# Bulletin No. 2000–12 > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/agency%3Airs%3A62640b1e26259fe3 ## Record - **Collection:** Agency decision - **Document type:** Agency decision ## Text Internal Revenue bulletin Bulletin No. 2000–12 March 20, 2000 HIGHLIGHTS OF THIS ISSUE These synopses are intended only as aids to the reader in identifying the subject matter covered. They may not be relied upon as authoritative interpretations. INCOME TAX ings rate” for 1999 and the “recomputed differential earnings rate” for 1998 under section 809 of the Code. Rev. Rul. 2000–13, page 774. Fringe benefits aircraft valuation formula. For purposes of section 1.61–21(g) of the Income Tax Regulations, relating to the rule for valuing noncommercial flights on employer-provided aircraft, the Standard Industry Fare Level (SIFL) cents-per-mile rates and terminal charges in effect for the first half of 2000 are set forth. Rev. Rul. 2000–14, page 779. LIFO; price indexes; department stores. The January 2000 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, January 31, 2000. Rev. Rul. 2000–15, page 774. Election in respect to losses attributable to a disaster. This ruling lists the areas declared by the President to qualify as major disaster or emergency areas during 1999 under the Disaster Relief and Emergency Assistance Act. Rev. Rul. 2000–16, page 780. Interests rates; underpayments and overpayments. The rate of interest determined under section 6621 of the Code for the calendar quarter beginning April 1, 2000, will be 9 percent for overpayments (8 percent in the case of a corporation), 9 percent for underpayments, and 11 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 is 6.5 percent. Notice 2000–16, page 826. Differential earnings rate for mutual life insurance companies. This notice sets forth the tentative “differential earn- EXEMPT ORGANIZATIONS REG–209601–92, page 829. Proposed regulations under section 513 of the Code relate to the tax treatment of sponsorship payments received by exempt organizations. A public hearing is scheduled for June 21, 2000. Announcement 2000–15, page 837. A list is provided of organizations that no longer qualify as organizations to which contributions are deductible under section 170 of the Code. ADMINISTRATIVE Rev. Proc. 2000–19, page 785. Substitute printed, computed-prepared, and computer-generated tax forms and schedules. Requirements are set forth for privately designed and printed federal tax forms and conditions under which the Service will accept computer-prepared and computer-generated tax forms and schedules. Rev. Proc. 98–65 superseded. Notice 2000–15, page 826. Listed transactions. This notice lists certain transactions that the Service has determined to be tax avoidance transactions and identifies the transactions as “listed transactions” for purposes of section 1.6011–4T(b)(2) of the Temporary Income Tax Regulations and section 301.6111–2T(b)(2) of the Temporary Procedure and Administration Regulations. (Continued on the next page) Finding Lists begin on page ii. Department of the Treasury Internal Revenue Service Notice 2000–17, page 827. Due date; 1999 federal tax returns; Patriots’ Day. This notice extends to April 18, 2000, the due date for filing 1999 federal tax returns and requests for extensions, and for making federal tax payments for taxpayers residing in certain parts of the northeast due to Patriots’ Day, a legal holiday in Massachusetts and Maine. Announcement 2000–12, page 835. The Treasury Department and Internal Revenue Service have issued three sets of temporary and proposed regulations requiring promoters to register confidential corporate tax shel- March 20, 2000 ters and to maintain lists of investors, and requiring corporate taxpayers to disclose large transactions that have characteristics common to tax shelters. In addition, the Service has created an Office of Tax Analysis to serve as the focal point for efforts to gather information relating to tax shelter activity and to coordinate appropriate responses. Announcement 2000–16, page 837. This announcement is a reprint of proposed regulations REG–101492–98 (2000–3 I.R.B. 326) with typographical errors corrected. 2000–12 I.R.B. The IRS Mission Provide America’s taxpayers top quality service by helping them understand and meet their tax responsibilities and by applying the tax law with integrity and fairness to all. Introduction The Internal Revenue Bulletin is the authoritative instrument of the Commissioner of Internal Revenue for announcing official rulings and procedures of the Internal Revenue Service and for publishing Treasury Decisions, Executive Orders, Tax Conventions, legislation, court decisions, and other items of general interest. It is published weekly and may be obtained from the Superintendent of Documents on a subscription basis. Bulletin contents are consolidated semiannually into Cumulative Bulletins, which are sold on a single-copy basis. It is the policy of the Service to publish in the Bulletin all substantive rulings necessary to promote a uniform application of the tax laws, including all rulings that supersede, revoke, modify, or amend any of those previously published in the Bulletin. All published rulings apply retroactively unless otherwise indicated. Procedures relating solely to matters of internal management are not published; however, statements of internal practices and procedures that affect the rights and duties of taxpayers are published. Revenue rulings represent the conclusions of the Service on the application of the law to the pivotal facts stated in the revenue ruling. In those based on positions taken in rulings to taxpayers or technical advice to Service field offices, identifying details and information of a confidential nature are deleted to prevent unwarranted invasions of privacy and to comply with statutory requirements. Rulings and procedures reported in the Bulletin do not have the force and effect of Treasury Department Regulations, but they may be used as precedents. Unpublished rulings will not be relied on, used, or cited as precedents by Service personnel in the disposition of other cases. In applying published rulings and procedures, the effect of subsequent legislation, regulations, court decisions, rulings, and proce- dures must be considered, and Service personnel and others concerned are cautioned against reaching the same conclusions in other cases unless the facts and circumstances are substantially the same. The Bulletin is divided into four parts as follows: Part I.—1986 Code. This part includes rulings and decisions based on provisions of the Internal Revenue Code of 1986. Part II.—Treaties and Tax Legislation. This part is divided into two subparts as follows: Subpart A, Tax Conventions, and Subpart B, Legislation and Related Committee Reports. Part III.—Administrative, Procedural, and Miscellaneous. To the extent practicable, pertinent cross references to these subjects are contained in the other Parts and Subparts. Also included in this part are Bank Secrecy Act Administrative Rulings. Bank Secrecy Act Administrative Rulings are issued by the Department of the Treasury’s Office of the Assistant Secretary (Enforcement). Part IV.—Items of General Interest. This part includes notices of proposed rulemakings, disbarment and suspension lists, and announcements. The first Bulletin for each month includes a cumulative index for the matters published during the preceding months. These monthly indexes are cumulated on a semiannual basis, and are published in the first Bulletin of the succeeding semiannual period, respectively. The contents of this publication are not copyrighted and may be reprinted freely. A citation of the Internal Revenue Bulletin as the source would be appropriate. For sale by the Superintendent of Documents, U.S. Government Printing Office, Washington, DC 20402. 2000–12 I.R.B. March 20, 2000 Part I. Rulings and Decisions Under the Internal Revenue Code of 1986 Section 61.—Gross Income Defined 26 CFR 1.61–21: Taxation of fringe benefits. Fringe benefits aircraft valuation formula. For purposes of section 1.61–21(g) of the Income Tax Regulations, relating to the rule for valuing noncommercial flights on employer-provided aircraft, the Standard Industry Fare Level (SIFL) cents-per-mile rates and terminal charges in effect for the first half of 2000 are set forth. Period During Which the Flight Is Taken 1/1/00 - 6/30/00 DRAFTING INFORMATION The principle author of this revenue ruling is Kathleen Edmondson of the Office of the Associate Chief Counsel (Employee Benefits and Exempt Organizations). For further information regarding this revenue ruling, contact Ms. Edmondson on (202) 622-6080 (not a toll-free call). Section 165.—Losses 26 CFR 1.165–11: Election in respect of losses attributable to a disaster. Election in respect of losses attributable to a disaster. This ruling lists the areas declared by the President to qualify as major disaster or emergency areas during 1999 under the Disaster Relief and Emergency Assistance Act. Rev. Rul. 2000–15 Under § 165(i) of the Internal Revenue Code, if a taxpayer suffers a loss attributable to a disaster occurring in an area subsequently determined by the President of March 20, 2000 Rev. Rul. 2000–13 For purposes of the taxation of fringe benefits under section 61 of the Internal Revenue Code, section 1.61–21(g) of the Income Tax Regulations provides a rule for valuing noncommercial flights on employer-provided aircraft. Section 1.61–21(g)(5) provides an aircraft valuation formula to determine the value of such flights. The value of a flight is determined under the base aircraft valuation formula (also known as the Standard Industry Fare Level formula or SIFL) by Terminal Charge $32.98 multiplying the SIFL cents-per-mile rates applicable for the period during which the flight was taken by the appropriate aircraft multiple provided in section 1.61–21(g)(7) and then adding the applicable terminal charge. The SIFL cents-permile rates in the formula and the terminal charge are calculated by the Department of Transportation and are reviewed semiannually. The following chart sets forth the terminal charges and SIFL mileage rates: SIFL Mileage Rates Up to 500 miles = $.1804 per mile 501-1500 miles = $.1376 per mile Over 1500 miles = $.1323 per mile the United States to warrant assistance by the Federal Government under the Disaster Relief and Emergency Assistance Act, 42 U.S.C. §§ 5121–5204c (1988 & Supp. V 1993) (the Act), the taxpayer may elect to claim a deduction for that loss on the taxpayer’s federal income tax return for the taxable year immediately preceding the taxable year in which the disaster occurred. For purposes of § 165(i), a disaster includes an event declared a major disaster or an emergency under the Act. Section 1.165–11(e) of the Income Tax Regulations provides that the election to deduct a disaster loss for the preceding year must be made by filing a return, an amended return, or a claim for refund on or before the later of (1) the due date of the taxpayer’s income tax return (determined without regard to any extension of time to file the return) for the taxable year in which the disaster actually occurred, or (2) the due date of the taxpayer’s income tax return (determined with regard to any extension of time to file the return) for the taxable year immediately preceding the taxable year in which the disaster actually occurred. 774 The provisions of § 165(i) apply only to losses that are otherwise deductible under § 165(a). An individual taxpayer may deduct losses if they are incurred in a trade or business, if they are incurred in a transaction entered into for profit, or if they are casualty losses under § 165(c)(3). The President has determined that during 1999 the areas listed below have been adversely affected by disasters of sufficient severity and magnitude to warrant assistance by the Federal Government under the Act. DRAFTING INFORMATION The principal author of this revenue ruling is Timothy Sheppard of the Office of Assistant Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling, contact Robert M. Casey on (202) 622-4960 (not a toll-free call). 2000–12 I.R.B. Disaster Areas in 1999 Arizona County of Maricopa Arkansas Counties of Bradley, Chicot, Clay, Columbia, Drew, Faulkner, Grant, Greene, Hempstead, Independence, Jackson, Jefferson, Lafayette, Lonoke, Miller, Monroe, Poinsett, Pulaski, Randolph, St. Francis, Saline, and White; and City of Beebe in White County California Counties of Butte, Humboldt, Napa, Plumas, San Bernardino, Shasta, Tehama, Trinity, Tuolome, and Yuba Type of Disaster Date of Disaster Severe storms, flooding, and high winds September 14-23 Severe storms, tornadoes, January 21-31 and high winds Severe fires August 24November 29 Severe storms, flooding, landslides, and mudslides April 29-May 19 High winds, heavy rain and flooding associated with Tropical Storm Floyd September 16-21 Hurricane Floyd September 15-17 Fire hazards April 15-May 25 Counties of Brevard, Duval, Flagler, Glades, Highlands, Indian River, Martin, Nassau, Palm Beach, St. Johns, St. Lucie, and Volusia. Hurricane Floyd September 13-25 Counties of Broward and Dade Hurricane Floyd September 14-16 Counties of Brevard, Broward, Collier, Dade, Flagler, Glades, Hendry, Highlands, Indian River, Martin, Monroe, Okeechobee, Orange, Osceola, Palm Beach, Polk, St. Lucie, Seminole, and Volusia Hurricane Irene October 14-24 Counties of Charlotte, De Soto, Hardee, Hillsborough, Lake, Lee, Manatee, Pasco, Pinellas, and Sarasota Hurricane Irene October 14-24 Severe storms and tornadoes April 15 Hurricane Floyd September 14-17 Colorado Counties of Bent, Crowley, Custer, Elbert, El Paso, Fremont, Kiowa, Larimer, Las Animas, Otero, Pueblo, and Weld Connecticut Counties of Fairfield, Litchfield, and Hartford Delaware County of New Castle Florida Counties of Alachua, Baker, Bay, Bradford, Brevard, Broward, Calhoun, Charlotte, Clay, Collier, Columbia, Dade, De Soto, Duval, Franklin, Gadsden, Gilchrist, Glades, Gulf, Hamilton, Hardee, Hendry, Highlands, Hillsbrough, Holms, Indian River, Jackson, Jefferson, Lee, Leon, Levy, Liberty, Manatee, Marion, Martin, Monroe, Nassau, Okeechobee Orange, Osceola, Palm Beach Pinellas, Polk, Putnam, Sarasota, Seminole, St. Lucie, Swannee, Union, Wakulla, Walton, and Washington Georgia Counties of Candler and Dooly Counties of Bryan, Camden, Chatham, Glynn, Liberty, and McIntosh Illinois Counties of Adams, Brown, Bureau, Calhoun, Cass, Champaign, Record/near