Rev. Proc. 85-3

SECTION 1. PURPOSE

This revenue procedure states the Internal Revenue Service (the Service) requirements relating to acceptable privately designed and printed or computer-prepared substitute federal tax return forms, (i.e., Forms 1040, 1040A, 1040EZ, 1120, 1120A, 940, 941, etc.) and computer-generated substitute schedules or forms to be attached thereto. It also authorizes the use of reproductions of official forms and gives direction for the proper completion of returns.

SEC. 2. SCOPE

This revenue procedure is the guide for preparing substitutes for most printed, computer-prepared and computer-generated tax forms. This procedure does not include guidance for Form 1040-ES, Form 1042S, Form 5498, the Form 1099 series, Form W-9 and the Form W-2 series. (See Sec. 18 to obtain guidance for the excluded forms.)

SEC. 3. DEFINITIONS

.01 Substitute Form. A tax form (or related schedule) that differs in any way from the official version and is intended to replace the entire form that is printed and distributed by the Service. This term also covers those approved substitute forms exhibited in this revenue procedure.

.02 Printed Form. A form produced using conventional printing processes. Also, a printed form which has been reproduced by photocopying or similar processes.

.03 Preprinted Pin-Fed Form. A printed form that has marginal perforations for use with automated and high-speed printing equipment.

.04 Computer-Prepared Substitute Form. A pre-printed form in which the taxpayer's name, address and tax entry information has been inserted by a computer, computer-printer or other computer-type equipment, such as word-processing equipment.

.05 Computer-Generated Substitute Form. A form that is entirely prepared by the use of a computer printer so that all the line numbers, line captions, and the tax amount data entries are in the same typeface. No graphics usually appear on the form. (Most tax returns requiring signature and establishing tax liability may not be computer generated. Among them are Forms 1040, 1040A, 1040EZ, and 1120.)

.06 Manually Prepared Form. A pre-printed form in which the taxpayer's name, address, and tax entry information is entered by an individual using a pen, pencil, typewriter, or other non-automated equipment.

.07 Graphics. Those parts of a printed tax form that are not tax amount entries or called-for information. Generally, these are line numbers, captions, instructions, special indicators, borders, rules, and strokes created by typesetting, photographics, photo-composition, etc.

.08 Acceptable Reproduced Form. A photocopy of an original form or of an unchanged reproduction proof supplied by the Service. (A reproduction is not a substitute form.)

.09 Supporting Statement (Supplemental Schedule). A document providing details information to support an entry for a line(s) on an official or approved substitute form and filed with (attached to) a tax return. (A supporting statement is not a tax form and does not take the place of an official form, unless specifically permitted elsewhere in this procedure).

.10 Specific Form Terms. The following terms are used throughout this revenue procedure in reference to all substitute forms.

1 Format. The overall physical arrangement and general layout of a substitute form, as represented by the official form version.

2 Sequence. The same numeric and logical placement order of data, as reflected on the official form version. Sequence is an integral part of the total format requirement.

3 Line Reference (Code). The line numbers, letters or alpha-numerics used to identify each captioned line on the official forms; and printed to the immediate left of each caption or data entry field.

4 Item Caption. The textual portion of each line on the form, identifying the specific data elements required.

5 Data Entry Field. All areas designated on a form for the insertion of data, such as dollar amounts, quantities, responses, check-boxes, etc.

SEC. 4. MESSAGE TO TAX RETURN PREPARERS

.01 If you plan to change or modify any tax forms, you must follow these procedures, and, in many cases, you must get official approval before using substitute forms. The Service is continuing a program to identify and contact tax return prepares using unapproved forms which do not conform to this revenue procedure and impede processing of the return.

SEC. 5. HIGHLIGHTS OF PERMITTED CHANGES AND REQUIREMENTS

.01 Things you can do to Internal Revenue Service printed tax forms to make them suitable for use as substitute tax forms without prior approval.

1 You can photocopy any tax form and use it instead of the official one.

2 You can reproduce any current tax form as cut sheets, snap-sets, and marginally-punched, pin-fed forms, so long as you use an official Service version as the master copy. Official versions are supplied by the Service, such as those in the taxpayer's tax package, those in Package X, those printed in revenue procedures, and reproduction proofs sold by the Service.

3 You can adjust the graphics on specified areas of printed Forms 1040 and 1040A (and other forms) to allow for computer-printed or word processor fill-in. Only the areas listed in this revenue procedure may be adjusted without specific prior approval.

4 You can print and duplicate the substitute "worksheet-type" versions of Schedules A and B of Form 1040 (see exhibits). The Service will accept these substitute schedules instead of the official versions. These Schedules serve different purposes. One allows the form to contain state tax information which is blocked out before filing with the Service. The other allows the form to be used singly or as part of a snap-set.

.02 THINGS YOU CANNOT DO TO INTERNAL REVENUE SERVICE PRINTED TAX FORMS TO MAKE THEM SUITABLE FOR USE AS SUBSTITUTE TAX FORMS.

1 You cannot, without prior Service approval, change any Internal Revenue Service tax forms or use your own (non-approved) version, unless specifically permitted by revenue procedure.

2 You cannot adjust any of the graphics on Forms 1040, 1040A and 1040EZ (except in those areas specified in revenue procedures) without prior approval from the Service.

3 Generally, you cannot use your own version of Schedule A (Form 1040) unless you first get it approved. The Service wants only one Schedule A -- either yours or ours; yours needs prior approval from the Service.

4 With some exceptions, you cannot omit filling out pertinent referenced (numbered or lettered) lines of the official Schedule A (and other tax forms) when attaching a supporting statement. Exceptions to line completion requirements are listed in this revenue procedure.

5 You cannot use your own preprinted label on tax returns filed with the Service. The ONLY label permitted is the one provided the taxpayers in their tax packages. Otherwise, the taxpayer's name, address, and other identifying information must be entered on the return in the spaces provided.

6 You cannot computer-generate the TAX RETURNS THEMSELVES (i.e. forms requiring signature and that establish tax liability; for example, Forms 1040, 1040A, 1040EZ, 1120, 940 and 941). These forms must be preprinted using conventional printing processes, photocopying or similar reproduction processes. The forms may be filled in by a computer, by a word processor, or the like, but the forms themselves must be printed like the Service versions are. First-time users of forms designed using computer graphics must receive prior written approval. (See Exception in Sec. 22).

.03 THINGS YOU CAN DO TO FILE COMPUTER-PREPARED/GENERATED FORMS. PRIOR APPROVAL IS NOT REQUIRED.

1 You can duplicate the approved, computer-generated formats of Schedules 1, A, B, C, D, E, F, G, R, SE, and W (of this revenue procedure), and use them without prior approval.

2 You can fill in official Internal Revenue Service supplied forms using computer or word-processing equipment. Internal Revenue Service forms are designed for a vertical spacing of six lines to the inch, with money amount columns wide enough to allow for the computer printing of ten characters.

3 You can change certain specified areas on the Forms 1040 and 1040A (spelled out in the revenue procedures) to assist computer-printing requirements and to allow for a little more room on certain lines.

4 If you meet the requirements, standards, and qualifications of this revenue procedure, you can, without prior approval, computer-generated your own substitutes of the tax forms (except for actual tax returns) not exhibited here. (See Agreement in Sec. 21).

