Bulletin No. 2021–26

HIGHLIGHTS

OF THIS ISSUE





Bulletin No. 2021–26

June 28, 2021

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.

ADMINISTRATIVE

EMPLOYEE PLANS

Rev. Proc. 2021-27, page 1252.

Notice 2021-37, page 1227.

This procedure provides specifications for the private printing of red-ink substitutes for the 2021 revisions of certain

information returns. This procedure will be reproduced as

the next revision of Publication 1179. Revenue Procedure

2020-35 is superseded.

ADMINISTRATIVE; INCOME TAX

T.D. 9950, page 1221.

These final regulations amend regulations under sections

165 and 7508A, interpreting new section 7508A(d) relating

to mandatory postponements of time to perform time-sensitive tax acts by reason of a federally declared disaster, and

clarifying the definition of federally declared disaster under

section 165(i)(5). The final regulations clarify that the phrase

“in the same manner as a period specified under [section

7508A(a)]” in section 7508A(d)(1) means that the time-sensitive acts postponed for the mandatory 60-day period are

those determined by the Secretary under section 7508A(a).

The final regulations further provide that the mandatory 60day period will only apply if the Secretary bases her discretionary determination on a disaster declaration that specifies

an incident date. The final regulations also clarify that the

mandatory 60-day period cannot exceed the one-year limitation provided under section 7508A(a). Finally, the final regulations clarify that a federally declared disaster includes an

event declared either a major disaster under section 401 of

the Stafford Act or an emergency under section 501 of the

Stafford Act.

Finding Lists begin on page ii.

This notice sets forth updates on the corporate bond monthly yield curve, the corresponding spot segment rates for

June 2021 used under § 417(e)(3)(D), the 24-month average

segment rates applicable for June 2021, and the 30-year

Treasury rates, as reflected by the application of § 430(h)

(2)(C)(iv).

EMPLOYMENT TAX

Rev. Proc. 2021-22, page 1231.

General Rules and Specifications for Substitute Form 941,

Schedule B (Form 941), Schedule D (Form 941), Schedule R

(Form 941), and Form 8974. This procedure provides general rules and specifications from the IRS for paper and computer-generated substitutes for Form 941; Schedule B (Form

941); Schedule D (Form 941); Schedule R (Form 941); and

Form 8974. This procedure supersedes Revenue Procedure

2020-31, 2020-27 I.R.B. 12.

INCOME TAX

Notice 2021-36, page 1227.

This Notice announces that the Treasury Department and the

IRS intend to amend the regulations under sections 59A and

6038A to defer the applicability date of certain provisions of

the regulations relating to the reporting of qualified derivative

payments until taxable years beginning on or after January

1, 2023.

The IRS Mission

Provide America’s taxpayers top-quality service by helping

them understand and meet their tax responsibilities and enforce the 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.

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 procedures 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 Other Related Items, 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 last Bulletin for each month includes a cumulative index

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monthly indexes are cumulated on a semiannual basis, and are

published in the last Bulletin of each semiannual period.

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.

June 28, 2021 

Bulletin No. 2021–26

Part I

26 CFR 301.7508A-1: Postponement of certain

tax-related deadlines by reasons of a federally

declared disaster or terroristic or military action;

26 CFR 1.165-1: Losses

FOR FURTHER INFORMATION

CONTACT: Andrew C. Keaton at (202)

317-5404 (not a toll-free number).

T.D. 9950

SUPPLEMENTARY INFORMATION:

DEPARTMENT OF THE

TREASURY

Internal Revenue Service

26 CFR Parts 1 and 301

Mandatory 60-Day

Postponement of Certain

Tax-Related Deadlines

by Reason of a Federally

Declared Disaster

AGENCY: Internal Revenue Service

(IRS), Treasury.

ACTION: Final regulations.

SUMMARY: This document contains final

regulations relating to the new mandatory

60-day postponement of certain time-sensitive tax-related deadlines by reason of a

federally declared disaster. This document

also contains final regulations clarifying

the definition of “federally declared disaster.” These final regulations affect individuals who reside in or were killed or injured

in a disaster area, businesses that have a

principal place of business in a disaster

area, relief workers who provide assistance

in a disaster area, or any taxpayer whose

tax records necessary to meet a tax deadline are located in a disaster area.

DATES: Effective Date: These regulations are effective on June 11, 2021.

Applicability Date: The date of applicability for the amendment to the Procedure and Administration Regulations under section 7508A is December 21, 2019,

as explained below in SUPPLEMENTARY INFORMATION.

The date of applicability for the amendment to the Income Tax Regulations under section 165 of the Code to clarify the

definition of the term “federally declared

disaster” is June 11, 2021.

Bulletin No. 2021–26

Background

Section 205 of the Taxpayer Certainty

and Disaster Tax Relief Act of 2019, enacted as Division Q of the Further Consolidated Appropriations Act, 2020, Public Law 116-94, 133 Stat. 2534, 3226,

amended section 7508A of the Code, relating to the discretionary authority of the

Secretary of the Treasury or her delegate

(Secretary) to postpone certain time-sensitive tax deadlines by reason of a federally declared disaster, by adding section

7508A(d). This provision provides qualified taxpayers a mandatory 60-day period that is to be disregarded “in the same

manner as a period specified under [section 7508A(a)].”

On January 13, 2021, the IRS published in the Federal Register a notice of

proposed rulemaking (REG-115057-20,

86 FR 2607) to interpret and implement

sections 165(i)(5) and 7508A(d). Five responsive written comments were received.

No commenter requested a public hearing,

so none was held.

As described more fully in the preamble to the proposed regulations, section

7508A(d) is ambiguous in at least two important respects – the time-sensitive acts to

be postponed (beyond the pension-related

actions described in section 7508A(d)(4))

are not specified and it is unclear how the

mandatory 60-day postponement period is

to be calculated when the disaster declaration specified in section 7508A(d) does

not contain an incident date. The legislative history is also insufficient to explain

these areas of ambiguity.

These final regulations amend the Procedure and Administration Regulations

(26 CFR part 301) under section 7508A

and the Income Tax Regulations (26 CFR

part 1) under section 165 to clarify the

definition of the term “federally declared

disaster.” As described further below, the

Department of the Treasury (Treasury

Department) and the IRS have modified

proposed §301.7508A-1(g)(4)(iii), Exam-

1221

ple (3), in these final regulations to better

illustrate the calculation of the mandatory

60-day postponement period and to correct typographical errors. No other changes have been adopted.

Comments on the Proposed

Regulations

Section 1.165-11(b)(1)

The proposed regulations provided that

a federally declared disaster includes both

a major disaster and an emergency declared under sections 401 or 501, respectively, of the Robert T. Stafford Disaster

Relief and Emergency Assistance Act

(Stafford Act), Public Law 100-707,102

Stat. 4689 (1988).

One commenter said it approved of

the proposed regulations including emergency declarations in the definition of a

federally declared disaster under section

165(i)(5)(A). However, another commenter was critical of this portion of the proposed regulations and recommended that

it be stricken. This second commenter said

emergency declarations are governed by a

different set of rules than major disaster

declarations, pointing out that emergency

declarations (i) do not need to be preceded

by a governor’s request for Stafford Act

relief (but may instead be declared sua

sponte by the President), (ii) may only result (if not followed up by a major disaster

declaration) in Federal assistance to local

governmental entities (as opposed to assistance to individuals), and (iii) may be

issued before a disaster. This commenter

further opined that President Trump’s letter of March 13, 2020, declaring an emergency under the Stafford Act with respect

to the COVID-19 pandemic, was not authorized by Congress to serve as a disaster

declaration under sections 165(i)(5)(A)

and 7508A of the Code.

The comment from the second commenter is not adopted in the final regulations. In the Explanation of Provisions

section of the preamble to the proposed

regulations, Part III. Federally Declared

Disasters, this issue is already addressed

in detail. There is no provision in the

Stafford Act to declare a “disaster.”

The legislative history of the Stafford

June 28, 2021

Act indicates that the term “disaster”

is an umbrella term that includes both

an emergency and a major disaster. The

Conference Report to the Disaster Relief and Emergency Assistance Act of

1974, Public Law 93-288, 88 Stat. 143

(1974), clarified the definitional section

of the Stafford Act, stating: “It was the

intention of the conferees not to define

the term ‘disaster’ specifically; whenever

used in this legislation such term includes

an emergency or a major disaster.” H.R.

Rep. 93-1037, p. 26 (May 13, 1974).

The opening section of the Stafford

Act, titled “Congressional findings and

declarations,” uses the generic term “disaster” in laying out the key congressional

findings and declarations that underlie the

rest of the chapter’s provisions. Stafford

Act section 101(a), 42 U.S.C. section

5121(a). In multiple revenue rulings, the

IRS has provided that, for the purposes

of section 165(i), a federally declared disaster includes an emergency or a major

disaster declared under the Stafford Act.

Several of these revenue rulings are cited

in the preamble to the proposed regulations.

The differences noted by the commenter between emergencies and major

disasters under the Stafford Act are not

material to their treatment under sections

165(i)(5)(A) and 7508A of the Code. Most

disaster declarations announced by the

Federal Emergency Management Agency

(FEMA) for particular states also provide

only public assistance, and no individual

assistance, to particular counties in the

state under the Stafford Act. In addition,

most emergency declarations announced

by FEMA are under section 501(a) of the

Stafford Act, and begin with a request

from a governor or other chief executive

of a state, territory, or tribal government.

As noted in the preamble to the proposed

regulations, it is rare for an emergency declaration to be made without such

a request. The President is authorized to

make an emergency declaration under

section 501(b) of the Stafford Act when

the United States will have the primary responsibility for response to the emergency. There is no difference in the need for

affected persons in a state threatened with

a disaster to receive relief from time-sensitive deadlines to perform specified acts

under the Code when the request for such

June 28, 2021

relief originates with the state’s governor

or is independently raised by the President. Consequently, the final regulations

make no changes to this portion of the

proposed regulations.

Section 301.7508A-1(g)(1)-(2)

The proposed regulations provided

that (excluding the pension-related acts

described in section 7508A(d)(4)) the

time-sensitive tax acts that are postponed

for the mandatory 60-day postponement

period are the acts, if any, that the Secretary determines to be postponed under

section 7508A(a) or (b).

One commenter expressed a general

concern that this provision had the potential to reduce section 7508A(d) to a

nullity. A second commenter expressed

its concerns specifically in terms of what

it contended was a clear reading of the

statute and its legislative history. This

commenter said it was clear that Congress intended to postpone the timely performance of all of the time-sensitive tax

acts, both taxpayer and government acts,

listed in section 7508(a)(1) of the Code.

However, this second commenter recommended that the final regulations provide

that the government may take advantage

of the postponement periods for government-initiated actions only if a taxpayer

first acts in reliance on the “automatic”

postponement periods for the taxpayer’s

time-sensitive tax acts.

A third commenter agreed with the

Secretary’s characterizations of the statute and legislative history as ambiguous

on the issues of which time-sensitive tax

acts (other than the pension-related tax

acts described in section 7508A(d)(4)) are

postponed under section 7508A(d) and of

which declared disasters are subject to the

mandatory 60-day postponement period

under section 7508A(d). This commenter

approved of the solution to these ambiguities that was reflected in the proposed

regulations, in terms of which time-sensitive tax acts would be postponed. This

commenter said section 7508A(d) was a

poorly-worded statute, that the legislative history of the provisions contained

contradictions, and the result was that

section 7508A(d)(1) leaves no (non-pension) time-sensitive tax acts for section

7508A(d) to operate upon, unless or until

1222

the Secretary exercises her powers under

section 7508A(a).

The third commenter noted also that

for the year 2017, the IRS provided relief

under section 7508A(a) in response to

only 14 of the 59 major disaster declarations announced by FEMA that year. If all

major disaster declarations automatically

entitled all taxpayers in disaster areas to

timing relief under section 7508A(d), the

commenter noted that there would be a

dramatic increase in the number of disasters leading to postponements of time-sensitive tax acts. On these issues, the third

commenter concluded that the proposed

regulations properly preserved the discretion of the IRS to determine which declared disasters should result in any type

of disaster relief and of which time-sensitive tax acts should be postponed under

section 7508A.

The comments from the first two commenters on this issue are not adopted in

the final regulations, while the approving

comments of the third commenter were

already reflected in the proposed regulations. As explained more fully in the

Explanation of Provisions section of the

preamble to the proposed regulations, Part

I. Time-Sensitive Tax Acts, and as noted

by the third commenter described above,

except for the rules regarding pensions

described in section 7508A(d)(4), section

7508A(d), by its terms, does not specify

the time-sensitive tax acts to be postponed

during the mandatory 60-day postponement period. Instead, section 7508A(d)

(1) provides that the mandatory 60-day

postponement period “shall be disregarded in the same manner as a period specified under [section 7508A(a)].” Section

7508A(a) is not self-executing, but rather,

requires a determination by the Secretary to specify the acts to be postponed.

As a result, the cross-reference to section

7508A(a) in section 7508A(d)(1) operates

to require the same determination by the

Secretary as a prerequisite to determining

the acts to which the mandatory 60-day

postponement period applies. This interpretation gives full effect to the statutory language and does not reduce section

7508A(d) to a nullity, because that section still imposes a mandatory period for

postponement and establishes a new category of persons eligible for relief – the

“qualified taxpayers” defined in section

Bulletin No. 2021–26

7508A(d)(2). The final regulations make

no changes to §301.7508A-1(g)(1) and (2)

of the proposed regulations.

Section 301.7508A-1(g)(3)(i)

Section 301.7508A-1(g)(3)(i) of the

proposed regulations tracked section

7508A(d)(1) and (d)(5) in describing how

the mandatory 60-day postponement period for federally declared disasters will

be calculated and how the calculation of

that mandatory postponement period will

interact with the Secretary’s discretionary

postponement period (if any) under section 7508A(a) and (b). The Explanation of

Provisions section of the preamble to the

proposed regulations, Part II. Calculation

of the Mandatory 60-Day Postponement

Period, identified a 120-day postponement period from the beginning incident

date of a disaster announced by FEMA as

the usual postponement period provided

by the IRS for those disasters where the

IRS exercises its discretion under section

7508A(a) or (b) to postpone any time-sensitive tax acts.

Consequently, most mandatory 60day postponement periods under section

7508A(d) will be calculated to run concurrently with the 120-day postponement period the IRS generally provides

under section 7508A(a) or (b). Two

commenters noted that section 7508A(d)

(1) and the proposed regulations did not

provide a clear rule for calculating the

mandatory 60-day postponement period

when there was more than one disaster

declaration issued for the same disaster

in a particular state or when any disaster

declaration was amended to provide any

new or modified incident dates (earliest

or latest) that were missing or different

from when the first disaster declaration

for a disaster in a state was announced

by FEMA. Two commenters suggested

potential alternative methods of making

calculations of the mandatory 60-day

postponement period more certain when

there are multiple disaster declarations

or disaster declarations that are amended

by FEMA for the earliest or latest incident dates described in section 7508A(d)

(1)(A) and (B).

One commenter claimed that a literal

reading of section 7508A(d)(1) creates

challenges for indefinite disasters, such

Bulletin No. 2021–26

as the COVID-19 pandemic, because the

statute could be interpreted to postpone

a taxpayer’s deadlines “indefinitely until

some unknown point in time that is long

after the disaster began.” To avoid this

“unworkable application” of the statute,

this commenter recommended that if the

initial disaster declaration does not expressly identify the latest incident date for

a disaster, then section 7508A(d) should

be interpreted as automatically providing

a postponement period until the date that

is 60 days after the earliest incident date

specified in a disaster declaration. However, the statute mitigates the commenter’s concern by directing that the postponement period under section 7508A(d)

“shall be disregarded in the same manner

as a period specified under subsection

(a).” That provision ensures that the Secretary retains the same discretion as she

has under section 7508A(a) to determine

what time-sensitive tax acts, if any, will be

postponed.

A second commenter noted what it

characterized as a pick-and-choose problem and an amendment problem with the

method of calculating the mandatory 60day postponement period provided for in

the proposed regulations and recommended the Secretary adopt one of several alternative bright-line rules it suggested for

making the calculation period more predictable.

This second commenter noted there

was a potential pick-and-choose problem among multiple potential FEMA-announced disaster declarations, because the

Treasury Department and the IRS propose

to treat FEMA-announced emergency

declarations (as well as major disaster

declarations) under the Stafford Act as

federally declared disasters under sections

165 and 7508A of the Code. This commenter’s recommendation to strike proposed amended regulation § 1.165-11(b)

(1) is discussed and rejected in the preamble discussion of this issue above.

Alternatively, the second commenter

recommended that the final regulations reflect a bright-line rule to address potential

multiple declarations, such as a first-out

rule (the first issued declaration controls),

a rule that a later major disaster declaration controls over an earlier emergency

declaration, or a rule that the issue date

of an emergency declaration is the earli-

1223

est incident date for section 7508A(d)(1)’s

mandatory 60-day postponement period.