Christian, Cook, DeWitt, Douglas, DuPage, Ford, Fulton, Greene, Grundy, record snow Hancock, Henderson, Henry, Iroquois, Kane, Kankakee, Kendall, Knox, Lake, La Salle, Livingston, Logan, Macon, Marshall, Mason, McDonough, 2000–12 I.R.B. 775 January 1-15 March 20, 2000 McHenry, McLean, Mercer, Menard, Morgan, Moultrie, Peoria, Piatt, Pike, Putnam, Sangamon, Schuyler, Scott, Shelby, Stark, Tazewell, Vermillion, Warren, Will, and Woodford County of Jo Daviess Severe storms and flash flooding Indiana Counties of Adams, Allen, Benton, Blackford, Boone, Carroll, Cass, Clay, Record/near record Clinton, DeKalb, Delaware, Elkhart, Fayette, Fountain, Fulton, Grant, snow Hamilton, Hancock, Hendricks, Henry, Howard, Huntington, Jasper, Jay, Johnson, Kosciusko, Lake, Lagrange, LaPorte, Madison, Marion, Marshall, Miami, Montgomery, Morgan, Newton, Noble, Parke, Porter, Pulaski, Putnam, Randolph, Rush, St. Joseph, Shelby, Starke, Steuben, Tipton, Tippecanoe, Vermillion, Vigo, Wabash, Warren, Wayne, Wells, White, and Whitley Iowa Counties of Black Hawk, Bremer, Buchanan, Butler, Chickasaw, Clayton, Clinton, Crawford, Delaware, Dubuque, Fayette, Harrison, Jones, Linn, Montgomery, and Scott Counties of Black Hawk, Bremer, Buchanan, Butler, Cerro Gordo, Chickasaw, Clayton, Crawford, Fayette, Floyd, Harrison, Howard, Jones, Linn, Mills, Mitchell, Montgomery, Pottawattamie, Story, Woodbury, and Worth Kansas Counties of Reno, Sedgwick, and Sumner Louisiana Parishes of Bossier, Caddo, Claiborne, De Soto, and Webster Maine Counties of Androscoggin, Cumberland, Kennebec, Oxford, and Somerset Maryland Counties of Anne Arundel, Calvert, Caroline, Cecil, Charles, Harford, Kent, Queen Anne’s, Somerset, St. Mary’s, and Talbot Massachusetts County of Worcester Michigan Counties of Alcona, Allegan, Arenac, Barry, Berrien, Cass, Crawford, Ionia, Iosco, Jackson, Kalamazoo, Kent, Lawrence, Lenawee, Macomb, Marquette, Mecosta, Monroe, Montmorency, Muskegeon, Newaygo, Oakland, Oceana, Ogemaw, Osceola, Oscoda, Otsego, Ottawa, St. Joseph, Van Buren, Washtenaw, and Wayne Minnesota Counties of Kittston, Marshall, Pennington, Polk, Red Lake, and Roseau Counties of Aitkin, Beltrami, Cass, Clay, Cook, Hubbard, Itasca, Lake, and St. Louis Missouri Counties of Andrew, Cole, Iron, Macon, Madison, and Osage March 20, 2000 776 May 16-17 January 1-15 Severe storms, flooding, and tornadoes May 16-29 Severe storms and flooding July 2-August 10 Severe storms and tornadoes May 3-6 Severe storms, tornadoes, April 3-7 and flooding Hurricane Floyd September 16-19 Hurricane Floyd September 16-20 Fire December 3-13 Near record snow January 2-15 Severe ice storms, flooding and heavy rains March 1-May 30 Severe storms, winds, and flooding July 4-August 2 Severe storms and flooding April 3-14 2000–12 I.R.B. Nebraska Counties of Burt, Douglas, and Washington Severe storms and flooding August 6-9 Severe storms and flash flooding July 8-16 Tropical Storm Floyd September 16-18 Hurricane Floyd September 16-18 Severe storms and flooding July 16-August 7 Near recod snow January 1-15 Counties of Livingston, Monroe, Ontario, Orleans, Wayne, and Wyoming Near record snow March 3-6 Counties of Albany, Dutchess, Essex, Greene, Nassau, Orange, Putnam, Rensselaer, Rockland, Schenectady, Schoharie, Suffolk, Ulster, Warren, and Westchester Hurricane Floyd September 16-18 Hurricane Dennis August 29September 11 Hurricane Floyd September 15November 2 Severe storms, flooding, snow and ice, ground saturation, landslides, mudslides, and tornadoes March 1-July 19 Tornadoes and severe storms May 3-5 Nevada County of Clark New Hampshire Counties of Belknap, Cheshire, and Grafton New Jersey Counties of Atlantic, Bergen, Burlington, Camden, Cape May, Cumberland, Essex, Glouscester, Hudson, Hunterdon, Mercer, Middlesex, Monmouth, Morris, Ocean, Passaic, Salem, Somerset, Sussex, Union, and Warren New Mexico Counties of Dona Ana, Luna, Mora, Rio Arriba, San Juan, Sandoval, and Sierra; and the Mescalero Apache Reservation New York Counties of Cattaraugus, Chautauqua, Erie, Genesee, Jefferson, Lewis, Niagara, Orleans, St. Lawrence, and Wyoming North Carolina Counties of Beaufort, Brunswick, Carteret, Craven, Currituck, Dare, Hyde, New Hanover, Onslow, Pamlico, and Pender Counties of Alamance, Anson, Beaufort, Bertie, Bladen, Brunswick, Camden, Carteret, Caswell, Chatham, Chowan, Columbus, Craven, Cumberland, Currituck, Dare, Davidson, Duplin, Durham, Edgecombe, Forsyth, Franklin, Gates, Granville, Greene, Guilford, Halifax, Harnett, Hertford, Hoke, Hyde, Johnston, Jones, Lee, Lenoir, Martin, Montgomery, Moore, Nash, New Hanover, Northampton, Onslow, Orange, Pamlico, Pasquotank, Pender, Perquimans, Person, Pitt, Randolph, Richmond, Robeson, Rockingham, Rowan, Sampson, Scotland, Stanly, Stokes, Tyrrell, Union, Vance, Wake, Warren, Washington, Wayne, and Wilson North Dakota Counties of Barnes, Benson, Bottineau, Burke, Burleigh, Cass, Cavalier, Dickey, Divide, Eddy, Emmons, Foster, Grand Forks, Griggs, Kidder, LaMoure, Logan, McHenry, McIntosh, McLean, Mercer, Morton, Mountrail, Nelson, Pembina, Pierce, Ramsey, Ransom, Renville, Richland, Rolette, Sargent, Sheridan, Sioux, Steele, Stutsman, Towner, Traill, Walsh, Ward, Wells, and Williams; and the Indian Reservations of the Spirit Lake Sioux Tribe, Standing Rock Soiux (that portion of the reservation that lies within the State of North Dakota), Three Affiliated Tribes, and Turtle Mountain Band of Chippewa Oklahoma Counties of Caddo, Canadian, Cleveland, Craig, Creek, Grady, Kingfisher, Latimer, Le Flore, Lincoln, Logan, McClain, Noble, Oklahoma, Okmulgee, Ottawa, Payne Pottawatomie, and Tulsa 2000–12 I.R.B. 777 March 20, 2000 Pennsylvania Counties of Juniata and McKean Severe storms and flooding August 20-21 Counties of Dauphin, Lycoming, Northumberland, Snyder, and Union Severe flash flooding associated with Tropical Depression Dennis September 6-7 Counties of Berks, Bucks, Chester, Delaware, Lancaster, Montgomery, Philadelphia, and York Hurricane Floyd September 16-29 Hurrican Lenny November 17-20 Hurricane Floyd September 14-30 Severe storms, tornadoes, and flooding June 4-18 Tennessee Counties of Benton, Carroll, Crockett, Decatur, Dickson, Fayette, Franklin, Giles, Hardeman, Haywood, Henderson, Houston, Humphreys, Jackson, Lauderdale, Lawrence, Lewis, Madison, Maury, Montgomery, Perry, Stewart, Warren, and Wayne Severe storms, tornadoes, and high winds January 17February 1 Counties of Cheatham, Chester, Davidson, Decatur, Dickson, Hardeman, Hardin, Henderson, Hickman, Houston, Humphreys, Lawrence, McNairy, Perry, Stewart, Sumner, White, and Williamson Severe storms, tornadoes, and flooding May 5-19 Severe storms and tornadoes May 4 Extreme fire hazards August 1December 10 Puerto Rico All 78 municipalities South Carolina Counties Allendale, Bamberg, Barnwell, Beaufort, Berkeley, Calhoun, Charleston, Chesterfield, Clarendon, Colleton, Darlington, Dillon, Dorchester, Florence, Georgetown, Hampton, Horry, Jasper, Kershaw, Lee, Lexington, Marion, Marlboro, Orangeburg, Richland, Sumter, and Williamsburg South Dakota County of Shannon and the Pine Ridge Indian Reservation Texas Counties of Bowie, Gregg, Red River, and Titus Counties of Anderson, Andrews, Angelina, Archer, Armstrong, Austin, Bailey, Bandera, Bastrop, Baylor, Bell, Bexar, Blanco, Borden, Bosque, Bowie, Brazoria, Brazos, Brewster, Briscoe, Brown, Burleson, Burnet, Caldwell, Calhoun, Callahan, Camp, Carson, Cass, Castro, Chambers, Cherokee, Childress, Clay, Cochran, Coke, Coleman, Collin, Collingsworth, Colorado, Comal, Comanche, Concho, Cooke, Coryell, Cottle, Crane, Crockett, Crosby, Culberson, Dallam, Dallas, Dawson, Deaf Smith, Delta, Denton, DeWitt, Dickens, Donley, Eastland, Ector, Edwards, El Paso, Ellis, Erath, Falls, Fannin, Fayette, Fisher, Floyd, Foard, Fort Bend, Franklin, Freestone, Gaines, Galveston, Garza, Gillespie, Glasscock, Gonzales, Gray, Grayson, Gregg, Grimes, Guadalupe, Hale, Hall, Hamilton, Hansford, Hardeman, Hardin, Harris, Harrison, Hartley, Haskell, Hays, Hemphill, Henderson, Hill, Hockley, Hood, Hopkins, Houston, Howard, Hudspeth, Hunt, Hutchinson, Irion, Jack, Jackson, Jasper, Jeff Davis, Jefferson, Johnson, Jones, Kaufman, Kendall, Kent, Kerr, Kimble, King, Kinney, Knox, Lamar, Lamb, Lampasas, Lavaca, Lee, Leon, Liberty, Limestone, Lipscomb, Llano, Loving, Lubbock, Lynn, Madison, Marion, Martin, Mason, Matagorda, McCulloch, McLennan, Medina, Menard, Midland, Milam, Mills, Mitchell, Montague, Montgomery, Moore, Morris, Motley, Nacogdoches, March 20, 2000 778 2000–12 I.R.B. Navarro, Newton, Nolan, Ochiltree, Oldham, Orange, Palo Pinto, Panola, Parker, Parmer, Pecos, Polk, Potter, Presidio, Rains, Randall, Reagan, Real, Red River, Reeves, Roberts, Robertson, Rockwall, Runnels, Rusk, Sabine, San Augustine, San Jacinto, San Saba, Schleicher, Scurry, Shackelford, Shelby, Sherman, Smith, Somerveil, Stephens, Sterling, Stonewall, Sutton, Swisher, Tarrant, Taylor, Terrell, Terry, Throckmorton, Titus, Tom Green, Travis, Trinity, Tyler, Upshur, Upton, Uvalde, Val Verde, Van Zandt, Victoria, Walker, Waller, Ward, Washington, Wharton, Wheeler, Wichita, Wilbarger, Williamson, Wilson, Winkler, Wise, Wood, Yoakum, and Young Counties of Aransas, Brooks, Cameron, Duval, Hidalgo, Jim Hogg, Jim Wells,Kenedy, Kleberg, Nueces, San Patricio, Webb, and Willacy U.S. Virgin Islands The U.S. Virgin Islands Utah County of Salt Lake Vermont Counties of Bennington, Caledonia, Essex, Lamoille, Orange, Orleans, Rutland, Washington, Windham, and Windsor Virginia City of Hampton Counties of Accomack, Brunswick, Caroline, Charles City, Chesterfield, Dinwiddie, Essex, Fairfax, Gloucester, Greenville, Halifax, Hanover, Henrico, Isle of Wight, James City, King and Queen, King George, King William, Lancaster, Lunenberg, Mathews, Mecklenburg, Middlesex, New Kent, Northampton, Northumberland, Prince George, Richmond, Southampton, Surry, Sussex, Westmoreland, and York, and Cities of Chesapeake City, Colonial Heights, Emporia, Franklin, Hampton, Hopewell, Newport News, Norfolk, Petersburg, Poquoson, Portsmouth, Richmond, Suffolk, Virginia Beach, and Williamsburg Severe storms and flooding caused by Hurricane Bret August 21-26 Hurricane Lenny November 16-20 Tornado, severe thunderstorms, and hail August 11 Severe storms and flooding associated with Hurricane Floyd September 16-21 Tropical Storm Dennis August 27September 13 Hurricane Floyd September 13-26 Severe storms, straightline winds, and flooding July 4-31 Wisconsin Counties of Ashland, Bayfield, Douglas, Florence, Iron, Oneida, Price, Rusk, Sawyer, and Vilas Section 472.—Last-in, First-out Inventories 26 CFR 1.472–1: Last-in, first-out inventories. LIFO; price indexes; department stores. The January 2000 Bureau of Labor Statistics price indexes are accepted for use by department stores employing the retail inventory and last-in, first-out inventory methods for valuing inventories for tax years ended on, or with reference to, January 31, 2000. 2000–12 I.R.B. Rev. Rul. 2000–14 methods for tax years ended on, or with reference to, January 31, 2000. The following Department Store Inventory Price Indexes for January 2000 were issued by the Bureau of Labor Statistics. The indexes are accepted by the Internal Revenue Service, under § 1.472–1(k) of the Income Tax Regulations and Rev. Proc. 86–46, 1986–2 C.B. 739, for appropriate application to inventories of department stores employing the retail inventory and last-in, first-out inventory The Department Store Inventory Price Indexes are prepared on a national basis and include (a) 23 major groups of departments, (b) three special combinations of the major groups - soft goods, durable goods, and miscellaneous goods, and (c) a store total, which covers all departments, including some not listed separately, except for the following: candy, food, liquor, tobacco, and contract departments. 779 March 20, 2000 BUREAU OF LABOR STATISTICS, DEPARTMENT STORE INVENTORY PRICE INDEXES BY DEPARTMENT GROUPS (January 1941 = 100, unless otherwise noted) Jan. 1999 Jan. 2000 Percent Change from Jan. 1999 to Jan. 20001 1. Piece Goods - - - - - - - - - - - - - - - - - - - - - - 2. Domestics and Draperies - - - - - - - - - - - - - - 3. Women’s and Children’s Shoes - - - - - - - - - - 4. Men’s Shoes - - - - - - - - - - - - - - - - - - - - - - 5. Infants’ Wear - - - - - - - - - - - - - - - - - - - - - - 6. Women’s Underwear - - - - - - - - - - - - - - - - 7. Women’s Hosiery - - - - - - - - - - - - - - - - - - - 8. Women’s and Girls’ Accessories - - - - - - - - - 9. Women’s Outerwear and Girls’ Wear - - - - - - 10. Men’s Clothing - - - - - - - - - - - - - - - - - - - - 11. Men’s Furnishings - - - - - - - - - - - - - - - - - - 12. Boys’ Clothing and Furnishings - - - - - - - - - 13. Jewelry - - - - - - - - - - - - - - - - - - - - - - - - - 14. Notions - - - - - - - - - - - - - - - - - - - - - - - - - 15. Toilet Articles and Drugs - - - - - - - - - - - - - - 16. Furniture and Bedding - - - - - - - - - - - - - - - 17. Floor Coverings - - - - - - - - - - - - - - - - - - - - 18. Housewares - - - - - - - - - - - - - - - - - - - - - - 19. Major Appliances - - - - - - - - - - - - - - - - - - - 20. Radio and Television - - - - - - - - - - - - - - - - 21. Recreation and Education2 - - - - - - - - - - - - - 22. Home Improvements2 - - - - - - - - - - - - - - - - 23. Auto Accessories2 - - - - - - - - - - - - - - - - - - - 507.3 643.1 640.4 894.0 628.6 560.7 316.2 535.4 376.9 603.8 585.2 482.1 965.3 729.7 946.8 678.4 602.4 813.6 237.7 69.6 100.7 130.3 107.8 493.8 622.0 613.3 887.2 650.8 571.4 327.6 530.3 369.1 612.9 618.0 497.1 962.0 764.5 970.9 697.0 603.2 789.9 233.3 62.7 95.2 129.8 107.6 -2.7 -3.3 -4.2 -0.8 3.5 1.9 3.6 -1.0 -2.1 1.5 5.6 3.1 -0.3 4.8 2.5 2.7 0.1 -2.9 -1.9 -9.9 -5.5 -0.4 -0.2 Groups 1 - 15: Soft Goods - - - - - - - - - - - - - - - - - 586.4 588.6 0.4 Groups 16 - 20: Durable Goods - - - - - - - - - - - - - - 459.0 446.2 -2.8 Groups 21 - 23: Misc. Goods2 - - - - - - - - - - - - - - - 106.0 102.2 -3.6 Store Total3 - - - - - - - - - - - - - - - - - - - - - - - - - - - 539.4 535.4 -0.7 Groups 1 Absence of a minus sign before the percentage change in this column signifies a price increase. 2 Indexes on a January 1986=100 base. 3 The store total index covers all departments, including some not listed separately, except for the following: candy, food, liquor, tobacco, and contract departments. DRAFTING INFORMATION The principal author of this revenue ruling is Alan J. Tomsic of the Office of Assistant Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling, contact Mr. Tomsic on (202) 622-4970 (not a toll-free call). Section 6621.