SEC. 6. APPROVAL

.01 Basic Requirements. Preparers who desire to file substitute privately designed and printed tax forms and/or computer-generated and computer-prepared tax forms must develop such substitutes using these guidelines. These substitutes, unless excepted by revenue procedure, must be approved by the Service before being filed.

.02 Requests for Approval.

1. The Service cannot approve your substitute form until the official form has been published. Please propose your substitute after you have examined the official form.

2 You should know the Service revenue procedure relating to the official form before you attempt to alter the form to meet your needs. Any alteration of forms must be within the limits acceptable to the Service. It is possible that, from one filing period to another, a change in law or a change in internal need (processing, audit, compliance, etc.) may change the allowable limits for the alteration of the official form.

3 When specific approval of any substitute form is desired, a sample of the proposed substitute should be forwarded for consideration by letter to the Internal Revenue Service. Attention: Substitute Forms Program Coordinator, D:R:R:I, 1111 Constitution Avenue, N.W., Washington, DC 20224. To expedite multiple forms approval, we prefer that your proposed forms be submitted in separate sets by return. For example, Forms 1040 and their normally related schedules or attachments should be separated from Forms 1120, etc., if at all possible. Schedules and forms (i.e., Forms 3468, 4136, etc.) that can be used with more than one type of return (1040, 1041, 1120, etc.) should be submitted only once for approval, regardless of the number of different tax returns they may ultimately be associated with.

4 As no Service office outside Washington, DC is authorized to approve substitute forms, unnecessary delay may result if forms are sent elsewhere for approval. All such forms must be forwarded to the above address for formal control, review, and official approval.

.03 When to Send Proposed Substitute. Proposed substitutes should be sent to the address listed in .02 above, as much in advance of the filing period for the form as possible. This is to allow adequate time for analysis and response and to permit notice to our field offices that your substitute is acceptable. Quarterly filed forms, such as the Form 941, must be submitted by the first day of the last month of the quarter.

.04 Accompanying Statement. When the sample substitute is submitted, there should be an accompanying statement that lists the form number of each substitute requested and details those items that deviate from the official form in position, arrangement, appearance, line numbers, additions, deletions, etc. Included with each of the items should be a detailed reason or justification for the change and an approximation of the number of forms expected to be filed.

.05 Approval/Non-Approval Letter. The Service sends a formal letter of approval/non-approval. Approval letters may contain qualifications for use of the substitutes. Non-approval letters may specify the changes required for approval, but also may require resubmission for approval. Telephone contact is used when warranted.

.06 Duration of Approval.

1 Approvals are good for only one calendar year (January through December) or, in the case of corporation tax forms (with the exception noted below), for the remainder of the quarters of the calendar year.

2 Please Note: In most cases each new filing season requires a new approval, even if the official form does not change. But see the exceptions in 3 and 4 below.

3 Exception: Quarterly tax forms in the 94X series (941, 942, etc.) are approved only for one quarter. Each new quarter requires a new approval.

4 Exception: Limited continued use of a change approved for one tax year may be allowed for the same form in the following tax year. See 07, below for the limitations and for other requirements. Examples of such changes are the use of abbreviated words, revised form spacing, compressed text lines, shortened captions, etc., which do not change the consistency of lines or text on the official forms.

.07 Limited Continued Use of an Approved Change.

1 If you received written approval of a previous tax year substitute form governed by this revenue procedure and wish to continue to use the approved change in your current tax year substitute form, you may revise your form to include this change and, without additional written approval, use it as a current tax year substitute form, provided you comply with the requirements in this revenue procedure. See exception in 2 below.

2 This means that if you received written approval for a specific change on a specific form last year, you may again make the same change on the same form this year, if the item changed is present on this year's official form. Thus, the change allowed in last year's approved substitute Schedule A, for example, can be continued in your new substitute for this year. The new substitute does not have to be sent to the IRS, and written approval is not required. However, the new substitute must conform to the official current year IRS form in other respects: date, Office of Management and Budget (OMB) approval number, sequence number, Paperwork Reduction Act Notice Statement, arrangement, item caption, line number, line reference, data sequence, etc. It must also comply with this revenue procedure -- which may have eliminated, added to, or otherwise changed the guideline which affected the change approved last year. Additionally, you will be bound by the "Agreement" in Section 21.

Exception: Those written approvals which stated that the approved change or form would not be allowed in any other tax year.

3 This authorization for continued use of an approved change is limited to the continuation of design logic from an immediately prior tax year substitute form to a current tax year substitute form.

.08 Requested Copies. In our letter of approval, you may be requested to send to the Service eleven (11) copies of each approved form. When received, the copies will be used to notify Internal Revenue Service Centers that your substitute forms are approved. The requested forms should be assembled in sets. A set constitutes a return with the related schedules and forms in the same order as they will be filed, i.e., Form 1040, Schedules A, B, C, etc., and associated Forms 2440, 2441, etc.

.09 Responsibility. Following the receipt of initial approval for a substitute forms package, or of a software output program to print substitute forms, it is the responsibility of the originator (designer or distributor) to provide each subsequent client firm or individual with the pertinent service forms requirements which must be met for continuing acceptability. Examples of this responsibility include the use of prescribed print paper, font size, legibility, state tax data deletion, the legal requirement of the Paperwork Reduction Act Notice for informing all users of substitute forms of the official use and collection requirements stated in the instructions for the official IRS forms, completion of documents, etc.

SEC. 7. OFFICE OF MANAGEMENT AND BUDGET (OMB) REQUIREMENTS FOR ALL SUBSTITUTE FORMS

.01 Legal Requirements of the Paperwork Reduction Act of 1980. Public Law 96-511 requires that: (1) OMB approve all Service tax forms, (2) each IRS form contains (in the upper right corner) the OMB approval number and any expiration date, and (3) each IRS form (or its instructions) state why IRS is collecting the information, how it will be used, and whether or not the information is required to be furnished. This information must be provided to every user of any official or substitute tax forms.

.02 Application to Substitute Forms.

1 Approval Number and Date Is Required. All substitute forms must contain in the upper right corner (see Marginal Printing, Sec. 11.02.1(c)) the OMB number and any expiration date that is on the official form.

2 Format Required (3 Options).

               (a) OMB NO. XXXX-XXXX

.03 Obtaining OMB Number, Date, and Statement. The OMB approval number, expiration date, and use and collection requirements may be obtained from the official printed form (or its instructions), the reproduction proof (or instructions), or from the Service.

SEC. 8. GENERAL GUIDELINES

.01 Official Form Is the Standard. Because a substitute form is a variation from the official form, you should know the requirements of the official form for the year of use before you modify it to meet your needs. For the most frequently used tax forms, the quickest way to obtain an official form is to request reproduction proofs of these forms. (See Sec. 20.)

.02 Design. Each form must follow the design of the official form as to format, arrangement, item caption, line numbers, line references, and sequence.

.03 State Tax Information Prohibited. State tax information must not appear (be visible) on the federal tax return which is filed with the Internal Revenue Service Center, except where amounts are claimed on or required by the federal return, e.g., line 6, Schedule A (Form 1040). (See Sec. 12.05 Block Out Methods.)

.04 Federal and State Columns. When a form is designed with both federal and state columns, the federal column must be to the left of the state column and adjacent to the line caption.

