IRS Publishes Requirements For Substitute Forms W-2C And W-3C.

Rev. Proc. 2002-51

  TABLE OF CONTENTS

.01 The purpose of this revenue procedure is to state the requirements of the Internal Revenue Service (IRS) and the Social Security Administration (SSA) relating to substitutes for Form W- 2c, Corrected Wage and Tax Statement, and Form W- 3c, Transmittal of Corrected Wage and Tax Statements, for:

• Preparing acceptable substitutes of the official IRS forms to file information returns with the IRS and SSA, and

• Using official or acceptable substitute forms to furnish information to recipients.

Note: Both paper substitute forms filed with the SSA and those furnished to employees that do not conform totally to these specifications are not acceptable. Forms W-2c (Copy A) and Forms W- 3c that do not conform may be returned. In addition, penalties may be assessed.

.03 Forms should not be submitted to either the IRS or the SSA for specific approval. If you are uncertain of any specification and want it clarified, you may submit a letter citing the specification, state your understanding and interpretation of the specification, and enclose an example of the form (if appropriate) to:

Note: Allow at least 45 days for the IRS to respond.

Section 2 - Nature of Changes.

.01 The following changes have been made since the last revision (March 1995) of Publication 1223:

• The text and exhibits have been extensively updated throughout the publication.

• A new checkbox, "Third-party sick pay," has been added to box 13 of Form W-2c and box c, "Kind of Payer," on Form W-3c.

• A Form W-3c is required to be included whenever you file a Form W-2c with the Social Security Administration (SSA), even if you are only filing Form W-2c to correct an employee's name and/or social security number (SSN).

• Copy A of Form W-2c and Form W-3c must be printed on 8.5-inch by 11 inch paper using the revised formats and nonreflective black ink. Form identification numbers "44444" and "55555", respectively, were added to the top of Forms W-2c and W-3c.

• Filers are instructed to use 12-point Courier font (SSA- preferred) for data entries in order to facilitate processing,

.01 Employers with less than 250 Forms W-2 to be corrected are encouraged to file electronically or use magnetic media for filing Forms W-2c (Copy A) with the SSA. Employers must use magnetic or electronic media for filing with the SSA if they file 250 or more Forms W-2c (Copy A) during a calendar year.

.02 To submit Forms W-2c on magnetic media or electronically, contact the Employer Service Liaison Officer (ESLO) for your state. Call 1-800-772-6270 for your ESLO's phone number. Specifications for filing Form W-2c on magnetic media or electronically are contained in SSA's MMREF-2, Magnetic Media Reporting and Electronic Filing of W-2c Information. As noted above, employers filing less than 250 Forms W-2c are not required to file on magnetic media or electronically. However, doing so will enhance the timeliness and accuracy of forms processing.

.03 You can also get information from the SSA's Business Services Online (BSO). You can access BSO by visiting the SSA Website at wwwssa.gov/employer or by calling 410-966-4105 (not a toll-free number). Call the SSA at 1-888-772-2970 if you experience problems using BSO. Information available includes Forms W-2c magnetic media filing instructions, information on electronic filing, selected IRS and SSA forms and publications, and general topics about information reporting. BSO can also be used to ask questions about those same items.

Section 4 - General Requirements for Substitute Paper Copies of Forms W-2c (Copy A) and W-3c That Payers Submit to SSA

.01 Include the OMB Number on Forms W-2c; (Copy A) and Form W-3c in the same location as on the official form.

.02 The words "For Privacy Act and Paperwork Reduction Act Notice, see separate instructions." must be printed on all Forms W-2c (Copy A) and Form W-3c.

.03 The Government Printing Office (GPO) symbol must not be printed on substitute Forms W-2c (Copy A) and Form W- 3c.

.04 The Catalog Number (Cat. No.) shown on the forms is used for IRS distribution purposes and should not be printed on any substitute forms.