—Determination of Interest Rate 26 CFR 301.6621–1: Interest rate. Interest rates; underpayements and overpayments. The rate of interest determined under section 6621 of the Code for the calendar quarter beginning April 1, March 20, 2000 2000, will be 9 percent for overpayments (8 percent in the case of a corporation), 9 percent for underpayments, and 11 percent for large corporate underpayments. The rate of interest paid on the portion of a corporate overpayment exceeding $10,000 is 6.5 percent. tion of a corporate overpayment of tax exceeding $10,000 for a taxable period is the sum of the federal short-term rate plus 0.5 of a percentage point for interest computations made after December 31, 1994. Under § 6621(a)(2), the underpayment rate is the sum of the federal short-term rate plus 3 percentage points. Rev. Rul. 2000–16 Section 6621(c) provides that for purposes of interest payable under § 6601 on any large corporate underpayment, the underpayment rate under § 6621(a)(2) is determined by substituting “5 percentage points” for “3 percentage points.” See § 6621(c) and § 301.6621–3 of the Regulations on Procedure and Administration for the definition of a large corporate underpayment and for the rules for determining Section 6621 of the Internal Revenue Code establishes the rates for interest on tax overpayments and tax underpayments. Under § 6621(a)(1), the overpayment rate beginning April 1, 2000, is the sum of the federal short-term rate plus 3 percentage points (2 percentage points in the case of a corporation), except the rate for the por- 780 2000–12 I.R.B. the applicable date. Section 6621(c) and § 301.6621–3 are generally effective for periods after December 31, 1990. Section 6621(b)(1) provides that the Secretary will determine the federal shortterm rate for the first month in each calendar quarter. Section 6621(b)(2)(A) provides that the federal short-term rate determined under § 6621(b)(1) for any month applies during the first calendar quarter beginning after such month. Section 6621(b)(2)(B) provides that in determining the addition to tax under § 6654 for failure to pay estimated tax for any taxable year, the federal short-term rate that applies during the third month following such taxable year also applies during the first 15 days of the fourth month following such taxable year. Section 6621(b)(3) provides that the federal short-term rate for any month is the federal short-term rate determined during such month by the Secretary in accordance with § 1274(d), rounded to the nearest full percent (or, if a multiple of 1/2 of 1 percent, the rate is increased to the next highest full percent). Notice 88–59, 1988–1 C.B. 546, announced that, in determining the quarterly interest rates to be used for overpayments and underpayments of tax under § 6621, the Internal Revenue Service will use the federal short-term rate based on daily compounding because that rate is most consistent with § 6621 which, pursuant to § 6622, is subject to daily compounding. Rounded to the nearest full percent, the federal short- term rate based on daily compounding determined during the month of January 2000 is 6 percent. Accordingly, an overpayment rate of 9 percent (8 percent in the case of a corporation) and an underpayment rate of 9 percent are established for the calendar quarter beginning April 1, 2000. The overpayment rate for the portion of a corporate overpayment exceeding $10,000 for the calendar quarter beginning April 1, 2000, is 6.5 percent. The underpayment rate for large corporate underpayments for the calendar quarter beginning April 1, 2000, is 11 percent. These rates apply to amounts bearing interest during that cal- endar quarter. Under § 6621(b)(2)(B), the 8 percent rate that applies to estimated tax underpayments for the first calendar quarter in 2000, as provided in Rev. Rul. 99–53, 1999–50 I.R.B. 657, also applies to such underpayments for the first 15 days in April 2000. Interest factors for daily compound interest for annual rates of 6.5 percent, 8 percent, 9 percent, and 11 percent are published in Tables 66, 69, 71, and 75 of Rev. Proc. 95–17,1995–1 C.B. 556, 620, 623, 625, and 629. Annual interest rates to be compounded daily pursuant to § 6622 that apply for prior periods are set forth in the tables accompanying this revenue ruling. DRAFTING INFORMATION The principal author of this revenue ruling is Raymond Bailey of the Office of Assistant Chief Counsel (Income Tax and Accounting). For further information regarding this revenue ruling, contact Mr. Bailey on (202) 622-6226 (not a toll-free call). TABLE OF INTEREST RATES PERIODS BEFORE JUL. 1, 1975 - PERIODS ENDING DEC. 31, 1986 OVERPAYMENTS AND UNDERPAYMENTS PERIOD RATE In 1995–1 C.B. DAILY RATE TABLE Before Jul. 1, 1975 Jul. 1, 1975—Jan. 31, 1976 Feb. 1, 1976—Jan. 31, 1978 Feb. 1, 1978—Jan. 31, 1980 Feb. 1, 1980—Jan. 31, 1982 Feb. 1, 1982—Dec. 31, 1982 Jan. 1, 1983—Jun. 30, 1983 Jul. 1, 1983—Dec. 31, 1983 Jan. 1, 1984—Jun. 30, 1984 Jul. 1, 1984—Dec. 31, 1984 Jan. 1, 1985—Jun. 30, 1985 Jul. 1, 1985—Dec. 31, 1985 Jan. 1, 1986—Jun. 30, 1986 Jul. 1, 1986—Dec. 31, 1986 6% 9% 7% 6% 12% 20% 16% 11% 11% 11% 13% 11% 10% 9% Table 2, pg. 557 Table 4, pg. 559 Table 3, pg. 558 Table 2, pg. 557 Table 5, pg. 560 Table 6, pg. 560 Table 37, pg. 591 Table 27, pg. 581 Table 75, pg. 629 Table 75, pg. 629 Table 31, pg. 585 Table 27, pg. 581 Table 25 pg. 579 Table 23, pg. 577 2000–12 I.R.B. 781 March 20, 2000 TABLE OF INTEREST RATES FROM JAN. 1, 1987 - Dec. 31, 1998 OVERPAYMENTS Jan. 1, 1987—Mar. 31, 1987 Apr. 1, 1987—Jun. 30, 1987 Jul. 1, 1987—Sep. 30, 1987 Oct. 1, 1987—Dec. 31, 1987 Jan. 1, 1988—Mar. 31, 1988 Apr. 1, 1988—Jun. 30, 1988 Jul. 1, 1988—Sep. 30, 1988 Oct. 1, 1988—Dec. 31, 1988 Jan. 1, 1989—Mar. 31, 1989 Apr. 1, 1989—Jun. 30, 1989 Jul. 1, 1989—Sep. 30, 1989 Oct. 1, 1989—Dec. 31, 1989 Jan. 1, 1990—Mar. 31, 1990 Apr. 1, 1990—Jun. 30, 1990 Jul. 1, 1990—Sep. 30, 1990 Oct. 1, 1990—Dec. 31, 1990 Jan. 1, 1991—Mar. 31, 1991 Apr. 1, 1991—Jun. 30, 1991 Jul. 1, 1991—Sep. 30, 1991 Oct. 1, 1991—Dec. 31, 1991 Jan. 1, 1992—Mar. 31, 1992 Apr. 1, 1992—Jun. 30, 1992 Jul. 1, 1992—Sep. 30, 1992 Oct. 1, 1992—Dec. 31, 1992 Jan. 1, 1993—Mar. 31, 1993 Apr. 1, 1993—Jun. 30, 1993 Jul. 1, 1993—Sep. 30, 1993 Oct. 1, 1993—Dec. 31, 1993 Jan. 1, 1994—Mar. 31, 1994 Apr. 1, 1994—Jun. 30, 1994 Jul. 1, 1994—Sep. 30, 1994 Oct. 1, 1994—Dec. 31, 1994 Jan. 1, 1995—Mar. 31, 1995 Apr. 1, 1995—Jun. 30, 1995 Jul. 1, 1995—Sep. 30, 1995 Oct. 1, 1995—Dec. 31, 1995 Jan. 1, 1996—Mar. 31, 1996 Apr. 1, 1996—Jun. 30, 1996 Jul. 1, 1996—Sep. 30, 1996 Oct. 1, 1996—Dec. 31, 1996 Jan. 1, 1997—Mar. 31, 1997 Apr. 1, 1997—Jun. 30, 1997 Jul. 1, 1997—Sep. 30, 1997 Oct. 1, 1997—Dec. 31, 1997 Jan. 1, 1998—Mar. 31, 1998 Apr. 1, 1998—Jun. 30, 1998 Jul. 1, 1998—Sep. 30, 1998 Oct. 1, 1998—Dec. 31, 1998 March 20, 2000 1995–1 C.B. RATE TABLE 8% 21 8% 21 8% 21 9% 23 10% 73 9% 71 9% 71 10% 73 10% 25 11% 27 11% 27 10% 25 10% 25 10% 25 10% 25 10% 25 10% 25 9% 23 9% 23 9% 23 8% 69 7% 67 7% 67 6% 65 6% 17 6% 17 6% 17 6% 17 6% 17 6% 17 7% 19 8% 21 8% 21 9% 23 8% 21 8% 21 8% 69 7% 67 8% 69 8% 69 8% 21 8% 21 8% 21 8% 21 8% 21 7% 19 7% 19 7% 19 782 PG 575 575 575 577 627 625 625 627 579 581 581 579 579 579 579 579 579 577 577 577 623 621 621 619 571 571 571 571 571 571 573 575 575 577 575 575 623 621 623 623 575 575 575 575 575 573 573 573 UNDERPAYMENTS 1995–1 C.B. RATE TABLE 9% 23 9% 23 9% 23 10% 25 11% 75 10% 73 10% 73 11% 75 11% 27 12% 29 12% 29 11% 27 11% 27 11% 27 11% 27 11% 27 11% 27 10% 25 10% 25 10% 25 9% 71 8% 69 8% 69 7% 67 7% 19 7% 19 7% 19 7% 19 7% 19 7% 19 8% 21 9% 23 9% 23 10% 25 9% 23 9% 23 9% 71 8% 69 9% 71 9% 71 9% 23 9% 23 9% 23 9% 23 9% 23 8% 21 8% 21 8% 21 PG 577 577 577 579 629 627 627 629 581 583 583 581 581 581 581 581 581 579 579 579 625 623 623 621 573 573 573 573 573 573 575 577 577 579 577 577 625 623 625 625 577 577 577 577 577 575 575 575 2000–12 I.R.B. TABLE INTEREST RATES FROM JANUARY 1, 1999 - PRESENT NONCORPORATE OVERPAYMENTS AND UNDERPAYMENTS RATE 7% 8% 8% 8% 8% 9% Jan. 1, 1999—Mar. 31, 1999 Apr. 1, 1999—Jun. 30, 1999 Jul. 1, 1999—Sep. 30, 1999 Oct. 1, 1999—Dec. 31, 1999 Jan. 1, 2000—Mar. 31, 2000 Apr. 1, 2000—Jun. 30, 2000 1995–1 C.B. TABLE 19 21 21 21 69 71 PAGE 573 575 575 575 623 625 TABLE OF INTEREST RATES FROM JANUARY 1, 1999 - PRESENT CORPORATE OVERPAYMENTS AND UNDERPAYMENTS Jan. 1, 1999—Mar. 31, 1999 Apr. 1, 1999—Jun. 30, 1999 Jul. 1, 1999—Sep. 30, 1999 Oct. 1, 1999—Dec. 31, 1999 Jan. 1, 2000—Mar. 31, 2000 Apr. 1, 2000—Jun. 30, 2000 OVERPAYMENTS 1995–1 C.B RATE TABLE PG UNDERPAYMENTS 1995–1 C.B. RATE TABLE PG 6% 7% 7% 7% 7% 8% 571 573 573 573 621 623 7% 8% 8% 8% 8% 9% RATE 1995–1 C.B. TABLE PG 13% 12% 12% 12% 11% 10% 10% 9% 9% 9% 9% 9% 9% 9% 10% 11% 11% 12% 11% 11% 11% 10% 31 29 29 29 75 73 73 71 23 23 23 23 23 23 25 27 27 29 27 27 75 73 85 583 583 583 629 627 627 625 577 577 577 577 577 577 579 581 581 583 581 581 629 627 17 19 19 19 67 69 19 21 21 21 69 71 573 575 575 575 623 625 TABLE OF INTEREST RATES FOR LARGE CORPORATE UNDERPAYMENTS FROM JANUARY 1, 1991 - PRESENT Jan. 1, 1991—Mar. 31, 1991 Apr. 1, 1991—Jun. 30, 1991 Jul. 1, 1991—Sep. 30, 1991 Oct. 1, 1991—Dec. 31, 1991 Jan. 1, 1992—Mar. 31, 1992 Apr. 1, 1992—Jun. 30, 1992 Jul. 1, 1992—Sep. 30, 1992 Oct. 1, 1992—Dec. 31, 1992 Jan. 1, 1993—Mar. 31, 1993 Apr. 1, 1993—Jun. 30, 1993 Jul. 1, 1993—Sep. 30, 1993 Oct. 1, 1993—Dec. 31, 1993 Jan. 1, 1994—Mar. 31, 1994 Apr. 1, 1994—Jun. 30, 1994 Jul. 1, 1994—Sep. 30, 1994 Oct. 1, 1994—Dec. 31, 1994 Jan. 1, 1995—Mar. 31, 1995 Apr. 1, 1995—Jun. 30, 1995 Jul. 1, 1995—Sep. 30, 1995 Oct. 1, 1995—Dec. 31, 1995 Jan. 1, 1996—Mar. 31, 1996 Apr. 1, 1996—Jun. 30, 1996 2000–12 I.R.B. 783 March 20, 2000 TABLE OF INTEREST RATES FOR LARGE CORPORATE UNDERPAYMENTS—Continued FROM JANUARY 1, 1991 - PRESENT RATE 1995–1 C.B. TABLE PG 11% 11% 11% 11% 11% 11% 11% 10% 10% 10% 9% 10% 10% 10% 10% 11% 75 75 27 27 27 27 27 25 25 25 23 25 25 25 73 75 629 629 581 581 581 581 581 579 579 579 577 579 579 579 627 629 1995–1 C.B. TABLE 18 20 18 18 66 64 66 66 18 18 18 18 18 16 16 16 14 16 16 16 64 66 PG 572 574 572 572 620 618 620 620 572 572 572 572 572 570 570 570 568 570 570 570 618 620 Jul. 1, 1996—Sep. 30, 1996 Oct. 1, 1996—Dec. 31, 1996 Jan. 1, 1997—Mar. 31, 1997 Apr. 1, 1997—Jun. 30, 1997 Jul. 1, 1997—Sep. 30, 1997 Oct. 1, 1997—Dec. 31, 1997 Jan. 1, 1998—Mar. 31, 1998 Apr. 1, 1998—Jun. 30, 1998 Jul. 1, 1998—Sep. 30, 1998 Oct. 1, 1998—Dec. 31, 1998 Jan. 1, 1999—Mar. 31, 1999 Apr. 1, 1999—Jun. 30, 1999 Jul. 1, 1999—Sep. 30, 1999 Oct. 1, 1999—Dec. 31, 1999 Jan. 1, 2000—Mar. 31, 2000 Apr. 1, 2000—Jun. 30, 2000 TABLE OF INTEREST RATES FOR CORPORATE OVERPAYMENTS EXCEEDING $10,000 FROM JANUARY 1, 1995 - PRESENT RATE 6.5% 7.5% 6.5% 6.5% 6.5% 5.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 6.5% 5.5% 5.5% 5.5% 4.5% 5.5% 5.5% 5.5% 5.5% 6.5% Jan. 1, 1995—Mar. 31, 1995 Apr. 1, 1995—Jun. 30, 1995 Jul. 1, 1995—Sep. 30, 1995 Oct. 1, 1995—Dec. 31, 1995 Jan. 1, 1996—Mar. 31, 1996 Apr. 1, 1996—Jun. 30, 1996 Jul. 1, 1996—Sep. 30, 1996 Oct. 1, 1996—Dec. 31, 1996 Jan. 1, 1997—Mar. 31, 1997 Apr. 1, 1997—Jun. 30, 1997 Jul. 1, 1997—Sep. 30, 1997 Oct. 1, 1997—Dec. 31, 1997 Jan. 1, 1998—Mar. 31, 1998 Apr. 1, 1998—Jun. 30, 1998 Jul. 1. 1998—Sep. 30, 1998 Oct. 1, 1998—Dec. 31, 1998 Jan. 1, 1999—Mar. 31, 1999 Apr. 1, 1999—Jun. 30, 1999 Jul. 1, 1999—Sep. 30, 1999 Oct. 1, 1999—Dec. 31, 1999 Jan. 1, 2000—Mar. 31, 2000 Apr. 1, 2000—Jun. 30, 2000 March 20, 2000 784 2000–12 I.R.B. Part III. Administrative, Procedural, and Miscellaneous Rev. Proc. 2000–19 TABLE OF CONTENTS CHAPTER 1 - INTRODUCTION TO SUBSTITUTE FORMS Section 1.1 - Overview of Revenue Procedure 2000–19 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.2 - IRS Contacts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.3 - Nature of Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.4 - Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 1.5 - Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 786 787 787 788 789 CHAPTER 2 - GENERAL GUIDELINES FOR SUBMISSIONS AND APPROVALS Section 2.1 - General Specificiations for Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.2 - Highlights of Permitted Changes and Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.3 - Vouchers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.4 - Restrictions on Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.5 - Guidelines for Obtaining IRS Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 2.6 - Office of Management and Budget (OMB) Requirements for All Substitute Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 789 790 790 791 791 794 CHAPTER 3 - PHYSICAL ASPECTS AND REQUIREMENTS Section 3.1- General Guidelines for Substitute Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.2 - Paper . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.3 - Printing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.4 - Margins . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.5 - Examples of Approved Formats . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 3.6 - Miscellaneous Information for Substitute Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 794 796 797 797 798 798 CHAPTER 4 - ADDITIONAL RESOURCES Section 4.1 - Guidance From Other Revenue Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.2 - Ordering Publications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.3 - Electronic Tax Products . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 4.4 - Federal Tax Forms on CD-ROM . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 799 799 800 800 CHAPTER 5 - REQUIREMENTS FOR SPECIFIC TAX RETURNS Section 5.1 - Tax Returns (Form 1040, 1040A, 1120, Etc.) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.2 - Changes Permitted to Graphics (Forms 1040A and 1040) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.3 - Changes Permitted to Form 1040A Graphics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 5.4 - Changes Permitted to Form 1040 Graphics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 801 802 803 803 CHAPTER 6 - FORMAT AND CONTENT OF SUBSTITUTE RETURNS Section 6.1 - Acceptable Formats for Computer-Generated Forms and Schedules . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 6.2 - Additional Instructions for All Forms . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 804 804 CHAPTER 7 - OCR FORMS Section 7.1 - Special Form 1040EZ Optical Character Recognition/Image Character Recognition (OCR/ICR) Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 7.2 - Computer-Generated Alternative Returns, Form 1040PC Format Return . