Rev. Proc. 88-28

PART A. GENERAL

01. The purpose of this revenue procedure is to state the requirements for: (1) reproducing paper substitutes of the forms shown below, covering payments made during the 1988 calendar year (for Forms 5498, contributions made for 1988), that are required to be filed with the Internal Revenue Service (IRS), (2) furnishing substitute statements to form recipients (see Section 4.01 for definition, and paper document reporting). This revenue procedure contains specifications for the following:

(a) Form 1098, Mortgage Interest Statement.

(b) Form 1099-A Information Return for Acquisition or Abandonment of Secured Property.

(c) Form 1099-B, Statement for Recipients of Proceeds From Broker and Barter Exchange Transactions.

(d) Form 1099-DIV, Statement for Recipients of Dividends and Distributions.

(e) Form 1099-G, Statement for Recipients of Certain Government Payments.

(f) Form 1099-INT, Statement for Recipients of Interest Income.

(g) Form 1099-MISC, Statement for Recipients of Miscellaneous Income.

(h) Form 1099-OID, Statement for Recipients of Original Issue Discount.

(i) Form 1099-PATR, Statement for Recipients (Patrons) of Taxable Distributions Received From Cooperatives.

(j) Form 1099-R, Statement for Recipients of Total Distributions From Profit-Sharing, Retirement Plans, Individual Retirement Arrangements, Insurance Contracts, Etc.

(k) Form 1099-S, Statement for Recipients of Proceeds From Real Estate Transactions.

(l) Form W-2G, Statement for Recipients of Certain Gambling Winnings.

(m) Form 5498, Individual Retirement Arrangement Information.

(n) Form 1096, Annual Summary and Transmittal of U.S. Information Returns.

02. For the purpose of this revenue procedure, a substitute form is one that is not printed by IRS. For a substitute form to be acceptable to the IRS, it must conform to the official form and the specifications outlined in this revenue procedure. DO NOT submit any substitutes for APPROVAL. Only those forms that conform to the official form and comply with the specifications set forth herein are acceptable. See Part A, Section 8 for the specifications that apply to form recipient statements (Copy B).

03. This revenue procedure supersedes Revenue Procedure 87-17.

SEC. 2. NATURE OF CHANGES

01. Various editorial changes have been made.

02. Chemical transfer paper no longer requires IRS approval.

03. Form 1099-S, Statement for Recipients of Proceeds From Real Estate Transactions, has been added. In the past, real estate transactions were reported on Form 1099-B.

04. A payee statement may be perforated to a check or to a statement of the payee's account. See section 8.01.

SEC. 3. REQUIREMENTS FOR ACCEPTABLE SUBSTITUTE FORMS 1096, 1098, 1099, 5498, AND W-2G.

01. Paper substitutes for Form 1096, and Copy A of Forms 1098, 1099, 5498, and W-2G, that totally conform to the specifications contained in this procedure may be privately printed and filed as returns with the IRS. DO NOT submit any substitutes for general approval. Only those forms that conform with the official form and the specifications contained herein are acceptable.

If you are uncertain of any specification set forth herein and want that specification clarified, you may submit a letter citing the specification in question, your interpretation of the specification, and an example of the form with your understanding of the specification to:

     Internal Revenue Service

03. Proposed substitutes for Copy A that do not conform to these specifications are not acceptable.

04. No IRS office is authorized to allow deviations from this revenue procedure.

05. IRS approval for the use of chemical transfer paper on Copy A is no longer required.

06. Forms 1096, 1098, 1099, 5498, and W-2G are subject to annual review and possible change. Filers are cautioned, therefore, against overstocking supplies of privately printed substitutes. THE SPECIFICATIONS CONTAINED IN THIS REVENUE PROCEDURE APPLY TO 1988 FORMS ONLY.

07. Copies of the official forms for the reporting year may be obtained from most Internal Revenue offices. IRS provides only cut sheets (no carbon interleaves) of these forms. If they are not available at your local IRS district office, you may ask them to order copies for you. You should receive your order within 10 days. If you prefer, you may order them by calling 1-800-424-Form.