The second commenter further recommended in this section of the final regulations that the Treasury Department and the

IRS provide a bright-line rule concerning

the effect of potential amendments to an

initial FEMA announced disaster declaration on how the mandatory 60-day postponement period is calculated. The additional potential bright-line alternatives

suggested by the second commenter were

that (i) future amendments will not affect

how the mandatory period is calculated,

or (ii) only amendments made within a

certain amount of time (say one year) will

affect the computation of the mandatory

period.

The Treasury Department and the IRS

appreciate the predictability offered by the

bright-line rules suggested by the second

commenter. Nevertheless, the statutory

language providing for a mandatory period beginning on the earliest incident date

specified in the disaster declaration and

ending on the date which is 60 days after

the latest incident date so specified is capable of being applied as written. While

amendments to disaster declarations and

shifting “latest” incident dates can cause

confusion, the intent of the statute is to

ensure that relief is provided throughout

the disaster period, assuming such a period is identified in the disaster declaration and the Secretary has determined that

postponement of time-sensitive tax acts

is warranted. As a result, the comment on

this issue is not adopted in the final regulations.

Section 301.7508A-1(g)(3)(ii)(A)

The proposed regulations provided that

in no event will the mandatory 60-day

postponement period be calculated to exceed one year. One commenter stated that

this portion of the proposed regulations

should be removed because it lacks any

basis in the text or legislative history of

section 7508A(d)(1) or (d)(4).

The comment on this issue is not adopted in the final regulations. As stated

in the Explanation of Provisions section

of the preamble to the proposed regulations, Part II. Calculation of the Mandatory 60-Day Postponement Period, it

defies logic for the Secretary’s discre-

June 28, 2021

tionary postponement period under section 7508A(a) to be limited to “a period

of up to 1 year,” and there be no limit

on the mandatory 60-day postponement

period under section 7508A(d). Interpreting section 7508A(d) to allow postponement periods for more than 1 year

would be contrary to the directive of

section 7508A(d)(1) that the mandatory

60-day postponement period must “be

disregarded in the same manner as a period specified under [section 7508A(a)].”

The final regulations make no change to

§301.7508A-1(g)(3)(ii)(A) of the proposed regulations.

Section 301.7508A-1(g)(4)(iii)

Example (3)

The proposed regulations provided an

Example (3) concerning a continuing disaster declaration involving wildfires that

was later amended by a subsequent FEMA

announcement of a latest incident date for

the disaster. This example contained typographical errors, including a misnumbering – “(5)” instead of “(4)” – of the

subparagraph for the four examples and

referring to the taxpayer in the example

variously as “Individual C” and “Individual D.”

One commenter further noted that the

intended rules, if any, which Example (3)

was meant to illustrate were not described

in the portions of the proposed regulations

which precede the Examples section.

Example (3) is intended to illustrate the

calculation of the mandatory 60-day postponement period in the event of an ongoing disaster with multiple declarations and

shifting “latest” incident dates described

in §301.7508A-1(g)(3) of these final regulations. The Treasury Department and the

IRS have modified Example (3) in these

final regulations, in consideration of the

comment above as well as the comments

received on §301.7508A-1(g)(3)(i), to

better illustrate the calculation of the mandatory 60-day postponement period and to

correct typographical errors.

Section 301.7508A-1(h)(2)

The proposed regulations provided that

the final regulations shall apply to all disasters declared on or after December 21,

2019.

June 28, 2021

One commenter requested not only that

the final regulations not be retroactive to

the effective date of section 7508A(d), but

that the final regulations provide relief to

any individuals or employee benefit plans

that took actions (or failed to take actions)

based on a good faith and reasonable interpretation of the postponement relief

provided in section 7508A. The commenter further requested that such good faith

relief be available for at least 60 days after

the final regulations are published in the

Federal Register.

The Applicability Date discussion

in the preamble to the proposed regulations clearly indicated the intention of the

Treasury Department and the IRS to rely

on the provisions of section 7805(b)(2)

of the Code for the applicability date of

these final regulations. Section 7805(b)

(2) provides that regulations filed or issued within 18 months of the date of

enactment of the statutory provision to

which the regulations relate are not prohibited from applying retroactively to

the date of enactment. Section 7508A(d)

was enacted on December 20, 2019, and

these final regulations have been filed

or issued within 18 months of that date

of enactment. The proposed regulations

were clear in stating that the Treasury

Department and the IRS intended for the

final regulations to apply to any disasters

that were declared on or after December

21, 2019. These final regulations do not

adopt the commenter’s request to modify §301.7508A-1(h)(2) of the proposed

regulations.

New Rule Proposal

One commenter requested that the final regulations “confirm” that all forms

of deadline relief requested under section

7508A are optional for affected taxpayers.

In particular, the commenter focused on

deadlines arising under employee benefit

plans. In some cases, the application of

these deadlines may affect both the plan

and the participants. After consideration,

the Treasury Department and the IRS

have concluded that the suggestions made

in this comment are beyond the intended

scope of the proposed regulations. Consequently, the suggestions are not adopted in

these final regulations.

1224

Modifications of Proposed Regulations

Section 301.7508A-1(g)(4)(iii) Example

(3)

Example (3) is modified to better illustrate the calculation of the mandatory 60day postponement period in the event of

multiple declarations and shifting “latest”

incident dates, and to correct typographical errors.

Applicability Dates

For date of applicability for the amendment to the Procedure and Administration

Regulations under section 7508A, see

§301.7508A-1(h), which provides that

the regulations promulgated by this Treasury decision are applicable for federally

declared disasters that are declared on or

after December 21, 2019, as explained in

the preamble to the proposed regulations

(REG-115057-20) published in the Federal Register (86 FR 2607), because section

7805(b)(2) of the Internal Revenue Code

(Code) provides that regulations filed or

issued within 18 months of the date of

the enactment of the statutory provision

to which they relate may apply to taxable

periods prior to those described in section

7805(b)(1) and these final regulations are

being published within 18 months of the

enactment of section 7508A(d) on December 20, 2019.

The date of applicability for the amendment to the Income Tax Regulations under section 165 of the Code to clarify the

definition of the term “federally declared

disaster” is June 11, 2021.

Special Analyses

Certain IRS regulations, including

these, are exempt from the requirements

of Executive Order 12866, as supplemented and affirmed by Executive Order

13563. Therefore, a regulatory assessment

is not required.

Pursuant to the Regulatory Flexibility Act (5 U.S.C. chapter 6), it is hereby

certified that these regulations will not

have a significant economic impact on a

substantial number of small entities. The

regulations clarify how the Secretary may

postpone certain time-sensitive tax deadlines by reason of a federally declared di-

Bulletin No. 2021–26

saster. Such postponements provide more

time for affected taxpayers to complete

time-sensitive acts than they otherwise

would have under the internal revenue

laws. In addition, the regulations do not

impose a collection of information burden

on any person, including small entities,

for purposes of the Regulatory Flexibility

Act (5 U.S.C. chapter 6). Accordingly, the

Secretary certifies that the regulations will

not have a significant economic impact

on a substantial number of small entities.

Pursuant to section 7805(f) of the Internal Revenue Code, the notice of proposed

rulemaking preceding these final regulations was submitted to the Chief Counsel

for Advocacy of the Small Business Administration for comments on its impact

on small business, and no comments were

received.

Drafting Information

The principal authors of these final regulations are Andrew C. Keaton and William V. Spatz of the Office of Associate

Chief Counsel (Procedure and Administration). However, other personnel from

the Treasury Department and the IRS participated in their development.

List of Subjects

26 CFR Part 1

Income taxes, Reporting and recordkeeping requirements.

26 CFR Part 301

Employment taxes, Estate taxes, Excise taxes, Gift taxes, Income taxes, Penalties, Reporting and recordkeeping requirements.

Adoption of Amendments to the

Regulations

Accordingly, 26 CFR parts 1 and 301

are amended as follows:

PART 1—INCOME TAXES

Paragraph 1. The authority citation

for part 1 continues to read in part as follows:

Authority: 26 U.S.C. 7805 * * *

Bulletin No. 2021–26

Par. 2. Section 1.165-11 is amended by

revising paragraphs (b)(1) and (h) to read

as follows:

§1.165-11 Election to take disaster loss

deduction for preceding year.

*****

(b) * * *

(1) A federally declared disaster means

any disaster subsequently determined by

the President of the United States to warrant assistance by the Federal Government

under the Robert T. Stafford Disaster Relief and Emergency Assistance Act (Stafford Act). A federally declared disaster

includes both a major disaster declared

under section 401 of the Stafford Act and

an emergency declared under section 501

of the Stafford Act.

*****

(h) Applicability dates—(1) In general.

Except as provided in paragraph (h)(2) of

this section, this section applies to elections and revocations that are made on or

after October 16, 2019.

(2) Paragraph (b)(1) of this section.

The second sentence of paragraph (b)(1)

of this section applies to elections and revocations that are made on or after June

11, 2021.

PART 301—PROCEDURE AND

ADMINISTRATION

Par. 3. The authority citation for part

301 continues to read in part as follows:

Authority: 26 U.S.C. 7805 * * *

Par. 4. Section 301.7508A-1 is amended by revising paragraph (g) and adding

paragraph (h) to read as follows:

§301.7508A-1 Postponement of certain

tax-related deadlines by reasons of a

federally declared disaster or terroristic

or military action.

*****

(g) Mandatory 60-day postponement—

(1) In general. In addition to (or concurrent with) the postponement period specified by the Secretary in an exercise of

the authority under section 7508A(a) to

postpone time-sensitive acts by reason of

a federally declared disaster, qualified taxpayers (as defined in section 7508A(d)(2))

are entitled to a mandatory 60-day post-

1225

ponement period during which the time to

perform those time-sensitive acts is disregarded in the same manner as under section 7508A(a). The rules of this paragraph

(g)(1) apply with respect to a postponement period specified by the Secretary under section 7508A(b), to postpone acts as

provided in section 7508A(d)(4). Except

for the acts set forth in paragraph (g)(2)

of this section, section 7508A(d) does not

apply to postpone any acts.

(2) Acts postponed. The time-sensitive

acts that are postponed for the mandatory

60-day postponement period are the acts

determined to be postponed by the Secretary’s exercise of authority under section

7508A(a) or (b). In addition, in the case of

any person described in section 7508A(b),

the time-sensitive acts postponed for the

mandatory 60-day postponement period include those described in section

7508A(d)(4):

(i) Making contributions to a qualified

retirement plan (within the meaning of

section 4974(c)) under section 219(f)(3),

404(a)(6), 404(h)(1)(B), or 404(m)(2);

(ii) Making distributions under section

408(d)(4);

(iii) Recharacterizing contributions under section 408A(d)(6); and

(iv) Making a rollover under section

402(c), 403(a)(4), 403(b)(8), or 408(d)(3).

(3) Calculation of mandatory 60-day

postponement period—(i) In general. The

mandatory 60-day postponement period

begins on the earliest incident date specified in a disaster declaration for a federally declared disaster and ends on the date

that is 60 days after the latest incident date

specified in the disaster declaration. In

accordance with section 7508A(d)(5), the

mandatory 60-day postponement period

under section 7508A(d) runs concurrently

with the postponement period determined

by the Secretary in exercising discretion

under section 7508A(a) or (b) if the period determined by the Secretary is equal

to or longer than 60 days after the latest

incident date. If the period determined

by the Secretary in exercising discretion

under section 7508A(a) or (b) ends prior

to 60 days after the latest incident date,

in accordance with section 7508A(d)(5),

the mandatory 60-day postponement period will run concurrently for the length

of the period determined by the Secretary

under section 7508A(a) or (b) and then

June 28, 2021

continue running in addition to the period

determined by the Secretary under section

7508A(a) or (b).

(ii) Limitations on the mandatory 60day postponement period. (A) In no event

will the mandatory 60-day postponement

period be calculated to exceed one year.

(B) In the event the Secretary determines to postpone time-sensitive acts

pursuant to a declaration establishing a

federally declared disaster for purposes

of section 7508A that does not specify an

incident date, there is no mandatory postponement period under section 7508A(d).

In such cases, the only postponement period will be the period determined by the

Secretary under section 7508A(a) or (b).

(4) Examples. The rules of this paragraph (g) are illustrated by the following

examples:

(i) Example (1). Individual A lives in a state that

experienced severe but isolated tornado damage on

March 15. On March 20, FEMA issued a Federal

Register Notice announcing a major disaster declaration approved by the President for the state where

Individual A lives, describing the incident date for

the tornado as March 15. Based upon that major disaster declaration, the IRS published a news release

identifying the taxpayers (by county) affected by the

disaster for purposes of section 7508A and specifying the time-sensitive acts that are postponed and

a period of postponement from March 15 through

July 31, pursuant to section 7508A(a). The county

where Individual A lives was included in the news

release. Under section 7508A(d), the mandatory 60day postponement period that Individual A is entitled

to begins on March 15 and ends 60 days after March

15, on May 14. The mandatory postponement period

applies to the same time-sensitive acts and runs concurrently with the relief the IRS provided to Individual A under section 7508A(a).

(ii) Example (2). Individual B lives in a coastal

state which experienced harmful effects from a hurricane that began to affect the weather in his state on

August 15 and ceased to be a weather factor in his

state on August 19. On August 22, FEMA issued a

Federal Register Notice announcing a major disaster

declaration approved by the President, determining

that the coastline counties in the state, including the

county where Individual B lives, were severely affected and that these counties were entitled to both

June 28, 2021

individual assistance and public assistance. The major disaster declaration specified the earliest incident

date for the hurricane in the state where Individual

B lives as August 15 and the latest incident date as

August 19. Based upon that major disaster declaration, the IRS published a news release identifying

the taxpayers affected by the disaster for purposes

of section 7508A and specifying the time-sensitive

acts that are postponed and a period of postponement

from August 15 through December 31, pursuant to

section 7508A(a). Under section 7508A(d), the mandatory 60-day postponement period that Individual B

is entitled to begins on August 15 and ends 60 days

after August 19, on October 18. The mandatory postponement period applies to the same time-sensitive

acts and runs concurrently with the relief the IRS

provided to Individual B under section 7508A(a).

(iii) Example (3). Individual C lives in a county

of a state that is experiencing ongoing wildfires. On

August 14, FEMA issued a Federal Register Notice

announcing an emergency declaration approved by

the President to make public assistance available under the Stafford Act to local governments to fight the

wildfires. This declaration specified an earliest incident date of August 14 and no latest incident date. On

August 17, FEMA issued a Federal Register Notice

announcing a major disaster declaration approved

by the President for the same wildfires incident, announcing that the residents of the county where Individual C lives were eligible to receive individual

assistance under the Stafford Act. This declaration

specified August 15 as the earliest incident date and

described the incident period as ongoing. Based upon

that major disaster declaration, the IRS exercised its

discretion under section 7508A(a) to publish a news

release identifying the taxpayers (by county) affected by the wildfires disaster for purposes of section

7508A and specifying both the time-sensitive acts

that are postponed and a period of postponement

from August 15 through December 15. Following the

initial news release, the wildfires disaster remained

ongoing, with no ending incident date specified, for

several months. The IRS published a second news

release postponing the time-sensitive acts through

January 15. FEMA subsequently amended the major

disaster declaration to specify the latest incident date

of November 19. Because the IRS acted in its discretion to provide relief in response to the major disaster

declaration, and not to provide relief in response to

the emergency declaration, the mandatory 60-day

postponement period that Individual C is entitled

to under section 7508A(d) begins on August 15, the

earliest incident date specified in the major disaster

declaration, and ends 60 days after the latest incident

date of November 19. The mandatory postponement

1226

period applies to the same time-sensitive acts and

runs concurrently with the relief the IRS provided

to Individual C under section 7508A(a), and ends on

January 18, which is 60 days after the latest incident

date and three days beyond the postponement period

specified by the IRS under section 7508A(a) in its

news release.

(iv) Example (4). Individual D lives in the United States, which is experiencing a nationwide emergency as a result of its residents being exposed to a

highly infectious and dangerous pandemic disease.

On March 13, the President declared a nationwide

emergency under section 501(b) of the Stafford Act.

The pandemic became a federally declared disaster

for purposes of section 7508A on March 13, however, no incident date was specified in the President’s

emergency declaration. Pursuant to the President’s

March 13 emergency declaration, the IRS published

several notices identifying the taxpayers affected by

the disaster for purposes of section 7508A and specifying the time-sensitive acts that are postponed and a

period of postponement that generally ran from April

1 through July 15, pursuant to section 7508A(a). Because, in this circumstance, the emergency declaration pursuant to which the notices were published did

not specify an incident date, there is no mandatory

postponement period under section 7508A(d). The

only postponement period is the period determined

by the Secretary pursuant to the discretionary authority under section 7508A(a).

(h) Applicability dates—(1) In general.

Except as provided in paragraph (h)(2) of

this section, this section applies to disasters declared after January 15, 2009.

(2) Paragraph (g) of this section. Paragraph (g) of this section applies to disasters declared on or after December 21,

2019.

