Substitute Printed,Computer-Prepared, and Computer-Generated Tax Forms and Schedules

Department of the TreasuryInternal Revenue Service

Publication 1167 (Rev. 10-96)Catalog Number 47013F

Revenue Procedure96-48

Reprinted from IR Bulletin 1996-39dated September 23, 1996

26 CFR 601.602: Tax forms and instructions.

Rev. Proc. 96-48

CONTENTS

PART A. GENERAL

SECTION 1. PURPOSE

SECTION 2. SCOPE

SECTION 3. NATURE OF CHANGES

SECTION 4. DEFINITIONS

SECTION 5. GENERAL REQUIREMENTS FOR APPROVAL

SECTION 6. HIGHLIGHTS OF PERMITTED CHANGES AND REQUIREMENTS

SECTION 7. APPROVAL

SECTION 8. OFFICE OF MANAGEMENT AND BUDGET (OMB)REQUIREMENTS FOR ALL SUBSTITUTE FORMS

SECTION 9. GENERAL GUIDELINES

SECTION 10. PHYSICAL ASPECTS AND REQUIREMENTS: PAPER

SECTION 11. PHYSICAL ASPECTS AND REQUIREMENTS: PRINTING

SECTION 12. PHYSICAL ASPECTS AND REQUIREMENTS: MARGINS

SECTION 13. EXAMPLES OF APPROVED FORMATS

SECTION 14. SPECIFICATIONS FOR FILING SUBSTITUTE FORMS

SECTION 15. GUIDANCE FROM OTHER REVENUE PROCEDURES

SECTION 16. ORDERING PUBLICATIONS

SECTION 17. ORDERING REPRODUCTION PROOFS

SECTION 18. READER LIST PROGRAM

SECTION 19. INTERNAL REVENUE INFORMATION SYSTEMS BULLETINBOARD AND THE INTERNET

SECTION 20. FEDERAL TAX FORMS ON CD-ROM

SECTION 21. AGREEMENT

PART B. SPECIFIC

SECTION 1. GENERAL

SECTION 2. CONDITIONS - TAX RETURNS (FORMS 1040, 1040A, 1120, ETC.)

SECTION 3. CHANGES PERMITTED TO GRAPHICS (FORMS 1040A AND 1040)

SECTION 4. CHANGES PERMITTED TO FORM 1040A GRAPHICS

SECTION 5. OTHER CHANGES PROHIBITED

SECTION 6. CHANGES PERMITTED TO THE FORM 1040 GRAPHICS

SECTION 7. OTHER CHANGES PROHIBITED

SECTION 8. ACCEPTABLE FORMATS FOR COMPUTER-GENERATEDFORMS AND SCHEDULES

SECTION 9. COMPUTER-GENERATED FORMS NOT SHOWN AS EXHIBITSIN THIS REVENUE PROCEDURE

SECTION 10. INSTRUCTIONS FOR FORMATTING COMPUTER-GENERATEDSUBSTITUTES

SECTION 11. ADDITIONAL INSTRUCTIONS FOR ALL FORMS

SECTION 12. FILING SUBSTITUTE FORMS WITH THE SERVICE

SECTION 13. SPECIAL FORM 1040EZ OPTICAL CHARACTER RECOGNITION(OCR) REQUIREMENTS

SECTION 14. COMPUTER-GENERATED ALTERNATIVE RETURNS, 1040PCFORMAT RETURN

SECTION 15. SPECIAL FORM 941 REQUIREMENTS - OCR SPECIFICATIONS

SECTION 16. SPECIAL FORM 941 REQUIREMENTS - BLACK ANDWHITE SPECIFICATIONS

SECTION 17. PAPER SUBSTITUTES FOR FORM 1042-S

SECTION 18. SPECIFICATIONS FOR FILING SUBSTITUTE SCHEDULES K-1

SECTION 19. PROCEDURES FOR PRINTING INTERNAL REVENUE SERVICEENVELOPES

SECTION 20. SPECIFICATIONS FOR OCR SCANNABLE APPLICATION FORMSFOR EMPLOYEE PLANS

SECTION 21. PROCEDURE FOR SUBSTITUTE FORM 5471 AND FORM 5472

SECTION 22. FORMS FOR ELECTRONICALLY FILED RETURNS

SECTION 23. FTD MAGNETIC TAPE PAYMENTS

SECTION 24. EFFECT ON OTHER DOCUMENTS

PART C. EXHIBITS

EXHIBIT A-1. SCHEDULE A (Preferred)