.05 Vertical Alignment of Amount Fields

1 When a form is to be computer-prepared, you may remove the vertical line in the amount field that separates dollars from cents. When a form is to be computer-generated, vertically align the amount entry field where possible. You must also use one of the ten-character amount formats shown in Sec. 23.04. Amount fields may be "rounded off" to dollars only, where form instructions specifically permit such entries.

2 When a form is to be manually prepared, the federal column must have a vertical line or some type of indicator in the amount field to separate dollars from cents if the official form has a vertical line. The cents columns must be at least 1/8-inch wide.

.06 Sequence Number. Please note that most forms have a "sequence number" located just below the year designation in the upper right corner of the form. The Service uses this number to indicate the order in which forms are processed when filed with a return. On computer-prepared forms it must be printed no less than 12-point, bold-face type and centered below the form's year designation. On computer-generated forms, place this sequence number following the year designation for the tax form and separate with an asterisk. (Example: 1984*07).

.07 Sequence Numbers Required. The sequence number is required on most IRS forms. Please note that some of the numbers necessarily change each year. The specific sequence numbers used on official IRS forms must be duplicated on the representative substitute form. If a sequence number is not provided on the official form, it is not required on a substitute of that form either.

.08 Paid Preparer's Information and Signature Area.

1 On Forms 1040A, 1040, and 1120, etc., the "Paid Preparer's Use Only" area may not be rearranged or relocated. You may, however, add three extra lines to the paid preparer's address area without prior approval. This applies to other tax forms as well.

2 On Form 1040EZ this information must be provided at the bottom of the form below the taxpayer's signature area. As an alternative, the printed Paid Preparer's Information and Signature Area from either a Form 1040 or 1040A may be attached to the bottom of form 1040EZ.

.09 Assemblage of Forms. When filing a return (i.e., Form 1040), the return must be arranged in this order: (1) the tax return, (2) Form 1040 schedules and forms in sequence number order, (3) all others (Form 1120, 1120S, 1065, 1041, etc.), lettered schedules (Schedule D, etc.) in alphabetical order and numbered forms in numerical order (Forms 2220, 4626, etc.) (4) supporting statements in the same sequence as the forms they support, and (5) additional information required or voluntarily submitted. In this way, they are received in the order in which they must be processed. If you do not send them to us in this order, the Service has to disassemble them and place them in this order before processing is continued.

SEC. 9. PHYSICAL ASPECTS AND REQUIREMENTS: PAPER

.01 Paper Content. The paper must be:

1 Chemical wood writing paper that is equal to or better than the quality used for the official form;

2 at least 18 pound (17" x 22", 500 sheets) or

3 at least 45 pound (25" x 38", 500 sheets).

.02 Paper Prohibited. Carbon-bonded paper is prohibited from use for all substitute forms filed with the Service.

.03 Paper with Chemical Transfer Properties -- Limited Use. Chemical transfer paper for all substitute forms may be used only when the following specifications are met.

1 Each ply within the chemical transfer set of forms must be labeled.

2 Only the top ply (ply one and white in color), the one which contains chemical on the back only (coated back), may be filed with the Service. For example, a set containing three plies would be constructed as follows: ply one (coated back), "Federal Return, File with IRS"; ply two (coated front and back), "Taxpayer's copy"; and ply three (coated front), "Preparer's copy."

3 The file designation, "Federal Return, File with IRS," for ply one must be printed in the bottom right margin (just below the last line of the form) in 12-point, bold-face type. It is not mandatory, but recommended, that the file designation, "Federal Return, File with IRS," be printed in a contrasting ink for visual emphasis.

4 Carbon Paper. We prefer that you do not attach any carbon paper to any return you file with the Service.

.04 Paper and Ink Color. We prefer that the color of paper substantially duplicate that of the original form. You may use white paper. This means that your substitute must be printed in black ink and may be on white or on the color paper the Service form is printed on. An exception to this rule is that Forms 1040A, 1040EZ, and 1040 substitute reproductions may be in black ink without the colored screening. Any additional exception to this rule requires written approval from the Service.

.05 Page Size. Substitute or reproduced forms and computer-prepared/generated substitutes may be the same size as the official form (8" x 11", in most cases) or they may be the standard commercial size (8 1/2" x 11") exclusive of pin-feed holes. The thickness of the stock cannot be less than .003 inch.

.06 Lined Paper. Computer-generated substitute forms must be submitted on quality lined, machine paper. Lined, color-barred paper is also acceptable. Lined paper assists Service employees during processing of the returns by allowing speedy and accurate location of tax entries corresponding to line captions. The lines provide the basic means for eye-travel from one side of the form to the other, and significantly reduces processing errors.

.07 Exception to Lined Paper Requirement. If your printer has underlining capability, you do not have to use lined or color-barred paper so long as you underline every other text line on the form. The underlining must be a continuous line and extend from the left text margin to the right text margin and be the same length for all lines on the pages.

SEC. 10. PHYSICAL ASPECTS AND REQUIREMENTS: PRINTING

.01 Printing Medium. The private printing of all substitute tax forms must be by conventional printing processes, photocopying, computer-graphics, or similar reproduction processes.

.02 Legibility. All forms must have a high standard of legibility, both as to printing and reproduction and as to fill-in matter. The Service reserves the right to reject those with poor legibility.

.03 Type Font. Almost all federal tax forms are printed using "News Gothic" by the basic type font. We request that you use this type font when composing any substitute forms.

.04 Image Size. The image size of printed substitute forms should be as close as possible to that of the official form. You may omit any text on both computer-prepared and computer-generated forms that is solely instructional.

.05 Title Area Changes. To allow a larger top margin for printing and more lines per page (see Sec. 11 below), the title line(s) for all substitute forms (not including the form's year designation and sequence code, when present), may be photographically reduced by 40 percent or reset as one line of type. When reset as one line, the type size may be no smaller than 14-point. You may omit "Department of the Treasury. Internal Revenue Service" and all reference to instructions in the form's title area.

.06 Remove Government Printing Office Symbol. When privately printing substitute tax forms, the Government Printing Office symbol and/or jacket number must be removed. In the same place, using the same type size, print the Employer Identifying Number (EIN) or the Social Security Number (SSN) of the printer or designer.

.07 Printing On One Side of Paper. While it is preferred that both sides of the paper be used for substitute and reproduced forms, resulting in the same page arrangement as that of the official form or schedule, the Service will not object if only one side of the paper is used.

.08 Photocopy Equipment. The Service does not undertake to approve or disapprove the specific equipment or process used in reproducing official forms, but requires only that the reproduced forms satisfy the conditions stated in the review procedures.

.09 Reproductions. Reproductions of official forms and substitute forms which do not meet the requirements of this revenue procedure may not be filed instead of the official forms.

.10 Removal of Instructions. You may remove all references to instructions. No prior approval is needed. One exception is that the statement "For Paperwork Reduction Act Notice. See Instructions", must be retained or provided.

SEC. 11. PHYSICAL ASPECTS AND REQUIREMENTS: MARGINS

.01 Margin Size.

1 The format of a reproduced tax return when printed on the page must have margins on all sides at least as large as the margins on the official form. This allows room for Service employees to make the necessary entries on the form during processing.

2 A one-half to one quarter inch margin must be maintained across the top, bottom, and both sides (exclusive of any pin-feed holes) of all computer-generated substitutes. The margin area is also used by Service employees to make necessary entries on the form during processing.

.02 Marginal Printing.