Douglas W. O’Donnell,

Deputy Commissioner for Services

and Enforcement.

Approved: May 25, 2021.

Mark J. Mazur,

Assistant Secretary of the Treasury

(Tax Policy).

(Filed by the Office of the Federal Register on June

13, 2021, 8:45 a.m., and published in the issue of the

Federal Register for June 11, 2021, 86 FR 31146)

Bulletin No. 2021–26

Part III

Section 59A Qualified

Derivative Payments

Reporting Requirements

Notice 2021-36

I. PURPOSE

This Notice announces that the Department of the Treasury (Treasury Department) and the Internal Revenue Service

(IRS) intend to amend the regulations under sections 59A and 6038A to defer the

applicability date of certain provisions of

the regulations relating to the reporting of

qualified derivative payments (“QDP”)

until taxable years beginning on or after

January 1, 2023.

II. BACKGROUND

On December 6, 2019, the Treasury

Department and the IRS published TD

9885 in the Federal Register (84 FR

66968), which contains final regulations

addressing the base erosion and anti-abuse

tax (“BEAT”) of section 59A (the “2019

final regulations”). The 2019 final regulations generally apply to taxable years

ending on or after December 17, 2018.

The 2019 final regulations included rules

under sections 59A and 6038A addressing

the reporting of QDPs, which are not base

erosion payments.

Under §1.59A-6(b)(2)(i), a payment

does not qualify as a QDP unless the taxpayer reports the information required in

§1.6038A-2(b)(7)(ix)for the taxable year.

Section 1.6038A-2(b)(7)(ix) requires a

taxpayer subject to the BEAT to report

on Form 8991the aggregate amount of

QDPs for the taxable year and make a

representation that all payments satisfy

the requirements of §1.59A-6(b)(2). If a

taxpayer fails to satisfy the reporting requirements of §1.59A-6(b)(2)(i) with respect to any payments, §1.59A-6(b)(2)(ii)

(the reporting failure exclusion) provides

that those payments are not eligible for the

QDP exception described in §1.59A-3(b)

(3)(ii)and are base erosion payments unless another exception applies.

Bulletin No. 2021–26

Section 1.6038A-2(b)(7)(ix) applies to

taxable years beginning on or after June

7, 2021. Section 1.6038A-2(g). Before

§1.6038A-2(b)(7)(ix) is applicable (the

transition period), a taxpayer is treated as

satisfying the QDP reporting requirements

to the extent that the taxpayer reports the

aggregate amount of QDPs on Form 8991,

Schedule A, provided that the taxpayer reports this amount in good faith. See

§1.59A-6(b)(2)(iv) and §1.6038A-2(g).

On October 9, 2020, the Treasury Department and the IRS published TD 9910

in the Federal Register (85 FR 64368),

which contains additional final regulations

relating to section 59A (the “2020 final regulations”). As described in the preamble

to the 2020 final regulations, a comment

was submitted that recommended that the

Treasury Department and the IRS address

the interaction of the QDP exception, the

BEAT netting rule in §1.59A-2(e)(3)(vi)

(with respect to positions for which a taxpayer applies a mark-to-market method

of accounting for U.S. federal income tax

purposes), and the QDP reporting requirements in §1.59A-6 and §1.6038A-2(b)(7)

(ix)–each in the 2019 final regulations.

The Treasury Department and the IRS

continue to study whether future guidance

may be appropriate. While studying this

matter, the Treasury Department and the

IRS have determined that it is appropriate

to extend the transition period.

III. AMENDED APPLICABILITY

DATE

Therefore, the Treasury Department and

the IRS intend to amend §1.6038A-2(g)

to provide that §1.6038A-2(b)(7)(ix) will

apply to taxable years beginning on or after January 1, 2023. Until §1.6038A-2(b)

(7)(ix) applies, the rules described in

§1.59A-6(b)(2)(iv) that apply during the

transition period will continue to apply.

IV. TAXPAYER RELIANCE

Taxpayers may rely on the provisions

of this Notice before the issuance of the

amendments to the final regulations described in section III of this Notice.

1227

V. DRAFTING INFORMATION

The principal author of this notice

is Sheila Ramaswamy of the Office of Associate Chief Counsel (International). For

further information regarding this notice

contact Sheila Ramaswamy at (202) 3176938 (not a toll-free number).

Update for Weighted

Average Interest Rates,

Yield Curves, and Segment

Rates

Notice 2021-37

This notice provides guidance on the

corporate bond monthly yield curve, the

corresponding spot segment rates used

under § 417(e)(3), and the 24-month average segment rates under § 430(h)(2) of the

Internal Revenue Code. In addition, this

notice provides guidance as to the interest

rate on 30-year Treasury securities under

§ 417(e)(3)(A)(ii)(II) as in effect for plan

years beginning before 2008 and the 30year Treasury weighted average rate under

§ 431(c)(6)(E)(ii)(I).

In addition to providing these rates

for current periods, this notice provides

24-month average segment rates for earlier periods for plan years beginning in 2020

and 2021, determined under § 430(h)(2)

(C)(iv) of the Code reflecting the modifications made by § 9706(a) of the American Rescue Plan Act of 2021, Pub. L.

No. 117-2 (ARP), which was enacted on

March 11, 2021.

YIELD CURVE AND SEGMENT

RATES

Section 430 specifies the minimum

funding requirements that apply to single-employer plans (except for CSEC

plans under § 414(y)) pursuant to § 412.

Section 430(h)(2) specifies the interest rates that must be used to determine

a plan’s target normal cost and funding

target. Under this provision, present val-

June 28, 2021

ue is generally determined using three

24-month average interest rates (“segment rates”), each of which applies to

cash flows during specified periods. To

the extent provided under § 430(h)(2)

(C)(iv), these segment rates are adjusted

by the applicable percentage of the 25year average segment rates for the period

ending September 30 of the year preceding the calendar year in which the plan

year begins.1 However, an election may

be made under § 430(h)(2)(D)(ii) to use

the monthly yield curve in place of the

segment rates.

Notice 2007-81, 2007-44 I.R.B. 899,

provides guidelines for determining the

Applicable Month

June 2021

es of the corresponding 25-year average

segment rates.

The 25-year average segment rates for

plan years beginning in 2020 and 2021

were published Notice 2019-51, 2019-41

I.R.B. 866, and Notice 2020-72, 2020-40

I.R.B. 789, respectively.

24-MONTH AVERAGE CORPORATE

BOND SEGMENT RATES

The three 24-month average corporate

bond segment rates applicable for June

2021 without adjustment for the 25-year

average segment rate limits are as follows:

24-Month Average Segment Rates Without 25-Year Average Adjustment

First Segment

Second Segment

1.27

2.77

25-YEAR AVERAGE SEGMENT

RATES

Section 9706(a) of ARP changes the

25-year average segment rates and the

applicable minimum and maximum percentages used under § 430(h)(3)(C)(iv) of

the Code to adjust the 24-month average

segment rates. Prior to this change, the applicable minimum and maximum percentages were 90% and 110% for a plan year

beginning in 2020, and 85% and 115% for

a plan year beginning in 2021, respectively. After this change, the applicable mini-

For Plan Years

Beginning In

monthly corporate bond yield curve, and

the 24-month average corporate bond

segment rates used to compute the target

normal cost and the funding target. Consistent with the methodology specified in

Notice 2007-81, the monthly corporate

bond yield curve derived from May 2021

data is in Table 2021-5 at the end of this

notice. The spot first, second, and third

segment rates for the month of May 2021

are, respectively, 0.61, 2.84, and 3.54.

The 24-month average segment rates

determined

under

§ 430(h)(2)(C)(i)

through (iii) must be adjusted pursuant to

§ 430(h)(2)(C)(iv) to be within the applicable minimum and maximum percentag-

mum and maximum percentages are 95%

and 105% for a plan year beginning in

2020 or 2021. In addition, pursuant to this

change, any 25-year average segment rate

that is less than 5% is deemed to be 5%.2

Pursuant to § 9706(c)(1) of ARP, these

changes apply with respect to plan years

beginning on or after January 1, 2020.

However, § 9706(c)(2) of ARP provides

that a plan sponsor may elect not to have

these changes apply to any plan year beginning before January 1, 2022.3

The adjusted 24-month average segment rates set forth in the chart below

Third Segment

3.45

reflect § 430(h)(2)(C)(iv) of the Code

as amended by § 9706(a) of ARP. These

adjusted 24-month average segment

rates apply only for plan years for which

an election under § 9706(c)(2) of ARP is

not in effect. For a plan year for which

such an election does not apply, the

24-month averages applicable for June

2021, adjusted to be within the applicable minimum and maximum percentages of the corresponding 25-year average segment rates in accordance with

§ 430(h)(2)(C)(iv) of the Code, are as

follows:

Adjusted 24-Month Average Segment Rates

Applicable

First

Second

Month

Segment

Segment

Third

Segment

2020

June 2021

4.75

5.50

6.27

2021

June 2021

4.75

5.36

6.11

The adjusted 24-month average segment rates set forth in the chart below do

not reflect the changes to § 430(h)(2)(C)

(iv) of the Code made by § 9706(a) of

ARP. These adjusted 24-month average

segment rates apply only for plan years for

Pursuant to § 433(h)(3)(A), the 3rd segment rate determined under § 430(h)(2)(C) is used to determine the current liability of a CSEC plan (which is used to calculate the minimum amount

of the full funding limitation under § 433(c)(7)(C)).

2

Pursuant to this change, the 25-year averages of the first segment rate for 2020 and 2021 are increased to 5.00% because those 25-year averages as originally published are below 5.00%.

3

This election may be made either for all purposes for which the amendments under § 9706 of ARP apply or solely for purposes of determining the adjusted funding target attainment percentage under § 436 of the Code for the plan year.

1

June 28, 2021

1228

Bulletin No. 2021–26

which an election under § 9706(c)(2) of

ARP is in effect. For a plan year for which

such an election applies, the 24-month av-

For Plan Years

Beginning In

erages applicable for June 2021, adjusted

to be within the applicable minimum and

maximum percentages of the correspond-

ing 25-year average segment rates in accordance with § 430(h)(2)(C)(iv) of the

Code, are as follows:

Pre-ARP Adjusted 24-Month Average Segment Rates

Applicable

First

Second

Month

Segment

Segment

Third

Segment

2020

June 2021

3.64

5.21

5.94

2021

June 2021

3.32

4.79

5.47

30-YEAR TREASURY SECURITIES

INTEREST RATES

Section 431 specifies the minimum

funding requirements that apply to multiemployer plans pursuant to § 412. Section

431(c)(6)(B) specifies a minimum amount

for the full-funding limitation described in

§ 431(c)(6)(A), based on the plan’s current

liability. Section 431(c)(6)(E)(ii)(I) provides that the interest rate used to calculate current liability for this purpose must

be no more than 5 percent above and no

more than 10 percent below the weighted

average of the rates of interest on 30-year

Treasury securities during the four-year

period ending on the last day before the

beginning of the plan year. Notice 88-73,

1988-2 C.B. 383, provides guidelines for

determining the weighted average interest rate. The rate of interest on 30-year

Treasury securities for May 2021 is 2.32

percent. The Service determined this rate

as the average of the daily determinations

For Plan Years

Beginning In

Treasury Weighted Average Rates

30-Year Treasury

Weighted Average

Permissible Range

90% to 105%

June 2021

2.23

2.00 to 2.34

under § 417(e)(3)(D) are segment rates

computed without regard to a 24-month

average. Notice 2007-81 provides guidelines for determining the minimum pres-

ent value segment rates. Pursuant to that

notice, the minimum present value segment rates determined for May 2021 are

as follows:

MINIMUM PRESENT VALUE

SEGMENT RATES

In general, the applicable interest rates

Month

May 2021

Minimum Present Value Segment Rates

First Segment

Second Segment

0.61

2.84

DRAFTING INFORMATION

The principal author of this notice

isTom Morgan of the Office of the Asso-

Bulletin No. 2021–26

of yield on the 30-year Treasury bond maturing in February 2051 determined each

day through May 12, 2021, and the yield

on the 30-year Treasury bond maturing

in May 2051 determined each day for

the balance of the month. For plan years

beginning in June 2021, the weighted average of the rates of interest on 30-year

Treasury securities and the permissible

range of rates used to calculate current liability are as follows:

ciate Chief Counsel (Employee Benefits,

Exempt Organizations, and Employment

Taxes). However, other personnel from

the IRS participated in the development

1229

Third Segment

3.54

of this guidance. For further information

regarding this notice, contact Mr. Morgan

at 202-317-6700 or Paul Stern at 202-3178702 (not toll-free numbers).

June 28, 2021

Table 2021-5

Monthly Yield Curve for May 2021

Derived from May 2021 Data

Maturity

0.5

1.0

1.5

2.0

2.5

3.0

3.5

4.0

4.5

5.0

5.5

6.0

6.5

7.0

7.5

8.0

8.5

9.0

9.5

10.0

10.5

11.0

11.5

12.0

12.5

13.0

13.5

14.0

14.5

15.0

15.5

16.0

16.5

17.0

17.5

18.0

18.5

19.0

19.5

20.0

Yield

0.16

0.21

0.28

0.36

0.48

0.61

0.76

0.92

1.09

1.26

1.42

1.59

1.75

1.91

2.06

2.20

2.34

2.46

2.57

2.68

2.77

2.86

2.94

3.01

3.07

3.12

3.17

3.21

3.24

3.27

3.30

3.32

3.34

3.35

3.37

3.38

3.39

3.40

3.40

3.41

June 28, 2021

Maturity

20.5

21.0

21.5

22.0

22.5

23.0

23.5

24.0

24.5

25.0

25.5

26.0

26.5

27.0

27.5

28.0

28.5

29.0

29.5

30.0

30.5

31.0

31.5

32.0

32.5

33.0

33.5

34.0

34.5

35.0

35.5

36.0

36.5

37.0

37.5

38.0

38.5

39.0

39.5

40.0

Yield

3.42

3.42

3.43

3.43

3.44

3.44

3.44

3.45

3.45

3.46

3.46

3.46

3.47

3.47

3.48

3.48

3.48

3.49

3.49

3.49

3.50

3.50

3.51

3.51

3.51

3.52

3.52

3.52

3.52

3.53

3.53

3.53

3.53

3.54

3.54

3.54

3.54

3.55

3.55

3.55

Maturity

40.5

41.0

41.5

42.0

42.5

43.0

43.5

44.0

44.5

45.0

45.5

46.0

46.5

47.0

47.5

48.0

48.5

49.0

49.5

50.0

50.5

51.0

51.5

52.0

52.5

53.0

53.5

54.0

54.5

55.0

55.5

56.0

56.5

57.0

57.5

58.0

58.5

59.0

59.5

60.0

Yield

3.55

3.56

3.56

3.56

3.56

3.56

3.56

3.57

3.57

3.57

3.57

3.57

3.57

3.58

3.58

3.58

3.58

3.58

3.58

3.58

3.59

3.59

3.59

3.59

3.59

3.59

3.59

3.59

3.60

3.60

3.60

3.60

3.60

3.60

3.60

3.60

3.60

3.61

3.61

3.61

1230

Maturity

60.5

61.0

61.5

62.0

62.5

63.0

63.5

64.0

64.5

65.0

65.5

66.0

66.5

67.0

67.5

68.0

68.5

69.0

69.5

70.0

70.5

71.0

71.5

72.0

72.5

73.0

73.5

74.0

74.5

75.0

75.5

76.0

76.5

77.0

77.5

78.0

78.5

79.0

79.5

80.0

Yield

3.61

3.61

3.61

3.61

3.61

3.61

3.61

3.61

3.62

3.62

3.62

3.62

3.62

3.62

3.62

3.62

3.62

3.62

3.62

3.62

3.62

3.62

3.63

3.63

3.63

3.63

3.63

3.63

3.63

3.63

3.63

3.63

3.63

3.63

3.63

3.63

3.63

3.63

3.63

3.64

Maturity

80.5

81.0

81.5

82.0

82.5

83.0

83.5

84.0

84.5

85.0

85.5

86.0

86.5

87.0

87.5

88.0

88.5

89.0

89.5

90.0

90.5

91.0

91.5

92.0

92.5

93.0

93.5

94.0

94.5

95.0

95.5

96.0

96.5

97.0

97.5

98.0

98.5

99.0

99.5

100.0

Yield

3.64

3.64

3.64

3.64

3.64

3.64

3.64

3.64

3.64

3.64

3.64

3.64

3.64

3.64

3.64

3.64

3.64

3.64

3.64

3.64

3.65

3.65

3.65

3.65

3.65

3.65

3.65

3.65

3.65

3.65

3.65

3.65

3.65

3.65

3.65

3.65

3.65

3.65

3.65

3.65

Bulletin No. 2021–26

NOTE. This revenue procedure will be reproduced as the next revision of IRS Publication 4436, General Rules and Specifications for Substitute Form 941, Schedule B (Form 941), Schedule D (Form 941), Schedule R (Form 941), and Form 8974.

