SERVICE PUBLISHES DIRECTIONS FOR SUBMITTING 'REPORTING AGENT AUTHORIZATION.'

Rev. Proc. 89-18

SECTION 1. PURPOSE

.01 As of January 31, 1988, the Internal Revenue Service will begin to maintain an automated file of Reporting Agents Authorization (RAAs) for client/taxpayers whose returns can be filed on magnetic tape. The purpose of this file, known as the Reporting Agents File (RAF), is twofold:

1) to permit rapid verification of the identity of a reporting agent when the need to discuss a taxpayer's account arises.

2) to permit the issuance of duplicate copies of official notices to the authorized agent as well as the taxpayer.

.02 The purpose of this Revenue Procedure is to provide instructions for the preparation and submission of Form 8655, Reporting Agent Authorization.

.03 The Reporting Agent Authorization (RAA) is a multi-use form that allows taxpayers to designate reporting agents:

1) to file certain employment tax returns on magnetic tape,

2) to submit federal tax deposits on magnetic tape for certain employment tax returns

.04 If a taxpayer has designated a reporting agent to file certain employment tax returns on magnetic tape, then the taxpayer may authorize the agent to receive copies of notices and correspondence with respect to those employment tax returns.

.05 Currently, agents designated to submit federal tax deposits on behalf of a taxpayer are not authorized to receive notices and copies of correspondence, if they are not also authorized to file the tax return on magnetic tape.

SECTION 2. REPORTING AGENT AUTHORIZATION

.01 The RAA may be submitted on Form 8655 (see exhibit #1), which is available on request; or any other instrument which clearly states that the reporting agent is granted the authority to file and sign the return or submit federal tax deposits. The RAA filed under this revenue procedure is not subject to the rules contained in the Conference and Practice Requirements (Treasury Regulation 601.502). If desired, the RAA may cover both the filing of returns on magnetic tape and the submission of federal tax deposits on magnetic tape. It is the responsibility of the reporting agent to ensure that the requirements specified in this revenue procedure are met for those authorizations currently on file and those submitted in the future.

.02 The taxpayer, or his/her authorized representative, must sign the RAA. If, however, "authorized representative" includes the holder of a general power of attorney, additional precautions are needed to assure that the person executing the RAA has been specifically authorized, himself/herself, to sign returns on behalf of the taxpayer. If the taxpayer wishes to authorize the reporting agent to receive employment return notices, correspondence, and transcripts from the Internal Revenue Service, the authorized representative must be someone with authority both to receive, and to designate others to receive, return information of the taxpayer. The signed document will remain in effect until such time as it is revoked by written notification from the taxpayer, the reporting agent, or terminated by the Internal Revenue Service.

1. The following persons may execute an RAA on behalf of a corporation or other business taxpayer:

(a) The individual, if the person required to make the return is an individual;

(b) The corporate president, chief executive officer or an officer authorized by law to bind the corporation, if the entity required to make the return is a corporation. These individuals may designate recipients of return information on behalf of a corporation. Additionally, with attestation by the corporation's secretary or other officer, any principal officer of the corporation may designate recipients of the corporation's return information;

(c) A responsible and duly authorized member or officer having knowledge of its affairs, if the person required to make the return is a partnership or other unincorporated organization. A non-partner officer of a partnership or other unincorporated organization may designate recipients of return information only if that officer has been granted authority to receive, and to re-delegate authority to receive, the return information of the partnership or organization;

(d) The fiduciary, if the entity required to make the return is a trust or estate; or

(e) An agent who is duly authorized in accordance with section 31.6011(a)-7 of the Employment Tax Regulations, provided the authorization explicitly states that the agent may both receive and designate recipients of the taxpayer's return information, if the form is used to designate the reporting agent as a recipient of return information.

.03 The scope of the RAA for magnetic tape filing of certain employment tax returns will be governed by the following instructions:

1. RAA will delegate to the reporting agent the power to sign and file appropriate federal tax returns.

2. The RAA becomes effective for the tax period designated by the agent/taxpayer and remains in effect for subsequent periods until revoked, or terminated. The RAA must be submitted timely and the Service must validate it prior to returns being filed by the agent (see Section 3).

3. The receipt of an RAA for magnetic tape filing revokes all prior reporting agent authorizations but has no effect on any other power of attorney or authorization.

4. The RAA may authorize the reporting agent to receive copies of notices, correspondence and transcripts with respect to employment returns filed by the designee.

5. Requests from a reporting agent for information or adjustments on an account for which the taxpayer has authorized magnetic tape filing will be honored by the service center.

