifier. The variable format section consists of the remainder of the document, including the reporting year and payer name, address, and identification number.

.02 Additional data blocks (including additional payment blocks) may be added to substitute Forms 1099, at the option of the payer, or in accordance with State requirements, but these additional data blocks must be contained in the variable format section except as noted in section 4.04(c) below.

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

.04 Specified format section layout (general.)--

(a) The specified format section, including contents, general arrangement and typography, must conform to one of the formats illustrated in Exhibit B, subject to section 4.05. Formats 1, 2, 3, 4, and 5 are preferred; however, formats 6, 7, 8, and 9 are also acceptable.

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

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

(d) If the taxpayer identifying number is a social security number, it must be printed in the following pattern: 000-00-0000. If it is an employer identification number, it must be printed as 00-0000000. Spaces may be used in lieu of hyphens.

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

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

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

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

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

(j) The appropriate format identifier (1, 2, 3, 4, 5, 6, 7, 8, or 9) must be shown in the upper left corner of Copy A, as illustrated in Exhibits A and B, one-fourth inch from the top and left edges. If payment identifiers are used, they should follow the format identifier. See Exhibit C. In addition, the appropriate format guidelines must also be shown on Copy A. The identifiers and guidelines need not be shown on the other copies of the form.

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

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

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

(b) In addition to the requirements in section 4.05(a), above, when the number or sequence of payments varies from the official form, or when a taxpayer identifying number is on the same line as the payments, a payment identifier must be printed on the form immediately to the right of the format identifier. The payment identifier consists of appropriate codes shown in section 4.05(d) below. The sequence of digits in the payment identifier must correspond exactly to the sequence of payments on the substitute form starting from the left.

(c) The taxpayer identifying number may be on the same line as the payment amounts. When this is done, format 6 or 7 must be used. In these cases, the number will be treated in the same manner as payment block, and assigned code "0" (numeric zero), as noted in section 4.05(d) below.

(d) The following codes apply when payment identifier numbers are used:

1. Gross dividends and other distributions on stock.

2. Earnings from savings and loan associations, credit unions, etc.

3. Other interest.

4. Patronage dividends and certain other distributions by cooperatives.

5. Rents and royalties.

6. Annuities, pensions, and other fixed or determinable income.

7. Commissions, fees, prizes and awards, etc., to nonemployees, and foreign items.

8. Taxpayer Identifying Number (used with format 6 or 7 only). See Exhibit C.

SEC. 5. SPECIFICATIONS.

.01 Basic form.--The latest revision of the prescribed Form 1099 should be used as the basis for the privately printed form. A copy of the latest revision of this form may be obtained from any District Director of Internal Revenue.

.02 Color and quality of paper.--

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

(b) The paper used for the other copies must be white, at least 18-pound (basis 17 x 22-1000).

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

.04 Quality of printing.--Printers must maintain strict quality control during production of substitute Forms 1099. Strict observance of printing and trimming tolerances is required.

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

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

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

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

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

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

SEC. 6. ADDITIONAL INSTRUCTIONS.

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

.02 Additional copies.--Additional copies may be prepared by payers for States requiring the report. When this is done, one such copy may be inserted between Copies A and B. Forms for delivery to State or local taxing authorities should be clearly labeled to indicate the purpose for which they are intended and should not bear any part of the designation, "Form 1099, U.S. Treasury Department, Internal Revenue Service."

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

.04 Instructions for payers.--

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

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

(c) Corrected returns Form 1099 must be submitted in accordance with instructions on Exhibit D.

SEC. 7. SUBSTITUTES NOT MEETING ABOVE CONDITIONS.

Proposed substitute forms which do not meet the conditions stated above, and requests for submission of Forms 1099 in the form of tabulating cards should be forwarded by letter to the Commissioner of Internal Revenue, Attention:D:S:E, 1111 Constitution Avenue, N.W., Washington, D.C. 20224. Requests for submission of magnetic tape should be forwarded to the appropriate Service Center.

SEC. 8. REPRODUCTION PROOFS.

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

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

SEC. 9. EFFECT ON OTHER DOCUMENTS.

This Revenue Procedure supersedes Revenue Procedure 67-21, C.B. 1967-1, 601.

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