1 Non-Tax Material Allowed in Limited Areas.

(a) On any 8- or 8 1/2-inch-wide Service or substitute form, you may print your logo, company or firm name, identifying and collation symbols, etc., in the left half of the top margin.

(b) With the exception of the actual tax return forms (i.e., Forms 1040, 1040A, 1040EZ, 1120, 940, 941, etc.), you may also print in the left vertical margin and in the left half of the bottom margin.

(c) Printing is never allowed in the right half of the top margin of the tax return form (i.e. Forms 1040, 1040A, 1040EZ, 1120, 940, 941, etc). The Service uses this area to imprint a File Location Number for each return.

2 Prior Approval Not Required. Prior approval is not required for the marginal printing allowed in 1 above when used with the unchanged exhibits in this revenue procedure or when printed on an official form, on a photocopy of an official form or on an (unchanged) IRS reproduction proof.

3 Prior Approval Required. The marginal printing allowance in 1 above is also the guide for the preparation of acceptable substitute forms. There is no exception to the requirement that no printing is allowed in the right half of the top margin of the tax return form.

SEC. 12. APPROVED SUBSTITUTE FORMATS FOR FORM 1040 SCHEDULES

.01 Exhibits of Approved Formats. Two sets of exhibits (Exhibits A-1, B-1, A-2 and B-2) are at the end of this revenue procedure. They are acceptable substitutes for the official forms. They are intended to be used in place of the official forms and may be used without prior approval. Both sets are usable for manual entry or computer preparation. Vertical spacing is six (6) lines to the inch. You may also refer to them as examples of how the guidelines in this revenue procedure may be used in some specific cases. Please note that the Service does not supply reproduction proofs for these exhibits.

.02 Printing or Duplication of Exhibits A-1 and A-2 and B-1 and B-2. You may (1) print these exhibits or (2) duplicate them photographically or by using photo-reproduction techniques, providing your printed or reproduced images are exactly like the ones in the exhibits. With the exception noted below, nothing can be changed.

.03 EXCEPTION. In Exhibit A-1 and A-2 you may change the areas containing "other" items (lines 2c, 9, 13, 15b and 22) as follows: (1) the areas inside the perimeter of the boxes containing the dash-leaders (--) may be used to permit any particular deduction item associated with the corresponding deduction category, and (2) the dash-leaders may be removed (but you may not change the amount column box size or position).

.04 Exhibits A-1 and A-2.

1 Exhibit A-1. This substitute Schedule A format may be used as a single sheet or as one of the copies of a snap-set. It is designed to be used in place of the official Schedule A (Form 1040).

2 Exhibit A-2. This substitute Schedule A format may be used as a single sheet when both federal and state tax information is placed on the same form.

3 No State Tax Information. No state tax information can appear on these forms when filed with the Form 1040. The state column may be present but the state tax information must not be visible when filed with the Service. We prefer that the entire state column be completely blocked out.

.05 BLOCK OUT METHODS. A suggested method to block out the state tax information is: (1) place the substitute form in a clear plastic folder, (2) on the folder, place a strip of opaque material the exact width and length of the column you wish to block out, then (3) photocopy the substitute form while still in the folder. The result will be a form with only the federal tax information visible. Another method is to take a black marking pen and, using either vertical or horizontal strokes, cross out the state figures. Carbon-interleaved sets may be used where the amounts entered in the state column are filled in with black carbon overprint. This copy may be filed with the return.

.06 Exhibits B-1 and B-2. These exhibits correspond to Exhibits A-1 and A-2, and the provisions in .04.1 and 2 above apply. Both of these exhibits are acceptable for use in place of the official Schedule B (Form 1040).

.07 Exhibits A-1 and B-1 or A-2 and B-2. These exhibits may be used as sets when the return calls for both Schedule A and B.

1 Acceptable computer-generated formats for the schedules usually attached to the Form 1040 are shown in the Exhibits section of this revenue procedure. The exhibits are for Schedules A, B, C, D, E, F, G, R, SE and W. Schedule 1 (Form 1040A) is also included. All are acceptable substitutes for the official forms. They are intended to be used (without change) in place of the official forms and may be used without prior approval. All lines (including those not used for tax information) must be printed. (Any change to text or format of an exhibit requires prior written approval.) Vertical spacing is six (6) lines to the inch. You may also refer to them as examples of how the guidelines in this revenue procedure may be used in specific cases.

2 A combination of upper and lower case print fonts is acceptable in producing the computer-generated exhibits included in this procedure.

SEC. 13. SPECIFICATIONS FOR FILING SUBSTITUTE SCHEDULES K-1

Prior approval is NOT required for a substitute Schedule K-1 that accompanies Form 1065 (for partnership), a Form 1120-S (for small business corporation), or a Form 1041 (for fiduciary) when the substitute Schedule K-1 meets all of the following requirements.

.01 The Schedule K-1 must contain the payer and recipient's name, address and SSN/EIN.

.02 The Schedule K-1 must contain all line items required for use by the taxpayer.

.03 The line items must be in the same order and arrangement as those on the official form.

.04 The line items must be numbered, titled, and/or captioned exactly as shown on the official form.

.05 Each taxpayer's information must be on a separate sheet of paper. Therefore, all continuously printed substitutes must be separated, by taxpayer, before filing with the Service.

.06 Substitute Schedules K-1 provided to the recipient must have instructions for the partner attached.

.07 You may be subject to a penalty if you file Schedules K-1 with the Service not conforming to the specifications of this Revenue Procedure.

SEC. 14. REQUIRED PREPARATION OF FORMS

.01 Completely Fill In Lines. You must completely fill in all the applicable numbered or reference lines on computer-prepared or generated forms (not just the totals) but all the items that make up the totals as well before attaching any supporting statement (see Sec. 15 below for exceptions).

.02 IRS Processing of Forms. The Service processes the return based on information entered on the official forms or approved substitutes. References are made to attachments only as required by law as processing requirements direct. When you fail to complete all the pertinent lines on the official forms, Service Tax Examiners have to locate the information on your attachment and write it on the proper line of the official form. This time consuming process causes delays in processing the return and increases the potential for errors both in transcription and in interpretation.

.03 Notification of Preparers. The Service is continuing a program to notify preparers who fail to meet the requirement to completely fill in lines.

SEC. 15. EXCEPTIONS TO LINE COMPLETION REQUIREMENTS

.01 Zero Entries. Detailed information for any deduction or income category may be omitted from the printout if the category total to be reported is zero. However, the substitute form must show the total (zero when applicable) for each category. This means when no tax information is applicable, leave the line blank.

.02 Lines Captioned "Other" (All Forms). It is not necessary to fill in every numbered or referenced line of tax forms when the line caption calls for "Other," i.e., "Other, (itemize)," "Other (specify)," "Other (attach schedule)," etc. Examples of this exception are lines 2c, 9, 13, 15b, and 22 for Schedule A, Form 1040. When this occurs, you may use a supporting statement and enter only the total amount of these "Other" items on the line of the official form. However, we prefer that you use the space on the official form when it is adequate.

.03 Schedule A (Form 1040). All numbered and lettered lines must be filled in, if applicable. Supporting statements may be used to give the details of the totals entered on such lines but may not be used as a substitute for a collection of lines. For example, the detailed information for "Taxes" may not be shown on a supporting statement (supplemental schedule) and only line 10 filled in. Lines 6 through 9 must also be completed. Also, for example the details of "State and local income taxes" may be shown on a supporting statement and the total of such taxes entered on line 6. Also, the total of itemized deductions must be entered on line 24.