.05 The SSA addresses must be printed on the front of Form W-3c below the body of the form (see Exhibit B). They are:

If you use the U.S. Postal Service:

.08 Employers may file privately-printed Forms W-2c (Copy A) and Form W-3c with the SSA. The substitute form must be an exact replica of the IRS-printed form with respect to layout and content.

.09 The back of substitute Forms W-2c (Copy A) and Form W-3c must be free of all printing.

.10 In addition:

• Hot wax and cold carbon spots are not permitted on any of the internal form plies.

• Color and paper quality for Copy A (cut sheets and continuous pinfeed forms) as specified by JCP Code 0-25, dated November 29, 1978, must be white 100% bleached chemical wood, optical character recognition (OCR) bond.

• Chemical transfer paper is permitted for Copy A only if:

• (a) chemically-backed;

  (b) you do not use carbon-coated forms; and

  (c) chemically-transferred images are black.

• All copies must be clearly legible. Interleaved carbon should be black and must be of good quality to assure legibility on all copies and to avoid smudging. Fading must be minimized to assure legibility.

• All copies should be legible and able to be photocopied.

• The contractor must initiate or have a quality control program to assure OCR ink density. The forms must be printed in nonreflective black ink.

Note: The form identifying number must be nonreflective carbon-based black ink in OCR A font,

.12 Two official Forms W-2c or one W-3c are contained on a single page that is 8.5 inches wide (exclusive of any snap stubs) by 11 inches deep. The width of a substitute form must be 7.5 inches. See Exhibits A and B.

.13 Forms W-2c (Copy A) of privately-printed, continuous substitute forms must be perforated at each 11" page depth. No perforations are allowed between the forms on a single page of Copies A.

Note: Perforations are required between all the other individual copies (Copies 1, B, C, 2, and D).

Section 5 - Requirements for Substitute Privately-Printed Forms W-2c (Copies B, C, and 2) Furnished to Employees

.01 All employers (including those who file on magnetic media or electronically) must furnish employees with at least two copies of Form W-2c (three or more for employees required to file a state, city, or local income tax return).

.02 The paper for all copies must be white and printed in black ink. The substitute Copy B (or its equal), which employees are instructed to attach to their federal income tax returns, must be at least 12-pound paper (basis 17 x 22-500). Other copies furnished to the employee must be at least 9-pound paper (basis 17 x 22-500).

.03 Interleaved carbon and chemical transfer paper for employee copies must be clearly legible, have the capability to be photocopied, and not fade to such a degree as to preclude legibility and the ability to photocopy.

.04 Type must be substantially identical in size and shape to that on the official form.

.05 Substitute forms for employees need to contain only the payment boxes and captions that are applicable. These boxes, box numbers, and box titles must, when applicable, match the IRS- printed form. In all cases, the employee name, address, and SSN must be present.

.06 The dimensions of these copies (Copies B, C, and 2), but not Copy A, may be expanded from the dimensions of the official form to allow space for conveying additional information. Also, on these copies (Copies B, C, and 2), the size of the boxes may be adjusted. This may permit the employer to eliminate other statements or notices that would otherwise be furnished to employees.

.07 The maximum allowable dimensions for employee copies of Form W-2c are no more than 6.5 inches deep by 8.5 inches wide. The minimum allowable dimensions for employee copies of Form W-2c are 2.67 inches deep by 4.25 inches wide.

Note: These maximum and minimum size specifications are subject to future change.

.08 Either horizontal or vertical format is permitted for substitute employee copies of Forms W-2c. That is, the width of the form may be either greater or less than the depth of the form.

.09 All copies of Form W-2c must clearly show the form number and the form title prominently displayed together in one area of the form. It is recommended (but not required) that this be located on the bottom left of Form W-2c. The reference to the "Department of the Treasury -- Internal Revenue Service" must be on all copies of Form W-2c. It is recommended (but not required) that this be located on the bottom right of Form W-2c.

.10 If the substitute Forms W-2c are not labeled as to the disposition of the copies, then written notification must be provided to each employee as specified below:

• The first copy of Form W-2c (Copy B) is filed with the employee's federal tax return.

