SERVICE ANNOUNCES GUIDELINES FOR PRIVATE REPRODUCTION OF FORMS 1040- ES.

Rev. Proc. 88-55

SECTION 1. PURPOSE

The purpose of this Revenue Procedure is as follows:

1) To state the requirements of the Internal Revenue Service (the Service) regarding the reproduction, private design and printing of substitute Form 1040ES vouchers including the requirements for the acceptance of a computer-generated Form 1040ES. (Note: A Form 1040ES produced from an unchanged reproduction proof, supplied by the Service, is not a substitute form.)

2) To state requirements for tax preparers to enter taxpayer identifying information on privately printed or computer- generated forms. To increase the efficiency of processing Forms 1040ES the Service requests that tax preparers enter the scanline data on all substitute forms prepared by them. Optical Character Recognition (OCR) technology using Font A or B must be used to be scannable by the Service. If laser print is not available, you may choose to use any letter quality printer including a typewriter element having OCR Font A or B with a mylar ribbon.

SECTION 2. 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 Internal Revenue Service tax forms, (2) each Service form must contain (in the upper right corner) the OMB approval number and any expiration date, and (3) each Service form (or its instructions) state why the Service is collecting the information, how it will be used, and whether or not the information is required to be furnished.

02 APPROVAL NUMBER AND DATE IS REQUIRED. All substitute Forms 1040ES must contain (in the upper right corner) the OMB number and any expiration date that is on the official form.

03 FORMAT REQUIRED. (2 Options)

(a) OMB No. XXXX-XXXX (preferred) OR OMB # XXXX-XXXX

(b) OMB No. XXXX-XXXX (Expires (mm-dd-yy) (preferred or OMB # XXXX-XXXX Expires (mm-dd-yy)

04 REQUIRED EXPLANATION TO USERS OF SUBSTITUTE FORMS. You must inform the users of your substitute forms of the Service use and collection requirements stated in the instructions for the official Service form. If you provide your users or customers with the official Internal Revenue Service instructions, Form 1040ES must retain the Paperwork Reduction Act Notice Statement as on the official form (usually in the lower lefthand corner). Otherwise, you must duplicate the material in the statement and add the phrase, "For Paperwork Reduction Act Notice, See Separate Instructions".

05 OBTAINING OMB NUMBER, DATE AND STATEMENT. The OMB approval number, expiration date (when applicable), and use and collection requirements may be obtained from the Service printed form (or its instructions), the reproduction proof (or instructions), or from the Service.

SECTION 3. DEFINITIONS

01 DEFINITIONS RELATING TO 1040ES TAX FORMS.

1 SUBSTITUTE FORM -- A tax form that differs in any way from the official version and is intended to replace the entire form which is printed and distributed by the Service. (A photocopy or a printed form produced from an unchanged reproduction proof, supplied by the Service, is not a substitute form.)

2 COMPUTER-GENERATED SUBSTITUTE FORM -- A document that is entirely prepared by the use of a computer-printing device 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.

3 GRAPHICS -- Those parts of the tax form that are not the tax amount entries or called-for information. Generally, these are line numbers, captions, instructions, rules, borders, special indicators, and rules or strokes created by typesetting, photo-graphics, photocompositions, etc.

4 PRINTED (OR PREPRINTED) FORM -- A substitute form produced using conventional printing processes, photocopying, or other similar processes.

5 PREPRINTED PIN-FED FORM -- A substitute form printed by conventional methods on paper with marginal perforations for use with automated and/or highspeed printing equipment. (THE MARGINAL PERFORATED STRIPS CONTAINING THE PIN-FEED HOLES, MUST BE REMOVED FROM ALL FORMS PRIOR TO FILING WITH THE SERVICE.)

SECTION 4. PRIVATE PRINTERS

01 ORDERING REPRODUCTION PROOFS. Persons who wish to privately print substitute Forms 1040ES should order reproduction proofs from the Service.

1 The Service provides for the public camera ready reproduction proof of Form 1040ES. The reproduction proof can only be ordered by using Form 6747, Order for Reproduction Proofs. Form 6747 can be obtained by written request to:

     Internal Revenue Service

02 PRIVATELY PRINTED FORMS 1040ES MUST MEET THE FOLLOWING CONDITIONS.

1 A clear band of 0.5 inch is required for the scanline. The center of the scanline will be 1-5/8 inches from the bottom of the form. There should be no marks in this area that can be detected by a reader/scanner.

2 Must be on chemical wood writing paper equal to or better than the quality used for the official forms. The paper must be 20# white. The thickness of the stock should not be less than 0.0039 inches. Carbon bonded paper is prohibited from use on Forms 1040ES filed with the Service.

3 The color of ink must be black.

4 The overall size of the form in width may range from 7-1/4 - 8-1/2 inches. The height of the form may range from 3 - 3-2/3 inches.

5 Must have a high standard of legibility, both as to original form and as to fill in matter. The Service may reject reproductions with poor legibility.