.04 Schedule B (Form 1040). Lines 2 and 4 need not be filled in on the form. A supporting statement may be used for the details of interest and dividend income and the appropriate totals of such income entered on lines 3 and 5, unless nominee distribution or accrued interest criteria apply. (See the tax package instructions concerning interest).

.05 Schedule C (Form 1040). All lines must be filled in when applicable, except the line where "Other expenses-specify" is listed. (See instruction in .02 above).

.06 Schedule E (Form 1040).

1 When there are entries on page 1 for any of Part I, the following requirements must be met: (1) In Part I, lines 1 and 2, the question must be answered and tax information must be entered on the lines provided.

2 Supporting statements may be used for the details of rental and royalty income and expenses. The appropriate totals must be carried over and entered in the total column for lines 3, 17, 18 and 21 through 25.

3 Part II (page 2) -- The income and loss from various partnerships, estates or trusts, and small business corporations also may be detailed on a supporting statement, but the appropriate total income and total loss must be entered on lines 26 through 40.

4 As applicable, either page 1 or page 2 may be filled separately and independently of each other, as a valid Schedule E. Both pages are not required, unless the entered tax data applies to all parts of the form.

.07 Schedule F (Form 1040). If the cash method is used, only page one is needed. Otherwise both pages one and two must be entirely printed.

.08 Form 4562. This form need not always be used to report depreciation. Instead you may use a supporting statement so long as it contains the same information as called for on the Form 4562. It is important that your form provides the required computations equivalent to the official form so that related return entries can be confirmed and/or computed if required.

SEC. 16. SUPPORTING STATEMENTS

.01 Use of Supporting Statements. Supporting statements are to be used to support line entries on the official form. Unless specifically authorized by this revenue procedure (see Sec. 15), they must not be used to avoid completing required lines of the official form.

.02 Supporting Statements. Supporting statements must: (1) provide details and explain entries made on the official form, (2) furnish all required information in the same sequence as called for on the official form, (3) furnish any additional information in the order of appearance on the form to which it refers, and (4) show taxpayer's name and social security number (SSN) or employer identification number (EIN), as applicable.

.03 Cross-Reference. Each supporting statement must be referenced to the form it supports, and the entry on the form must be cross-referenced to the supporting statement. For example, put "Statement X" on the top of the supporting statement that contains the identified line number and the supporting information, and put "See Statement X" on the line of the form that references the statement.

.04 Extent of Use. You may attach supporting statements to explain or support any line item on an official or approved substitute form.

.05 Assemblage. For filing purposes, supporting statements are not attached directly to their related forms. Rather, all supporting statements are assembled in the same sequence as the forms they support; they are then placed after the lettered and numbered forms (See Sec. 8.09).

.06 Multiple Supporting Statements. Supporting statements for each numbered or lettered tax form may be on one page or may be on multiple pages. But each numbered or lettered form must have a separate page for its supporting statements(s). Each page should be the size of the form it supports, or it may be 8" x 11" or 8 1/2" x 11".

.07 Not Reviewed for Approval. The Service does not give its approval for specific supporting statements. The taxpayer or the tax practitioner for the taxpayer, must meet the needs as they arise, using the guidelines in this revenue procedure.

SEC. 17. SPECIFICATIONS FOR FILING SUBSTITUTE FORMS

.01 Filing Substitute Forms. Follow the same instructions as for filing official forms. These instructions are in the taxpayer's tax package.

.02 Computer-Prepared Tax Forms. For filing purposes the Service will accept computer-prepared tax forms (i.e., Forms 1040, 1040A, 1040EZ, 1120, 940, 941, etc.) filled in by a computer or by word-processing equipment, but these forms must be pre-printed.

.03 Computer-Generated Forms. For filing purposes, the Service will accept computer-generated versions of forms that are attached to individual and business income tax returns, provided the substitutes and their manner of completion meet the guidelines prescribed herein.

.04 Combination of Manually Prepared and Computer-Prepared/Generated Forms. For filing purposes, the Service will accept substitute tax forms that contain a combination of computer-prepared/generated and manually filled in information.

.05 Taxpayer and Preparer Signatures. All taxpayer signatures on forms to be filled with the Service must be original signatures, affixed subsequent to the reproduction process. However, the income tax preparer can satisfy the manual signature requirement by signing a completed income tax return form, making a photocopy of the return form, and having the taxpayer sign and file the photocopy. (See Rev. Rul. 78-370, 1978-2 C.B. 336.)

.06 Use Preaddressed Label. When filing substitute or reproduced forms, use the preaddressed label included in the tax package the Service sent to the taxpayer. Use of the label avoids larger processing costs because it reduces the potential for error -- the kind of error which can delay the receipt of refund and information needed by the taxpayer, as well as significantly reducing the processing time for each return. No other label may be used.

.07 Use Internal Revenue Service Envelope. When filling substitute or reproduced forms, use the envelope enclosed with the taxpayer's tax package. This envelope is coded for sorting into several categories. Use of the coded envelope can help speed up the processing and reduce processing costs. Do not use the Service-provided, tax-package envelope for other correspondence with the Service, as its misuse can delay the correspondence.

.08 Voluntarily Submitted Information. Additional information required or voluntarily submitted should be on the same size paper as the official form and attached to the return following the supporting statements. (See Sec. 8.09.)

SEC. 18. GUIDANCE FROM OTHER REVENUE PROCEDURES

.01 Guidance for the substitute tax forms not covered in this revenue procedure and the revenue procedures which govern their use, are as follows:

Form 1040-ES Revenue Procedure -- 82-7, 1982-1 C.B. 410, not reprinted for distribution.

Form 1042S Revenue Procedure -- 84-70, 1981-2 C.B. 549, Order as IRS Publication 1161.

Form W-2 series Revenue Procedure -- 84-44, 1984-22 I.R.B. 13, order as IRS Publication 1141.

Form 1099 series and form 5498 Revenue Procedure 84-70, 1984-43 I.R.B. 33. Order as IRS Publication 1179.

SEC. 19. ORDERING REVENUE PROCEDURES

.01 If you receive Package X, Informational Copies of Federal Tax Forms, you may use the Form 2333P, Order blank for Revenue Procedures, contained therein to order the following revenue procedures:

Pub. 1220, the revenue procedure on magnetic tape reporting for information returns (Forms 5498, 1099 and W-2G).

Pub. 1141, the revenue procedure on specifications for private printing of Forms W-2, W-2P, and W-3.

Pub. 1253, the revenue procedure on magnetic cassette/mini-disk reporting for information returns (Forms 5498, 1099 and W-2G). (Write-in on Form 2333P order blank)

Pub. 1254, the revenue procedure on magnetic disk reporting for information returns (Forms 5498, 1099 and W-2G). (Write-in on Form 2333P order blank)

Pub. 1255, the revenue procedure on magnetic diskette reporting for information returns (Forms 5498, 1099 and W-2G). (Write-in on Form 2333P order blank)

Pub. 1149, the revenue procedure on magnetic tape reporting for Windfall Profit Tax (Form 6248).

Pub. 1161, the revenue procedure on reprinted paper substitutes for Form 1042S.

Pub. 1162, the revenue procedure on group exemption procedures.

Pub. 1167, the revenue procedure on general substitute form requirements.