• The second copy of Form W-2c (Copy C) is for the employee's records.

• If applicable, the third copy (Copy 2) of Form W-2c is filed with the employee's state, city, or local income tax return. If the substitute Forms W-2c are labeled, the forms must contain the applicable description as stated on the official form.

Section 6 - Instructions for Employers

.01 Privately-printed substitute Forms W-2c are not required to contain a copy to be retained by employers (Copy D). However, employers must be prepared to verify or duplicate this information if the IRS or the SSA requests it. Paper filers who do not keep Copy D of Form W-2c should be able to generate a facsimile of Form W-2c (Copy A) in case of loss.

.02 If Copy D is provided for the employer, instructions contained on the back of Copy D of the official form must appear on the back of the substitute form. If Copy D is not provided, these instructions must be furnished to the employer on a separate statement.

.03 Only originals or compliant substitute copies of Forms W- 2c and Forms W-3c may be filed with the SSA. CARBON COPIES AND PHOTOCOPIES ARE NOT ACCEPTABLE.

.04 Employers should type or machine print entries on non- laser generated forms whenever possible and provide good quality data entries by using a high quality type face, inserting data in the middle of blocks that are well separated from other printing and guidelines, and taking any other measures that will guarantee clear, sharp images.

.05 Because employers must file a machine-scannable Form W-2c, be aware of the following requirements. Use 12-point Courier (SSA- preferred) font for data entries. Proportional-spaced fonts are unacceptable. You must refrain from printing any data in the top margin of the forms

.06 The employer must also furnish payee copies of Forms W-2c (Copies B, C, and 2) that are legible and capable of being photocopied (by the employee).

.07 When Forms W-2c or W-3c are typed, black ink must be used with no script type, inverted font, italics or dual-case alpha characters.

.08 The filer's Employer Identification Number (EIN) must be entered in box e of Form W-3c and is a preferred entry in box e of Form W-2c.

.09 The employer's name, address, EIN, and state ID number may be preprinted.

Section 7 - OMB Requirements for Substitute Forms

.01 The Paperwork Reduction Act (the Act) of 1995 (Public Law 104-13) requires that:

• The OMB approves all IRS tax forms that are subject to the Act.

• Each IRS form contains (in or near the upper right comer) the OMB approval number, if any. (The official OMB numbers may be found on the official IRS printed forms and are also shown in the exhibits.)

• Each IRS form (or its instructions) states:

•  

  1. Why the IRS needs the information,

  2. How it will be used, and

  3. Whether or not the information is required to be famished to the IRS.

.03 The OMB requirements for substitute IRS forms are:

• Any substitute form or substitute statement to a recipient must show the OMB number as it appears on the official IRS form.

• For Form W-3c and Copy A of Form W-2c, the OMB number must appear exactly as shown on the official IRS form.

• For any copy other than Copy A, the OMB number must use one of the following formats.

2. OMB # XXXX-XXXX (acceptable).

.04 All substitute Forms W-3c and Copy A of Form W-2c must state, "For Privacy Act and Paperwork Reduction Act Notice, see separate instructions." If no instructions are provided to users of your forms, you must furnish them the exact text of the Privacy Act and Paperwork Reduction Act Notice.

Section 8 - Reproducible Copies of Forms

.01 You can order official IRS forms and information copies of federal tax materials by calling the IRS Distribution Center at 1-800-829-3676. Other ways to get federal tax material include:

• The Internet.

• CD-ROM.

• GPO Superintendent of Documents Bookstores.

.02 You can access the IRS Website on the Internet via:

• File Transfer Protocol (FTP) using ftp.irs.gov or

• World Wide Web by using www.irs.gov

Section 9 - Effect on Other Revenue Procedures

.01 Revenue Procedure 95-18, 1995-1 C.B. 657 (reprinted as Publication 1223, Rev 3-95), is superseded.

Section 10 - Exhibits