Rev. Proc. 2021-22

TABLE OF CONTENTS

Part 1 –

Section 1.1 – Purpose . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1231

Section 1.2 – What’s New. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1233

Section 1.3 – Reminders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1233

Section 1.4 – General Requirements for Reproducing IRS Official Form 941, Schedule B, Schedule D,

Schedule R, and Form 8974 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1233

Section 1.5 – Reproducing Form 941, Schedule B, Schedule D, Schedule R, and Form 8974 for

Software-Generated Paper Forms. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1235

Section 1.6 – Specific Instructions for Schedule D. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1236

Section 1.7 – Specific Instructions for Schedule R. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1237

Section 1.8 – Specific Instructions for Form 8974. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1237

Section 1.9 – Office of Management and Budget (OMB) Requirements for Substitute Forms. . . . . . . . . . . . . . . . . . . . . . . 1238

Section 1.10 – Order Forms and Instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1238

Section 1.11 – Effect on Other Documents. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1239

Section 1.12 – Helpful Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1239

Section 1.13 – Exhibits. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1241

Part 1

Section 1.1 – Purpose

.01 The purpose of this revenue procedure is to provide general rules and specifications from the

IRS for paper and computer-generated substitutes for Form 941, Employer’s QUARTERLY Federal Tax Return; Schedule B (Form 941), Report of Tax Liability for Semiweekly Schedule Depositors (referred to in this revenue procedure as “Schedule B”); Schedule D (Form 941), Report

of Discrepancies Caused by Acquisitions, Statutory Mergers, or Consolidations (referred to in this

revenue procedure as “Schedule D”); Schedule R (Form 941), Allocation Schedule for Aggregate

Form 941 Filers (referred to in this revenue procedure as “Schedule R”); and Form 8974, Qualified Small Business Payroll Tax Credit for Increasing Research Activities.

Caution. Before creating a substitute Form 941, see Pub. 1167, General Rules and Specifications

for Substitute Forms and Schedules, for additional rules and specifications for payment vouchers

(Vouchers), printing in margins (Marginal Printing), and additional instructions (Additional Instructions for All Forms).

Note. Substitute territorial forms (941-PR, Planilla para la Declaración Federal TRIMESTRAL

del Patrono; 941-SS, Employer’s QUARTERLY Federal Tax Return (American Samoa, Guam,

the Commonwealth of the Northern Mariana Islands, and the U.S. Virgin Islands); and Anexo B

(Formulario 941-PR), Registro de la Obligación Contributiva para los Despositantes de Itinerario

Bisemanal), should also conform to the specifications outlined in this revenue procedure.

.02 This revenue procedure provides information for substitute Form 941, Schedule B, Schedule

D, Schedule R, and Form 8974. If you need more in-depth information on who must complete

these forms and how to complete them, see the Instructions for Form 941, the Instructions for

Schedule B, the Instructions for Schedule D, the Instructions for Schedule R, the Instructions for

Form 8974, and Pub. 15, Employer’s Tax Guide, or visit IRS.gov.

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Note. Failure to produce acceptable substitutes of the forms and schedules listed in this revenue

procedure may result in delays in processing. This may result in penalties.

.03 Forms that completely follow the guidelines in this revenue procedure and are exact replicas

of the official IRS forms do not need to be submitted to the IRS for specific approval. Substitute

forms and schedules need to be scanned using IRS scanning equipment.

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

1.

Submit a letter citing the specification.

2.

State your understanding of the specification.

3.

Enclose an example (if appropriate) of how the form would appear if produced using your

understanding.

4.

Be sure to include your name, complete address, phone number, and, if applicable, your

email address with your correspondence. Send your request to SCRIPS@IRS.gov or

­SubstituteForms@IRS.gov, or use the following address.

Internal Revenue Service

Attn: Substitute Forms Program

SE:W:CAR:MP:P:TP

1111 Constitution Ave. NW, Room 6554

Washington, DC 20224

Note. Allow at least 30 days for the IRS to respond.

.04 However, software developers and form producers should send a blank copy of their substitute

Form 941, Schedule B, and Schedule R in Portable Document Format (PDF) to SCRIPS@IRS.

gov. The purpose is not specifically for approval but to assist the IRS in preparing to scan these

forms. Submitters will only receive comments if a significant problem is discovered through this

process.

Submitters are not expected to delay marketing their forms in order to receive feedback. Submitters must not include any “live” taxpayer data on any substituteform submitted for review.

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

Form 8974.

•

Official paper forms: 951121 (Form 941, page 1); 951221 (Form 941, page 2); 951921

(Form 941, page 3); 951020 (Form 941, page 4); 960311 (Schedule B); 950421 (Schedule R,

page 1); 950521 (Schedule R, page 2); and 950817 (Form 8974).

•

Substitute 6x10 grids: 971121 (Form 941, page 1); 971221 (Form 941, page 2); 971921

(Form 941, page 3); 971020 (Form 941, page 4); 970311 (Schedule B); 970421 (Schedule R,

page 1); 970521 (Schedule R, page 2); and 970817 (Form 8974).

Generally, the last two digits of the form ID code represent the last year in which the IRS made

major formatting changes to the layout of a page of theform.

Note. Page 4 of Form 941 (page intentionally left blank) is not required to be filed with the IRS

as part of a substitute Form 941. However, if page 4 of the substitute Form 941 is filed, it must

include the form ID code.

.06 This revenue procedure will be updated only if there are major formatting changes to the

layout of the forms or there are other changes that impact the processing of substitute forms. This

revenue procedure won’t be updated solely because a line is changed to “Reserved for future use.”

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Section 1.2 – What’s New

There were significant changes to Form 941 and Schedule R (Form 941) under the American

Rescue Plan Act of 2021 (the ARP). See the instructions for these forms at IRS.gov/Form941 for

more information about the changes made under the ARP.

Due to changes made under the ARP, the form ID codes on pages 1 through 3 of Form 941 and

both pages of Schedule R have changed. The new form ID codes are provided under Section

1.1.05, earlier, and under Section 1.4.08 and Section 1.5.02, later.

Section 1.3 – Reminders

.01 Draft forms. Draft forms can be found at IRS.gov/DraftForms.

Section 1.4 – General Requirements for Reproducing IRS Official Form 941, Schedule B, Schedule D,

Schedule R, and Form 8974

.01 Submit substitute Form 941, Schedule B, Schedule D, Schedule R, and Form 8974 to the IRS

for specifications review. Substitute Form 941, Schedule B, Schedule D, Schedule R, and Form

8974 that completely conform to the specifications contained in this revenue procedure do not

require prior approval from the IRS, but should be submitted to SCRIPS@IRS.gov to ensure that

they conform to IRS format and scanning specifications.

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

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

20 lb. white bond paper).

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

.04 The IRS prefers printing Form 941 on both sides of a single sheet of paper, but it is acceptable

to print on one side of each of two separate sheets of paper.

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

.06 Print the substitute form using nonreflective black (not blue or other-colored) ink. Printing in

an ink color other than black may reduce readability in the scanning process. This may result in

figures being too faint to be recognizable.

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.07 Use typefaces that are substantially identical in size and shape to the official form and use rules

and shading (if used) that are substantially identical to those on the official form. Use font size as

large as possible within the fields.

.08 In the same location as shown on the official IRS forms, print the six-digit form ID code (if one

exists on the official form) on each form using nonreflective black, carbon-based, 12-point font.

The use of non-OCR-A font may reduce readability for scanning. Use the official form to develop

your substitute form.

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

strings to print adjacent to the code.

Generally, the year digits represent the last year in which the IRS made major formatting changes

to the layout of a page of the form. Therefore, the last two digits may not be the same as the current tax year. For the tax period starting April 2021 and until this revenue procedure is superseded,

print “951121” on Form 941, page 1; “951221” on Form 941, page 2; “951921” on Form 941,

page 3; “951020” on Form 941, page 4; “960311” on Schedule B; “950421” on Schedule R, page

1; “950521” on Schedule R, page 2; and “950817” on Form 8974. See Section 1.5 for information

on form ID codes for software-generated forms.

Note. Page 4 of Form 941 (page intentionally left blank) is not required to be filed with the IRS

as part of a substitute Form 941. However, if page 4 of the substitute Form 941 is filed, it must

include the form ID code.

.09 Print the OMB number in the same location as on the official form. Be sure to include the

OMB number on Form 941, Schedule B, Schedule D, Schedule R, and Form 8974.

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

forms.

Note. Instead of a four-sided checkbox for the entry, just the bottom line of the box can be used as

long as the location and size remain the same.

.11 Print “For Privacy Act and Paperwork Reduction Act Notice, see the back of the Payment

Voucher.” at the bottom of page 1 of Form 941.

.12 Print “For Paperwork Reduction Act Notice, see separate instructions.” at the bottom of

Schedule B and Schedule D.

.13 Print “For Paperwork Reduction Act Notice, see the separate instructions.” at the bottom of

Schedule R.

.14 Print “For Paperwork Reduction Act Notice, see the separate instructions.” at the bottom of

Form 8974.

.15 Do not print the form catalog number (“Cat. No.”) at the bottom of the forms or instructions.

Instead, print your IRS-issued three-letter substitute form source code in place of the catalog

number on the left at the bottom of page 1 of Form 941, Schedule B, Schedule D, Schedule R,

and Form 8974.

Note. You can obtain a three-letter substitute form source code by requesting it by email at

­SubstituteForms@IRS.gov. Please enter “Substitute Forms” on the subject line.

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

instructions.

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Section 1.5 – Reproducing Form 941, Schedule B, Schedule D, Schedule R, and Form 8974 for

Software-Generated Paper Forms

.01 You may use the PDF files to develop the layout for your forms. Draft forms found at IRS.

gov/DraftForms can be used to develop interim formats until the forms are finalized. When forms

become finalized, they are posted and can be found at IRS.gov/Forms. You may use 6x10 grid

formats to develop software versions of Form 941, Schedule B, Schedule D, Schedule R, and

Form 8974.

Please follow the specifications exactly to develop the fields.

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

•

“971121” for Form 941, page 1; “971221” for Form 941, page 2;

“971921” for Form 941, page 3; “971020” for Form 941, page 4;

“970311” for Schedule B; “970421” for Schedule R, page 1;

“970521” for Schedule R, page 2; and “970817” for Form 8974, as the form ID codes.

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

•

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

official forms.

•

Use single lines for “Employer Identification Number (EIN)” and other entry areas in the

entity section of Form 941, pages 1, 2, and 3; Schedule B; Schedule R, pages 1 and 2; and

Form 8974.

•

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

•

Do not pre-print decimal points in the data boxes. However, where the amounts are required,

the amounts should be printed with decimal points and place holders for cents.

•

Delete the pre-printed formatting in any “date” boxes.

•

Use a single box for “Personal Identification Number (PIN)” on Form 941.

•

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

.03 If producing both the form and the data or the form only, print your three-letter source code

at the bottom of Form 941, page 1; Schedule B; Schedule D; Schedule R, page 1; or Form 8974.

See Section 1.4.15.

.04 If producing only the data on the form, print your four-digit software industry vendor code

on Form 941. The four-digit vendor code preceded by four zeros and a slash (0000/9876) must

be pre-printed. If you have a valid vendor code issued to you through the National Association of

Computerized Tax Processors (NACTP), you should use that code. If you do not have a valid vendor code, contact the NACTP via email at president@nactp.org for information on these codes.

.05 Print “For Privacy Act and Paperwork Reduction Act Notice, see the back of the Payment

Voucher.” at the bottom of Form 941, page 1.

.06 Print “For Paperwork Reduction Act Notice, see separate instructions.” at the bottom of

Schedule B and Schedule D.

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.07 Print “For Paperwork Reduction Act Notice, see the separate instructions.” at the bottom of

Schedule R, page 1.

.08 Print “For Paperwork Reduction Act Notice, see the separate instructions.” at the bottom of

Form 8974.

.09 Be sure to print the OMB number in the same location as on the official forms on substitute

Form 941, Schedule B, Schedule D, Schedule R, and Form 8974.

.10 Do not print the form catalog number (“Cat. No.”) at the bottom of the forms or instructions.

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

instructions.

.12 To ensure accurate scanning and processing, enter data on Form 941, Schedule B, Schedule D,

Schedule R, and Form 8974 as follows.

•

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

•

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

•

Omit dollar signs. Commas are optional.

•

Except for Form 941, lines 1, 2, and 12, leave blank any data field with a value of zero.

•

Enter negative amounts with a minus sign. For example, report “-10.59” instead of “(10.59).”

Note. The IRS prefers that you use a minus sign for negative amounts instead of parentheses or

some other means. However, if your software only allows for parentheses in reporting negative

amounts, you may use them.

Section 1.6 – Specific Instructions for Schedule D

.01 To properly file and to reduce delays and contact from the IRS, Schedule D must be produced

as close as possible to the official form.

.02 Use Schedule D to explain why you have certain discrepancies. See the Instructions for Schedule D for more information. In many cases, the information on Schedule D helps the IRS resolve

discrepancies without contacting you.

.03 If a substitute Schedule D is not submitted in similar format to the official IRS schedule, the

substitutes may be returned, you may be contacted by the IRS, delays in processing may occur,

and you may be subject to penalties.

Section 1.7 – Specific Instructions for Schedule R

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Schedule R has been redesigned to allow the new lines from the June 2021 revision of Form 941

to be reported on Schedule R.

.01 To properly file and to reduce delays and contact from the IRS, Schedule R and Continuation

Sheets for Schedule R must be produced as close as possible to the official form.

Note. Do not present the information in spreadsheet or similar format. We may not be able to

properly process nonconforming documents with an excessive number of entries. Complete as

many Continuation Sheets for Schedule R (Schedule R, page 2) as necessary. If Continuation

Sheets are not used or they vary in form from the official form, processing may be delayed and

you may be subject to penalties.

.02 Use Schedule R to allocate the aggregate information reported on Form 941 to each client. If

you have more than 5 clients, complete as many Continuation Sheets for Schedule R as necessary.

Attach Schedule R, including any Continuation Sheets, to your aggregate Form 941 and file it with

your return. Enter your business information carefully.

Make sure all information exactly matches the information shown on the aggregate Form 941.

Compare the total of each column on Schedule R, line 9 (including your information on line 8),

to the amounts reported on the aggregate Form 941. For each column total of Schedule R, the

relevant line from Form 941 is noted in the column heading. If the totals on Schedule R, line 9, do

not match the totals on Form 941, there is an error that must be corrected before submitting Form

941 and Schedule R.

.03 Do:

•

Develop and submit only conforming Schedules R,

•

Follow the format and fields exactly as on the official Schedule R, and

•

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

.04 Do not:

•

Add or delete entry lines;

•

Submit spreadsheets, database printouts, or similar formatted documents instead of using the

Schedule R format to report data; and

•

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

.05 If substitute Schedules R and Continuation Sheets for Schedule R are not submitted in similar

format to the official schedule, the substitutes may be returned, you may be contacted by the IRS,

delays in processing may occur, and you may be subject to penalties.

Section 1.8 – Specific Instructions for Form 8974

.01 To properly file and to reduce delays and contact from the IRS, Form 8974 must be produced

as close as possible to the official form.

.02 Use Form 8974 only if you are claiming the qualified small business payroll tax credit for

increasing research activities.

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.03 If a substitute Form 8974 is not submitted in similar format to the official IRS form, the substitutes may be returned, you may be contacted by the IRS, delays in processing may occur, and

you may be subject to penalties.

Section 1.9 – Office of Management and Budget (OMB) Requirements for Substitute Forms

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

•

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

•

Each IRS form contains the OMB approval number, if assigned. The official OMB numbers

may be found on the official IRS-printed forms.

•

Each IRS form (or its instructions) states:

1.

Why the IRS needs the information,

2.

How it will be used, and

3.

Whether or not the information is required to be furnished to theIRS.

.02 This information must be provided to any users of official or substitute IRS forms or instructions.

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

•

Any substitute form or substitute statement to a recipient must show the OMB number as it

appears on the official form.

•

For Form 941, Schedule B, Schedule D, Schedule R, and Form 8974, the OMB number

(1545-0029) must appear exactly as shown on the official form.

•

For Form 941, Schedule B, Schedule D, Schedule R, and Form 8974, the OMB number must

use one of the following formats.

1.

OMB No. 1545-0029 (preferred).

2.

OMB # 1545-0029 (acceptable).

.04 If no instructions are provided to users of your forms, you must furnish to them the exact text

of the Privacy Act and Paperwork Reduction Act Notice.

Section 1.10 – Order Forms and Instructions

.01 You can order forms and instructions at IRS.gov/OrderForms.

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Section 1.11 – Effect on Other Documents

.01 Revenue Procedure 2020-31, 2020-27 I.R.B. 12, dated June 29, 2020, is superseded.

Section 1.12 – Helpful Information

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

Schedule D, Schedule R, and Form 8974.

.02 These forms are subject to review and possible changes, as required. Therefore, employers are

cautioned against overstocking supplies of privately printed substitutes.