.04 The scope of the RAA for submission of federal tax deposits on magnetic tape will be governed by the following instructions:

.1 The RAA will delegate to the reporting agent the power to prepare and submit FTDs for taxes reported on Forms 940, 941 and 943.

.2 The RAA becomes effective for the tax period the agent/taxpayer notifies the Service that he/she is responsible for submitting federal tax deposits and remains in effect until revoked or terminated. The RAA must be submitted timely and the Service must validate it prior to any submission of federal tax deposits by the agent (see Section 3).

.3 An RAA that is limited to submitting FTDs for a taxpayer does not entitle the agent to receive copies of notices and correspondence for a taxpayer. It does permit an agent to request information or submit information on the deposits submitted by the agent. This includes any penalties that may result from such deposits.

.05 An RAA can be prepared to cover both functions, magnetic tape filing of certain employment tax returns and magnetic tape submission of federal tax deposits in payment of the taxes reported on certain employment tax returns.

.1 If the RAA covers both functions, the taxpayer may authorize the agent to receive copies of notices and correspondence with respect to employment tax returns filed by the designee.

.2 If one function of the RAA (either magnetic tape filing or FTD submission) is revoked, the other remains in effect. However, if a return is added to a function, a new RAA must be submitted.

.06 Requests for taxpayer address changes may not be made by the reporting agent. Requests for address changes for taxpayers that are reported under magnetic tape filing will be processed only if they originate with one of the following:

(a) The taxpayer,

(b) An employee of the Service, or

(c) An attorney-in-fact if the attorney has a full Power of Attorney for all tax matters concerning a taxpayer, and has filed a copy of the Power of Attorney with the Service.

SECTION 3. SUBMISSION OF REPORTING AGENT AUTHORIZATIONS

.01 Reporting Agents (RAs) who desire to file client/taxpayer employment tax returns on magnetic tape or make magnetic tape submission of federal tax deposits relating to employment taxes must formally apply to the Internal Revenue Service for these privileges. Currently, the required information for these applications is contained within Revenue Procedures for Form 940 magnetic tape filing, for Forms 941/941E magnetic tape filing, and for submission on magnetic tape of Federal Tax Deposits for employment taxes. Contact the Internal Revenue Service at the address listed in section 6 for copies of the current revenue procedures.

.02 The applications governed by the referenced revenue procedures must be accompanied by the individual RAAs and a list of client/taxpayers for whom magnetic tape returns will be filed and/or federal tax deposits will be made.

.03 The list must be accompanied by a copy of the reporting agent authorizations (RAAs) signed by the taxpayer or authorized representative (See Section 2.01). A photocopy is acceptable. If, however, "authorized representative" includes the holder of a general power of attorney, additional precautions are needed to assure that the person executing the RAA has been specifically authorized, himself/herself, to sign returns on behalf of the taxpayer. The authorized representative must be someone with authority both to receive, and to designate others to receive, return information of the taxpayer.

.04 There are two methods of submitting the list of taxpayers for whom magnetic tape returns will be filed and/or federal tax deposits will be submitted; magnetic tape and paper listings. If the reporting agent wishes, he/she may always file the list on magnetic tape, but if the number of client/taxpayers for filing of magnetic tape returns exceeds 100, then the list must be filed on magnetic tape.

.05 Lists submitted on magnetic tape must be submitted in accordance with the specifications in sections 7 and 8. Magnetic tapes submitted with a significant number of errors will be returned to the Reporting Agent (RA) for correction. The magnetic tape file list can contain information on both magnetic tape return filing and magnetic tape submission of FTDs.

.06 Lists submitted on paper must be submitted in duplicate using the format indicated in exhibit #2 for both magnetic tape filing of returns and for submission of federal tax deposits.

.07 If in the course of business, the reporting agent wishes to add or delete client/taxpayers from his/her current authorized list, the format for both the magnetic tape file and the paper list is the same as for the initial listing submission.

.08 The list of additions or deletions should not exceed 500. Once an inventory of 500 is reached, it should be forwarded to the Service. If the submission exceeds 500, we cannot guarantee the records will be processed within 30 days.

.09 The list of taxpayers to be added to the magnetic tape filing system and magnetic tape FTD submission system must be submitted by certain deadlines. This is because the Service requires time to validate the information on the list and the associated RAAs and to return a validated listing to the reporting agent.