08. Only original or ribbon copies that are typed or machine printed with BLACK CARBON BASED INK may be filed with IRS. Carbon copies and photocopies are not acceptable.

SEC. 4. DEFINITIONS

01. The term "taxpayer (form recipient) identification number (TIN)" for an individual means the individual's social security number (SSN). The SSN consists of nine digits separated by hyphens as follows: 000-00-0000. For all other form recipients, the term "taxpayer (form recipient) identification number" means the employer identification number (EIN). The EIN consists of nine digits separated by one hyphen as follows: 00-0000000. For a sole proprietor, use the sole proprietor's SSN.

02. In the past the terms payee and recipient were usually synonymous. The addition of new forms to the information returns family requires different terminology to identify the recipient of a copy of the form filed with IRS i.e., 1098 is payer/borrower, 1099-A is borrower, 1099S is transferor, 5498 is participant. Therefore, to prevent any confusion, the person who is required by law to receive a copy of the official form or information statement will be referred to as the "form recipient."

03. The term "filer" means the person or organization required by law to file with IRS a form listed in section 1.01 above. A filer includes a payer, a recipient of mortgage interest payments, a broker, a barter exchange, a person reporting real estate transactions, a trustee or issuer of an individual retirement arrangement (including an IRA or SEP), and a lender who acquires an interest in secured property or who has reason to know that the property has been abandoned.

04. A corrected and/or amended return is one that corrects previously reported information.

05. The term "substitute form" means a paper substitute of Copy A of an official form listed in section 1.01 above that totally conforms to the provisions in this revenue procedure.

06. The term "form recipient statement" means a paper statement of the information reported on a form listed in section 1.01 above that must be furnished to a person, (form recipient) as so defined under the applicable provisions of the Internal Revenue Code.

07. A composite statement is a substitute form recipient copy of official Forms 1099-DIV, INT, OID and PATR, in the aggregate or in any combination thereof. A filer may use a composite statement when such reportable payments are paid to the same form recipient during the calendar year. A composite statement is one form (although the form itself may comprise more than one page) that contains all the requisite Form 1099 information (for Forms 1099-DIV, INT, OID, and PATR) A composite statement may contain any combination of the above Form 1099 information. A composite Form 1099 CANNOT be filed with IRS. If the filer does not use a composite statement for these payments, the filer must provide the necessary information to the form recipient separately on each respective form or substitute statement as the case may be.

SEC. 5. INSTRUCTIONS FOR PREPARING FORMS THAT WILL BE FILED WITH THE IRS

01. The form recipient's name, street address, city, state, and ZIP code information must be TYPED OR MACHINE PRINTED IN BLACK INK on separate lines. The city, state, and ZIP code must be on the same line.

02. The name of the appropriate form recipient must be shown on the first or second name line in the area on the form provided for the form recipient name and address. (See Section 6 for guidelines on the preferred methods for the form recipient name and TIN). No descriptive information or other name should precede the form recipient's name. ONLY one form recipient name should appear on the first line of the form. If more than one form recipient(s) name must be entered, we prefer that the filer place the responsible form recipient (person or organization whose TIN is provided) on the first line. Place other form recipients' names on the succeeding name lines (up to 2 name lines are allowable). While we prefer that these guidelines be followed in submitting information returns, we recognize that certain states require that the entities on trust accounts be provided in a different format. Filers should provide information returns reflecting payments to trust accounts with the trusts' TIN in the recipients' TIN areas, and the trusts' names as the recipients' first name lines and the trustee as the recipient's second name lines.

03. The box below the form recipient's name and address may be used for the account number. This information is not required; however, special caution must be taken if an account number is being entered. This number must be unique and MUST NOT appear anywhere on the form other than in the box specified for this use. If window envelopes are used, this number must not show through the window because the Postal Service may not accept them for metered mail.

04. Filers must TYPE OR MACHINE PRINT data entries on the forms, use carbon-base BLACK ribbon, insert data in the middle of blocks well separated from other printing and guidelines, and take other measures to guarantee a clear, dark black, sharp image.