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

Bulletin No. 2021–26

•

Form 941, Employer’s QUARTERLY Federal Tax Return.

•

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

•

Schedule D (Form 941), Report of Discrepancies Caused by Acquisitions, Statutory Mergers,

or Consolidations (referred to in this revenue procedure as “Schedule D”).

•

Schedule R (Form 941), Allocation Schedule for Aggregate Form 941 Filers (referred to in

this revenue procedure as “Schedule R”).

•

Form 8974, Qualified Small Business Payroll Tax Credit for Increasing Research Activities.

•

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

•

Instructions for Form 941.

•

Instructions for Schedule B (Form 941).

•

Instructions for Schedule D (Form 941).

•

Instructions for Schedule R (Form 941).

•

Instructions for Form 8974.

•

Pub. 15, Employer’s Tax Guide.

•

SCRIPS@IRS.gov for submissions.

•

SubstituteForms@IRS.gov for questions.

1239

June 28, 2021

•

For questions:

Internal Revenue Service

Attn: Substitute Forms Program

SE:W:CAR:MP:P:TP

1111 Constitution Ave. NW, Room 6554

Washington, DC 20224

June 28, 2021

•

IRS.gov/DraftForms for draft forms.

•

IRS.gov/Forms for final forms.

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Section 1.13 – Exhibits

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NOTE. This revenue procedure will be reproduced as the next revision of IRS Publication 1179, General Rules and Specifications for Substitute Forms 1096, 1098,

1099, 5498, and Certain Other Information Returns.

Forms and instructions. (Also, Part 1, Sections 101, 162(f), 170, 199A, 220, 223, 401(a), 403(a), 403(b), 408, 408A, 457(b), 529, 529A, 530, 853A, 892, 1400Z-1,

1400Z–2, 1441, 6041, 6041A, 6042, 6043, 6044, 6045, 6047, 6049, 6050A, 6050B, 6050D, 6050E, 6050H, 6050J, 6050N, 6050P, 6050Q, 6050R, 6050S, 6050U,

6050W, 6050X, 6050Y, 6071, 1.402A-2, 1.408-5, 1.408-7, 1.408-8, 1.408A-7, 1.1441-1 through 1.1441-5, 1.1471-4, 1.6041-1, 1.6042-2, 1.6042-4, 1.6043-4, 1.60442, 1.6044-5, 1.6045-1, 1.6045-2, 1.6045-4, 1.6047-1, 1.6047-2, 1.6049-4, 1.6049-6, 1.6049-7, 1.6050A-1, 1.6050B-1, 1.6050D-1, 1.6050E-1, 1.6050H-1, 1.6050H-2,

1.6050J-1T, 1.6050N-1, 1.6050P-1, 1. 6050S-1, 1.6050S-3, 1.6050W-1, 1.6050W-2, 1.6050Y-1, 1.6050Y-2, 1.6050Y-3.)

Rev. Proc. 2021-27

TABLE OF CONTENTS

Part 1 – GENERAL INFORMATION

Section 1.1 – Overview of Revenue Procedure 2021-27/What’s New. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1253

Section 1.2 – Definitions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1256

Section 1.3 – General Requirements for Acceptable Substitute Forms 1096, 1097-BTC, 1098, 1099, 3921,

3922, 5498, W-2G, and 1042-S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1256

Part 2 – SPECIFICATIONS FOR SUBSTITUTE FORMS 1096 AND COPIES A OF FORMS 1098,

1099, 3921, 3922, AND 5498 (ALL FILED WITH THE IRS)

Section 2.1 – Specifications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1259

Section 2.2 – Instructions for Preparing Paper Forms That Will Be Filed With the IRS. . . . . . . . . . . . . . . . . . . . . . . . . . . . 1264

Part 3 – SPECIFICATIONS FOR SUBSTITUTE FORM W-2G (FILED WITH THE IRS)

Section 3.1 – General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1266

Section 3.2 – Specifications for Copy A of Form W-2G. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1266

Part 4 – SUBSTITUTE STATEMENTS TO FORM RECIPIENTS AND FORM RECIPIENT COPIES

Section 4.1 – Specifications. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1267

Section 4.2 – Composite Statements. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1271

Section 4.3 – Additional Information for Substitute and Composite Forms 1099-B. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1273

Section 4.4 – Required Legends. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1273

Section 4.5 – Miscellaneous Instructions for Copies B, C, D, E, 1, and 2. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1275

Section 4.6 – Electronic Delivery of Recipient Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1277

Part 5 – ADDITIONAL INSTRUCTIONS FOR SUBSTITUTE FORMS 1097- BTC, 1098, 1099, 5498,

W-2G, AND 1042-S

Section 5.1 – Paper Substitutes for Form 1042-S. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1278

Section 5.2 – OMB Requirements for All Forms in This Revenue Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1280

Section 5.3 – Ordering Forms and Instructions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1281

Section 5.4 – Effect on Other Revenue Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1282

Part 6 – EXHIBITS

Section 6.1 – Exhibits of Forms in This Revenue Procedure. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1282

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Part 1

General Information

Section 1.1 – Overview of Revenue Procedure 2021-27/What’s New

1.1.1

Purpose

1.1.2

Which Forms Are Covered?

The purpose of this revenue procedure is to set forth the 2021 requirements for:

•

Using official Internal Revenue Service (IRS) forms to file information returns with the IRS,

•

Preparing acceptable substitutes of the official IRS forms to file information returns with the

IRS, and

•

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

This revenue procedure contains specifications for these information returns:

Form

Bulletin No. 2021–26

Title

1096

Annual Summary and Transmittal of U.S. Information Returns

1097-BTC

Bond Tax Credit

1098

Mortgage Interest Statement

1098-C

Contributions of Motor Vehicles, Boats, and Airplanes

1098-E

Student Loan Interest Statement

1098-F

Fines, Penalties, and Other Amounts

1098-MA

Mortgage Assistance Payments

1098-Q

Qualifying Longevity Annuity Contract Information

1098-T

Tuition Statement

1099-A

Acquisition or Abandonment of Secured Property

1099-B

Proceeds From Broker and Barter Exchange Transactions

1099-C

Cancellation of Debt

1099-CAP

Changes in Corporate Control and Capital Structure

1099-DIV

Dividends and Distributions

1099-G

Certain Government Payments

1099-H

Health Coverage Tax Credit (HCTC) Advance Payments

1099-INT

Interest Income

1099-K

Payment Card and Third Party Network Transactions

1099-LS

Reportable Life Insurance Sale

1099-LTC

Long-Term Care and Accelerated Death Benefits

1099-MISC

Miscellaneous Information

1099-NEC

Nonemployee Compensation

1099-OID

Original Issue Discount

1099-PATR

Taxable Distributions Received From Cooperatives

1099-Q

Payments From Qualified Education Programs (Under Sections 529 and 530)

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June 28, 2021

Form

1.1.3

Scope

Title

1099-QA

Distributions From ABLE Accounts

1099-R

1099-S

Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans,

IRAs, Insurance Contracts, etc.

Proceeds From Real Estate Transactions

1099-SA

Distributions From an HSA, Archer MSA, or Medicare Advantage MSA

1099-SB

Seller’s Investment in Life Insurance Contract

3921

Exercise of an Incentive Stock Option Under Section 422(b)

3922

5498

Transfer of Stock Acquired Through An Employee Stock Purchase Plan

Under Section 423(c)

IRA Contribution Information

5498-ESA

Coverdell ESA Contribution Information

5498-QA

ABLE Account Contribution Information

5498-SA

HSA, Archer MSA, or Medicare Advantage MSA Information

W-2G

Certain Gambling Winnings

1042-S

Foreign Person’s U.S. Source Income Subject to Withholding

For purposes of this revenue procedure, a substitute form or statement is one that is not published

by the IRS. For a substitute form or statement to be acceptable to the IRS, it must conform to the

official form or the specifications outlined in this revenue procedure. Do not submit any substitute

forms or statements listed above to the IRS for approval. Privately published forms may not state,

“This is an IRS approved form.”

Filers making payments to certain recipients during a calendar year are required by the Internal

Revenue Code (the Code) to file information returns with the IRS for these payments. These filers

must also provide this information to their recipients. In some cases, this also applies to payments

received. See Part 4 for specifications that apply to recipient statements (generally Copy B).

In general, section 6011 of the Code contains requirements for filers of information returns. A filer

must file information returns electronically or on paper. A filer who is required to file 250 or more

information returns of any one type during a calendar year must file those returns electronically.

Caution. Financial institutions that are required to report payments made under chapter 3 or 4

must file Forms 1042-S electronically, regardless of the number of forms to file.

Note. If you file electronically, do not file the same returns on paper.

Although not required, small volume filers (fewer than 250 returns during a calendar year) may

file the forms electronically. See the requirements for filing information returns (and providing a

copy to a payee) in the 2021 General Instructions for Certain Information Returns and the 2021

Instructions for Form 1042-S. In addition, see the current revision of Publication 1220, Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G, for electronic

filing through the IRS FIRE system.

1.1.4

For More

Information

June 28, 2021

The IRS prints and provides the forms on which various payments must be reported. See Section 5.3, later, for ordering forms and instructions. Alternately, filers may prepare substitute copies

of these IRS forms and use such forms to report payments to the IRS.

1254

Bulletin No. 2021–26

•

The Internal Revenue Service/Information Returns Branch (IRS/IRB) maintains a centralized customer service call site to answer questions related to information returns (Forms

W-2, W-3, W-2c, W-3c, 1099 series, 1096, etc.). You can reach the call site at 866-455-7438

(toll-free) or outside the U.S. 304-263-8700 (not a toll-free number). Persons with a hearing

or speech disability with access to TTY/TDD equipment can call 304-579-4827 (not a tollfree number). You may also send questions to the call site via the Internet at mccirp@irs.

gov. Note. IRS/IRB does not process information returns which are filed on paper forms. See

Publication 1220 for information on waivers and extensions of time.

•

For other tax information related to business returns or accounts, call 800-829-4933. Persons

with hearing or speech disabilities with access to TTY/TDD equipment can call 800-8294059 to ask tax account questions or to order forms and publications.

Note. Further information impacting Publication 1179, such as issues arising after its final release,

will be posted on IRS.gov at IRS.gov/pub1179.

1.1.5

What’s New

The following changes have been made to this year’s revenue procedure. For further information

about each form listed below, see the separate reporting instructions.

Electronic filing of returns. The Taxpayer First Act of 2019, enacted July 1, 2019, authorized

the Department of the Treasury and the IRS to issue regulations that reduce the 250-return requirement for 2021 tax returns. If those regulations are issued and effective for 2021 tax returns

required to be filed in 2022, we will post an article at IRS.gov explaining the change. Until regulations are issued, however, the number remains at 250, as reflected in these instructions.

Where to send extension of time to furnish statements to recipients. An extension of time to

furnish the statements is now a fax only submission. See M. Extension of time to furnish statements to recipients, in the 2021 General Instructions for Certain Information Returns. You can

access the extension of time to furnish statements to recipients section at IRS.gov/instructions/

i1099gi#idm140388152503184.

Form 1098-F filing requirements. At the time these instructions were sent to print, the filing

of Form 1098-F was not yet required. See the proposed regulations at www.federalregister.gov/

documents/2020/05/13/2020-08649/denial-of-deduction-for-certain-fines-penalties-and-other-amounts-information- with-respect-to. For the latest filing information, see Form1098F.

Form 1099-H continuous-use conversion. Form 1099-H and its instructions have been converted from annual updates to continuous use. The form and its instructions will be updated as

required. For more information, see the Guide to Information Returns, in the General Instructions

for Certain Information Returns. For the latest filing information, see Form 1099-H.

Form 1099-MISC. The title of the Form 1099-MISC has changed from Miscellaneous Income to

Miscellaneous Information.

Form 1099-NEC resized. We have reduced the height of the form so it can accommodate 3 forms

on a page.

Exhibits. All of the exhibits in this publication were updated to include all of the 2021 revisions

of those forms that have been revised.

Editorial changes. We made editorial changes throughout, including updated references. Redundancies were eliminated as much as possible.

Bulletin No. 2021–26

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Section 1.2 – Definitions

1.2.1

Form Recipient

Form recipient means the person to whom you are required by law to furnish a copy of the official

form or information statement. The form recipient may be referred to by different names on various Forms 1099 and related forms (beneficiary, borrower, debtor, donor, employee, filer, homeowner, insured, participant, payee, payer, payer/borrower, payment recipient, policyholder, seller,

shareholder, student, transferor, or, in the case of Form W-2G, the winner). See Section 1.3.4.

1.2.2

Filer

Filer means the person or organization required by law to file with the IRS a form listed in Section 1.1.2 with the IRS. A filer may be a payer, creditor, payment settlement entity, recipient of

mortgage or student loan interest payments, educational institution, broker, barter exchange, person reporting real estate transactions; a trustee or issuer of any educational or ABLE Act savings

account, individual retirement arrangement, or medical savings account; a lender who acquires an

interest in secured property or who has reason to know that the property has been abandoned; a

corporation reporting a change in control and capital structure or transfer of stock to an employee;

certain donees of motor vehicles, boats, and airplanes; or an acquirer or issuer of a life insurance

contract.

1.2.3

Substitute Form

Substitute form means a paper substitute of Copy A of an official form listed in Section 1.1.2 that

completely conforms to the provisions in this revenue procedure.

1.2.4

Substitute Form Recipient

Statement (recipient

statement)

1.2.5

Composite Substitute

Statement

Substitute form recipient statement means a paper or electronic statement of the information reported on a form listed in Section 1.1.2. For the remainder of this revenue procedure, we will refer

to this as a recipient statement. This statement must be furnished to a person (form recipient), as

defined under the applicable provisions of the Code and the applicable regulations.

Composite substitute statement means one in which two or more required statements (for example, Forms 1099-INT and 1099-DIV) are furnished to the recipient on one document. However,

each statement must be designated separately and must contain all the requisite Form 1099 information except as provided under Section 4.2. A composite statement may not be filed with the IRS.

Section 1.3 – General Requirements for Acceptable Substitute Forms 1096, 1097-BTC, 1098, 1099, 3921,

3922, 5498, W-2G, and 1042-S

June 28, 2021

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Bulletin No. 2021–26

1.3.1

Introduction

Paper substitutes for Form 1096 and Copy A of Forms 1097-BTC, 1098, 1099, 3921, 3922, 5498,

W-2G, and 1042-S that completely conform to the specifications listed in this revenue procedure

may be privately printed and filed as returns with the IRS. The reference to the Department of the

Treasury– Internal Revenue Service should be included on all such forms.

If you are uncertain of any specification and want it clarified, you may submit a letter citing the

specification, stating your understanding and interpretation of the specification, and enclosing an

example of the form (if appropriate) to:

Internal Revenue Service

Attn: Substitute Forms Program

SE:W:CAR:MP:P:TP

1111 Constitution Ave. NW Room 6554

Washington, DC 20224

Note. Allow at least 30 days for the IRS to respond.

You may also contact the Substitute Forms Program via email at substituteforms@irs.gov. Please

enter “Substitute Forms” on the Subject Line.

Forms 1096, 1097-BTC, 1098, 1099, 3921, 3922, 5498, W-2G, and 1042-S are subject to annual

review and possible change. Therefore, filers are cautioned against overstocking supplies of privately printed substitutes.

1.3.2

Logos, Slogans, and

Advertisements

Some Forms 1097-BTC, 1098, 1099, 3921, 3922, 5498, W-2G, and 1042-S that include logos,

slogans, and advertisements may not be recognized as important tax documents. A payee may not

recognize the importance of the payee copy for tax reporting purposes due to the use of logos,

slogans, and advertisements.

Accordingly, the IRS has determined that logos, slogans, and advertising are not allowed on the

payee copies of the above forms, on Copy A filed with the IRS, or on Form 1096, with the following exceptions:

•

The exact name of the payer, broker, or agent, primary trade name, trademark, service mark,

or symbol of the payer, broker, or agent, an embossment or watermark on the information

return and payee copies that is a representation of the name, a primary trade name, trademark,

service mark, or symbol of the payer, broker, or agent, that is;

•

Presented in any typeface, font, stylized fashion, or print color normally used by the payer,

broker, or agent, and used in a nonintrusive manner; and

•

As long as these items do not materially interfere with the ability of the recipient to recognize,

understand, and use the tax information on the payee copies.

The IRS e-file logo on the IRS official payee copies may be included, but it is not required, on any

of the substitute form copies.

The information return and payee copies must clearly identify the payer’s name associated with

its employer identification number.

Logos and slogans may be used on permissible enclosures, such as a check or account statement,

other than information returns and payee copies.

Bulletin No. 2021–26

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June 28, 2021

If you have comments about the restrictions on including logos, slogans, and advertising on information returns and payee copies, send your comments to:

Internal Revenue Service

Attn: Substitute Forms Program

SE:W:CAR:MP:P:TP

1111 Constitution Ave. NWRoom 6554

Washington, DC 20224

or email them to substituteforms@irs.gov.