Pub. 1179, the revenue procedure on paper substitute information returns (Forms 1099 and W-2G). (Write-in on Form 2333P order blank)

Pub. 1187 and Pub. 1187 Supplement, the revenue procedures on magnetic tape reporting for Form 1042S.

.02 The above listed revenue procedures may be obtained also by writing to: Internal Revenue Service, Publications, P.O. Box 25866, Richmond, VA 23260. Be sure to order using IRS Publication number.

SEC. 20. ORDERING REPRODUCTION PROOFS

.01 The Service provides for the public camera-ready, reproduction proofs of many of its printed tax forms. These reproduction proofs can only be ordered by using Form 6747, Order for Reproduction Proofs. Form 6747 can be obtained by written request to Internal Revenue Service, PM:S:FM:P, Attention: Reproduction Proof Coordinator, Room 1528, 1111 Constitution Ave., N.W., Washington, DC 20224.

.02 Basic specifications, such as margin, pagination, etc., will be printed in the margins of the reproduction proofs and must be removed before printing. The official reproduction proof margins across the top, bottom, and sides must be maintained on all reproductions and substitute forms.

.03 A charge of $1.00 per page will be made for each reproduction proof regardless of page size. After an order has been filled, invoices will be mailed to the requestor.

SEC. 21. AGREEMENT

Any person or company who uses substitute forms and makes all or part of the changes specified in this revenue procedure, agrees to the following stipulation: The Service presumes the changes are made in accordance with these procedures and, as such, will be noninterruptive to the processing of the tax return. Should any of the changes prove to be not exactly as described, and as a result become disruptive to the Service during processing of the tax return, the person or company agrees to accept the determination of the Service as to whether or not the form may continue to be used during the filing season, and also agrees to work with the Service in correcting noted deficiencies. Notification of deficiencies may be made by letter, phone call, or both.

SEC. 22. CONDITIONS -- TAX FORMS (1040A, 1040EZ, 1040, 1120, 940, 941, Etc.)

.01 PROHIBITED FORMS.

1 COMPUTER-GENERATED VERSIONS.

Computer-generated versions of a tax return form (e.g. Form 1040, 1040EZ, 1040A, 1120, 940, 941, etc.) which requires a signature are not permitted. Only preprinted substitutes of these forms are allowed. Approval is extended to consider certain types of computer-generated graphic formats as acceptable "preprinted" substitutes. All such forms must have formal approval prior to their use.

2 COMPUTER-GENERATED GRAPHICS -- First Time Users

First-time users who design substitute forms using computer-graphics (e.g. laser printing, dot matrix addressable printing, etc.) must receive prior approval before using them. Exception: Experienced users who have previously received written approval from the Service for tax forms do not need written approval before using their forms. This assumes that all new requirements for the tax year have been fully complied with, based on actual comparison with the final versions of the official IRS forms. However, users are bound by the agreement in Sec. 21.

.02 FILL-IN INFORMATION.

The tax return from itself (i.e., 1040, 1040A, 1040EZ, 1120, 940, 941, etc.) may be filled in by a computer printer or other similar automated equipment, but the form itself must be created beforehand (i.e. preprinted) using conventional printing methods, photocopying, computer-graphics (laser printing) or other similar reproduction processes.

.03 CHANGES PERMITTED TO THE FORMS 1040, 1040A & 1040EZ.

1 Certain changes (listed below) are permitted to the graphics of the form without prior approval, but these changes apply only to preprinted forms as described in .02 above.

2 Changes not requiring prior approval are good only for the annual filing period, January through December.

3 Other Changes Not Listed. All changes not listed here require prior approval from the Service BEFORE the form may be filed with the Service.

SEC. 23. CHANGES PERMITTED TO GRAPHICS (FORMS 1040A, 1040 AND 1040EZ).

Changes Permitted to the Graphics on Forms 1040, 1040A and 1040EZ and, Where Applicable, on Other Forms as Well for Use With Computer-Prepared (i.e. printed forms Only).

.01 Adjustments

You may make minor vertical and horizontal spacing adjustments to allow for computer or word-processing printing. This includes widening the amount columns or tax entry areas so long as the adjustments do not exceed other provisions stated in revenue procedures. No prior approval is needed for these changes. However, the user of forms with such changes are bound by the "Agreement" in Section 21.

.02 Name and Address Area.

1 The horizontal rules and instructions within the name and address area may be removed and the entire area left blank; no line or instruction can remain in the area. However, the statement regarding use of the IRS mail label should be retained.

2 The heavy ruled border (when present) that outlines the name and address area must not be removed, relocated, expanded or contracted.

3 Required Format

(a) When the name and address area is left blank, as provided in 1 above, the following format must be used when printing the taxpayer's name and address. Otherwise, unless the taxpayer's preprinted label is affixed over the information entered in this area, the lines must be filled-in as shown.

1st name line (35 characters maximum)

In-care-of name line (35 characters maximum)

Street address (35 characters maximum)

City, State (24 char. max.), one blank char., & zip (five char.)

(b) When there is no in-care-of name line, the name and address will consist of only three lines. Examples of the formats follow:

Example of name and address with no in-care-of name line:

                    JOHN AND MARY JONES

                    JOHN AND MARY JONES

(d) The ONLY label that may be used is the OFFICIAL INTERNAL REVENUE SERVICE LABEL SUPPLIED to the taxpayer in his/her tax package. Please use the official Internal Revenue Service supplies label to help reduce errors, and to expedite Service input and processing of returns received.

(e) For identification purposes, you may computer print the taxpayer's name and address on the form and afterward affix the OFFICIAL INTERNAL REVENUE SERVICE SUPPLIED LABEL over the computer printed address. This applies whether or not the horizontal rules and the instructions have been removed from the address area.

.03 Social Security Number (SSN) AND Employer Identification Number (EIN) Area.

1 The vertical lines separating the format arrangement of the SSN/EIN may be removed.

2 When the vertical lines are removed, the SSN and EIN formats must be 000-00-0000 or 00-0000000, respectively.

.04 Cents Columns

1 You may remove the vertical rule that separates the dollars from the cents.

2 All entries in the amount column should have a decimal point following the whole dollar amounts whether or not the vertical line that separates the dollars from the cents is present.

3 You may omit printing the cents, but all amounts entered on the form must follow a consistent format. You are strongly urged to round off the figures to whole dollar amounts, following the official return instructions.

4 When printing money amounts, you must use one of the following ten-character formats: (a) 0,000,000. (b) 000,000.00

5 When there is no entry for a line, leave the line blank.

.05 "Paid Preparer's Use Only" Area.

1 On all forms, where present, the paid preparer's information area may not be rearranged or relocated.

2 You may add three lines and remove the horizontal rules in the preparer's address area.

3 Form 1040EZ preparers must sign the return and provide all other required information. This information should be provided at the bottom on the form below the taxpayer's signature area. (See Section 8.)

SEC. 24. CHANGES PERMITTED TO FORM 1040A GRAPHICS

No prior approval is needed for the following changes (for use with computer-prepared forms only).

.01 Line 4.

The line caption may be compressed vertically to one line (to allow for same line entry for the name of the qualifying unmarried child) by using the following caption:

"Head of household; unmarried child's name. . . ." name field

.02 Line 5c.

To allow for a two-line field for printing dependent children's names, you may shorten the caption to:

"Dep. children" (names field) (names field)

.03 Line 5d.

