IRS Updates Rules for Substitutes of Revised Form 941

Note. This revenue procedure will be reproduced as the next revision of IRS Publication 4436, General Rules and Specifications for Substitute Form 941, Schedule B (Form 941), Schedule D (Form 941), and Schedule R (Form 941).

26 CFR 601.602: Forms and instructions.

(Also Part 1, Sections 170, 220, 401(a), 403(a), 403(b), 408, 408A, 457(b) 529, 530, 853A, 1441, 6041, 6041A, 6042, 6043, 6044, 6045, 6047, 6049, 6050A, 6050B, 6050D, 6050E, 6050H, 6050J, 6050N, 6050P, 6050Q, 6050R, 6050S, 6050W, 1.401(a)(9), 1.408-5, 1.408-7, 1.408A-7, 1.1441-1 through 1.1441-5, 1.6041-1, 7.6041-1, 1.6042-2, 1.6042-4, 1.6044-2, 1.6044-5, 1.6045-1, 5f.6045-1, 1.6045-2, 1.6045-4, 1.6047-1, 1.6049-4, 1.6049-6, 1.6049-7, 1.6050A-1, 1.6050B-1, 1.6050D-1, 1.6050E-1, 1.6050H-1, 1.6050H-2, 1.6050J-1T, 1.6050N-1, 1.6050P-1, 1.6050W-1.)

                           TABLE OF CONTENTS

.01 The purpose of this revenue procedure is to provide general rules and specifications from the IRS for paper and computer-generated substitutes for Form 941, Employer's QUARTERLY Federal Tax Return; Schedule B (Form 941); Report of Tax Liability for Semiweekly Schedule Depositors (referred to in this revenue procedure as "Schedule B"); Schedule D (Form 941), Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations (referred to in this revenue procedure as "Schedule D"); and Schedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers (referred to in this revenue procedure as "Schedule R").

Note. Substitute territorial forms (941-PR, Planilla para la Declaración Federal TRIMESTRAL del Patrono; 941-SS, Employer's QUARTERLY Federal Tax Return (American Samoa, Guam, the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands); and Anexo B (Formulario 941-PR), Registro de la Obligación Contributiva para los Despositantes de Itinerario Bisemanal) should also conform to the specifications outlined in this revenue procedure.

.02 This revenue procedure provides information for substitute Form 941, Schedule B, Schedule D, and Schedule R. If you need more in-depth information on who must complete these forms and how to complete them, see the Instructions for Form 941, Instructions for Schedule B, Instructions for Schedule D, instructions included with Schedule R, and Pub. 15, Employer's Tax Guide, or visit IRS.gov.

Note. Failure to produce acceptable substitutes of the forms and schedules listed in this revenue procedure may result in delays in processing and penalties.

.03 Forms that completely follow the guidelines in this revenue procedure and are exact replicas of the official IRS forms do not need to be submitted to the IRS for specific approval. Substitute forms and schedules need to be scanned using IRS scanning equipment.

If you are uncertain of any specification and want clarification, do the following.

.04 However, software developers and form producers should send a blank copy of their substitute Form 941 and Schedule B in Portable Document Format (PDF) to SCRIPS@irs.gov. The purpose is not specifically for approval but to assist the IRS in preparing to scan these forms. Submitters will only receive comments if a significant problem is discovered through this process. Submitters are not expected to delay marketing their forms in order to receive feedback. Submitters must not include any "live" taxpayer data on any substitute form submitted for review.

.05 The following six-digit form ID codes are used on Form 941 and the schedules for Form 941.

• Official paper forms: 950114 (Form 941, page 1); 950214 (Form 941, page 2); 960311 (Schedule B); 950413 (Schedule R, page 1); 950513 (Schedule R, page 2); and 950613 (Schedule R, page 3).

• Substitute 6x10 grids: 970114 (Form 941, page 1); 970214 (Form 941, page 2); 970311 (Schedule B); 970413 (Schedule R, page 1); 970513 (Schedule R, page 2); and 970613 (Schedule R, page 3).

Section 1.2 -- What's New

.01 Future Developments. For the latest information about developments related to Form 941 and its instructions, such as legislation enacted after they were published, go to www.irs.gov/form941.

Section 1.3 -- General Requirements for Reproducing IRS Official Form 941, Schedule B, Schedule D, and Schedule R

.01 Submit substitute Form 941, Schedule B, Schedule D, and Schedule R to the IRS for specifications review. Substitute Form 941, Schedule B, Schedule D, and Schedule R that completely conform to the specifications contained in this revenue procedure do not require prior approval from the IRS, but should be submitted to SCRIPS@irs.gov to ensure that they conform to IRS format and scanning specifications.

.02 Print the form on standard 8.5 inches wide by 11-inch paper.

.03 Use white paper that meets generally accepted weight, color, and quality standards (minimum 20 lb. white bond paper).

Note. Reclaimed fiber in any percentage is permitted provided that the requirements of this standard are met.

.04 The IRS prefers printing Form 941 on both sides of a single sheet of paper, but it is acceptable to print on one side of each of two separate sheets of paper.