1.3.3

Copy A Specifications

Proposed substitutes of Copy A must be exact replicas of the official IRS form with respect to

layout and content. Proposed substitutes for Copy A that do not conform to the specifications in

this revenue procedure are not acceptable.

Further, if you file such forms with the IRS, you may be subject to a penalty for failure to file a

correct information return under section 6721 of the Code. The amount of the penalty is based on

when you file the correct information return.

Penalties. The amounts of the penalty for returns required to be filed in 2022 is shown in O.

Penalties in the 2021 General Instructions for Certain Information Returns. You can access the

penalties section at IRS.gov/instructions/ i1099gi#idm140065029227536.

1.3.4

Copy B and Copy C

Specifications

Copy B and Copy C of the following forms must contain the information in Part 4 to be considered a “statement” or “official form” under the applicable provisions of the Code. The format of

this information is at the discretion of the filer with the exception of the location of the tax year,

form number, form name, and the information for composite Form 1099 statements as outlined

under Section 4.2.

Copy B, of the forms below, is for the following recipients.

Form

June 28, 2021

Recipient

1098

For Payer/Borrower

1098-C

For Donor

1098-E; 1099-A

For Borrower

1098-F

For Payer

1098-MA

For Homeowner

1098-Q

For Participant

1098-T

For Student

1099-C

For Debtor

1099-CAP

For Shareholder

1099-K

For Payee

1099-LS

For Payment Recipient

1099-LTC

For Policyholder

1099-R; W-2G

Indicates that these forms may require Copy B to be

attached to the federal income tax return.

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Form

Recipient

1099-S

For Transferor

1099-SB

For Seller

All remaining Forms 1099;

1097-BTC;1042-S

3921; 3922

For Recipient

5498; 5498-SA

For Participant

5498-QA; 5498-ESA

For Beneficiary

For Employee

Copy C of the following forms is for the following recipients.

Form

Recipient

1097-BTC

For Payer

1098

For Recipient/Lender

1098-C

For Donor’s Records

1042-S; 1098-E

For Recipient

1098-F; 1098-MA; 1098-T;

1099-K

1098-Q

For Filer

1099-CAP; 3921; 3922

For Corporation

1099-LTC

For Insured

1099-QA

For Payer

1099-R

For Recipient’s Records

All other Forms 1099

See Section 4.5.2

5498

For Trustee or Issuer

5498-ESA; 5498-SA

For Trustee

5498-QA

For Issuer

W-2G

For Winner’s Records

For Issuer

Note. On Copy C, Form 1099-LTC, you may reverse the locations of the policyholder’s and the

insured’s name, street address, city, state, and ZIP code for easier mailing.

Part 2

Specifications for Substitute Forms 1096 and Copies A of Forms 1098, 1099, 3921, 3922, and 5498

(All Filed With the IRS)

Section 2.1 – Specifications

2.1.1

Online Fillable Forms

Bulletin No. 2021–26

Due to the very low volume of paper Forms 1097-BTC, 1098-C, 1098–F, 1098-MA, 1099-A,

1099-CAP, 1099-LTC, 1099-Q, 1099-QA, 1099-SA, 3922, 5498-ESA, 5498-QA, and 5498-SA

1259

June 28, 2021

received and processed by the IRS each year, these forms have been converted to fillable online

PDFs.

Note. The instructions for substitute Forms 1042-S, also a fillable online format, are found separately in Part 5.

These forms in their fillable format can be found at IRS.gov/formspubs.

All the instructions regarding the substitute forms found in Part 1, and Sections 2.1.2, 2.1.7, 2.1.9,

and 2.1.10, and the remainder of this publication, unless specified differently immediately below,

remain in effect if you are going to produce the online fillable forms as paper or online substitute

forms.

•

Copy A of privately printed substitutes of the forms listed above must be exact replicas of

the official forms with respect to layout and content. Use the official form, found on IRS.gov,

printed actual size on an 8½ inches by 11 inches sheet of paper. The forms will print one to

a page.

•

All printing must be in high quality nonglossy black ink.

•

Paper for Copy A must be white chemical wood bond, or equivalent, 20 pounds (basis 17 x

22-500), plus or minus 5% (0.05); or offset book paper, 50 pounds (basis 25 x 38-500). No

optical brighteners may be added to the pulp or paper during manufacture. The paper must

consist of principally bleached chemical wood pulp or recycled printed paper. It must also be

suitably sized to accept ink without feathering.

Note. If you want to print the forms as they formerly appeared to save paper, with the exception of

Forms 1097-BTC (printed 2-to-a-page) and 1098-C (single form page), they are all printed 3-to-apage. Follow the 3-to-a-page measurements in Section 6. Form 1098-C can be found at IRS.gov/

Form1098C. Print the form to actual size, no scaling.

2.1.2

General Requirements

Form identifying numbers (for example, 9191 for Form 1099-DIV) must be printed in nonreflective black carbon-based ink in print positions 15 through 19 using an optical character recognition

(OCR) A font. The checkboxes to the right of the form identifying numbers must be 10-point boxes. The “VOID” checkbox is in print position 25 (1.9 inches from left vertical line of the form).

The “CORRECTED” checkbox is in print position 33 (2.7 inches from left vertical line of the

form). Measurements are generally from the left edge of the paper, not including the perforated

strip.

The substitute form Copy A must be an exact replica of the official IRS form with respect to layout

and content. To determine the correct form measurements, see Exhibits A through CC at the end

of this publication.

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

permitted on the back of a mailer top envelope ply.

Use of chemical transfer paper for Copy A is acceptable.

The Government Printing Office (GPO) symbol must be deleted.

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2.1.3

Color and Paper Quality

Color and paper quality for Copy A (cut sheets and continuous pinfeed forms) as specified by JCP

Code 0-25, dated November 29, 1978, must be white 100% bleached chemical wood, OCR bond

produced in accordance with the following specifications.

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

are met.

Acidity: Ph value, average, not less than

4.5

Basis Weight: 17 x 22-500 cut sheets

18-20

Metric equivalent–g/m2

75

A tolerance of ±5 pct. is allowed.

Stiffness: Average, each direction, not less than-milligrams

50

Tearing strength: Average, each direction, not less than-grams

40

Opacity: Average, not less than-percent

82

Thickness: Average-inch

0.0038

Metric equivalent-mm

0.097

A tolerance of +0.0005 inch (0.0127 mm) is allowed. Paper cannot

vary more than 0.0004 inch (0.0102 mm) from one edge to the other.

Porosity: Average, not less than-seconds

10

Finish (smoothness): Average, each side-seconds

20-55

For information only, the Sheffield equivalent-units

170-100

Dirt: Average, each side, not to exceed-parts per million

2.1.4

Chemical Transfer Paper

8

Chemical transfer paper is permitted for Copy A only if the following standards are met.

•

Only chemically backed paper is acceptable for Copy A. Front and back chemically treated

paper cannot be processed properly by machine.

•

Carbon-coated forms are not permitted.

•

Chemically transferred images must be black.

All copies must be clearly legible. Fading must be minimized to assure legibility.

2.1.5

Printing

All print on Copy A of Forms 1097-BTC, 1098, 1098-C, 1098-E, 1098-MA, 1098-Q, 1098-T,

1099-A, 1099-B, 1099-C, 1099-DIV, 1099-G, 1099-INT, 1099-K, 1099-LS, 1099-MISC, 1099NEC, 1099-OID, 1099-PATR, 1099-Q, 1099-R, 1099-S, 1099-SB, 3921, 3922, 5498, and the

print on Form 1096 above the statement, “Return this entire page to the Internal Revenue Service.

Photocopies are not acceptable.” must be in Flint J-6983 red OCR dropout ink or an exact match.

However, the 4-digit form identifying number must be in nonreflective carbon-based black ink in

OCR A font.

The shaded areas of any substitute form should generally correspond to the format of the official

form.

The printing for the Form 1096 jurat statement and the text that follows may be in any shade or

tone of black ink. Black ink should only appear on the lower part of the reverse side of Form 1096,

where it will not bleed through and interfere with scanning.

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Note. The instructions on the front and back of Form 1096, which include filing addresses, must

be printed.

Separation between fields must be 0.1 inch.

Other printing requirements are discussed in Sections 2.1.5 through 2.1.9.

2.1.6

OCR

Specifications

You must initiate, or have, a quality control program to assure OCR ink density. Readings will be

made when printed on approved 20 lb. white OCR bond with a reflectance of not less than 80%

(0.80). Black ink must not have a reflectance greater than 15% (0.15). These readings are based

on requirements of the “BancTec IntelliScan XDS” Optical Scanner using Flint J-6983 red OCR

dropout ink or an exact match.

The following testers and ranges are acceptable:

Important information: The forms produced under these specifications must be guaranteed to

function properly when processed through High Speed Scan-Optics 9000 mm scanners. Forms

require precision spacing, printing, and trimming.

Density readings on the solid J-6983 (red) must be between the ranges of 0.95 to 0.90. The optimal

scanning range is 0.93. Density readings on the solid black must be between the ranges of 112 to

108. The optimal scanning range is 110.

Note. The readings are taken using an Ex-Rite 500 series densitometer, in Status T with Absolute

or – paper setting under an Illuminate 5000 Kelvin Watt Light. You must maintain print contrast

specification of ink and densitometer reflectivity reading throughout the entire production run.

•

MacBeth PCM-II. The tested Print Contrast Signal (PCS) values when using the MacBeth

PCM-II tester on the “C” scale must range from .01 minimum to .06 maximum.

•

Kidder 082A. The tested PCS values when using the Kidder 082A tester on the Infra Red (IR)

scale must range from .12 minimum to .21 maximum. White calibration disc must be 100%.

Sensitivity must be set at one (1).

•

Alternative testers must be approved by the IRS to establish tested PCS values. You may

obtain approval by writing to the following address:

Commissioner of Internal Revenue

Attn: SE:W:CAR:MP:P:TP

Business Publishing – Tax Products

1111 Constitution Ave. NW

Room 6554

Washington, DC 20224

2.1.7

Typography

Type must be substantially identical in size and shape to the official form. All rules are either

1/2-point or 3/4-point. Rules must be identical to those on the official IRS form.

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

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2.1.8

Dimensions

Generally, three Copies A of Forms 1098, 1099, 3921, and 3922 are contained on a single page

(3-to-a-page), 8 inches wide (without any snap-stubs and/or pinfeed holes) by 11 inches deep.

Exceptions. Forms 1097-BTC, 1098, 1098-Q, 1099-B, 1099-DIV, 1099-INT, 1099-K, 1099MISC, 1099-OID, 1099-R, and 5498 contain two copies on a single page (2-to-a-page). Forms

1098-C and 1042-S are single-page documents.

There is a 0.33 inch top margin from the top of the corrected box, and a 0.2 to 0.25 inch right

margin, with a +/- 1/20 (0.05) inch tolerance for the right margin. If the right and top margins are

properly aligned, the left margin for all forms will be correct. All margins must be free of print.

See Exhibits A through CC in Part 6 for correct form measurements.

These measurements are constant for certain Forms 1098, 1099, and 5498. These measurements

are shown only once in this publication, on Form 1097-BTC (Exhibit B) 2-to-a-page and on Form

1098-E (Exhibit E) 3-to-a-page. Exceptions to these measurements, and form-specific measurements are shown on the rest of the exhibits.

The depth of the individual trim size of each 3-to-a-page form must be 3 2/3 inches, the same

depth as the official form, unless otherwise indicated.

The depth of the individual trim size of each 2-to-a-page form is 5 1/2 inches.

2.1.9

Perforation

Copy A (3-to-a-page and 2-to-a-page) of privately printed continuous substitute forms must be

perforated at each 11 inches page depth. No perforations are allowed between forms on the Copy

A page.

Exception. Copy A of Form W-2G may be perforated.

The words “Do Not Cut or Separate Forms on This Page” must be printed in red dropout ink (as

required by form specifications) between the 3-to-a-page or 2-to-a-page. This statement should

not be included after the last form on the page.

Separations are required between all the other individual copies (Copies B and C, and Copies 1

and 2 of Forms 1099-B, 1099-DIV, 1099-G, 1099-INT, 1099-K, 1099-MISC, 1099-NEC, 1099OID, 1099-R, and Copy D for Forms 1099–LS, 1099-LTC, 1099-R, and 1042-S) in the set. Any

recipient copies printed on a single sheet of paper must be easily separated. The best method of

separation is to provide perforations between the individual copies. Each copy should be easily

distinguished, whatever method of separation is used.

Note. Perforation does not apply to printouts of copies that are furnished electronically to recipients (as described in Regulations section 31.6051-1(j)). However, these recipients should be cautioned to carefully separate any copies. See Section 4.6.1, later, for information on electronically

furnishing statements to recipients.

2.1.10

Required Inclusions/

Exclusions

Bulletin No. 2021–26

You must include the OMB Number on Copies A and Form 1096 in the same location as on the

official form.

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The following Privacy Act and Paperwork Reduction Act Notice phrases must be printed on Copy

A of the forms as follows. It must also be printed on the Copy C, D, or E of the form retained by

the filer.

•

“For Privacy Act and Paperwork Reduction Act Notice, see the current version of the General

Instructions for Certain Information Returns” on Forms 3921 and 3922.

•

“For more information and the Privacy Act and Paperwork Reduction Act Notice, see

the 2021 General Instructions for Certain Information Returns” on Form 1096.

•

“For Privacy Act and Paperwork Reduction Act Notice, see instructions” on Form 1042S.

•

“For Privacy Act and Paperwork Reduction Act Notice, see the 2021 General Instructions

for Certain Information Returns” must be printed on all other forms listed in Section 1.1.2.

A postal indicia may be used if it meets the following criteria.

•

It is printed in the OCR ink color prescribed for the form.

•

No part of the indicia is within one print position of the scannable area.

The printer’s symbol (GPO) must not be printed on substitute Copy A. Instead, the employer

identification number (EIN) or the vendor code of the form’s printer must be entered in place of

the Catalog Number (Cat. No.). The 4-digit vendor code, preceded by four zeros and a slash, for

example, 0000/9876, must appear in 12-point Arial font, or a close approximation, on Copy A only

of Forms 1096, 1097-BTC, 1098, 1099, 3921, 3922, 5498, and W-2G. The vendor code is used to

identify the forms producer. Vendor codes can be obtained free of charge from the National Association of Computerized Tax Processors (NACTP) via email at president@nactp.org. The use of a

vendor code is recommended.

Note. Vendor codes from the NACTP are required by those companies producing the 1099 family

of forms (Forms 1096, 1097-BTC, 1098, 1099, 3921, 3922, 5498, and W-2G) as part of a product

for resale to be used by multiple issuers. Issuers developing 1099 family forms to be used only for

their individual company do not require a vendor code.

The Cat. No. shown on the forms is used for IRS distribution purposes and should not be printed

on any substitute forms.

The form must not contain the statement “IRS approved” or any similar statement.

Section 2.2 – Instructions for Preparing Paper Forms That Will Be Filed With the IRS

2.2.1

Recipient Information

The form recipient’s name, street address, city, state, ZIP code, and telephone number (if required)

should be typed or machine printed in black ink in the same format as shown on the official IRS

form. The city, state, and ZIP code must be on the same line.

The following rules apply to the form recipient’s name(s).

June 28, 2021

•

The name of the appropriate form recipient must be shown on the first or second name line in

the area provided for the form recipient’s name.

•

No descriptive information or other name may precede the form recipient’s name.

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•

Only one form recipient’s name may appear on the first name line of the form.

•

If multiple recipients’ names are required on the form, enter on the first name line the recipient name that corresponds to the recipient taxpayer identification number (TIN) shown on

the form. Place the other form recipients’ names on the second name line (only 2 name lines

are allowable).

Because certain states require that trust accounts be provided in a different format, filers should

generally provide information returns reflecting payments to trust accounts with the:

•

Trust’s employer identification number (EIN) in the recipient’s TIN area,

•

Trust’s name on the recipient’s first name line, and

•

Name of the trustee on the recipient’s second name line.

Although handwritten forms will be accepted, the IRS prefers that filers type or machine print

data entries. Also, filers should insert data as directed by shading, or in the middle of blocks, well

separated from other printing and guidelines, and take measures to guarantee clear, dark black,

sharp images. Photocopies are not acceptable.

Truncating payee identification number on payee statements. Where permitted, filers may

truncate a payee’s identification number (social security number (SSN), individual taxpayer identification number (ITIN), adoption taxpayer identification number (ATIN), or employer identification number (EIN)) on the payee statement (including substitute and composite substitute

statements) furnished to the payee in paper form or electronically. Generally, the payee statement

is that copy of an information return designated “Copy B” on the form. To truncate where allowed,

replace the first 5 digits of the 9-digit number with asterisks (*) or Xs (for example, an SSN xxxxx-xxxx would appear on the paper payee statement as ***-**-xxxx or XXX-XX-xxxx). See

Treasury Decision 9675, 2014-31 I.R.B. 242, available at IRS.gov/irb/2014-31_IRB#TD-9675.