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 7.3 - Specifications for OCR Scannable Application Forms for Employee Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2000–12 I.R.B. 785 805 807 808 March 20, 2000 CHAPTER 8 - MISCELLANEOUS FORMS AND PROGRAMS Section 8.1 - Paper Substitutes for Form 1042-S . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.2 - Specifications for Filing Substitute Schedules K-1 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.3 - Procedures for Printing Internal Revenue Service Envelopes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 8.4 - Procedures for Substitute Form 5471 and Form 5472 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 809 811 811 813 CHAPTER 9 - ALTERNATIVE METHODS OF FILING Section 9.1 - Forms for Electronically Filed Returns . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 9.2 - FTD Magnetic Tape Payments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Section 9.3 - Effect on Other Documents . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 814 815 815 EXHIBITS Exhibit A-1. Schedule A (Preferred) Exhibit A-2. Schedule A (Acceptable) Exhibit B-1. Schedule B (Preferred) Exhibit B-2. Schedule B (Acceptable) Exhibit CG-A. Schedule A (Computer Generated) Exhibit CG-B. Schedule B (Computer Generated) Exhibit C. Sample Checklist Exhibit L-1. List of Forms Referred to in Revenue Procedure Chapter 1 Introduction to Substitute Forms Section 1.1 - Overview of Revenue Procedure 2000–19 1.1.1 Purpose This revenue procedure provides the general requirements and conditions for the development, print ing, and approval of all substitute tax forms to be acceptable for filing in lieu of official IRS forms. 1.1.2 Unique Forms Certain unique, specialized forms require the use of other additional revenue procedures to supplement this publication. See Chapter 4. 1.1.3 Scope The Internal Revenue Service accepts quality substitute tax forms that are consistent with the official forms and do not have an adverse impact on our processing. The IRS Substitute Forms Program administers the formal acceptance and processing of these forms nationwide. While this program deals primarily with paper documents, it also interfaces with other processing and filing media such as: • • • Magnetic tape, Optical character recognition, and Electronic filing, etc. Only those substitute forms that comply fully with the requirements set forth herein are acceptable. Exhibit L-1 lists the form numbers mentioned in this document and their titles. This revenue procedure is updated as required to reflect pertinent tax year form changes and to meet processing and/or legislative requirements. 1.1.4 Forms Covered by This Revenue Procedure The following types of forms are covered by this revenue procedure: • • • • • 1.1.5 Forms NOT Covered by This Revenue March 20, 2000 IRS tax returns and their related forms and schedules. Applications for permission to file returns electronically and forms used as required documentation for electronically filed returns. Powers of Attorney. Estimated tax payment vouchers. Forms and schedules relating to partnerships, exempt organizations, and employee plans. The following types of forms are not covered: • • W-2, W-3 (see Publication 1141 for information on these forms) 1096, 1098 series, 1099 series, 5498 series, and W-2G (see Publication 1179 for information on 786 2000–12 I.R.B. Procedure these forms) Federal Tax Deposit (FTD) coupons, which may not be reproduced. Forms 1040-ES(OCR) and 1041-ES(OCR), which may not be reproduced. Requests for information or documentation initiated by the Service. Forms used internally by the Service. State tax forms. Forms developed outside IRS (except for Form TD F 90-22.1, Report of Foreign Bank and Financial Accounts). • • • • • • Section 1.2 — IRS Contacts 1.2.1 Where To Send Substitute Forms Send your substitute forms for approval to the following offices (DO NOT send forms with taxpayer data): Form Office and Address 4789, 8300, 8362, 8852, TD F 90-22.1, TD F 90-22.47 IRS Computing Center BSA Compliance Branch P.O. Box 32063 Detroit, MI 48232-0063 4461, 4461-A, 4461-B, 5300, 5303, 5307, 5310, 5310-A, and 6406 Internal Revenue Service Attn: EP OCR Forms Coordinator OP:E:EP:FC 1111 Constitution Avenue, NW Room 2232 IR Washington, DC 20224 All others (except W-2, W-3, 1096, 1098, 1099, 5498, and W-2G) Internal Revenue Service Attn: Substitute Forms Program OP:FS:FP:F:CD 1111 Constitution Avenue, NW Room 5244 IR Washington, DC 20224 In addition, the Substitute Forms Program can be contacted via email at tfpmail@publish.no.irs.gov. Use this email address only to inquire about forms covered by this revenue procedure. DO NOT attach graphic files for approval with email. For questions about Forms W-2 and W-3, refer to IRS Publication 1141, General Rules and Specifications for Private Printing of Substitute Forms W-2 and W-3. For Forms 1096, 1098, 1099, 5498, and W-2G, refer to IRS Publication 1179, Specifications for Paper Document Reporting and Paper Substitutes for Forms 1096, 1098, 1099 Series, 5498, and W-2G. Section 1.3 - Nature of Changes 1.3.1 Changes to the Revenue Procedure • • • • • • • 2000–12 I.R.B. The pages of this revenue procedure has been numbered to facilitate ease of use. The IRS Internet website address has been changed to http://www.irs.gov. References to the FTP and Telnet addresses have been deleted.. Definition of “advanced draft” has been added. Vendor responsibility for monitoring revisions to official forms has been articulated. Section on Form 941 OCR requirements has been removed. Pricing information for the Federal Tax Forms CD-ROM has been revised. Processing of 1999 Plan Year Forms 5500 and 5500-EZ will be processed by the Pension and Welfare Benefits Administration, effective July 1, 2000. 787 March 20, 2000 • • • • • • • • Form 5500-C/R has been obsoleted for Plan Year 1999. The Electronic Filing Program is now called the IRS e-file Program. Instructions for the boxes on Form 1042-S have been revised. Voucher scan lines now have a six-digit tax period (YYYYMM). Forms 8543-NR and 8453-OL are now referenced in the section on electroncially filed returns. Forms 1040-ES(OCR) and 1041-ES(OCR) added to list of forms not covered by this revenue procedure. Four-digit portion of ZIP codes on envelopes revised for froms 1040, 940, and 943. Various editorial changes have been made. Section 1.4 - Definitions 1.4.1 Substitute Form A tax form (or related schedule) that differs in any way from the official version and is intended to replace theentire form that is printed and distributed by the Service. This term also covers those approved substitute forms exhibited in this revenue procedure. 1.4.2 Printed (or Preprinted) Form A form produced using conventional printing processes. Also, a printed form which has been reproduced by photocopying or similar processes. 1.4.3 Preprinted Pin-Fed Form A printed form that has marginal perforations for use with automated and high-speed printing equipment. 1.4.4 ComputerPrepared Substitute Form A preprinted form in which the taxpayer’s tax entry information has been inserted by a computer, computer-printer, or other computer type equipment, such as word-processing equipment. 1.4.5 ComputerGenerated Substitute Tax Return or Form A tax return or form that is entirely designed and printed by the use of a computer printer,such as a laser printer, etc., on plain white paper. This return or form must conform to the physical layout of the corresponding Service form although the typeface may differ. The text should match the text on the officially printed form as closely as possible; condensed text and abbreviations will be considered on a case-by-case basis. Exception: All jurats (perjury statements) must be reproduced verbatim. 1.4.6 ManuallyPrepared Form A preprinted reproduced form in which the taxpayer’s tax entry information is entered by an individual using a pen, pencil, typewriter, or other non-automated equipment. 1.4.7 ComputerGenerated Answer Sheet Format Tax Return A tax return that contains only the taxpayer’s significant line entries, and is formatted three columns per page with tax form headings, a summary, and jurat. This return is printed on plain white paper using a computer printer. 1.4.8 Graphics Those parts of a printed tax form that are not tax amount entries nor called-for information. Generally, these are line numbers, captions, shadings, instructions, special indicators, borders, rules, and strokes created by typesetting, photographics, photocomposition, etc. 1.4.9 Acceptable Reproduced Form A legible photocopy of an original form. 1.4.10 Supporting Statement (Supplemental Schedule) A document providing detailed information to support an entry for a line(s) on an official or approved substitute form and filed with (attached to) a tax return. (A supporting statement is not a tax form and does not take the place of an official form, unless specifically permitted elsewhere in this procedure.) 1.4.11 Specific Forms Terms The following terms are used throughout this revenue procedure in reference to all substitute forms, with the exception of the 1040PC “answer sheet format” tax return. Continued on next page March 20, 2000 788 2000–12 I.R.B. 1.4.12 Format The overall physical arrangement and general layout of a substitute form. 1.4.13 Sequence The same numeric and logical placement order of data, as reflected on the official form version. Sequence is an integral part of the total format requirement. 1.4.14 Line Reference (Code) The line numbers, letters or alphanumerics used to identify each captioned line on the official forms, and printed to the immediate left of each caption or data entry field. 1.4.15 Item Caption The textual portion of each line on the form identifying the specific data elements required. 1.4.16 Data Entry Field All areas designated on a form for the insertion of data, such as dollar amounts, quantities, responses, checkboxes, etc. 1.4.17 Advanced Draft A draft revision of a new or revised form may be posted to the IRS Internet site for information purposes. Substitute forms may be submitted based on these advanced drafts but any company that receives forms approval based on these early drafts is responsible for monitoring and revising froms to mirror any revisions in the final forms provided by the Service. Section 1.5 - Agreement Section 1.5.1 Important Stipulation of This Revenue Procedure Any person or company who uses substitute forms and makes all or part of the changes specified in this revenue procedure agrees to the following stipulations: • The Internal Revenue 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 Internal Revenue Service during processing of the tax return, the person or company agrees to accept the determination of the IRS as to whether or not the form may continue to be used during the filing season. • The person or company agrees to work with the IRS in correcting noted deficiencies. Notification of deficiencies may be made by any combination of fax, letter, email, or phone contact and may include the return of unacceptable forms for resubmission of acceptable forms. Chapter 2 General Guidelines for Submissions and Approvals Section 2.1 - General Specifications for Approval 2.1.1 Overview If you produce any tax returns and forms using IRS guidelines on permitted changes, you can generate your own substitutes without further approval. If your changes are more extensive, you must get official approval before using substitute forms. These changes include the use of typefaces and sizes other than those found on the official form and the condensing of line item descriptions to save space. 2.1.2 Schedules Schedules are considered to be an integral part of a complete tax return when assigned consecutive page numbers and printed contiguously with page 1 of the return. 2.1.3 Example of Schedules That Must Be Submitted With the Return Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, is an example of this situation, where Schedules A through U have pages numbered as part of the basic return. For a Form 706 to be approved, the entire form including Schedules A through U must be submitted. 2.1.4 Examples of Schedules That However, Schedules 1, 2, and 3 of Form 1040A are examples of schedules that can be separately computer-generated. Although printed by the IRS as a continuation of Form 1040A, none of these schedContinued on next page 2000–12 I.R.B. 789 Can Be Submitted Separately ules have page numbers that require them to be filed with Form 1040A, and may, therefore, be separated from Form 1040A and submitted as computer-generated substitute schedules. 2.1.5 Use and Distribution of Unapproved Forms The Internal Revenue Service is continuing a program to identify and contact tax return preparers, forms developers, and software publishers who use or distribute unapproved forms that do not conform to this revenue procedure. The use of unapproved forms impedes processing of the returns. Section 2.2 - Highlights of Permitted Changes and Requirements 2.1.1 Methods of Reproducing Internal Revenue Service Forms Official versions are supplied by the Internal Revenue Service, such as those in the taxpayer’s tax package, those printed in revenue procedures, and over-the-counter forms available at IRS and other governmental public offices or buildings. Forms are also available on CD-ROM, and on-line viaFedworld and the Internet. There are methods of reproducing Internal Revenue Service printed tax forms suitable for use as substitute tax forms without prior approval. • You can photocopy most tax forms and use them instead of the official ones. The entire substitute form, including entries, must be legible. • You can reproduce any current tax form as cut sheets, snapsets, and marginally punched, pin-fed forms so long as you use an official IRS version as the master copy. • You can reproduce a “signature form” as a valid substitute form. Many tax forms (including returns) have a taxpayer signature requirement as part of the form layout. The jurat/perjury statement/signature line areas must be retained and worded exactly as on the official form. The requirement for a signature by itself does not prohibit a tax form from being properly computer-generated. • You can computer-generate Answer Sheet Format Tax Returns on plain bond paper using IRSaccepted software for the 1040PC format for return types 1040EZ, 1040, 1040A, and attachments, forms, and schedules. Section 2.3 - Vouchers 2.3.1 Overview All payment vouchers (Forms 940-V, 940-EZ(V), 941- V, 943-V, 945-V, 1040-V, and 2290-V) must be reproduced. Substitute vouchers must be the same size as the officially printed vouchers. Vouchers that are prepared for printing on a laser printer may include a scanline. 