6 The basic specification such as margins etc., will be printed in the top margin of the reproduction proof and must be removed before printing. The official reproduction proof margins across the top, bottom and sides must be maintained on all reproductions. The reproduced form must be an exact facsimile of the official form and meet the requirements as set forth in this revenue procedure to be considered an unchanged reproduction. (This type of reproduction needs no approval.)

7 All lines and numbers which appear on the official form must also appear on the substitute form.

8 The Service does not approve or disapprove the specific equipment or process used in reproducing substitute forms but requires only that the reproduced forms satisfy the conditions stated in this revenue procedure.

9 Substitute forms which do not meet the requirements of this revenue procedure may not be filed in lieu of the official form.

SECTION 5. COMPUTER-GENERATED FORMS 1040ES

01 Form 1040ES may be computer generated; the entire form may be printed by computer on blank paper if all specifications in this revenue procedure are met. The generated form must have vertical spacing of six lines per inch and horizontal spacing of 10 characters per inch. It is requested that a scan area be included on the form.

02 MARGINS -- A one-quarter inch margin must be maintained across the top and both sides (exclusive of any pin-feed holes) on all computer-generated substitutes. The margin allows for slight printing misalignment when forms are prepared on high-speed equipment.

03 Tax preparers who are computer generating Form 1040ES should enter the scan line data as specified in Section 6.

04 FORMAT ARRANGEMENT -- The format of each substitute form must follow the format of the official form as to item captions, line references, line numbers, form arrangement and format etc. Basically try to make the form look like the official one with readability being a primary factor. All line numbers and items must be printed even though an amount is not entered on the line.

SECTION 6. SPECIAL OPTICAL CHARACTER RECOGNITION (OCR) SCANLINE REQUIREMENTS

01 It is requested that tax preparers provide the required information so the Service can capture posting data from the scanline using Optical Character Recognition technology. This can be accomplished by using laser print or any other technology that can provide the same product. You may choose to use a typewriter having OCR Font A or B with a mylar ribbon if laser print is not available.

1 Position of scanline

Scanline data should be positioned so that the last character in the scan line ends 3-1/2 inches from right edge of form.

2 Type of Font

OCR-A or OCR-B

02 Scanline and Character Position.

1 VERTICAL CHARACTER DISPLACEMENT -- Characters should not fall more than 0.060 inches above or below the baseline of the scan line.

2 HORIZONTAL CHARACTER DISPLACEMENT -- The minimum acceptable clear space between characters is 0.014.

3 VERTICAL LINE SEPARATION -- The line to be scanned should occupy the center of a clear band 0.5 inches in height.

4 LINE SKEW -- Characters in the scan line must not run out of the Optical Reader's field of view. Over an 8.5 inch line of print, the line should not be skewed more than 1.4 degrees.

5 ROTATION -- The maximum allowable rotation of the character image is +1.5 degree measured relative to the baseline of the line of print.

03 Form 1040ES Scanline Description (Sample)

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SECTION 7. APPROVAL

01 Any person making changes or desires to file substitute Form 1040ES, must develop such substitute using guidelines in this revenue procedure and they should be approved by the Service before being filed.

02 Determination of such requests will be made after the Service's copy is finalized, usually in mid-October. Proposed substitutes should be sent to the address below as much in advance of the filing period for the form as possible. This is to permit adequate time for analysis and response. Please provide your substitute form after you have examined the official form. Include how the form will be prepared and the weight of the paper used in printing the form.

     Internal Revenue Service

04 If approval for placement/readability of the scanline is requested, please submit fifty (50) completed Forms 1040ES which will be tested through a remittance processing system. (NOTE: The fifty documents can consist of five (5) different entities.)

05 If we approve the placement-readability of your substitute form, an approval number will be assigned. This number should be printed or typewritten in the area of the bottom left margin. This approval number on Form 1040ES will indicate to the Service that the form has been approved for processing through an Optical Character Recognition/Remittance Processing System.

06 The Service sends a formal letter of approval/disapproval. Disapproval letters will specify the changes required for approval and will also require resubmission for approval. Telephone contact will be used to clarify a request.

07 Approval is good for only one tax year. (April through January)

SECTION 8. USE OF THE EDITION WHICH IS MAILED TO THE TAXPAYER

01 The edition of Form 1040ES which is mailed to the taxpayer has the scan line already entered. This package also includes four envelopes each coded to identify the contents. The preparer is asked to use the edition sent to the taxpayer. The preparer is also asked to instruct the taxpayers to use the envelopes, received with their package, in sending their voucher and payment to the Service. Any privately provided envelopes must contain the caption "Form 1040ES" on left center of envelope face. The envelope size must be 3-5/8 x 8- 1/2 inches.

02 Beginning April 1, 1989, Form 1040ES will be processed Nationwide via lockbox at a commercial facility. See exhibit 4 for a listing of Service Centers and their respective lockbox site.

SECTION 9. AGREEMENT

Any person 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 preparer 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.

SECTION 10. EFFECT ON OTHER DOCUMENTS

This revenue procedure supersedes Revenue Procedure 87-38, 1987- 2 C.B. 503.

SECTION 11. EXHIBITS SECTION

This Revenue Procedure may change from year to year as new technology is developed.

                              EXHIBIT 1