05. Machine printed forms should be printed using a 6 lines/inch option.

06. Machine printed forms must be printed in 10 pitch pica (i.e., 10 print characters per inch) or 12 pitch elite (i.e., 12 print positions per inch).

07. On corrected returns, an "X" must be placed within the check box located at the top of the form to the left of the word CORRECTED." The accompanying Form 1096 for a submission of corrected returns should also contain an "X" within the "CORRECTED" box at the top of the form. DO NOT type the words CORRECTED RETURN on the Form 1096, 1098, 1099, 5498 or W-2G. All required data blocks must be completed on a corrected return since it replaces and supersedes the information return previously filed. Do not intermix corrected and original returns in a submission. Corrected returns should be filed separately.

08. For corrected or voided documents, enter an "X" within the appropriate box using only computer print, typewriter or #2 pencil. DO NOT use a ball-point pen or felt tip marker. The machine used to "read" paper forms generally cannot "read" these ink types.

09. Substitute forms prepared in continuous or strip form must be burst and stripped to conform to the size specified for a single sheet before they are filed with IRS. The size specified DOES NOT INCLUDE PINFEED HOLES. Pinfeed holes MUST NOT be present on forms filed with IRS.

10. Use decimal points to indicate dollars and cents. DO NOT use dollars signs ($), ampersands (&), asterisks (*), commas (,), or other special characters.

11. DO NOT FOLD Forms 1096, 1098, 1099, or 5498 mailed to IRS. Mail these forms flat in an appropriately sized envelope or box. Folded documents cannot be readily moved through the scanner transport used in IRS processing.

12. DO NOT STAPLE Forms 1096 to the returns being transmitted. Staple holes in the vicinity of the return code number reduce our ability to machine scan the return code number, which is used to identify the type of document being processed.

13. MAIL completed paper forms to the IRS service center specified in the 1988 Instructions for Forms 1099, 1098, 5498, 1096, and W-2G.

14. If you submit forms to IRS that do not meet the specifications in this revenue procedure, you may be subject to a penalty under section 6721 or 6723 of the Internal Revenue Code. The penalty is $50 for each form that the IRS cannot accept as a return because it does not meet the provisions set out in this revenue procedure.

15. Filers who submit forms with missing or incorrect information (other than an SSN) on an information return may be subject to a penalty under section 6723 of the Internal Revenue code. Generally the penalty is $5 per information return. For instructions on how to file information returns, see the 1988 Instructions for Forms 1099, 1098, 5498, 1096, and W-2G.

SEC. 6. TAXPAYER IDENTIFICATION NUMBERS

01. Under section 6109 of the Internal Revenue Code, a person with respect to whom a return, statement, or other document is required to be made by another person must furnish his taxpayer identification number (TIN) to such other person. The number must be furnished to the filer whether or not the form recipient is required to file a tax return or is covered by Social Security. Section 6109 also requires filers to request the TINs and place them on returns required to be filed with IRS.

02. Filers must provide correct TINs on all forms submitted. It is particularly important that correct social security and employer identification numbers for form recipients be provided on magnetic media or paper forms submitted to IRS.

03. Section 6676 of the Internal Revenue Code imposes a $50 penalty on filers for each return filed with an incorrect or missing TIN. For payments of interest, dividends, patronage and original issue discount the penalty is self-assessable on Form 8210, Self- Assessed Penalties Return.

04. The TIN required to be furnished to the IRS depends primarily on the manner in which the account is maintained in the filer's records. Usually, the TIN provided must be that of the owner of record. If an account is recorded as a joint account, i.e., more than one person is listed on the account, furnish the TIN and name of the first person listed on the record. For individuals, recipients, including sole proprietors, the TIN is the SSN. For other entities, furnish an EIN.

05. Sole proprietors filing information returns should show their EIN on the return if required to have an EIN. If not, they should show their SSN.

06. The charts below will help you determine the TIN to be furnished to IRS.

            CHART 1. GUIDELINES FOR SOCIAL SECURITY NUMBERS

01. IRS encourages all filers including nominees (hereafter collectively referred to as filers) to file information returns on magnetic media instead of paper forms. All forms listed in Sec. 1.01 (except Form 1096) may be filed on magnetic media.