2.3.2 Scanline Specifications NNNNNNNNN AA AAAA NN N NNNNNN NNN A B C D E F G A - Social Security Number/Employer Identification Number (SSN/EIN) has 9 numeric spaces. B - Check Digit has 2 alpha spaces. C - Name Control has 4 alphanumeric spaces. D - Master File Tax (MFT) Code has 2 numeric spaces (see below). E - Taxpayer Identification Number (TIN) Type has 1 numeric space (see below). F - Tax period has six numeric spaces in year/month format (YYYYMM). G - Transaction Code has 3 numeric spaces. 2.3.3 MFT Code Code Number for: • Form 1040 family - 30; • Form 940/940-EZ - 10; • Form 941 - 01; • Form 943 - 11; • Form 945 - 16; and • Form 2290 - 60. 2.4 TIN Type Type Number for: • Form 1040 family - 0; and • Forms 940, 940-EZ, 941, 943, 945, and 2290 - 2. 2.3.5 Voucher Size The voucher size must be exactly 8.0” X 3.25”. The document scanline must be vertically positioned 1.625 inches from the bottom of the scanline to the bottom of the voucher. The right most character Continued on next page March 20, 2000 790 2000–12 I.R.B. of the scanline must be placed 3.5 inches from the right leading edge of the document. The maximum vertical displacement is .06 inches. The minimum required horizontal clear space between characters is .014 inches. The line to be scanned must have a clear band 0.25 inches in height from top to bottom of the scanline, and from border to border of the document. “Clear band” means no printing except for dropout ink. 2.3.6 Print and Paper Weight Vouchers must be imaged in black ink using OCR A or OCR B, size 1 font. The paper must be 20 to 24 pound OCR bond paper weight. Section 2.4 - Restrictions on Changes 2.4.1 Things You CANNOT Do to IRS Forms Suitable for Substitute Tax Forms You cannot, without prior IRS approval, change any Internal Revenue Service tax form or use your own (non-approved) versions (preprinted labels), including graphics, unless specifically permitted by this revenue procedure. You cannot adjust any of the graphics on Forms 1040, 1040A, and 1040EZ (except in those areas specified in Chapter 5 of this revenue procedure) without prior approval from the IRS Substitute Forms Program. You cannot use your own preprinted label on tax returns filed with IRS, unless you fully comply with the exception criteria specified in the section on use of preaddressed IRS labels in this revenue procedure. Section 2.5 - Guidelines for Obtaining IRS Approval 2.5.1 Basic Requirements Preparers who desire to file substitute privately designed and printed tax forms and/or computer-generated and computer-prepared tax forms must develop such substitutes using the guidelines for substitute forms established in this chapter. These substitutes, unless excepted by revenue procedure, must be approved by the IRS before being filed. 2.5.2 1040PC Format Return A software developer who wants to market, distribute, or use for its own clientele, a tax preparation package featuring the 1040PC tax return format, must first file an application to participate in the program. Only after successfully fulfilling test requirements will a developer’s software package be accepted by the IRS to produce 1040PC tax returns. 2.5.3 Conditional Approval Based on Advance Drafts The Internal Revenue Service cannot grant final approval of your substitute form until the official form has been published. However, the IRS has established a location on the Internet for the posting of advance drafts of forms. This site can be reached through the Tax Professional’s Corner at http://www.irs.ustreas.gov/prod/bus_info/tax_pro. We encourage submission of proposed substitutes of these advance draft forms, and will grant conditional approval based solely on these early drafts. These advance drafts are subject to significant change before forms are finalized. If these advance drafts are used as the basis for your substitute forms, you will be responsible for subsequently updating your final forms to agree with the final official version before use. These revisions need not be submitted for further approval. NOTE: Approval of forms based on advance drafts will not be granted after the final version of an official form is published. • Any alteration of forms must be within the limits acceptable to the Service. It is possible that, from one filing period to another, a change in law or a change in internal need (processing, audit, compliance, etc.) may change the allowable limits for the alteration of the official form. • When specific approval of any substitute form (other than those specified in Chapter 2, IRS Contacts) is desired, a sample of the proposed substitute should be forwarded for consideration by letter to the Substitute Forms Program Coordinator at the address shown in Chapter 2. • To expedite multiple forms approval, we prefer that your proposed forms be submitted in separate sets by return. For example, Forms 1040 and their normally related schedules or attachContinued on next page 2000–12 I.R.B. 791 March 20, 2000 2.5.3 Conditional Approval Based on Advanced Drafts (continued) ments should be submitted separately from Forms 1120, 1065, 5500 Series, etc., if at all possible. Schedules and forms (e.g., Forms 3468, 4136, etc.) that can be used with more than one type of return (e.g., 1040, 1041, 1120, etc.) should be submitted only once for approval, regardless of the number of different tax returns with which they may be ultimately associated. In addition, all pages of a multipage form or return should be submitted in the same package. 2.5.4 Approving Offices As no IRS office except the ones specified in this procedure (per the chart in Chapter 1) are authorized to approve substitute forms, unnecessary delay may result if forms are sent elsewhere for approval. All forms submitted to any other office must be forwarded to the appropriate office for formal control and review. The Substitute Forms Program Coordinator may then coordinate the response with the program analyst responsible for the processing of that form. Such coordination may include allowing the analyst to officially approve the form. No IRS office is authorized to allow deviations from this revenue procedure. 2.5.5 Service’s Review of Software Programs, etc. The IRS does not review or approve the logic of specific software programs, nor confirm the calcula tions entered on forms output from these programs that are submitted for approval. The accuracy of the program itself remains the responsibility of the software package developer, distributor, or user. The Substitute Forms Program is primarily concerned with the prefiling quality review of the final forms output, produced by whatever means, that are expected to be processed by IRS field offices. For the above reasons, it is suggested that you submit forms without including any “taxpayer” information such as names, addresses, monetary amounts, etc. 2.5.6 When to Send Proposed Substitutes Proposed substitutes, which are required to be submitted per this revenue procedure, should be sent as much in advance of the filing period as possible. This is to allow adequate time for analysis and response. 2.5.7 Accompanying Statement When the sample substitute is submitted, there should be an accompanying statement that lists the form number of each substitute requested and detail those items that deviate from the official form in position, arrangement, appearance, line numbers, additions, deletions, etc. Included with each of the items should be a detailed reason or justification for the change and an approximation of the number of forms expected to be filed. When requesting approval for multiple forms, the statement should be presented as a checksheet. Checksheets are not mandatory, but do facilitate the approval process. The checksheet may look like the example (Exhibit C) displayed in the back of this procedure or may be one of your own design. Please include your fax number on the checksheet. 2.5.8 Approval/ Non-Approval Notice The Substitute Forms Coordinator will fax the checksheet or an approval letter back to the originator if a fax number has been provided, unless: • the requester has asked for a formal letter; or • significant corrections are required to the submitted forms Notice of approval may contain qualifications for use of the substitutes. Notices of non-approval letters may specify the changes required for approval, and may also require resubmission of the form(s) in question. Telephone contact is used when possible. 2.5.9 Duration of Approval Most signature tax returns and many of their schedules and related forms have the tax (liability) year printed in the upper right corner. Approvals for these forms are usually good for one calendar year (January through December of the year of filing). Quarterly tax forms in the 94X series, and Form 720, require approval for any quarter in which the form has been revised. 2.5.10 Limited Continued Use of Approved Change • If the preprinted year is the only change made to a form, the form for the upcoming year is not subject to review. • Otherwise, each new filing season requires a new approval. Limited continued use of a change approved for one tax year may be allowed for the same form in the following tax year. Examples of such limitations and requirements are the use of abbreviated words, revised form spacing, compressed text lines, shortened captions, etc., which do not change the con sistency of lines or text on the official forms. If substantial changes are made to the form, new substitutes must be submitted for approval. If only minor editorial changes are made to the form, it is not subject to review. Continued on next page March 20, 2000 792 2000–12 I.R.B. If you received written approval of a previous tax year substitute form governed by this revenue procedure and continue to use the approved change on your current tax year substitute form, you may revise your form to include this change and, without additional written approval, use it as a current tax year substitute form, provided you comply with the requirements in this revenue procedure. 2.5.11 When Approval Is Not Required If you received written approval for a specific change on a specific form last year, such as deleting the vertical lines used to separate dollars and cents on some forms and schedules, e.g., Schedules A&B of Form 1040, you may again make the same change on the same form this year if the item changed is still present on this year’s official form. • The new substitute does not have to be sent to the IRS and written approval is not required. • However, the new substitute must conform to the official current year IRS form in other respects: date, Office of Management and Budget (OMB) approval number, attachment sequence number, Paperwork Reduction Act Notice statement, arrangement, item caption, line number, line reference, data sequence, etc. • It must also comply with this revenue procedure—which may have eliminated, added to, or otherwise changed the guideline(s) which affected the change approved last year. Exception: Those written approvals which state that the approved change or form would not be allowed in any other tax year, or for a temporary, limited, or interim approval pending resolution of a failure to meet one or more IRS-prescribed requirements are subject to revire in subsequent years. • This authorization for continued use of an approved change is limited to the continuation of design logic from an immediately prior tax year substitute form to a current tax year substitute form. 2.5.12 Continuous Use Forms Forms without preprinted tax years are called “continuous use” forms. Many of these forms had expiration dates, but these are being phased out. Continuous use forms are revised when a legislative change affects the form or a change will facilitate processing. 2.5.13 Internet Program Chart A chart of print dates (for annual and quarterly forms) and most current revision dates (for continuous use forms) will be maintained on the Internet. For further details, see the section on Internet access in Chapter 4 of this revenue procedure. 2.5.14 Required Copies Generally, you must send us one copy of each form being submitted for approval. However, if you are producing forms for different computer systems (e.g., IBM (or compatible) vs. MacIntosh) or different types of printers (laser vs. dot matrix), and these forms differ significantly in appearance, submit one copy for each type of system or printer. 2.5.15 Requestor’s Responsibility After Receipt of Approval Following the receipt of initial approval for a substitute forms package, or of a software output program to print substitute forms, it is the responsibility of the originator (designer or distributor) to provide each subsequent client firm or individual with the pertinent Service forms requirements that must be met for continuing acceptability. Examples of this responsibility include: • • 2.5.16 Source Code The Substitute Forms Program Unit, OP:FS:FP:F:CD, will assign a unique source code to each firm that submits substitute paper forms for approval. This will be a permanent control number that should be used on every form created by a particular firm. • • • 2000–12 I.R.B. The use of prescribed print paper, font size, legibility, state tax data deletion. The legal requirements of the Paperwork Reduction Act Notice for informing all users of substitute forms of the official use and collection requirements stated in the instructions for the official IRS forms, completion of documents, etc. This source code should be printed at the bottom left margin area on the first page of every approved substitute paper form. The source code for paper returns consists of three alpha characters. This source code should not be used on optically scanned (OCR) forms. 793 March 20, 2000 Section 2.6 - Office of Management and Budget (OMB) Requirements for All Substitute Forms 2.6.1 OMB Requirements for All Substitute Forms Legal Requirements of the Paperwork Reduction Act of 1995 (“Act”). Public Law 104-13 requires that: • OMB approve all IRS tax forms that are subject to the Act, • Each IRS form contains (in the upper right corner) the OMB number, if any, and • Each IRS form (or its instructions) states why IRS needs the information, how it will be used, and whether or not the information is required to be furnished. This information must be provided to every user of official or substitute tax forms. 