Caution. Recipient TINs must not be truncated on Copy A filed with the IRS.

2.2.2

Account Number Box

Use the account number box on all Forms 1098, 1099, 3921, 3922, 5498, and W-2G for an account

number designation when required by the official IRS form. The account number is required if you

have multiple accounts for a recipient for whom you are filing more than one information return

of the same type. Additionally, the IRS encourages you to include the recipients’ account numbers

on paper forms if your system of records uses the account number rather than the name or TIN

for identification purposes. Also, the IRS will include the account number in future notices to you

about backup withholding. If you are using window envelopes to mail statements to recipients and

using reduced rate mail, be sure the account number does not appear in the window. The Postal

Service may not accept these for reduced rate mail.

Exception. Form 1098-T can have third-party provider information.

2.2.3

Specifications and

Restrictions

Bulletin No. 2021–26

•

Machine-printed forms should be printed using a 6 lines/inch option, and should be printed

in 10 pitch pica (10 print positions per inch) or 12 pitch elite (12 print positions per inch).

Proportional spaced fonts are unacceptable.

•

Substitute forms prepared in continuous or strip form must be burst and stripped to conform to

the size specified for a single sheet before they are filed with the IRS. The size specified does not

include pin feed holes. Pin feed holes must not be present on forms filed with the IRS.

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June 28, 2021

•

Do not use a felt tip marker. The machine used to “read” paper forms generally cannot read

this ink type.

•

Do not use dollar signs ($), ampersands (&), asterisks (*), commas (,), or other special characters in the numbered money boxes.

Exception. Use decimal points to indicate dollars and cents (for example, 2000.00 is acceptable).

2.2.4

Where To File

•

Do not use apostrophes (’), asterisks (*), or other special characters on the payee name line.

•

Do not fold Forms 1097-BTC, 1098, 1099, 3921, 3922, or 5498 mailed to the IRS. Mail these

forms flat in an appropriately sized envelope or box. Folded documents cannot be readily

moved through the machine used in IRS processing.

•

Do not staple Forms 1096 to the transmitted returns. Any staple holes near the return code

number may impair the IRS’s ability to machine scan the type of documents.

•

Do not type other information on Copy A.

•

Do not cut or separate the individual forms on the sheet of forms of Copy A (except Forms

W-2G).

Mail completed paper forms to the IRS service center shown in the Instructions for Form 1096

and in the 2021 General Instructions for Certain Information Returns. Specific information needed

to complete the forms mentioned in this revenue procedure are given in the specific form instructions. A chart showing which form must be filed to report a particular payment is included in the

2021 General Instructions for Certain Information Returns.

Part 3

Specifications for Substitute Form W-2G (Filed With the IRS)

Section 3.1 – General

3.1.1

Purpose

The following specifications give the format requirements for substitute Form W-2G (Copy A

only), which is filed with the IRS.

A filer may use a substitute Form W-2G to file with the IRS (referred to as “substitute Copy A”).

The substitute form must be an exact replica of the official form with respect to layout and content.

Section 3.2 – Specifications for Copy A of Form W-2G

3.2.1

Substitute Form W-2G

(Copy A)

June 28, 2021

You must follow these specifications when printing substitute Copy A of the Form W-2G.

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Caution. The payee’s TIN (SSN, ITIN, ATIN, or EIN) must not be truncated onCopy A of Form

W2-G.

Item

Substitute Form W-2G (Copy A)

Paper Color and

Quality

Paper for Copy A must be white chemical wood bond, or equivalent, 20

pounds (basis 17 x 22-500), plus or minus 5% (0.05). The paper must

consist substantially of bleached chemical wood pulp. It must be free

from unbleached or ground wood pulp or post-consumer recycled paper.

It must also be suitably sized to accept ink without feathering.

All printing must be in a high quality nonglossy black ink.

Ink Color and

Quality

Typography

Dimensions

Hot Wax and Cold

Carbon Spots

Printer’s Symbol

Catalog Number

The type must be substantially identical in size and shape to the official

form. All rules on the document are either 1/2 point (0.007 inch), 1

point (0.015 inch), or 3 point (0.045). Vertical rules must be parallel to

the left edge of the document; horizontal rules to the top edge.

The official form is 8 inches wide x 51/2 inches deep, exclusive of a

snap stub. Any substitute Copy A can be between 8 inches and 81/2

inches wide by 5 inches deep. The snap feature is not required on

substitutes. All margins must be free of print. There is a 0.33 inch top

margin from the top of the corrected box, and a 1/2 inch left margin. If

the top and left margins are properly aligned, the right margin for all

forms will be correct. If the substitute forms are in continuous or strip

form, they must be burst and stripped to conform to the size specified

for a single form.

Hot wax and cold carbon spots are not permitted on any of the internal

form plies. These spots are permitted on the back of a mailer top

envelope ply.

The Government Printing Office (GPO) symbol must not be printed on

substitute Forms W-2G. Instead, the employer identification number

(EIN) of the form’s printer must be printed in the bottom margin on the

face of each individual Copy A on a sheet. The form must not contain

the statement “IRS approved” or any similar statement.

The Catalog Number (Cat. No.) shown on Form W-2G is used for IRS

distribution purposes and should not be printed on any substitute forms.

Part 4

Substitute Statements to Form Recipients and Form Recipient Copies

Section 4.1 – Specifications

4.1.1

Introduction

Bulletin No. 2021–26

If you do not use the official IRS form to furnish statements to recipients, you must furnish an

acceptable substitute statement. Information presented in substitute statements should be in a

point size large enough to be easily read by recipients. To be acceptable, your substitute statement

must comply with the rules in this Part. If you are furnishing a substitute form, see Regulations

sections 1.6042-4, 1.6044-5, 1.6049-6, and 1.6050N-1 to determine how the following statements

must be provided to recipients for most Forms 1099-DIV and 1099-INT, all Forms 1099-OID and

1099-PATR, and Form 1099-MISC, or 1099-S for royalties. Generally, information returns may

be furnished electronically with the consent of the recipient. See Section 4.6.1.

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Note. A trustee of a grantor-type trust may choose to file Forms 1099 and furnish a statement to

the grantor under Regulations sections 1.671-4(b)(2)(iii) and (b)(3)(ii). The statement required by

those regulations is not subject to the requirements outlined in this section.

4.1.2

Substitute Statements to

Recipients for Certain

Forms 1099-B, 1099- DIV,

1099-INT, 1099-OID, and

1099-PATR

The rules in this section apply to Form 1099-B, 1099-DIV (except for section 404(k) dividends),

1099-INT (except for interest reportable under section 6041), 1099-OID, and 1099-PATR only.

You may furnish form recipients with Copy B of the official Form 1099 or a substitute Form 1099

(recipient statement) if it contains the same information as the official IRS form (such as aggregate

amounts paid to the form recipient, any backup withholding, the name, address, and TIN of the

person making the return, and any other information required by the official form). Information

not required by the official form should not be included on the substitute form except for state income tax withholding information. But see Section 4.3 regarding additional information that may

be included on substitute and composite Forms 1099-B, such as basis for noncovered securities.

Note. Many of the information returns now include boxes for providing state withholding information as part of the official form, with additional copies for convenience. Payers may, however,

provide the state withholding information separately (such as on a separate page or section) in

order to assist the payee with completing a state income tax return that requires the attachment of

any information return that includes state withholding amounts and payer numbers.

Exception for supplementary information. The substitute form may include supplementary information that will assist the payee with completing his or her tax return. Such information could

include expense and cost basis factors related to the reporting for widely held fixed investment

trusts (WHFITs), as required under Regulations section 1.671-5. The substitute statement should

disclose to the payee that such supplementary information is not furnished to the IRS. See Section

4.3 for additional requirements when providing supplemental information with the Form 1099-B

that is not furnished to the IRS.

Form 1099-B. For transactions reportable on Form 8949, brokers that use substitute statements

should segregate dispositions of noncovered securities from covered securities, and further segregate long-term and short-term dispositions of covered securities. They may also segregate longterm from short-term dispositions of noncovered securities, to the extent that date acquired is

known. For 2021 dispositions, the substitute Forms 1099-B may have up to five separate sections,

each with a heading identifying which securities are included in the list, and each separately

totaled. Each section, after totaling or within the heading for the section, should indicate how to

report the transactions on Form 8949, as indicated.

June 28, 2021

1.

Short-term transactions for which basis is reported to the IRS—Report on Form 8949, Part I,

with Box A checked.

2.

Short-term transactions for which basis is not reported to the IRS—Report on Form 8949,

Part I, with Box B checked.

3.

Long-term transactions for which basis is reported to the IRS—Report on Form 8949, Part

II, with Box D checked.

4.

Long-term transactions for which basis is not reported to the IRS—Report on Form 8949,

Part II, with Box E checked.

5.

Transactions for which basis is not reported to the IRS and for which short-term or long-term

determination is unknown (to Broker). You must determine short-term or long-term based on

your records and report on Form 8949, Part I, with Box B checked, or on Form 8949, Part

II, with Box E checked, as appropriate.

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For each section, each transaction may include information not reported to the IRS, such as basis,

date acquired, and gain or loss. Therefore, for short-term dispositions where basis was not reported to the IRS, basis and date acquired may be shown just as it would be shown for short-term

dispositions where basis was reported to the IRS.

For 2021 dispositions, each of the applicable sections must have Sales Price and Cost or Other

Basis (if known) separately totaled. Net gain or loss, if included for any of the sections, may also

be totaled.

Brokers may also use substitute Form 1099-B for transactions that are not directly reported on

Form 8949. Examples include transactions involving regulated futures contracts, foreign currency contracts, and section 1256 option contracts. Any additional sections created for this purpose

should be segregated from those transactions directly reportable on Form 8949.

The substitute form requirements in the following paragraphs also apply to Form 1099-B.

Form 1099-INT, 1099-DIV, 1099-OID, or 1099-PATR. A substitute recipient statement for

Forms 1099-INT, 1099-DIV, 1099-OID, or 1099-PATR must comply with the following requirements.

•

Box captions and numbers that are applicable must be clearly identified, using the same wording and numbering as on the official form.

•

The recipient statement (Copy B) must contain all applicable recipient instructions as provided on the front and back of the official IRS form. You may provide those instructions on

a separate sheet of paper.

•

The box caption “Federal income tax withheld” must be in boldface type or otherwise highlighted on the recipient statement.

•

The recipient statement must contain the Office of Management and Budget (OMB) number

as shown on the official IRS form. See Section 5.2.

•

The recipient statement must contain the tax year (for example, 2021), form number (for

example, Form 1099-INT), and form name (for example, Interest Income) of the official

IRS Form 1099. This information must be displayed prominently together in one area of the

statement. For example, the tax year, form number, and form name could be shown in the

upper right part of the statement. Each copy must be appropriately labeled (such as Copy B,

For Recipient). See Section 4.5.2 for applicable labels and arrangement of assembly of forms.

Note. Do not include the words “Substitute for” or “In lieu of” on the recipient statement.

•

Layout and format of the statement is at the discretion of the filer. However, the IRS encourages the use of boxes so that the statement has the appearance of a form and can be easily

distinguished from other nontax statements.

•

Each recipient statement of Form 1099-B, 1099-DIV, 1099-INT, 1099-OID, or 1099-PATR

must include the direct access telephone number of an individual who can answer questions

about the statement. Include that telephone number conspicuously anywhere on the recipient

statement.

A mutual fund family may furnish one statement (for example, one piece of paper) on which it

reports the dividend income earned by a recipient from multiple funds within the family of mutual

funds, as required by Form 1099-DIV. However, each fund and its earnings must be stated separately. The statement must contain an instruction to the recipient that each fund’s dividends and

name, not the name of the mutual fund family, must be reported on the recipient’s tax return. The

statement cannot contain an aggregate total of all funds. In addition, a mutual fund family may furnish a single statement (as a single filer) for Form 1099-INT, 1099-DIV, or 1099-OID information

(see Section 4.2.1, later). Each fund and its earnings must be stated separately. The statement must

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June 28, 2021

contain an instruction to the recipient that each fund’s earnings and name, not the name of the

mutual fund family, must be reported on the recipient’s tax return. The statement cannot contain

an aggregate total of all funds.

You may enter a total of the individual accounts listed on the statement only if they have been

paid by the same payer. For example, if you are listing interest paid on several accounts by one

financial institution on Form 1099-INT, you may also enter the total interest amount. You may also

enter a date next to the corrected box if that box is checked.

4.1.3

Substitute Statements to

Recipients for Certain

Forms 1098, 1099, 5498,

and W-2G

Statements to form recipients for Forms 1097-BTC, 1098, 1098-C, 1098-E, 1098-F, 1098-MA,

1098-Q, 1098-T, 1099-A, 1099-C, 1099-CAP, 1099-G, 1099-K, 1099-LS, 1099-LTC, 1099MISC, 1099-NEC, 1099-Q, 1099-QA, 1099-R, 1099-S, 1099-SA, 1099-SB, 3921, 3922, 5498,

5498-ESA, 5498-QA, 5498-SA, W-2G, 1099-DIV (only for section 404(k) dividends reportable

under section 6047), and 1099-INT (only for interest of $600 or more made in the course of a trade

or business reportable under section 6041) can be copies of the official forms or an acceptable

substitute.

Caution. The IRS does not require a donee to use Form 1098-C as the written acknowledgment

for contributions of motor vehicles, boats, and airplanes. However, if you choose to use copies of

Form 1098-C or an acceptable substitute as the written acknowledgment, then you must follow

the requirements of this section.

To be acceptable, a substitute recipient statement must meet the following requirements.

•

The tax year, form number, and form name must be the same as the official form and must

be displayed prominently together in one area on the statement. For example, they may be

shown in the upper right part of the statement.

•

The statement must contain the same information as the official IRS form, such as aggregate

amounts paid to the form recipient, any backup withholding, the name, address, and TIN of

the filer and of the recipient, and any other information required by the official form.

•

Each substitute recipient statement for Forms W-2G, 1097-BTC, 1098, 1098-C, 1098-E,

1098-F, 1098-T, 1099-A, 1099-C, 1099-CAP, 1099-DIV, 1099-G (excluding state and local

income tax refunds), 1099-K, 1099-INT, 1099-LS, 1099-LTC, 1099-MISC (excluding fishing

boat proceeds), 1099-NEC, 1099-Q, 1099-R (for qualified long-term care insurance contracts

under combined arrangements only), 1099-S, 1099-SA, 1099-SB, and 5498-SA must include

the direct access telephone number of an individual who can answer questions about the

statement.

•

Include the telephone number conspicuously anywhere on the recipient statement. Although

not required, payers reporting on Forms 1099-QA, 1099-R (payments other than qualified

long-term care insurance contracts under combined arrangements), 3921, 3922, 5498, 5498ESA, and 5498-QA are encouraged to furnish telephone numbers at which recipients of the

form(s) can reach a person familiar with the information reported.

•

All applicable money amounts and information, including box numbers required to be reported to the form recipient, must be titled on the recipient statement in substantially the same

manner as those on the official IRS form. The box caption “Federal income tax withheld”

must be in boldface type on the recipient statement.

Exception. If you are reporting a payment as “Other income” in box 3 of Form 1099-MISC, you

may substitute appropriate language for the box title. For example, for payments of accrued wages

and leave to a beneficiary of a deceased employee, you might change the title of box 3 to “Beneficiary payments” or something similar.

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Note. You cannot make this change on Copy A.

4.1.4

Online Fillable Copies B, C,

D, 1, and 2

•

If federal income tax is withheld and shown on Form 1099-R or W-2G, Copy B and Copy

C must be furnished to the recipient. If federal income tax is not withheld, only Copy C of

Forms 1099-R and W-2G must be furnished. However, for Form 1099-R, instructions similar

to those on the back of the official Copy B and Copy C of Form 1099-R must be furnished

to the recipient. For convenience, you may choose to provide both Copies B and C of Form

1099-R to the recipient.

•

You must provide appropriate instructions to the form recipient similar to those on the official IRS form, to aid in the proper reporting on the form recipient’s income tax return. For

payments reported on Forms 1099-B and 1099-CAP, the requirement to include instructions

substantially similar to those on the official IRS form, may be satisfied by providing form

recipients with a single set of instructions for all Forms 1099-B and 1099-CAP statements

required to be furnished in a calendar year.

•

If you use carbonless sets to produce recipient statements, the quality of each copy in the set

must meet the following standards.

1.

All copies must be clearly legible.

2.

All copies must be able to be photocopied.

3.

Fading must not diminish legibility and the ability to photocopy.

•

In general, black chemical transfer inks are preferred, but other colors are permitted if the

above standards are met. Hot wax and cold carbon spots are not permitted on any of the internal form plies. The back of a mailer top envelope ply may contain these spots.

•

For reporting state income tax withholding and state payments, you may add an additional

box(es) to recipient copies, as appropriate. In addition, the state withholding information may

be provided separately and apart from the other information in the event the recipient must

attach a copy to the recipient’s tax return. Note. You cannot make this change on Copy A.