02. Any person who is required to file, or was required to file for the prior year, more than 50 Forms 1099-DIV (for dividends reportable under section 6042 of the Code), 1099-INT, 1099-OID, or 1099-PATR in any combination, for a calendar year MUST file these returns on magnetic media. This requirement applies to any person for any period unless such person establishes that this requirement would result in undue hardship and requests a waiver from the filing requirements. To request a waiver from filing on magnetic media, submit a waiver request on a written statement or on Form 8508, Request for Waiver from Filing Information Returns on Magnetic Media, 90 days before the due date of the return and send it to the following address: Internal Revenue Service, National Computer Center, P.O. Box 1359, Martinsburg, WV 25401-1359.

03. Regulations section 1.6045-1(1) requires brokers and barter exchanges to use magnetic media in reporting any Form 1099-B data to IRS. Generally, new brokers and new barter exchanges may request an undue hardship exception by filing a waiver request by the end of the second month following the month in which they became a broker or barter exchange, at the address in .02 above.

04. You are required to use magnetic media for filing Forms 1098, 1099-A, 1099-G, 1099-MISC (except substitute payments reported in Box 8), 1099-R, 1099-S, 5498, and W-2G if you are required to file, or were required to file for the prior year, 250 or more returns unless you establish that this requirement would result in undue hardship. A request for a waiver should be submitted by written statement or on Form 8508, 90 days before the due date of the return and sent to the National Computer Center, at the address in .02 above.

05. Specifications for filing information returns on magnetic tape, 9 inch, 5 1/4 diskette, and 3 1/2 inch diskette are contained in various revenue procedures relating to Requirements and Conditions for Filing Information Returns on Magnetic Media. Copies of these procedures may be obtained from any Internal Revenue district office or by writing to the address in .02 above or calling (304) 263-8700 (not a toll-free number). Filers or agents who are required to, or want to, file information returns on magnetic media must file Form 4419, Application for Information Returns Filing on Magnetic Media. Forms 4419 must be filed prior to submitting returns on magnetic media. IRS will provide a written reply to the applicant and further instructions at the time of approval. The application must be sent to the National Computer Center address in .02 above.

06. Since many states accept information returns filed on magnetic media, savings may be obtained if similar media is used for filing with IRS and state agencies. For information regarding state magnetic media filing requirements, filers should contact the respective state tax authority.

SEC. 8. STATEMENT TO FORM RECIPIENTS AND FORM RECIPIENT COPIES.

01. For payments of interest and dividends reportable on Forms 1099-DIV (for dividends reportable under section 6042 of the IRC), 1099-INT (except for interest reportable under section 6041), 1099- OID, or 1099-PATR, an official Form 1099 must be furnished to a form recipient either in a statement mailing by first-class mail or in person. For payments of royalties reportable on Form 1099-MISC, you are also required to furnish the statement in person or in a statement mailing by first-class mail, but the statement need not be the official form. These forms may be mailed or provided to the form recipient in one of two ways: (1) in a statement mailing with other Forms 1098, 1099 or 5498 form recipient statements, a check, a letter explaining why no check is enclosed, a statement of the person's account, Forms W-8 and W-9, Forms W-2 and W-2P, and a letter limited to an explanation of the tax consequences of the enclosed form recipient statements. A form recipient statement may be perforated to a check with respect to the account reported on the payee statement or to a statement of the payee's specific account if payments on such account are reflected on the form recipient statement. The enclosure to which the form recipient statement is perforated must contain, in a bold and conspicuous type the legend "Important Tax Return Document Attached." If this method is used, the statement "Important Tax Return Document Enclosed" must appear on the outside of the envelope and on each check, letter, or account statement in a bold and conspicuous manner. (2) In a separate mailing with other Forms 1098, 1099, or 5498 form recipient statements, Forms W-8 and, W-9 Forms W-2 and W-2P, and a letter of the tax consequences of the enclosed form recipient statements. If you follow the second method you are not required to include the legend "Important Tax Return Document Enclosed" on the envelope. NOTE: Applies to (1) and (2), No other information, such as advertising, promotional material, or a quarterly or annual report, may be mailed with the form recipient statement or provided in person with the form recipient statement without violating these requirements. See Notice 87-17, 1987-1 CB. 454, and other applicable procedures for the rules on how these statements should be provided to form recipients.