2.6.2 Application of Act to Substitute Forms 2.6.3 Required Explanation to Users 2.6.4 Obtaining OMB Number and Notice On forms to which OMB numbers have been assigned: • All substitute forms must contain in the upper right corner the OMB number that is on the official form. • Format Required - OMB No. XXXX-XXXX (Preferred) or OMB # XXXX-XXXX. You must also inform the users of your substitute forms of the IRS use and collection requirements stated in the instructions for the official IRS form. • If you provide your users or customers with the official IRS instructions, page 1 of each form must retain either the Paperwork Reduction Act Notice, or a reference to it as the IRS does on the official forms (usually in the lower left corner of the forms). • If the IRS instructions are not provided to users of your forms, the exact text of the Paperwork Reduction Act Notice must be furnished on the form or separately. • This notice reads, in part, “We ask for this information to carry out the Internal Revenue laws of the United States. You are required to give us the information. We need it to ensure that you are complying with these laws and to allow us to figure and collect the right amount of tax...” • You must also include a copy of the alternative statement provided to users of your forms with the forms you submit for approval. The OMB number and Paperwork Reduction Act Notice may be obtained from the official form (or its instructions), or any format produced by the IRS (e.g., Compact Disc (CD), Internet download, or Bulletin Board System (BBS) download). Chapter 3 Physical Aspects and Requirements Section 3.1 - General Guidelines for Substitute Forms 3.1.1 General Information The Official Form is the standard. Because a substitute form is a variation from the official form, you should know the requirements of the official form for the year of use before you modify it to meet your needs. The IRS provides several means of obtaining the most frequently used tax forms. These include the Internet, fax-on-demand, CD-ROM and an electronic forms bulletin board (see chapter 4). 3.1.2 Design Each form must follow the design of the official form as to format arrangement, item caption, line numbers, line references, and sequence. 3.1.3 State Tax Information Prohibited State tax information must not appear (be visible) on the federal tax return or associated form or schedule which is filed with the IRS, except where amounts are claimed on or required by the federal return, e.g., state and local income taxes, Schedule A (Form 1040). Continued on next page March 20, 2000 794 2000–12 I.R.B. 3.1.4 Vertical Alignment of Amount Fields IF a form is to be... A form is to be manually prepared THEN... • • Computer-generated • • Computer-prepared • • 3.1.5 Attachment Sequence Number • The federal column must have a vertical line or some type of indicator in the amount field to separate dollars from cents if the official form has a vertical line. The cents column must be at least 3/10” wide. Vertically align the amount entry fields where possible. Use one of the following amount formats: • 0,000,000. • 0,000,000.00 You may remove the vertical line in the amount field that separates dollars from cents. Use one of the following amount formats: • 0,000,000. • 0,000,000.00 Most individual income tax forms have a required “attachment sequence number” located just below the year designation in the upper right corner of the form. The IRS uses this number to indicate the order in which forms are to be attached to the tax return so they may be processed in that order. Some of the attachment sequence numbers may change each year. On computer-prepared forms: • The sequence number may be printed in no less than 12-point boldface type and centered below the form’s year designation. • The sequence number may also be placed following the year designation for the tax form and separate with an asterisk. • It is not necessary to duplicate the “Attachment Sequence Number” wording, except for the actual number. 3.1.6 Paid Preparer’s Information and Signature Area On Forms 1040EZ, 1040A, 1040, and 1120, etc., the “Paid Preparer’s Use Only” area may not be rearranged or relocated. You may, however, add three extra lines to the paid preparer’s address area without prior approval. This applies to other tax forms as well. Please note that the preparer’s area on Form 1040EZ is on the bottom of page 2. Substitute Forms 1040EZ with the preparer area in any location other than the bottom of page 2 will not be accepted. 3.1.7 Assembly of Forms If developing software or forms for use by others, please inform your customers/clients that the order in which the forms are arranged may affect the processing of the package. A return must be arranged in order indicated below. 2000–12 I.R.B. 795 March 20, 2000 If the form is... Then sequence is 1040 • • Any other (Form 1120, 1120S, 1065, 1041, etc.) • • Form 1040 Schedules and forms in sequence number order The tax return Lettered schedules (Schedule D, etc.) in alphabetical order • nNnumbered forms in numerical order Supporting statements should then follow in the same sequence as the forms they support. Additional information required should be attached last. In this way, the forms are received in the order in which they must be processed. If you do not send returns to us in this order, the IRS has to delay processing to disassemble them and place them in order before processing is continued. Section 3.2 - Paper 3.2.1 Paper Content The paper must be: • Chemical wood writing paper that is equal to or better than the quality used for the official form, • At least 18 pound (17” x 22”, 500 sheets), or • At least 50 pound offset book (25” x 38”, 500 sheets). 3.2.2 Paper with Chemical Transfer Properties There are several kinds of paper prohibited for substitute forms. These are: • Carbon-bonded paper • Chemical transfer paper except when the following specifications are met: • Each ply within the chemical transfer set of forms must be labeled. • Only the top ply (ply one and white in color), the one that contains chemical on the back only (coated back), may be filed with the Service. 3.2.3 Example A set containing three plies would be constructed as follows: one ply (coated back), “Federal Return, File with IRS”; ply two (coated front and back), “Taxpayer’s copy”, and ply three (coated front), “Preparer’s copy.” • The file designation, “Federal Return, File with IRS,” for ply one must be printed in the bottom right margin (just below the last line of the form) in 12-point, bold-face type. • It is not mandatory, but recommended, that the file designation ”Federal Return, File with IRS,” be printed in a contrasting ink for visual emphasis. 3.2.4 Carbon Paper Do not attach any carbon paper to any return you file with the Internal Revenue Service. 3.2.5 Paper and Ink Color We prefer that the color and opacity of paper substantially duplicates that of the original form. This means that your substitute must be printed in black ink and may be on white or on the colored paper the IRS form is printed on. Forms 1040A and 1040 substitute reproductions may be in black ink without the colored shading. The only exception to this rule is Form 1041-ES, which should always be printed with a very light gray shading in the color screened area. This is necessary to assist us in expeditiously separating this form from the very similar Form 1040-ES. 3.2.6 Page Size Substitute or reproduced forms and computer prepared/generated substitutes may be the same size as the official form (8” x 11” in most cases) or they may be the standard commercial size (8 1/2” x 11”) exclusive of pin-feed holes. The thickness of the stock cannot be less than .003 inch. March 20, 2000 796 2000–12 I.R.B. Section 3.3 - Printing 3.3.1 Printing Medium The private printing of all substitute tax forms must be by conventional printing processes, photo copying, computer-graphics, or similar reproduction processes. 3.3.2 Legibility All forms must have a high standard of legibility, both as to printing and reproduction and as to fill-in matter. Entries of taxpayer data may be no smaller than eight points. The Internal Revenue Service reserves the right to reject those with poor legibility. The ink and printing method used must ensure that no part of a form (including text, graphics, data entries, etc.) develops “smears” or similar quality deterioration. This includes any subsequent copies or reproductions made from an approved master substitute form, either during preparation or during IRS processing. 3.3.3 Type Font Many federal tax forms are printed using “Helvetica” as the basic type font. We request that you use this type font when composing substitute forms. 3.3.4 Print Spacing Substitute forms should be printed using a 6 lines/inch vertical print option. They should also be printed horizontally in 10 pitch pica (i.e., 10 print characters per inch) or 12 pitch elite (i.e., 12 print positions per inch). 3.3.5 Image Size The image size of a printed substitute form should be as close as possible to that of the official form. You may omit any text on both computer-prepared and computer-generated forms that is solely instructional. 3.3.6 Title Area Changes To allow a large top margin for marginal printing and more lines per page, the title line(s) for all substitute forms (not including the form’s year designation and sequence number, when present), may be photographically reduced by 40 percent or reset as one line of type. When reset as one line, the type size may be no smaller than 14-point. You may omit “Department of the Treasury, Internal Revenue Service” and all reference to instructions in the form’s title area. 3.3.7 Remove Government Printing Office Symbol and IRS Catalog Number When privately printing substitute tax forms, the Government Printing Office symbol and/or jacket number must be removed. In the same place, using the same type size, print the Employer Identification Number (EIN), the Social Security Number (SSN) of the printer or designer, or the IRS assigned source code. (We prefer this last number be printed in the lower left area of the first page of each form.) Also remove the IRS Catalog Number, if one is present in the bottom center margin, and the Recycle Symbol, if the substitute is not produced on recycled paper. 3.3.8 Printing on One Side of Paper While it is preferred that both sides of the paper be used for substitute and reproduced forms, resulting in the same page arrangement as that of the official form or schedule, the IRS will not reject your forms if only one side of the paper is used. 3.3.9 Photocopy Equipment The IRS does not undertake to approve or disapprove the specific equipment or process used in reproducing official forms. Photocopies of forms must be entirely legible and satisfy the conditions stated in this and other revenue procedures. 3.3.10 Reproductions Reproductions of official forms and substitute forms that do not meet the requirements of this revenue procedure may not be filed instead of the official forms. Illegible photocopies are subject to being returned to the filer for resubmission of legible copies. 3.3.11 Removal of Instructions You may remove all references to instructions. No prior approval is needed. One exception is that the statement, “For Paperwork Reduction Act Notice, see instructions”, must be retained or a similar statement provided on each form. Some forms refer the taxpayer to a page number in the instructions for information on the Paperwork Reduction Act. Section 3.4 - Margins 3.4.1 Margin Size The format of a reproduced tax return when printed on the page must have margins on all sides at least as large as the margins on the official form. This allows room for IRS employees to make the necessary entries on the form during processing. • 2000–12 I.R.B. A 1/2” to 1/4” inch margin must be maintained across the top, bottom, and both sides (exclusive of any pin-fed holes) of all computer-generated substitutes. 797 March 20, 2000 • 3.4.2 Marginal Printing The marginal, perforated strips containing the pin-fed holes must be removed from all forms prior to filing with the Internal Revenue Service. Non-tax material allowed in limited areas. • • Printing is never allowed in the top right margin of the tax return form (i.e., Forms 1040, 1040A, 1040EZ, 1120, 940, 941, 5500 Series, etc.). The Service uses this area to imprint a Document Locator Number for each return. With the exception of the actual tax return forms (i.e., Forms 1040, 1040A, 1040EZ, 1120, 940, 941, etc.), you may print in the left vertical margin and in the left half of the bottom margin. Prior approval is not required for the marginal printing allowed when printed on an official form or on a photocopy of an official form. The marginal printing allowance is also the guide for the preparation of acceptable substitute forms. There is no exception to the requirement that no printing is allowed in the top right margin of the tax return form. Section 3.5 - Examples of Approved Formats 3.5.1 Examples of Approved Formats From the Exhibits Two sets of exhibits (Exhibits A-1, A-2, B-1, and B-2) are at the end of this revenue procedure. These are examples of how the guidelines in this revenue procedure may be used in some specific cases. Vertical spacing is six (6) lines to the inch. 3.5.2 Examples of Acceptable computergenerated formats Examples of acceptable computer-generated formats are also shown in the Exhibits section of this rev enue procedure. Exhibits CG-A and CG-B show computer-generated Schedules 1995 A and B. Vertical spacing is six (6) lines to the inch. You may also refer to them as examples of how the guidelines in this revenue procedure may be used in specific cases. A combination of upper and lower case print fonts is acceptable in producing the computer-generated forms included in this procedure. This same logic for computer-generated forms can be applied to any IRS form that is normally reproducible as a substitute form, with the exception of tax return forms as discussed elsewhere. These examples are from a prior year and are not to be used as substitute forms. Section 3.6 - Miscellaneous Information for Substitute Forms 3.6.1 Filing Substitute Forms To be acceptable for filing, a