.10 The deadlines must be met to enable the Service to return a validated listing to the Reporting Agent with a name control for each taxpayer listed. Under no circumstance should the Reporting Agent submit a taxpayer's return or FTD submission on magnetic tape without return of the validated listing from the Service with a name control for each taxpayer. The validated listing is the confirmation that the RAA has been accepted. In addition, the Service will notify the reporting agent if the taxpayer's return should be filed at a different service center from the one at which the taxpayer's last return was filed. If the Service has agreed to let the reporting agent consolidate filing in one Service Center, no additional confirmation will be made.

.11 The deadlines for the lists on paper or magnetic tape are the same, the first day of the last month of the tax period (period covered by the return). As an example, lists for RAAs involving Forms 940 and 943 must be submitted by the first day of December. Lists for RAAs involving Forms 941/941E must be submitted by the first day of the last month of the calendar quarter.

.12 When the reporting agent determines that he/she will no longer be filing tax returns or making FTD submissions for a taxpayer, action should be taken to notify the service center which accepted the RAA of one of the following conditions. This is done in association with submission of a delete list.

1. The delete list (paper or magnetic tape) should be accompanied by a statement (signed by the taxpayer or the reporting agent) for each taxpayer stating the taxpayer is out of business (state the effective date) and will no longer be liable for filing returns (Final Return) or making deposits.

2. The delete list (paper or magnetic) should be accompanied by a statement indicating the reporting agent will no longer be submitting returns or deposits on magnetic tape for the taxpayer who is still in business and is still liable for such returns (Discontinued Clients). This item may be included on the transmittal letter.

.13 The preparation of a paper listing (exhibit #2) is reasonably self explanatory. The following addresses questions that might arise. Examples of entries are provided on the exhibit.

1. Name and Address of Reporting Agent -- self explanatory.

2. Agent Identifying Number -- Two digit number assigned by IRS to reporting agents who submit federal tax deposits (not Employer Identification Number).

3. Agent Employer Identification Number -- self explanatory.

4. List Type -- Either Additions or Deletions. Separate paper lists must be prepared for additions and deletions.

5. Name of Agents Contact Point.

6. Phone Number of Agents Contact Point.

7. Client Account Number -- Optional for benefit of agents.

8. Employer Identification Number -- Of taxpayer.

9. Name Control -- Blank when submitted by Agent. Will be filled in when returned to agent by IRS.

10. Taxpayer Name and Address -- self explanatory.

11. RAA submitted for

a) Return Filing 940 -- Enter YYMM if RAA covers it. (see Section 7 for YYMM explanation)

b) Return Filing 941 or 941E -- Enter YYMM if RAA covers it.

c) FTD submission 940 -- Enter YYMM if RAA covers it.

d) FTD submission 941 -- Enter YYMM if RAA covers it.

e) FTD submission 943 -- Enter YYMM if RAA covers it.

f) Notice to Agent -- Put X if RAA covers it, but only if Return Filing is also covered.

12. Local Service Center -- Service Center where taxpayer last filed taxreturns. Use the following abbreviations:

ANSC = Andover, ATSC = Atlanta, AUSC = Austin, BSC = Brookhaven, CSC = Cincinnati, FSC = Fresno, KCSC = Kansas City, MSC = Memphis, OSC = Ogden, PSC = Philadelphia

SECTION 4. REPORTING AGENTS FILE

.01 By October 1, 1987, the service centers will be prepared to accept magnetic tape submissions from reporting agents. By November 1, 1987, all current reporting agents must submit lists of their current client/taxpayers using the format specified in Sections 7 and 8 (magnetic tape format). No copies of the authorizations need be submitted with these special lists. Delay in submitting these lists will delay the inclusion of the RAAs on the RAF and delay the receipt of benefits to be derived from it.

.02 The taxpayer record described in Exhibit 11 needs some clarification in its application to the special November 1, 1987 submission. The use of the fields is as described in Exhibit 11 with the following clarifications:

1. Positions 1-116 -- Use as described in Exhibit 11.

2. Position 117 -- Enter "Y", if Forms 940 are authorized to be filed on magnetic tape.

3. Positions 118-121 -- Enter YYMM date of earliest return filed by taxpayer through magnetic tape for which you would wish to receive notices.

4. Position 122 -- Enter "A".

5. Position 123 -- Enter "Y", if Forms 941 are authorized to be filed on magnetic tape.

6. Position 124-127 -- Enter YYMM date of earliest return filed by taxpayer through magnetic tape for which you would wish to receive notices.