02. The requirement to furnish form recipients with an official Form 1099-DIV, INT, OID, and PATR, may be met by furnishing a substitute Form 1099 (form recipient statement) if it contains language substantially similar to that of the official IRS form, such as the aggregate amount paid to the form recipient, any Federal income tax withheld under IRC section 3406 of the Code, the name, address, and TIN of the person making the return, and any other information required by the official form. Generally, information not required by the official form should not be included on the form because it may violate the mailing requirements (see .01 above). In addition, the form recipient statement for interest, dividends, patronage dividends, and original issue discount must contain the information listed below.

1. All money amounts required to be reported to the form recipient must be titled and numbered in substantially the same manner as those on the official IRS form.

2. The form recipient statement must contain all applicable form recipient instructions provided on the front and back of the official IRS form.

3. Form recipient statement covering reportable interest, dividends, patronage dividends, and original issue discount must contain the following statement in bold and conspicuous type, "This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction will be imposed on you if this income is taxable and IRS determines that it has not been reported."

4. The form recipient statement must contain the Office of Management and Budget (OMB) number as shown on the official IRS form.

5. The form recipient statement must show the title and number of the official IRS Form 1099 for which it substitutes.

03. If the form recipient statement contains all the information listed in .02 above, layout and format of the form is at the discretion of the filer.

04. A composite form recipient statement is permitted for reportable payments of interest, dividends, patronage dividends, and/or original issue discount (Forms 1099-DIV, INT, OID or PATR) when one filer is reporting any or all of these payments during a calendar year to the same form recipient. Although the composite form recipient statement may be on one form, the format of the composite form recipient statement must satisfy the following requirements in addition to the requirements listed in .02 above.

1. All information pertaining to a particular type of payment must be located and blocked together on the form and must be separate from any information covering other types of payments included on the form.

2. The title of the official IRS form or forms for which this form recipient statement substitutes must be shown at the beginning of each appropriate block of information.

3. Any information required by the official IRS form that would otherwise be repeated in each information block is only required to be listed once in the first information block on the composite form. For example, there is no requirement to report the name of the filer in each information block.

05. Statements to form recipients of other reportable payments on Forms 1098, 1099-A, 1099-B, 1099-G, 1099-MISC (except payments reportable under section 6045), 1099-R, 1099-S, 5498, 1099-DIV (or payments reportable under section 6047), 1099-INT (for payments reportable under section 6041) and W-2G should meet the following requirements:

1. The filer and form recipient information required on the official IRS form must be included.

2. All money amounts and information required to be reported to the form recipient must be titled on the form recipient statement in substantially the same manner as those on the official IRS form.

3. Form recipient statements must contain the following:

(1) Forms 5498 and Form 1099-R -- "This is important tax information and is being furnished to the Internal Revenue Service."

(2) Forms 1099-G and W-2G -- "This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this income is taxable and the IRS determines that it has not been reported."

(3) Forms 1099-B and 1099-MISC -- Same as item (2) above, except change "may" to "will" in the second sentence.

(4) Form 1099-A -- "This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction will be imposed on you if taxable income results from this transaction and the IRS determines that it has not been reported."

(5) Form 1098 -- (a) "This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanction will be imposed on you if the IRS determines that an underpayment of tax results because you overstated a deduction for this mortgage interest on your return."

(b) "The amount shown may not be fully deductible by you on your Federal income tax return. Limitations based on the cost and value of the secured property may apply. In addition, you may only deduct an amount of mortgage interest to the extent it was incurred by you, actually paid by you, and not reimbursed by another person."

NOTE: The language contained in 5(a) differs from the 1988 official IRS Form 1098. You may choose to use the legend as shown on the official IRS form in place of 5(a).