substitute return or form must print out in a format that will allow the party submitting the return to follow the same instructions as for filing official forms. These instructions are in the taxpayer’s tax package or in the related form instructions. The form must be on the appropriate size paper, be legible, and include a jurat where one appears on the published form. 3.6.2 Caution to Software Publishers The IRS has received returns produced by software packages with approved output where either the form heading was altered or the lines were spaced irregularly. This produces an illegible or unrecognizable return or a return with the wrong number of pages. We realize that many of these problems are caused by individual printer differences but they may delay input of return data and, in some cases, generate correspondence to the taxpayer. Therefore, in the instructions to the purchasers of your product, both individual and professional, please stress that their returns will be processed more efficiently if they are properly formatted. This includes: • • 3.6.3 Use Preaddressed IRS Label March 20, 2000 Having the correct form numbers and titles at the top of the return, and Submitting the same number of pages as if the form were an official IRS form, with the line items on the proper pages. If you are a practitioner filling out a return for a client or a software publisher who prints instruction manuals, stress the use of the preaddressed label provided in the tax package the IRS sent to the tax payer, when available. The use of this label (or its precisely duplicated label information) is extremely important for the efficient, accurate, and economical processing of a taxpayer’s return. Labeled returns indicate that a taxpayer is an established filer and permits us to automatically accelerate processing of those returns. This results in quicker refunds, more accurate names/addresses and postal deliveries, and less manual review by IRS functions. Continued on next page 798 2000–12 I.R.B. 3.6.5 Programming to Print Forms Whenever applicable: • Use only the following label information format for single filers: JOHN Q. PUBLIC 310 OAK DRIVE HOMETOWN, STATE 94000 • Use only the following information for joint filers: JOHN Q. PUBLIC MARY I. PUBLIC 310 OAK DRIVE HOMETOWN, STATE 94000 Chapter 4 Additional Resources Section 4.1 - Guidance From Other Revenue Procedures 4.1.1 General Guidance for the substitute tax forms not covered in this revenue procedure and the revenue procedures that govern their use are as follows: • Revenue Procedure 94-79, IRS Publication 1355, Requirements and Conditions for the Reproduction, Private Design, and Printing of Substitute Forms 1040-ES. • Revenue Procedures 99-24, IRS Publication 1141, General Rules and Specifications for Private Printing of Substitute Forms W-2 and W-3. • Revenue Procedure 99-34, IRS Publication 1179, Specifications for Paper Document Reporting and Paper Substitutes for Forms 1096, 1098, 1099, 5498, and W-2G. • Revenue Procedure 98-44, IRS Publication 1187, Specifications for Filing Form 1042-S, Foreign Person’s U.S. Source Income Subject to Withholding, on Magnetic Tape. • Revenue Procedure 99-29, IRS Publication 1220, Specifications for Filing Forms 1098, 1099, 5498, and W-2G Magnetically or Electronically. • Revenue Procedure 95-18, IRS Publication 1223, Specifications for Private Printing of Substitute Forms W-2c and W-3c. Section 4.2 - Ordering Publications 4.2.1 Sources of Publications The publications listed below may be ordered by calling 1-800-TAX-FORM (1-800-829-3676). Identify the requested document by IRS publication number: • Pub. 1141, the revenue procedure on specifications for private printing for Forms W-2 and W-3. • Pub. 1167, the revenue procedure on substitute printed, computer- prepared, and computer-generated tax forms and schedules. This publication is available from the IRS Internet website. • Pub. 1179, the revenue procedure on paper substitute information returns (Forms 1096, 1098, 1099, 5498, and W-2G). • Pub. 1192, Catalog of Reproducible Forms and Instructions. • Pub. 1220, the revenue procedure on electronic or magnetic tape and magnetic diskette reporting for information returns (Forms 1098, 1099 series, 5498, and W-2G). • Pub. 1223, the revenue procedure on substitute Forms W-2c and W-3c. • Pub. 1239, Specifications for Filing Form 8027, Employer’s Annual Information Return of Tip Income and Allocated Tips, on Magnetic Tape. • Pub. 1245, Magnetic Tape Reporting for Forms W-4. Continued on next page 2000–12 I.R.B. 799 March 20, 2000 4.2.2 Where To Order • Pub. 1345, Handbook for Electronic Filers of Individual Income Tax Returns (Tax Year 1999). (This is an annual publication; tax year is subject to change). This publication is available from the IRS Internet website. • Pub. 1345-A, Handbook for Electronic Filers of Individual Income Tax Returns (Tax Year 1999) (Supplement). This publication, printed in the late fall, supplements Publication 1345. • Pub. 1355, the revenue procedure on the requirements for substitute Form 1040-ES. If you are mailing your order, the address to use is determined by your location. If you live in the ... Then mail your order to ... Western United States Western Area Distribution Center Rancho Cordova, CA 95743-0001 Central United States Central Area Distribution Center P.O. Box 8903 Bloomington, IL 61702-8903 Eastern United States or or foreign country Eastern Area Distribution Center P.O. Box 85074 Richmond, VA 23261-5074 Section 4.3 - Electronic Tax Products 4.3.1 The Internet Copies of tax forms with instructions, publications, and other tax related materials may be obtained via the Internet. Forms can be downloaded in several file formats (PDF- Portable Document Format, PS - PostScript, and PCL - Printer Control Language). Those choosing to use PDF files for viewing on a personal computer can also download a free copy of the Adobe Acrobat Reader. • World Wide Web - http://www.irs.gov Access to these sites is free but time on the Internet is subject to the fees charged by your Internet provider. 4.3.2 Fedworld (BBS) The Internal Revenue Information Systems (IRIS) Bulletin Board can be reached via FedWorld, an aggregation of federal BBS maintained by the Department of Commerce. IRIS can be reached directly by modem at (703) 321-8020; FedWorld’s main number is (703) 321-3339. These are toll calls. 4.3.3 Tax Fax The most frequently requested tax forms, instructions, and other information are available through IRS Tax Fax at (703) 368-9694. Call from your fax machine and follow the voice prompts. Your request will be transmitted directly back to you. Each call is limited to requesting three items; users pay the telephone line charges. 4.3.4 Report of Print Dates The Service makes available a site on the Internet that shows print dates for forms used by taxpayers in the preparation of returns and subsequent transactions. It is in three parts: • Schedule of anticipated print dates of annual returns, • Schedule of anticipated print dates of quarterly returns, and • Schedule of last revision dates for continuous use only forms. The site address is http://www.irs.gov/prod/bus_info/tax_pro/formsch.html. The site will be updated weekly during peak printing periods and as necessary at other times. Section 4.4 - Federal Tax Forms on CD-ROM 4.4.1 Information About Federal Tax Forms CD-ROM March 20, 2000 The CD-ROM contains over 3,000 tax forms and publications for small businesses, return preparers, and others who frequently need current or prior year tax products. Most current tax forms on the CDROM may be filled in electronically, then printed out for submission and saved for recordkeeping. 800 2000–12 I.R.B. Other products on the CD-ROM include the Internal Revenue Bulletins, Tax Supplements, and Internet resources for the tax professional with links to the World Wide Web. All necessary software to view the files must be installed from the CD-ROM. Software for Adobe Acrobat Reader is included on the disk. The software will run under Windows 95/98/NT and MacIntosh System 7.5 and later. All products are presented in Adobe’s Portable Document Format (PDF). In addition, the TIPs are provided in the Standard Generalized Markup Language (SGML). 4.4.2 System Requirements and How to Order the Federal Tax Forms CD-ROM For system requirements, contact the National Technical Information Service (NTIS) help desk at 703487-4608. The cost of the CD if purchased via the Internet at http://www.irs.gov/cdorders from NTIS is $16 (plus a $5 handling fee). If purchased using the following methods the cost is $23 (plus a $5 handling fee). • by phone - 1-877-CDFORMS (1-877-233-6767) • by fax - (703) 605-6900 • by mail using the order form contained in IRS Publication 1045 (Tax Professionals Program) • by mail to: National Technical Information Service 5285 Port Royal Road Springfield, VA 22161 There is a $7 discount per CD for orders of 50 or more copies, making the price $16 per CD plus a $5 handling fee. Chapter 5 Requirements for Specific Tax Returns Section 5.1 - Tax Returns (Form 1040, 1040A, 1120, Etc.) 5.1.1 Acceptable Forms There are acceptable computer-generated versions of a tax return form (e.g., Form 1040, 1040A, 1120, etc., which requires a signature and that establishes tax liability) that are permitted under the following conditions: • These substitute returns must be printed on plain white paper. • Substitute returns and forms must conform to the physical layout of the corresponding IRS form although the typeface may differ. The text should match the text on the officially published form as closely as possible; condensed text and abbreviations will be considered on a case-by-case basis. Exception: All jurats (perjury statements) must be reproduced verbatim. No text can be added, deleted, or changed in meaning. It must be readily identifiable as a valid tax return. 5.1.2 ComputerGenerated Condensed Format Versions • Various computer-graphic print media such as laser printing, dot matrix addressable printing, etc., may be used to produce the substitute forms. • The substitute return must be the same exact number of pages, and contain the same line text as the official return. • All computer-generated tax returns MUST be submitted for approval prior to their original use. Should you receive an approval letter for a return and the following year’s return has no changes except the preprinted year, the latter return is not subject to approval. Exception: If the approval letter specifies a one-time exception for your return, the next year’s return must be approved. The accepted condensed print format version for individual returns is the 1040PC “answer sheet format” tax return. The approval process for Form 1040PC differs from that of traditional forms. See Chapter 7 for additional information. Continued on next page 2000–12 I.R.B. 801 March 20, 2000 5.1.3 Prohibited Forms The following are prohibited: • Tax returns (e.g., Forms 1040, etc.) computer-generated on lined or color-barred paper. • Tax returns that differ from the official IRS forms in a manner that makes them not standard or processable. 5.1.4 Changes Permitted to Forms 1040 and 1040A Certain changes (listed in Section 5.2 through 5.4) are permitted to the graphics of the form without prior approval, but these changes apply only to acceptable preprinted forms. Changes not requiring prior approval are good only for the annual filing period, which is the current Tax Year. Such changes are valid in subsequent years only if the official form does not change. 5.1.5 Other Changes Not Listed All changes not listed in Sections 5.2 through 5.4 require prior approval from the Service BEFORE the form may be filed. Section 5.2 - Changes Permitted to Graphics (Forms 1040A and 1040) 5.2.1 Adjustments You may make minor vertical and horizontal spacing adjustments to allow for computer or word-processing printing. This includes widening the amount columns or tax entry areas so long as the adjustments do not exceed other provisions stated in revenue procedures. No prior approval is needed for these changes. 5.2.2 Name and Address Area The horizontal rules and instructions within the name and address area may be removed and the entire area left blank; no line or instruction can remain in the area. However, the statement regarding use of the IRS label should be retained. The heavy ruled border (when present) that outlines the name, address area, and social security number must not be removed, relocated, expanded, or contracted. 5.2.3 Required Format When the name and address area is left blank, the following format must be used when printing the taxpayer’s name and address. Otherwise, unless the taxpayer’s preprinted label is affixed over the information entered in this area, the lines must be filled in as shown: • 1st name line (35 characters maximum) • 2nd name line (35 characters maximum) • In-care-of name line (35 characters maximum) • City, State (25 char. max.), one blank char., & ZIP (five char.) 5.2.4 Conventional Name and Address Data When there is no in-care-of name line, the name and address will consist of only three lines (single filer) or four lines (joint filer). Name and address (joint filer) with no in-care-of name line: JOHN Z. JONES MARY I. JONES 1234 ANYWHERE ST., APT 111 ANYTOWN, STATE 12321 5.2.5 Example of In-Care-Of Name Line Name and address (single filer) with in-care-of name line: 5.2.6 Social Security Number (SSN) and Employer Identification Number (EIN) Area The vertical lines separating the format arrangement of the SSN/EIN may be removed. When the vertical lines are removed, the SSN and EIN formats must be 000-00-0000 or 00-0000000, respectively 5.2.7 Cents Column • • JOHN Z. JONES C/O THOMAS A. JONES 4311 SOMEWHERE AVE. SAMETOWN, STATE 54345 • March 20, 2000 You may remove the vertical rule that separates the dollars from the cents. All entries in the amount column should have a decimal point following the whole dollar amounts whether or not the vertical line that separates the dollars from the cents is present. You may omit printing the cents, but all amounts entered on the form must follow a consistent format. You are strongly urged to round off the figures to whole dollar amounts, following the official return instructions. Continued on next page 802 2000–12 I.R.B. • • • 5.2.8 “Paid Preparer’s Use Only” Area Where several amounts are summed together, the total should be rounded off subsequent to the addition (i.e, individual amounts should not be rounded off for computation purposes). When printing money amounts, you must use one of the following ten- character formats: (a) 0,000,000. (b) 000,000.00 When there is no entry for a line, leave the line blank. On all forms, the paid preparer’s information area may not be rearranged or relocated. You may add three lines and remove the horizontal rules in the preparer’s address area. Section 5.3 - Changes Permitted to Form 1040A Graphics 5.3.1 General No prior approval is needed for the following changes (for use with computer-prepared forms only). 