1 The number of the lines for listing "other dependents" may be expanded to a maximum of 5.

2 Column captions may be shortened to one line descriptions.

.04 Line 9a (and 9b)

These lines may be changed to allow larger amount entry fields by removing references to instructions.

.05 Other Lines.

Any line whose caption takes up two or more vertical lines may be compressed to one line by using contractions, etc., and by removing instructional references.

.06 Page 2 (Form 1040A)

All lines must be present and numbered in the order shown on the official form.

SEC. 25. OTHER CHANGES PROHIBITED

No other changes to the Form 1040A graphics are allowed without prior approval.

SEC. 26. CHANGES PERMITTED TO THE FORM 1040 GRAPHICS (FOR USE WITH COMPUTER-PREPARED FORMS ONLY).

No prior approval is needed for the following changes:

.01 Line 4. This line may be compressed horizontally (to allow for a larger entry area for the name of the qualifying unmarried child) by using the following caption:

"Head of household; unmarried child's name" (name field)

.02 Line 6c.

To allow for a two-line field for printing dependent children's names you may shorten the caption to:

"Dep. children" (names field) (names field)

.03 Line 6d.

1 The vertical lines separating columns (1) through (5) may be removed. The captions may be shortened to allow a one-line caption for each column.

2 The number of lines for listing "other dependents" may be expanded to a maximum of 5 by compressing other noted areas and lines.

.04 Other Lines.

Any other line whose caption takes up two or more vertical lines may be compressed to one line by using contractions, etc., and by removing instructional references.

.05 Line 22

1 This line may be expanded vertically to a maximum of 3 lines.

2 The amount entry box must remain a single entry and the cross hatched shading must extend down the numbered line box to the same number of lines you add.

.06 Line 38. You may change the line caption to read "Tax" and computer-print either the words "FROM TAX TABLES:" OR "FROM SCHEDULE/FORM" and computer-print the appropriate text.

.07 Line 39. You may change the caption to read: "Additional taxes from Form/Section" and computer-print only the form(s) or/and section number that apply.

SEC. 27. OTHER CHANGES PROHIBITED

No other changes to the Form 1040 graphics are permitted without prior approval.

SEC. 28. ACCEPTABLE FORMATS OF COMPUTER-GENERATED FORMS AND SCHEDULES

1 Exhibits of acceptable computer-generated formats for the schedules usually attached to the Form 1040 are shown in the Exhibits section of this revenue procedure.

2 Use of Acceptable Formats. If your computer-generated forms appear exactly like the exhibits, no prior authorization is needed.

3 Changes to exhibits are not permitted without prior approval. Any change to the text or format of any of the exhibits requires prior written approval.

SEC. 29. COMPUTER-GENERATED FORMS NOT SHOWN AS EXHIBITS IN THIS REVENUE PROCEDURE

.01 Those desiring to computer-generate forms not shown here may do so, but they must design such forms themselves by following the manner and style of those in the Exhibits section of this publication, and by taking care to observe other requirements and conditions stated here.

.02 Computer-generated forms so designed do not require prior approval from the Service. However, the user of such forms is bound by the "Agreement" in Sec. 21 above.

.03 If you wish, you may submit any substitute form to the Service for approval consideration.

SEC. 30. INSTRUCTIONS FOR PREPARING COMPUTER-GENERATED SUBSTITUTES

.01 Format Arrangement.

The format of each substitute schedule or form must follow the format of the official schedule or form as to item captions, line references, line numbers, sequence, form arrangement and format, etc. Basically try to make the form look like the official one, with readability being a primary factor. Use periods and/or other special characters to separate the various parts and sections of the form. With the exceptions in .02 below, all line numbers and items must be printed even though an amount is not entered on the line.

.02 Line Numbers.

1 When a line on an official form is designated by a number or a letter, that designation (reference code) must be used on a substitute form.

2 The reference code must be printed to the left of the corresponding captioned line and also immediately preceding the data entry field even if there is no reference code immediately preceding the data entry field on the official form.

3 In addition, the reference code that is immediately before the data field must either be followed by a period or enclosed in parentheses. There also must be at least two blank spaces between the period or the right parentheses and the first character of the data field. (See example below.)

4 A decimal point (i.e., a period) should be used for each money amount regardless of whether the amount is reported in dollars and cents or in whole dollars, or whether or not the vertical line that separates the dollars from the cents is present. The decimal points must be vertically aligned when possible.

                               Example:

.04 Exception to Forms that must be entirely printed in whole or in part.

1 On Schedule F, depending on which accounting method is used (cash or accrual), the following will apply. If the cash accounting method is used only page one of Schedule F needs to be printed. Otherwise both page one and two must be entirely printed.

2 On Schedule E, it is not necessary to print both pages if data does not apply. Either page one or page two can be printed and filed separately.

SEC. 31. ADDITIONAL INSTRUCTIONS FOR ALL FORMS

.01 Internal control numbers and identifying symbols of the computer preparer may be shown on the substitute, if the use of such numbers or symbols is acceptable to the taxpayer and the taxpayer's representative. If shown, such information must not be printed in the top one-half inch clear area, from the center to the right edge, of any form or schedule requiring a signature. With the exception of the actual tax return form (i.e. Forms 1040, 1120, 940, 941, etc.), you may also print in the left vertical and bottom left margins. The bottom left margin you may use extends 3 1/2 inches from the left edge of the form. (See Sec. 11 for more information on this subject.)

.02 Descriptions for captions, lines, etc., appearing on the substitute forms may be limited to one print line by using abbreviations and contractions and by omitting articles, prepositions, etc. However, sufficient key words must be retained to permit ready identification of the caption, line or item.

1 Explanatory detail and/or intermediate calculations for derivation of fine line totals, may be included on the substitute. We prefer that such calculations be submitted in the form of a supporting statement. If intermediate calculations are included on the substitute, the line on which they appear may not be numbered or lettered. Intermediate calculations may not be printed in the right column. This column is reserved for official numbered and lettered lines that correspond to the ones on the official form. If a supporting statement is submitted, intermediate calculations or subtotals may be formatted at the preparer's option.

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

3 Information for more than one schedule may not be shown on the same printout page without prior approval from the Service. Except for computer-generated Schedules A and B (Form 1040), almost any form may be continued on two or more pages if necessary. When a form is continued on two or more pages, clearly identify at the bottom of each page, including page 1, that is continued, e.g., "Page 1, Schedule C Continued." It is strongly recommended that a substitute form not exceed the same number of pages used for the official form.

4 Identify all computer-prepared substitutes clearly; print the form designation one-half inch from the top margin and one and one-half inches from the left margin; print the title centered on the first line of print; and print the taxable year and, where applicable, the sequence number of the same line one-half to one inch from right margin. Include the taxpayer's name and SSN on all forms and attachments. Also print the OMB number and (when applicable) the forms expiration date, as reflected on the official form.

5 The state tax column may be present, but the state tax information must NOT be visible on the copy filed with the Service. When a form is designed with both federal and state columns, the federal column must be to the left of the state column and adjacent to the line caption.

6 Attach all payments (check or money order, or cash) to the front of the tax return.

7 Negative (or loss) monetary amount entries should be enclosed in brackets on all substitute forms, to insure the accuracy of our computation.

SEC. 32. FILING SUBSTITUTE FORMS WITH IRS

Follow the same instructions as for filing official forms. These instructions are in the taxpayer's tax package.