(6) Form 1099-S any written statement must contain the following: "This is important tax information and is being furnished to the Internal Revenue Service. If you are required to file a return, a negligence penalty or other sanctions will be imposed on you if this item is required to be reported and the IRS determines that is has not been reported.

NOTE: You may use a Uniform Settlement Statement (under RESPA) as the written statement if it is conformed by designating on the statement the legend described above and that information reported to IRS on Form 1099-S.

4. Appropriate instructions to the form recipient, similar to those on the official IRS form, must be provided to aid in the proper reporting of the items on the form recipient's income tax return. For payments reported on Form 1099-B, the requirement to include on the statement furnished to form recipients instructions that are substantially similar to those on the official IRS form may be satisfied by providing form recipient with a single set of instructions with respect to all statements required to be furnished in a calendar year.

06. Form recipient statements specified in .05 above may contain information other than that required by the official IRS form. However, if other information is included, such statements cannot be mailed with Forms 1099-DIV, INT, OID, or PATR or their substitutes without violating the statement mailing requirements.

07. A composite form recipient statement for forms specified in .05 above is permitted when one filer is reporting any or all of these payments during a calendar year to the same form recipient. A composite statement is not allowable for a combination of forms listed in .05 above and forms listed in .04 above. For example, a composite statement of Form 1098 and 1099-INT (for interest reportable under section 6049) is not allowable. Although the composite form recipient statement may be on one form, the format of the composite form recipient statement must satisfy the requirements listed in items (1), (2), and (3) of .04 above.

PART B. SUBSTITUTE FORM FORMAT REQUIREMENTS (EXCLUDING FORM W-2G)

SEC. 1. GENERAL

01. The following specifications prescribe the format requirements of Forms 1098 (Copy A), 1099 (Copy A), 5498 (Copy A), and 1096.

02. The form identifying number (e.g., 9191 for Forms 1099-DIV) must be printed in non-reflective black carbon-based ink in print positions 25 through 29 using an OCR A font. The ballot boxes located to the right of the form identifying number must be 10-point boxes.

NOTE: If the ballot box is checked indicating a corrected return or a "void" return, more than 50% of the box must be covered by an "X." Do not type "CORRECTED RETURN" on the top of the form. All required data must be completed on the corrected form since it replaces and supersedes the information return previously filed.

SEC. 2 SPECIFICATIONS FOR FORMS 1096 AND COPY A OF FORMS 1098, 1099 AND 5498

01. The substitute form must be an exact replica of the official IRS reproduction proof with respect to layout contents. "Spot Carbons" are NOT PERMITTED for Copy A. The Government Printing Office (GPO) symbol must be deleted. Specifications for Copy A are provided in Exhibits A thru N.

02. Color and quality of paper. Paper 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 produced in accordance with the following specifications:

NOTE: Reclaimed fiber in any percentage is permitted, provided the requirements of this standard are met.

 1 Acidity: pH value, average, not less than         4.5

OCR SPECIFICATIONS

Contractor must have or initiate a qualify control program to assure OCR ink density. In addition he must have at or adjacent to his production area either a MacBeth PCM-II tester or a Kidder 082A tester in order that testing may be accomplished at regular intervals throughout a shift.

Paper and Ink

Readings will be made when printed on approved 20 lb. White OCR bond with a reflectance of not less than 80%. Black ink must not have a reflectance greater than 15%. These readings are based on requirements of the "REI Input 80 Model C1 & D" Optical Scanner using Sinclair and Valentine J-6983 red ink or equal.

MacBeth PCM II Tester

The tested Print Contrast Signal (PCS) values when using the MacBeth PCM-II tester on the "C" scale must range from .01 minimum to .06 maximum.

Kidder 082A Tester

The tested Print Contrast Signal (PCS) values when using the Kidder 082A tester on the Infra Red (IR) scale must range from .12 minimum to .21 maximum. White Calibration disc must be 100%, sensitivity must be set one (1).

Alternative Tester

If an alternative tester is used it must be approved by the Government so that tested (PCS) values can be established with this equipment. Approval may be obtained by writing to the following address:

                   Commissioner of Internal Revenue

04. Typography -- Type must be substantially identical in size and shape with corresponding type on the official form. All rules are either 1/2-point or 3/4-point. Rules must be identical to that on the official IRS form.