•

On Copy C of Form 1099-LTC, you may reverse the location of the policyholder’s and the

insured’s name, street address, city, state, and ZIP code for easier mailing.

•

If an institution insurer uses a third-party service provider to file Form 1098-T, then in addition to the institution or insurer’s name, address, and telephone number, the same information

may be included for the third-party service provider in the space provided on the form.

•

Forms 1099-A and 1099-C transactions, if related, may be combined on Form 1099-C.

Copies B, C, D, 1, and 2, as applicable, to be furnished to recipients and kept in the filers’ records,

have been made online fillable at IRS.gov/forms-instructions for many forms referenced in these

instructions. See the separate instructions for Forms 1098, 1098-E & T, 1098-F, 1098-Q, 1099-A

& C, 1099-B, 1099-DIV, 1099-G, 1099-INT & OID, 1099-K, 1099-LS, 1099-MISC, 1099-NEC,

1099-PATR, 1099-R & 5498, 1099-S, 1099-SB, and 3921.

Section 4.2 – Composite Statements

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June 28, 2021

4.2.1

Composite Substitute

Statements for Certain

Forms 1099-B, 1099- DIV,

1099-INT, 1099-MISC,

1099-OID, 1099-PATR, and

1099- S

A composite recipient statement is permitted for reportable payments consisting of the proceeds

of brokerage and barter transactions, dividends, interest, original issue discount, patronage dividends, and royalties. The following forms may be included on a composite substitute statement,

when one payer is reporting more than one of these payments during a calendar year to the same

form recipient.

•

Form 1099-B.

•

Form 1099-DIV (except for section 404(k) dividends).

•

Form 1099-INT (except for interest reportable under section 6041).

•

Form 1099-MISC (only for royalties or substitute payments in lieu of dividends and interest).

•

Form 1099-OID.

•

Form 1099-PATR.

•

Form 1099-S (only for royalties).

Generally, do not include any other Form 1099 information (for example, 1099-A or 1099-C) on a

composite statement with the information required on the forms listed in the preceding sentence.

Although the composite recipient statement may be on one sheet, the format of the composite

recipient statement must satisfy the following requirements in addition to the requirements listed

earlier in Sections 4.1.2, 4.3, and 4.4, as applicable.

4.2.2

Composite Substitute

Statements to Recipients for

Forms Specified in Sections

4.1.2 and 4.1.3

June 28, 2021

•

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

included on the form. For example, if you are reporting interest and dividends, the Form

1099-INT information must be presented separately from the Form 1099-DIV information.

•

The composite recipient statement must prominently display the form number and form name

of the official IRS form together in one area at the beginning of each appropriate block of

information. The tax year must only be placed on each block of information if it is not prominently displayed elsewhere on the page on which the information appears.

•

Any information required by the official IRS forms that would otherwise be repeated in each

information block is required to be listed only once in the first information block on the composite form. For example, there is no requirement to report the name of the filer in each information block. This rule does not apply to any money amounts (for example, federal income

tax withheld) or to any other information that applies to money amounts.

•

A composite statement is an acceptable substitute only if the type of payment, and the recipient’s tax obligation with respect to the payment, are as clear as if each required statement

were furnished separately on an official form.

A composite recipient statement for the forms specified in Section 4.1.2 or 4.1.3 is permitted when

one filer is reporting more than one type of payment during a calendar year to the same form recipient. A composite statement is not allowed for a combination of forms listed in Sections 4.1.2

and 4.1.3.

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Exceptions:

•

Substitute payments in lieu of dividends or interest reported in box 8 of Form 1099-MISC

may be reported on a composite substitute statement with Form 1099-DIV.

•

Form 1099-B information may be reported on a composite form with the forms specified in

Section 4.1.2 as described in Section 4.2.1.

•

Royalties reported on Form 1099-MISC or 1099-S may be reported on a composite form only

with the forms specified in Section 4.1.2.

Although the composite recipient statement may be on one sheet, the format of the composite recipient statement must satisfy the requirements listed in Section 1.1.1 as well as the requirements

in Section 4.1.3. A composite statement of Forms 1098 and 1099-INT (for interest reportable

under section 6049) is not allowed.

Section 4.3 – Additional Information for Substitute and Composite Forms 1099-B

4.3.1

General Requirements for

Presenting Additional Form

1099-B

Information

A filer may include Form 1099-B information on a composite form with the forms listed in Section

4.1.2. Therefore, supporting, explanatory, or comparable relevant information for covered and

noncovered lots on the 1099-B portion of the composite statement can be included. This information includes display on the payee statement of data elements such as basis for noncovered lots,

explanatory remarks on permissible basis adjustments for covered lots, descriptions of the type

of transaction (merger, buy to close, redemption, etc.), identification of contingent payment debt

obligations, and lot relief methods.

If you wish to provide additional information to the investor on the same substitute recipient Form

1099-B, the form must follow the rules set forth in this Section 4.3 and should clearly delineate

how the information is presented. Any information presented should make reference to its corresponding number on the official form, as appropriate. You should clearly categorize each type of

information you are reporting.

4.3.2

Added Legend for

Providing Additional

1099-B Information

An additional separate legend is required that explains exactly which pieces of information are

and which are not reported to the IRS, to the extent, if any, the information is not already identified as not being reported to the IRS, as described in Section 4.1.2. It should clearly explain how

the information is presented. You may present this legend in a way that is consistent with your

design as long as it clearly indicates which information is being provided to the IRS. Additionally,

a reminder to taxpayers that they are ultimately responsible for the accuracy of their tax returns

is also required.

Section 4.4 – Required Legends

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June 28, 2021

4.4.1

Required Legends for

Forms 1098

4.4.2

Required Legends for

Forms 1099 and W-2G

June 28, 2021

Form 1098 recipient statements (Copy B) must contain the following legends:

•

Form 1098

1.

“The information in boxes 1 through 10 is important tax information and is being furnished to the IRS. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if the IRS determines that an underpayment of tax results

because you overstated a deduction for the mortgage interest or for these points, reported

in boxes 1 and 6; or because you did not report the refund of interest (box 4); or because

you claimed a nondeductible item.”

2.

Caution. “The amount shown may not be fully deductible by you. Limits based on the

loan amount and the cost and value of the secured property may apply. Also, you may

only deduct interest to the extent it was incurred by you, actually paid by you, and not

reimbursed by another person.”

•

Form 1098-C: Copy B - “In order to take a deduction of more than $500 for this contribution,

you must attach this copy to your federal tax return. Unless box 5a or 5b is checked, your

deduction cannot exceed the amount in box 4c.” Copy C - “This information is being furnished to the IRS unless box 7 is checked.”

•

Form 1098-E: “This is important tax information and is being furnished to the IRS. If you are

required to file a return, a negligence penalty or other sanction may be imposed on you if the

IRS determines that an underpayment of tax results because you overstated a deduction for

student loan interest.”

•

Forms 1098-F and 1098-MA: “This is important tax information and is being furnished to the

IRS.”

•

Form 1098-Q: “This information is being furnished to the IRS.”

•

Form 1098-T: “This is important tax information and is being furnished to the IRS. This form

must be used to complete Form 8863 to claim education credits. Give it to the tax preparer or

use it to prepare the tax return.”

•

Forms 1099-A, 1099-C, 1099-CAP, and 1099-K: Copy B - “This is important tax information

and is being furnished to the IRS. If you are required to file a return, a negligence penalty or

other sanction may be imposed on you if taxable income results from this transaction and the

IRS determines that it has not been reported.”

•

Forms 1099-B, 1099-DIV, 1099-G, 1099-INT, 1099-MISC, 1099-NEC, 1099-OID, 1099PATR, 1099-Q, and 1099-QA: Copy B - “This is important tax information and is being

furnished to the IRS. If you are required to file a return, a negligence penalty or other sanction

may be imposed on you if this income is taxable and the IRS determines that it has not been

reported.”

•

Form 1099-LS: Copy B - “This is important tax information and is being furnished to the IRS.

If you are required to file a return, a negligence penalty or other sanction may be imposed on

you if this item is required to be reported and the IRS determines that it has not been reported.” Copy C - “Copy C is provided to you for information only. Only the payment recipient

is required to report this information on a tax return.”

•

Form 1099-LTC: Copy B - “This is important tax information and is being furnished to the

IRS. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if this item is required to be reported and the IRS determines that it has not been

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reported.” Copy C - “Copy C is provided to you for information only. Only the policyholder

is required to report this information on a tax return.”

4.4.3

Required Legends for

Forms 1097-BTC, 3921,

3922, and 5498

•

Form 1099-R: Copy B - “Report this income on your federal tax return. If this form

shows federal income tax withheld in box 4, attach this copy to your return.” Copy C “This information is being furnished to the IRS.”

•

Forms 1099-S and 1099-SB: Copy B - “This is important tax information and is being furnished to the IRS. If you are required to file a return, a negligence penalty or other sanction

may be imposed on you if this item is required to be reported and the IRS determines that it

has not been reported.”

•

Form 1099-SA: Copy B - “This information is being furnished to the IRS.”

•

Form W-2G: Copy B - “This information is being furnished to the IRS. Report this income

on your federal tax return. If this form shows federal income tax withheld in box 4,

attach this copy to your return.” Copy C - “This is important tax information and is being

furnished to the IRS. If you are required to file a return, a negligence penalty or other sanction

may be imposed on you if this income is taxable and the IRS determines that it has not been

reported.”

•

Form 1097-BTC: Copy B - “This is important tax information and is being furnished to the

IRS. If you are required to file a return, a negligence penalty or other sanction may be imposed on you if an amount of tax credit exceeding the amount reported on this form is claimed

on your income tax return.”

•

Form 3921: Copy B - “This is important tax information and is being furnished to the IRS.

If you are required to file a return, a negligence penalty or other sanction may be imposed

on you if this item is required to be reported and the IRS determines that it has not been

reported.” Copy C - “This copy should be retained by the corporation whose stock has been

transferred under Section 422(b).”

•

Form 3922: Copy B - “This is important tax information and is being furnished to the IRS.”

Copy C - “This copy should be retained by the corporation.”

•

Form 5498: Copy B - “This information is being furnished to the IRS.” Note. If you do not

provide another statement to the participant because no contributions were made for the year,

the statement of the fair market value, and any required minimum distribution of the account,

must contain this legend and a designation of which information is being provided to the IRS.

•

Forms 5498-ESA, 5498-QA, and 5498-SA: Copy B - “This information is being furnished to

the IRS.”

Section 4.5 – Miscellaneous Instructions for Copies B, C, D, E, 1, and 2

4.5.1

Copies

Bulletin No. 2021–26

Copies B, C, and in some cases D, E, 1, and 2 are included in the official assembly for the convenience of the filer. You are not legally required to include all these copies with the privately printed

substitute forms. Furnishing Copy B, and in some cases Copy C, will satisfy the legal requirement

to provide statements of information to form recipients.

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June 28, 2021

Note. If an amount of federal income tax withheld is shown on Form 1099-R or W-2G, Copy B

(to be attached to the tax return) and Copy C must be furnished to the recipient. Copy D (Forms

1099-R and W-2G) may be used for payer records. Only Copy A should be filed with the IRS.

4.5.2

Arrangement of Assembly

Copy A (“For Internal Revenue Service Center”) of all forms must be on top. The rest of the assembly must be arranged, from top to bottom, as follows.

Form

1098

Copy B “For Payer/Borrower”; Copy C “For Recipient/Lender.”

1098-C

1098-E

Copy B “For Donor”; Copy C “For Donor’s Records”; Copy D “For

Donee.”

Copy B “For Borrower”; Copy C “For Recipient.”

1098-F

Copy B “For Payer”; Copy C “For Filer.”

1098-MA

Copy B “For Homeowner”; Copy C “For Filer.”

1098-Q

1098-T

1099-A

1097-BTC, 1099-PATR,

1099-Q, and 1099-QA

1099-C

1099-CAP

1099-B, 1099-DIV,

1099-G, 1099-INT,

1099-MISC, 1099NEC, and 1099-OID

1099-K

Copy B “For Participant”; Copy C “For Issuer.”

Copy B “For Student”; Copy C “For Filer.”

Copy B “For Borrower”; Copy C “For Lender.”

Copy B “For Recipient”; Copy C “For Payer.”

1099-LS

1099-LTC

1099-R

1099-S

1099-SA

1099-SB

3921

3922

5498

5498-ESA

5498-QA

5498-SA

June 28, 2021

Title

Copy B “For Debtor”; Copy C “For Creditor.”

Copy B “For Shareholder”; Copy C “For Corporation.”

Copy 1 “For State Tax Department”; Copy B “For Recipient”;

Copy 2 “To be filed with recipient’s state income tax return, when

required”; and Copy C “For Payer.”

Copy 1 “For State Tax Department”; Copy B “For Payee”; Copy

2 “To be filed with the recipient’s state income tax return, when

required”; Copy C “For Filer.”

Copy B “For Payment Recipient”; Copy C “For Issuer”; Copy D

“For Acquirer.”

Copy B “For Policyholder”; Copy C “For Insured”; Copy D “For

Payer.”

Copy 1 “For State, City, or Local Tax Department”; Copy B “Report

this income on your federal tax return. If this form shows federal

income tax withheld in box 4, attach this copy to your return”; Copy

C “For Recipient’s Records”; Copy 2 “File this copy with your state,

city, or local income tax return, when required”; Copy D “For Payer.”

Copy B “For Transferor”; Copy C “For Filer.”

Copy B “For Recipient”; Copy C “For Trustee/Payer.”

Copy B “For Seller”; Copy C “For Issuer.”

Copy B “For Employee”; Copy C “For Corporation”; Copy D “For

Transferor.”

Copy B “For Employee”; Copy C “For Corporation.”

Copy B “For Participant”; Copy C “For Trustee or Issuer.”

Copy B “For Beneficiary”; Copy C “For Trustee.”

Copy B “For Beneficiary”; Copy C “For Issuer.”

Copy B “For Participant”; Copy C “For Trustee.”

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Form

W-2G

1042-S

4.5.3

Perforations

Title

Copy 1 “For State, City, or Local Tax Department”; Copy B “Report

this income on your federal tax return. If this form shows federal

income tax withheld in box 2, attach this copy to your return”; Copy

C “For Winner’s Records”; Copy 2 “Attach this copy to your state,

city, or local income tax return, if required”; Copy D “For Payer.”

Copy B “For Recipient”; Copy C “For Recipient” and “Attach to any

federal tax return you file”; Copy D “For Recipient” and “Attach to

any state tax return you file”; Copy E “For Withholding Agent.”

Instructions for perforation of forms can be found in Section 2.1.9, earlier.

Section 4.6 – Electronic Delivery of Recipient Statements

4.6.1

Electronic Recipient

Statements

If you are required to furnish a written statement (Copy B or an acceptable substitute) to a recipient, then you may furnish the statement electronically instead of on paper. This includes furnishing the statement to recipients of Forms 1098, 1098-E, 1098-F, 1098-MA, 1098-Q, 1098-T,

1099-A, 1099-B, 1099-C, 1099-CAP, 1099-DIV, 1099-G, 1099-H, 1099-INT, 1099-K, 1099-LS,

1099-LTC, 1099-MISC, 1099-NEC, 1099-OID, 1099-PATR, 1099-Q, 1099-QA, 1099-R, 1099S, 1099-SA, 1099-SB, 1042-S, 3921, 3922, 5498, 5498-ESA, 5498-QA, and 5498-SA. It also

includes Form W-2G (except for horse and dog racing, jai alai, sweepstakes, wagering pools, and

lotteries).

Note. Until further guidance is issued, you cannot furnish Form 1098-C electronically. Perforation

(see Section 2.1.9, earlier) does not apply to printouts of copies of forms that are furnished electronically to recipients. However, recipients should be cautioned to carefully separate the copies.

If you meet the requirements listed in Sections 4.6.2 and 4.6.3, you are treated as furnishing the

statement timely.

4.6.2

Consent

Bulletin No. 2021–26

The recipient must consent in the affirmative to receiving the statement electronically and not

have withdrawn the consent before the statement is furnished. The consent by the recipient must

be made electronically in a way that shows that he or she can access the statement in the electronic

format in which it will be furnished. You must notify the recipient of any hardware or software

changes prior to furnishing the statement. A new consent to receive the statement electronically is

required after the new hardware or software is put into service. Prior to furnishing the statements

electronically, you must provide the recipient a statement with the following statements prominently displayed.

•

If the recipient does not consent to receive the statement electronically, a paper copy will be

provided.

•

The scope and duration of the consent. For example, whether the consent applies to every

year the statement is furnished or only for the January 31, 2022 (February 15 for Forms 1099-

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B, 1099-S, and 1099-MISC with payments reported in box 8 or 10) immediately following

the date of the consent.

4.6.3

Format, Posting, and

Notification

•

How to obtain a paper copy after giving consent.

•

How to withdraw the consent. The consent may be withdrawn at any time by furnishing the

withdrawal in writing (electronically or on paper) to the p

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