5.3.2 Line 4 of Form 1040A This line may be compressed horizontally (to allow for same line entry for the name of the qualifying child) by using the following caption: “Head of household; child’s name” (name field). 5.3.3 Other Lines Any line whose caption takes up two or more vertical lines may be compressed to one line by using contractions, etc., and by removing instructional references. 5.3.4 Page 2 of Form 1040A All lines must be present and numbered in the order shown on the official form. These lines may also be compressed. 5.3.5 Color Screening It is not necessary to duplicate the colorscreening used on the official form. A substitute Form 1040A may be printed in black and white only, with no color screening. 5.3.6 Other Changes Prohibited No other changes to the Form 1040A graphics are allowed without prior approval, except for the removal of instructions and references to instructions. Section 5.4 - Changes Permitted to Form 1040 Graphics 5.4.1 General No prior approval is needed for the following changes (for use with computer-prepared forms only). 5.4.2 Line 4 of Form 1040 This line may be compressed horizontally (to allow for a larger entry area for the name of the qualifying child) by using the following caption: “Head of household; child’s name” (name field). 5.4.3 Line 6c of Form 1040 The vertical lines separating columns (1) through (4) may be removed. The captions may be short ened to allow a one-line caption for each column. 5.4.4 Other Lines Any other line whose caption takes up two or more vertical lines may be compressed to one line by using contractions, etc., and by removing instructional references. 5.4.5 Line 21 Other Income The fill-in portion of this line may be expanded vertically to three lines. The amount entry box must remain a single entry. 5.4.6 Line 40 of Form 1040 - Tax You may change the line caption to read “Tax” and computer print the words “Total includes tax from” and either “Form(s) 8814”, or “Form 4972”. If both forms are used , print both form numbers. 5.4.7 Line 47 of Form 1040 You may change the caption to read: “Other credits from Form” and computer-print only the form(s) that apply. 5.4.8 Color Screening It is not necessary to duplicate the color screening used on the official form. A substitute Form 1040 may be printed in black and white only, with no color screening. 5.4.9 Other Changes Prohibited No other changes to the Form 1040 graphics are permitted without prior approval except for the removal of instructions and references to instructions. 2000–12 I.R.B. 803 March 20, 2000 Chapter 6 Format and Content of Substitute Returns Section 6.1 - Acceptable Formats for Computer-Generated Forms and Schedules 6.1.1 Exhibits and Use of Acceptable ComputerGenerated Formats Exhibits of acceptable computer-generated formats for the schedules usually attached to the Form 1040 are shown in the Exhibits section of this revenue procedure. • If your computer-generated forms appear exactly like the exhibits, no prior authorization is needed. • Those who want to computer-generate forms not shown here may do so, but they must design such forms themselves by following the manner and style of those in the Exhibits section of this revenue procedure, and by taking care to observe other requirements and conditions stated here. The Service encourages the submission of all proposed forms covered by this revenue procedure. 6.1.2 Instructions The format of each substitute schedule or form must follow the format of the official schedule or form as to item captions, line references, line numbers, sequence, form arrangement and format, etc. Basically, try to make the form look like the official one, with readability and consistency being primary factors. You may use periods and/or other similar special characters to separate the various parts and sections of the form. DO NOT use alpha or numeric characters for these purposes. With the exceptions described in paragraph 6.1.3, all line numbers and items must be printed even though an amount is not entered on the line. 6.1.3 Line Numbers When a line on an official form is designated by a number or a letter, that designation (reference code) must be used on a substitute form. The reference code must be printed to the left of the corresponding captioned line and also immediately preceding the data entry field even if there is no reference code immediately preceding the data entry field on the official form. If an entry field contains multiple lines but shows the line references only one time on the left and right side of the form, do not use more than the same number of line references on the substitute return. In addition, the reference code that is immediately before the data field must either be followed by a period or enclosed in parentheses. There also must be at least two blank spaces between the period or the right parenthesis and the first digit of the data field. (See example below.) 6.1.4 Decimal Points A decimal point (i.e., a period) should be used for each money amount regardless of whether the amount is reported in dollars and cents or in whole dollars, or whether or not the vertical line that separates the dollars from the cents is present. The decimal points must be vertically aligned when possible. Example: 5 STATE & LOCAL INC. TAXES................5 495.00 6 REAL ESTATE TAXES................6 7 PERSONAL PROPERTY TAXES................7 198.00 or 5 STATE & LOCAL INC. TAXES................(5) 495.00 6 REAL ESTATE TAXES................(6) 7 PERSONAL PROPERTY TAXES................(7) 198.00 6.1.5 Multiple Page Forms When submitting multiple page forms, send all pages of the form in the same package. If you are not producing certain pages, please note that in your cover letter. Section 6.2 - Additional Instructions for All Forms 6.2.1 Use of Your Own Internal Control Numbers and March 20, 2000 Internal control numbers and identifying symbols of the computer preparer may be shown on the sub stitute, if the use of such numbers or symbols is acceptable to the taxpayer and the taxpayer’s representative. If shown, such information must not be printed in the top 1/2” clear area of any form or Continued on next page 804 2000–12 I.R.B. Identifying Symbols schedule requiring a signature. With the exception of the actual tax return form (i.e., Forms 1040, 1120, 940, 941, 5500 Series, etc.), you may print in the left vertical and bottom left margins. The bottom left margin you may use extends 3 1/2 inches from the left edge of the form. 6.2.2 Descriptions for Captions, Lines, etc. Descriptions for captions, lines, etc., appearing on the substitute forms may be limited to one print line by using abbreviations and contractions, and by omitting articles, prepositions, etc. However, sufficient key words must be retained to permit ready identification of the caption, line, or item. 6.2.3 Derivation of Final Totals Explanatory detail and/or intermediate calculations for derivation of final line totals may be included on the substitute. We prefer that such calculations be submitted in the form of a supporting statement. If intermediate calculations are included on the substitute, the line on which they appear may not be numbered or lettered. Intermediate calculations may not be printed in the right column. This column is reserved for official numbered and lettered lines that correspond to the ones on the official form. If a supporting statement is submitted, intermediate calculations or subtotals may be formatted at the preparer’s option. 6.2.4 Instructional Text Prescribed for the Official Form Text prescribed for the official form, which is solely instructional in nature, e.g., “Attach this schedule to Form 1040,” “See instructions,” etc., may be omitted from the substitute form. 6.2.5 Mixing of Forms on the Same Page Prohibited Information for more than one schedule or form may not be shown on the same printout page. Both sides of the paper may be printed for multiple page official forms; but it is unacceptable to intermix single page schedules of forms, except for Schedules A and B (Form 1040), which are printed back to back by the Service. Schedule E can be printed on both sides of the paper, because the official form is multiple page, with page 2 continued on the back. However, do not print Schedule E on the front page and Schedule SE on the back, or Schedule A on the front and Form 8615 on the back, etc. Both pages of a substitute form must match the official form version it represents, except that the back page may be blank if the Service form only contains the instructions thereon. 6.2.6 Identifying Computer-Prepared Substitutes Identify all computer-prepared substitutes clearly; print the form designation 1/2” from the top margin and 1 1/2” from the left margin; print the title centered on the first line of print; and print the taxable year and, where applicable, the sequence number on the same line _ to 1” from right margin. Include the taxpayer’s name and SSN on all forms and attachments. Also, print the OMB number as reflected on the official form. 6.2.7 Negative Amounts Negative (or loss) monetary amount entries should be enclosed in brackets, or signed minus, to assist in the accurate computation and input of form data. On many official forms the Service preprints brackets in selected negative data fields, and these designations should be retained or inserted on affected substitute forms. Chapter 7 OCR Forms Section 7.1 - Special Form 1040EZ Optical Character Recognition/Image Character Recognition (OCR/ICR) Requirements 7.1.1 Form 1040EZ Designed in OCR/ICR Format The Form 1040EZ is designed in OCR/ICR format. The IRS has the capability to machine read this form by optical character recognition/image character recognition (OCR/ICR) equipment. Form 1040EZ data may also be filed electronically or on a 1040PC format return. An acceptable substitute OCR/ICR Form 1040EZ must generally be an exact replica of the official OCR/ICR reproduction proof with respect to layout, content, and required OCR/ICR characteristics. 2000–12 I.R.B. 805 March 20, 2000 7.1.2 Paper Requirements for OCR/ICR Form 1040EZ 7.1.3 Specific Ink Requirements The special paper requirements which must be met for the development of a substitute (privately print ed) OCR/ICR Form 1040EZ include the following: Property Requirements Color and quality of paper Paper must be white, OCR/ICR grade bond, with no fluorescent additives or water marks, and with zero rag content. Reflectivity of paper Must be 80% or greater. Opacity The paper opacity ratio must be 80% or more. Paper Weight Specified paper weight is 20 lb. OCR/ICR bond (.0035”). Dirt Must not exceed 10 parts per million. Finish (smoothness) Must be between 90 and 160 units (Sheffield). Porosity Paper should have a Gurley reading between 15 and 95. Gloss Paper with shiny or lustrous appearance (glossy) should be avoided. Size Form trim size must be 8” x 11”. The specific ink requirements which must be met for this form include the following: Property March 20, 2000 Requirements Print Color The face of the form prints in black and green, the back prints in black only (70 % screen). Ink Green ink used must be highly reflective OCR/ICR type, such as Flint J-27975, or an exact match. Black ink used must be nonreflective. Face Registration Black to green must be .02” (plus or minus) both horizontally and vertically. Face Screen Forms contain a green-screened background equal to a 15% tone of 110-line screen. Follow registration marks on repro-proof for screen positioning. Handprinted boxes are included on Page 1 of the reproduction proof and should be printed as a 50% value of the recommended OCR/ICR green ink. Inks used for handprinted boxes must reflect at least 90% of the background on which it is printed as measured in the visible range. Face Margins Approximately 2/6” head from top trimmed edge to screen (1/2” to black image). 1/6” outside from trimmed edges to screen. Back Margins 1/2” head, 5/16” foot, and 5/16” sides. Back Screen Back copy should be screened for 70% tone value. 806 2000–12 I.R.B. 7.1.4 Typography Type must be substantially identical in both size and shape with corresponding type on the official form reproduction proof. 7.1.5 Proper Alignment and Position of Handprinted Characters To assure proper alignment and position of handprinted characters representing return lines 1 through 10 tax data, they must be handprinted (entered) into the preprinted amount field boxes on the form. A #2 lead wooden pencil, or blue, and/or black ink pen (ball point, fountain, or felt-tipped) is recommended as the writing tool that will consistently provide the required stroke width and print contrast on entered characters. 7.1.6 Reading of Handprinted Character Techniques Reading of handprinted characters requires adherence to the following techniques: • Enter numeric amount digits carefully and clearly. Fill at least 2/3 of the individual character box height, keeping the character within the box with no overlapping or touching characters. Specific required constraints are shown below. • When entering “fours”, keep the top open. • When entering “ones”, do not use serifs. • When entering “twos”, do not add extra loops. • All character lines must be connected with no gaps. 7.1.7 Note: All the general and detailed provisions of this revenue procedure apply (in addition to this specific OCR/ICR Section) to the development of substitute OCR/ICR Forms 1040EZ. Section 7.2 - Computer-Generated Alternative Returns, 1040PC Format Return 7.2.1 Introduction The Internal Revenue Service offers an electronic approach for filing individual income tax returns. The 1040PC Format Return is an alternative to th e conventional preprinted tax return. The 1040PC is an answer shee [Text truncated at 120,000 characters. The full text is on the page linked above.] --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/agency%3Airs%3A62640b1e26259fe3. Public record. Not legal advice.