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

05. Dimension -- Three official Forms 1098, 1099 or 5498 (Copy A) are contained on a single page, which is 8 inches wide (exclusive of any snapstubs and/or pinfeed holes) by 11 inches deep. The top margins must be 2/6 inch, and the right margin must be 1/4 inch plus or minus .0313 inch. If the right and top margins are properly aligned the left margin for all forms will be correct. All margins must be free of all printing.

NOTE: The image size of Forms 1099-S will be 1/6 of an inch shorter than the other Forms 1099, 1098, or 5498. See Exhibit K for specifications.

06. The depth of the individual trim size of each form on a page must be the same (3-2/3 inches) as that of the official form.

07. Perforations are required between forms on all copies except Copy A to enable the separation of individual forms.

08. The words "For Paperwork Reduction Act Notice and instructions for completing this form, see Instructions for Forms 1099, 1098, 5498, 1096 and W-2G MUST be printed on Copy A and Copy C.

09. The OMB Number MUST be printed on EACH ply in the same location as on the official form.

10. PRIVATELY PRINTED CONTINUOUS SUBSTITUTE FORMS (Copy A) MUST BE PERFORATED AT EACH 11" (3-on) PAGE DEPTH. NO PERFORATIONS ARE ALLOWED BETWEEN THE 3-2/3" FORMS ON A SINGLE COPY PAGE OF COPY A.

11. The words "Do NOT Cut or Separate Forms on This Page" must be printed in red dropout ink (as required by form specifications) between the three forms. NOTE: Perforations are required between all the other individual copies (Copies B and C, and Copies 1 and 2 for Form 1099-R) included in the set.

12. The back of a substitute Copy A must be free of all printing.

13. Carbonized. "SPOT CARBONS" are NOT PERMITTED for Copy A. Interleaved carbon must be of good qualify to assure legibility of information on all parts to preclude smudging and should be black. "Chemical transfer paper" is now permitted without IRS approval.

14. Printer's symbol -- The GPO symbol must not be placed on substitute Copy A. IN PLACE OF THE GPO SYMBOL, the employer identification number (EIN) of the forms printer must be printed in the bottom margin on the fact of each individual form of Copy A.

15. A postal indicia may be used if it meets the following criteria: a) it is printed in the OCR ink color prescribed for the form; b) no part of the indicia is within 1 print position of the scannable area; c) there is a 2/6 inch head margin; and d) there is a 1/4 inch right margin.

PART C. SUBSTITUTE FORM FORMAT REQUIREMENTS FOR FORM W-2G ONLY

SEC. 1. GENERAL

01. The following specifications prescribe the format requirements of From W-2G -- COPY A ONLY

02. A filer may file a substitute Form W-2G with IRS (hereinafter referred to as substitute Copy A). Substitute forms submitted to IRS must be exact replicas to layout and contents. The Government Printing Office symbol must be deleted.

SEC. 2. SPECIFICATIONS FOR COPY A FOR FORMS W-2G

01. Color and Quality of Paper.

1. Paper for Copy A must be white chemical wood bond, or equivalent, 20 pound (basis 17 x 22-500), plus or minus 5 percent. The paper must consist of principally bleached chemical woodpulp and be free from unbleached or ground woodpulp or recycled printer paper. It also must be suitably sized to accept ink without feathering.

2. Copies B and C (to be filed with tax return and For Winner's Records) and D (For Payer) are provided in the official assembly solely for the convenience of the filer. Filers may choose the format, design, color and quantity of the paper used for these copies.

3. Copies 1 and 2 are provided to file with the state. Some states have requested the addition of these two plys and they have been included solely for the convenience of the filer.

02. Color and Quality of Ink -- All printing must be in a high quality non-gloss black ink. Bar codes should be free from picks and voids.

03. Typography - Type must be substantially identical in size and shape with corresponding type on the official form. All rules on the document are either 1/2 point (.007 inch), 1 point (0.015 inch) or 3 point (0.045). Vertical rules must be parallel to the left edge of the document; horizontal rules, parallel to the top edge.