7. Position 128 -- Enter "A".

8. Positions 129-158 -- Blank fill.

9. Positions 159-168 -- Client Account Number, Optional use.

10. Position 169 -- Enter "N" for all taxpayers for which an RAA is on file authorizing you to receive notices.

11. Positions 170-173 -- Blank fill.

12. Positions 174-200 -- Blank fill.

.03 The Internal Revenue Service will reconcile their existing files with the special submissions of the agents and will notify the agents of discrepancies with respect to missing authorizations and to authorizations no longer on the current list.

SECTION 5. FTD ONLY REPORTING AGENTS AUTHORIZATIONS

.01 At present, the Service will continue to manually maintain a file of RAAs that authorize federal tax deposit magnetic tape submissions without authorizing magnetic tape filing.

.02 These authorizations will be used to verify the right of an agent to discuss a taxpayer's account as it relates to federal tax deposits.

SECTION 6. ADDITIONAL INFORMATION

Requests for additional copies of this revenue procedure, requests for copies of appropriate input record element specifications, and requests for tape filing information should be addressed to the Director, Internal Revenue Service Center, at one of the following addresses:

          1. North-Atlantic Region

.01 Conventions

(a) Reporting Agents who submit their initial or add and delete lists on magnetic tape must conform to Level 3 of the ANSI Standard X3.27-1978 (Magnetic Tape Labels and File Structure for Information Interchange). Specifically this calls for recognition of the following label types: VOL1, HDR1, HDR2, EOV1, EOV2, EOF1, and EOF2 (see Exhibits 3 through 9 for specific label specifications). There will be no user labels or non-labeled tapes accepted for processing.

(b) Record Mark

No restrictions apply to record marks.

(c) Tape Mark

The tape marks will be automatically generated for an interchange tape (defined in Section 7.01). An example is provided in Section 8. Magnetic Tape Specifications .02.

.02 Definitions

 Element                 Description

.01 These specifications prescribe the required format and content of the records to be included in the file, but not the methods or equipment to be used in their preparation. A physical tape reel must have the following physical characteristics:

 Type of tape            1/2 inch Mylar base, oxide coated

      VOL1

.04 Affix an external label to each tape with the following information:

1. Name of reporting agent,

2. Number of RAAS entries (submitted or deleted) on file (even if more than one reel comprises file),

3. Density (1600),

4. Channel (9),

5. Parity (odd),

6. Sequence number of reel and total number of reels in file (for example, 1 of 3).

7. Write in large type:

EXPEDITE RAA MAGNETIC TAPE SUBMISSION DELIVER TO TAPE LIBRARY

.05 Record Length

The tape records prescribed in the specifications must be blocked at one record per block (200 tape character positions).

.06 Data

Only character data may be used. This means numeric fields cannot use overpunched signs and should be right justified with remaining unused positions zero filled. Special characters should be limited to -, &, % or / and can only be used in the name line fields and the street address fields of Reporting Agent "RA" Record and Taxpayer "TP" Record. Otherwise, characters must be numeric or alphabetic. All numeric data should be in unsigned ASCII characters (no binary data).

.07 Reporting Agent Record

Identifies the reporting agent who prepares and transmits the tape file and the RAAs (see Exhibit 10). The Agent Record must precede the first Taxpayer record reported on the first reel of the file. Contact the Magnetic Tape Coordinator for Business Tax Returns for additional details, if necessary.

.08 Client/Taxpayer Records

1. Taxpayer records contain information for each filer reported by the reporting agent (see Exhibit 11). The number of Taxpayer Records appearing on one tape file will depend on the number of taxpayers represented.

2. All records will be blocked individually with no other records in the block. Records should have a blocking factor for which blocks will not exceed 200 tape character positions. All records must be fixed length. Fields identified as indicators should always carry a value. Other fields must be left justified and blank filled on right with blank filling of non-significant fields.

.09 End of File Trailer Record

This record contains a count of all Taxpayer Records (see Exhibit 12). The Trailer record must be the last record on the agent's tape file. It can be followed only by a tape mark.

SECTION 9. EFFECTIVE DATE

This revenue procedure is completely effective January 31, 1988. However, section 4, which relates to the establishment of the Reporting Agents File and related technical specifications is effective October 1, 1987.

SECTION 10. EFFECT ON OTHER DOCUMENTS

The instructions contained in this revenue procedure supersede authorization information contained in Revenue Procedures for Form 940 magnetic tape filing, for Forms 941/941E magnetic tape filing, and for submissions on magnetic tape of Federal Tax Deposits for employment taxes.

                              EXHIBIT 1

                               EXHIBIT 4

                               EXHIBIT 5

                               EXHIBIT 6

                               EXHIBIT 7

                               EXHIBIT 8

                               EXHIBIT 9

                              EXHIBIT 10