.05 Make the substitute paper form as identical to the official form as possible.

.06 Print the substitute form using nonreflective black (not blue or other-colored) ink. Printing in an ink color other than black may reduce readability in the scanning process. This may result in figures being too faint to be recognizable.

.07 Use typefaces that are substantially identical in size and shape to the official form and use rules and shading (if used) that are substantially identical to those on the official form. Use font size as large as possible within the fields.

.08 Print the six-digit form ID code (if one exists on the official form) in the upper right-hand corner of each form using nonreflective black, carbon-based, 12-point. The use of non-OCR-A font may reduce readability for scanning. Use the official form to develop your substitute form.

Note. Maintain as much white space as possible around the form ID code. Do not allow character strings to print adjacent to the code.

The year digits represent the last year in which the IRS made major formatting changes to the layout of the form. Therefore, the last two digits may not be the same as the current tax year. For tax year 2015, print "950114" on Form 941, page 1; "950214" on Form 941, page 2; "960311" on Schedule B; "950413" on Schedule R, page 1; "950513" on Schedule R, page 2; and "950613" on Schedule R, page 3. See Section 1.4 for information on form ID codes for software-generated forms.

.09 Print the OMB number in the same location as on the official form. Be sure to include the OMB number on Form 941, Schedule B, Schedule D, and Schedule R.

.10 Print all entry boxes and checkboxes exactly as shown (location and size) on the official forms.

Note. Instead of a four-sided checkbox for the entry, just the bottom line of the box can be used as long as the location and size remain the same.

.11 Print "For Privacy Act and Paperwork Reduction Act Notice, see the back of the Payment Voucher." at the bottom of page 1 of Form 941.

.12 Print "For Paperwork Reduction Act Notice, see separate instructions." at the bottom of Schedule B and Schedule D. Print "For Paperwork Reduction Act Notice, see the instructions." at the bottom of Schedule R.

.13 Do not print the form catalog number ("Cat. No.") at the bottom of the forms or instructions. Instead, print your IRS-issued three letter substitute form source code in place of the catalog number on the left at the bottom of page 1 of Form 941, Schedule B, Schedule D, and Schedule R.

Note. You can obtain a three-letter substitute form source code by requesting it by email atsubstituteforms@irs.gov. Please enter "Substitute Forms" on the subject line.

.14 Do not print the Government Printing Office (GPO) symbol at the bottom of the forms or instructions.

Section 1.4 -- Reproducing Form 941, Schedule B, Schedule D, and Schedule R for Software-Generated Paper Forms

.01 You may use the PDF files to develop the layout for your forms. Draft forms found at www.irs.gov/app/picklist/list/draftTaxForms.html can be used to develop interim formats until the forms are finalized. When forms become finalized, they are posted and can be found at www.irs.gov/app/picklist/list/formsPublications.html. You may use 6x10 grid formats to develop software versions of Form 941, Schedule B, Schedule D, and Schedule R. Please follow the specifications exactly to develop the fields.

.02 If you are developing software using the 6x10 grid, you may make the following modifications.

• "970114" for Form 941, page 1; "970214" for Form 941, page 2; "970311" for Schedule B; "970413" for Schedule R, page 1; "970513" for Schedule R, page 2; and "970613" for Schedule R, page 3, as the form ID codes.

• Note. Maintain as much white space as possible around the form ID code. Do not allow character strings to print adjacent to the code.

• Place all 6x10 grid boxes and entry spaces in the same field locations as indicated on the official forms.

• Use single lines for "Employer Identification Number (EIN)" and other entry areas in the entity section of Form 941, page 1; Schedule B; and Schedule R, pages 1 and 2.

• Reverse type is not needed as shown on the official form.

• Do not pre-print decimal points in the data boxes. However, where the amounts are required, the amounts should be printed with decimal points and place holders for cents.

• Delete the pre-printed formatting in any "date" boxes.

• Use a single box for "Personal Identification Number (PIN)" on Form 941.

• You may delete all shading when using the 6x10 grid format.

.04 If producing only the data on the form, print your four-digit software industry vendor code on Form 941. The four-digit vendor code preceded by four zeros and a slash (0000/9876) must be pre-printed. If you have a valid vendor code issued to you through the National Association of Computerized Tax Processors (NACTP), you should use that code. If you do not have a valid vendor code, contact the NATCP via email at president@natcp.org for information on these codes.

.05 Print "For Privacy Act and Paperwork Reduction Act Notice, see the back of the Payment Voucher." at the bottom of Form 941, page 1.

.06 Print "For Paperwork Reduction Act Notice, see separate instructions." at the bottom of Schedule B and Schedule D.

.07 Print "For Paperwork Reduction Act Notice, see the instructions." at the bottom of Schedule R, page 1.

.08 Be sure to print the OMB number in the same location as on the official forms on substitute Form 941, Schedule B, Schedule D, and Schedule R.

.09 Do not print the form catalog number ("Cat. No.") at the bottom of the forms or instructions.

.10 Do not print the Government Printing Office (GPO) symbol at the bottom of the forms or instructions.