04. Dimensions -- The official form is 8 inches wide x 3-2/3 inches deep, exclusive of a 2/3 inch snap stub on the left side of the form. The snap feature is not required on substitutes. The top and right margins must be 1/4 inch plus or minus .0313. If the top and right margins are properly aligned, the left margin for all forms will be correct. All margins must be free of all printing. If the substitute forms are in continuous or strip form, they must be burst and stripped to conform to the size specified for a single form before they are filed with IRS.

1. The width of a substitute Copy A must be 8 inches. The left margin must be free of all printing other than that shown on the official form.

2. The depth of a substitute Copy A must be 3-2/3 inches.

05. Clear Area -- The back of Copy A must be free of all printing.

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

07. Printer's Symbol -- The Government Printing Office symbol must not be printed on substitute Forms W-2G. In place thereof, the printer's employer identification number should appear in the same place on such substitute forms.

PART D. ADDITIONAL INSTRUCTIONS FOR FORMS 1098, 1099, 5498, AND W-2G.

SEC. 1. OTHER COPIES

01. Copies 1 and 2, B, C, and D are included in the official assembly for the convenience of the filer. Although there is no requirement that privately printed substitute forms include these copies, Copies B and C will satisfy the requirement of law and regulations concerning the statement of information that is required to be furnished to the form recipient. Copies C and D may be desired as a filer record copy.

02. Arrangement of Assembly -- The parts of the assembly shall be arranged, from top to bottom, as follows: Forms 1099 (Except 1098, 1099-A, 1099-R, 1099-S, 5498, and W-2G) Copy A (Original), "For Internal Revenue Service Center"; Copy B "For Recipient"; Copy C "For Payer". Form 1098 (Copy A (original), "For Internal Revenue Service Center"; (Copy B "For Payer"; Copy C "For Recipient." Form 1099-A Copy A (Original), "For Internal Revenue Service Center"; Copy B "for Borrower"; Copy C "For Lender." Form 1099-R Copy A (Original), "For Internal Revenue Service", Copy 1, "For State Tax Department"; Copy B, "For Recipient"; Copy 2, "To be filed with recipient's state income tax return when required."; Copy C, "For Payer". Form 1099-S Copy A (original), "For Internal Revenue Service Center"; Copy B, "For Transferor"; Copy C, "For Filer." Form 5498 Copy A (Original), "For Internal Revenue Service Center", Copy B "For Participant"; Copy C "For Trustee or Issuer." Form W-2G Copy A (Original), "For Internal Revenue Service Center"; Copy 1, "For State Tax Department"; Copy B and C "For Winner's Records"; Copy 2 "To be filed with winner's state income tax return, if required.", Copy D "For Payer."

SEC. 2. REPRODUCTION PROOFS

01. Reproduction Proofs -- Order blanks for reproduction proofs are mailed annually to requestors of record and to other users upon request. Printers and others wishing to obtain reproduction proofs may send their requests to:

                      Internal Revenue Service

SEC. 3. OMB REQUIREMENTS

01. Office of Management and Budget (OMB) Requirements for Substitute Forms -- Pub. L. 96-511 requires: (1) OMB approval of Internal Revenue Service tax forms, (2) that each form show (in the upper right corner) the OMB approval number, and (3) the form (or its instructions) state why IRS is collecting the information, how it will be used and whether it must be given to us. The official IRS forms or instructions will contain this information.

02. As it applies to substitute IRS forms this means:

1. All substitute forms must show the OMB number as it appears on the official IRS form.

2. For Copy A, the OMB number must appear exactly as shown on the official IRS form.

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

a. OMB No. XXXX-XXXX (preferred) or;

b. OMB # XXXX-XXXX

4. You must inform the users of your substitute forms of the reasons for IRS collection, use and requirements, as stated in the instructions for the IRS form.

5. The official OMB approval numbers may be obtained for reproduction proofs, or official IRS printed forms.

SEC. 4. EFFECT ON OTHER REVENUE PROCEDURES

Revenue Procedure 87-17 is superseded.

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