SEC. 33. SPECIAL FORM 1040EZ OPTICAL CHARACTER RECOGNITION (OCR) REQUIREMENTS

.01 The Form 1040EZ is designed in OCR format. IRS has the capability to machine read this form by optical character recognition (OCR) equipment (Scan-Optics-System 540).

.02 It is optional to produce the 1040EZ substitute as a normal (black and white) reproduction, or as an actual OCR version. The following criteria applies if the form is to be OCR scannable. Otherwise, you may print this form under the previous general guidelines of this Revenue Procedure.

.03 An acceptable substitute OCR Form 1040EZ must generally be an exact replica of the official OCR reproduction proof with respect to layout, content and required OCR characteristics.

.04 The specific paper requirements which must be met for the development of substitute (privately printed) forms include the following.

1 Color and quality of paper -- Paper must be white, OCR grade bond, with no fluorescent additives or water marks, and with zero rag content.

2 Reflectivity of paper -- Must be 80% or greater.

3 Opacity -- The paper opacity ration must be 80% or more.

4 Paper Weight -- Specified paper weight is 20 lb. OCR bond (.0035").

5 Dirt -- Must not exceed 10 parts per million.

6 Finish (smoothness) -- Must be between 90 and 160 units (Sheffield).

7 Porosity -- Paper should have a Gurley reading between 15 and 95.

8 Gloss -- Paper with shiny or lustrous appearance (glossy) should be avoided.

9 Size -- Form trim size must be 8" x 11".

.05 The specific ink requirements which must be met for this form include the following.

1 Print Color -- The face of the form prints in black and green, the back prints in black only.

2 Ink -- Green ink used must be highly reflective OCR type, such as Sinclaire and Valentine J-2-27975, or an exact match. Black ink used must be non-reflective.

3 Face Registration -- Black to green must be .02" (plus or minus) both horizontally and vertically.

4 Face Screen -- Forms contain a green screened background equal to a 15% tone of a 110-line screen. Follow registration marks on repro-proof for screen positioning. Handprint boxes are included on Page 1 of the reproduction proof and should be printed as a 50% value of the recommended OCR green ink. Inks used for handprint boxes must reflect at least 90% of the background on which it is printed as measured in the visible range.

5 Face Margins -- Approximately 2/6" head from top trimmed edge to screen (1/2" to black image). 1/6" outside from trimmed edges to screen. Exact margins are provided with reproduction proofs.

6 Back Margins -- 1/2" head, 5/16" foot, and 5/16" sides.

.06 Typography -- Type must be substantially identical in both size and shape with corresponding type on the official form reproduction proof.

.07 To assure proper alignment and position of hand-printed characters representing return lines 1 through 11 tax data, they must be hand printed (entered) into the preprinted amount field boxes on the form.

A #2 lead wooden pencil is recommended as the writing tool which will consistently provide the required stroke width and print contrast on entered characters.

.08 Reading of handprinted characters requires adherance to the following techniques.

1 Enter numeric amount digits carefully and clearly. Fill at least 2/3 of the individual character box height, keeping the character within the box with no overlapping or touching characters. Specific required digit constraints are shown below.

2 When entering "fours", keep the top open.

3 When entering "one", do not use serifs.

4 When entering "twos", do not add extra loops.

5 All character lines must be connected, with no gaps.

.09 Use Taxpayer's Preaddressed Label. Reproduced OCR Forms 1040EZ must have ONLY the taxpayer's preaddressed label affixed to be processable as an OCR document. Substitute labels and handwritten name/address information is not acceptable.

.10 All the general and detailed provisions of this Revenue Procedure apply (in addition to this specific OCR Section) for the development of substitute OCR Forms 1040EZ.

SEC. 34 SPECIAL FORM 1120-A OPTICAL CHARACTER RECOGNITION (OCR) REQUIREMENTS

.01 A New Form 1120-A has been developed for Tax Year 1984 use, and is designed in OCR format. This return will be read by Optical Character Recognition (OCR) equipment (Recognition Equipment Inc.-Input 80 Model B Scanner).

.02 It is optional to produce the 1120A substitute as a normal (black and white) reproduction, or as an OCR scannable version. The following specific criteria applies if the substitute form is to be produced for OCR processing. Otherwise, you may print this form under the general guidelines of this Revenue Procedure.

.03 An acceptable substitute OCR Form 1120A must be an exact replica of the official reproduction proof with respect to layout, content and required OCR characteristics.

.04 The specific paper requirements for this form generally duplicate those specified in Section 33, with the following exception:

1 Size -- Form 1120A trim size must be 8-1/2" x 11".

.05 The specific ink requirements which must be met for this form include the following.

1 Print Color -- Black and brown.

2 Ink -- Brown ink must be highly reflective OCR type, such as Sinclair and Valentine J-22053, or an exact match. Black ink must be non-reflective.

3 Face Registration -- Black to brown must be 0.015 (1/64)" (plus or minus) both horizontally and vertically.

4 Handprint Boxes -- These handprint boxes (for IRS entries and use only) are included on page 2 of the reproduction proof, and should be printed as a 50% screen value of the recommended OCR brown ink. Inks used for handprint boxes must measure 20% or less when tested using MacBeth PCM=II tester 'C' scale.

5 Face margins -- Minimum margins require 11 2/6" head, 1/2" left and right, and 5/16" foot.

6 Back margins -- 11-2/6" head, 1/2" left and right, and 5/16" foot. Exact margins are provided with reproduction proofs.

.06 Typography -- Type must be substantially identical in both size and shape with corresponding type on the official form reproduction proof.

.07 All entries on an OCR Form 1120A must be either typed or machine printed, to permit OCR scanning. Otherwise the return will be manually processed.

.08 Use Taxpayer's Preaddressed Label. Reproduced OCR Forms 1120A must have ONLY the taxpayer's preaddressed label affixed to be processable as an OCR document. Substitute labels and handwritten name/address information is not acceptable.

.09 All general and detailed provisions of this Revenue Procedure apply (in addition to this specific OCR Section) for the development of substitute OCR Forms 1120A.

SEC. 35. SPECIAL FORM 941 AND 942 OPTICAL CHARACTER RECOGNITION (OCR) REQUIREMENTS

.01 The Forms 941 and 942 will be processed using Optical Character Recognition (OCR) equipment starting with returns for the first quarter of 1985 which are due April 30, 1985. OCR equipment allows us to process the return more efficiently and quickly.

.02 For the first two years of operation (all four quarters of 1985 and 1986), it will be optional to produce the substitute returns as a normal black and white reproduction, or as an OCR scannable version. However, effective with the 1987 tax returns it is requested that you produce the returns in only scannable format.

.03 An acceptable substitute OCR Form 941/942 must be an exact replica of the official reproduction proof with respect to layout, content and required OCR characteristics.

.04 The specific requirements for this form generally duplicate those specified in Section 34.04 through .09 with the exception that the handprint boxes (for IRS entries and use only) are included on page 1 of the form.

SEC. 36. EFFECT ON OTHER DOCUMENTS

This revenue procedure supersedes Revenue Procedure 84-9, 1984-1 C.B. 375.

[Editor's note: Exhibits A-1 through CG-W depict examples of preferred and acceptable formats for the substitute, computer generated IRS Forms discussed above. These illustrations are not suitable for electronic reproduction.]