.11 To ensure accurate scanning and processing, enter data on Form 941, Schedule B, Schedule D, and Schedule R as follows.

• Display/print the name and EIN on all pages and attachments in the proper associated fields.

• Use 12-point (minimum 10-point) Courier font (where possible).

• Omit dollar signs, but use commas when showing amounts.

• Except for Form 941, lines 1 and 2, leave blank any data field with a value of zero.

• Enter negative amounts with a minus sign. For example, report "10.59" instead of "(10.59)."

• Note. The IRS prefers that you use a minus sign for negative amounts instead of parentheses or some other means. However, if your software only allows for parentheses in reporting negative amounts, you may use them.

.01 To properly file and to reduce delays and contact from the IRS, Schedule D must be produced as closely as possible to the official form.

.02 Use Schedule D to explain why you have certain discrepancies. See the Instructions for Schedule D for more information. In many cases, the information on Schedule D helps the IRS resolve discrepancies without contacting you.

.03 If a substitute Schedule D is not submitted in similar format to the official IRS schedule, the substitutes may be returned, you may be contacted by the IRS, delays in processing may occur, and you may be subject to penalties.

Section 1.6 -- Specific Instructions for Schedule R

.01 To properly file and to reduce delays and contact from the IRS, Schedule R must be produced as closely as possible to the official form.

Note. Do not present the information in spreadsheet or similar format. We may not be able to properly process nonconforming documents with an excessive number of entries. Complete as many Continuation Sheets for Schedule R (Schedule R, page 2) as necessary. If Continuation Sheets are not used or they vary in form from the official form, processing may be delayed and you may be subject to penalties.

.02 Use Schedule R to allocate the aggregate information reported on Form 941 to each client. If you have more than 15 clients, complete as many Continuation Sheets for Schedule R as necessary. Attach Schedule R, including any Continuation Sheets, to your aggregate Form 941 and file it with your return. Enter your business information carefully.

Make sure all information exactly matches the information shown on the aggregate Form 941. Compare the total of each column on Schedule R, line 19 (including your information on line 18), to the amounts reported on the aggregate Form 941. For each column total of Schedule R, the relevant line from Form 941 is noted in the column heading. If the totals on Schedule R, line 19, do not match the totals on Form 941, there is an error that must be corrected before submitting Form 941 and Schedule R.

.03 Do:

• Develop and submit only conforming Schedules R.

• Follow the format and fields exactly as on the official Schedule R.

• Maintain the same number of entry lines on the substitute Schedule R as on the official form.

• Add or delete entry lines.

• Submit spreadsheets, database printouts, or similar formatted documents instead of using the Schedule R format to report data.

• Reduce or expand font size to add or delete extra data or lines.

Section 1.7 -- OMB Requirements for Substitute Forms

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

• The Office of Management and Budget (OMB) approves all IRS tax forms that are subject to the Act.

• Each IRS form contains the OMB approval number, if assigned. The official OMB numbers may be found on the official IRS-printed forms.

• 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 furnished to the IRS.

.03 The OMB requirements for substitute IRS forms are the following.

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

• For Form 941, Schedule B, Schedule D, and Schedule R, the OMB number (1545-0029) must appear exactly as shown on the official form.

• For Form 941, Schedule B, Schedule D, and Schedule R, the OMB number must use one of the following formats.

•  

  1. OMB No. 1545-0029 (preferred).

  2. OMB # 1545-0029 (acceptable).

Section 1.8 -- Order Forms and Instructions

.01 You can order forms and instructions atwww.irs.gov/orderforms.

Section 1.9 -- Effect on Other Documents

.01 Revenue Procedure 2014-57, 2014-45 I.R.B., dated November 3, 2014, is superseded.

Section 1.10 -- Helpful Information

.01 Please follow the specifications and guidelines to produce substitute Form 941, Schedule B, Schedule D, and Schedule R.

.02 These forms are subject to review and possible changes as required. Therefore, employers are cautioned against overstocking supplies of privately printed substitutes.

.03 Here is a review of references that were listed throughout this document.

• Form 941, Employer's QUARTERLY Federal Tax Return.

• Schedule B (Form 941), Report of Tax Liability for Semiweekly Schedule Depositors (referred to in this revenue procedure as "Schedule B").

• Schedule D (Form 941), Report of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations (referred to in this revenue procedure as "Schedule D").

• Schedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers (referred to in this revenue procedure as "Schedule R").

• Substitute territorial forms (941-PR, 941-SS, and Anexo B (Formulario 941-PR)).

• Instructions for Form 941.

• Instructions for Schedule B (Form 941).

• Pub. 15, Employer's Tax Guide.

• SCRIPS@irs.gov for submissions.

• Substituteforms@irs.gov for questions.

• For questions:

•  

  Internal Revenue Service

   

  Attn: Substitute Forms Program

   

  SE:W:CAR:MP:P:TP

   

  5000 Ellin Road, C6-440

   

  Lanham, MD 20706

   

• www.irs.gov/app/picklist/list/draftTaxForms.html for draft forms.

• www.irs.gov/app/picklist/list/formsPublications.html for final forms.