EXHIBIT A-2. SCHEDULE A (Acceptable)

EXHIBIT B-1. SCHEDULE B (Preferred)

EXHIBIT B-2. SCHEDULE B (Acceptable)

EXHIBIT CG-A. SCHEDULE A (Computer generated)

EXHIBIT CG-B. SCHEDULE B (Computer generated)

EXHIBIT BW-1. FORM 941 - Acceptable black and white substitute

EXHIBIT BW-2. SCHEDULE B, Form 941 - Acceptable black and white substitute

EXHIBIT L - 1. LIST OF FORMS REFERRED TO IN REVENUE PROCEDURE

EXHIBIT L - 2. PAYMENT VOUCHER SPECIFICATIONS

SECTION 17. ORDERING REPRO-DUCTION PROOFS

SECTION 18. READER LIST PRO-GRAM

SECTION 19. INTERNAL REV-ENUE INFORMATION SYSTEMSBULLETIN BOARD AND THEINTERNET

SECTION 20. FEDERAL TAXFORMS ON CD–ROM

SECTION 21. AGREEMENT

PART B. SPECIFIC

SECTION 1. GENERALSECTION 2. CONDITIONS - TAXRETURNS (FORMS 1040, 1040A,1120, ETC.)

SECTION 3. CHANGES PERMIT-TED TO GRAPHICS (FORMS1040A AND 1040)

SECTION 4. CHANGES PERMIT-TED TO FORM 1040A GRAPH-ICS

SECTION 5. OTHER CHANGESPROHIBITED

SECTION 6. CHANGES PERMIT-TED TO THE FORM 1040GRAPHICS

SECTION 7. OTHER CHANGESPROHIBITED

SECTION 8. ACCEPTABLE FOR-MATS FOR COMPUTER-GENERATED FORMS ANDSCHEDULES

SECTION 9. COMPUTER-GENERATED FORMS NOTSHOWN AS EXHIBITS IN THISREVENUE PROCEDURE

SECTION 10. INSTRUCTIONSFOR FORMATTINGCOMPUTER-GENERATED SUB-STITUTES

SECTION 11. ADDITIONAL IN-STRUCTIONS FOR ALL FORMS

SECTION 12. FILING SUBSTI-TUTE FORMS WITH THE SER-VICE

SECTION 13. SPECIAL FORM1040EZ OPTICAL CHARACTERRECOGNITION (OCR) RE-QUIREMENTS

SECTION 14. COMPUTER GEN-ERATED ALTERNATIVE RE-TURNS, 1040PC FORMAT RE-TURN

SECTION 15. SPECIAL FORM 941REQUIREMENTS - OCR SPECI-FICATIONS

SECTION 16. SPECIAL FORM 941REQUIREMENTS - BLACK ANDWHITE SPECIFICATIONS

SECTION 17. PAPER SUBSTI-TUTES FOR FORM 1042–S

SECTION 18. SPECIFICATIONSFOR FILING SUBSTITUTESCHEDULES K–1

SECTION 19. PROCEDURES FORPRINTING INTERNAL REV-ENUE SERVICE ENVELOPES

SECTION 20. SPECIFICATIONSFOR OCR SCANNABLE APPLI-CATION FORMS FOR EM-PLOYEE PLANS

SECTION 21. PROCEDURE FORSUBSTITUTE FORM 5471 ANDFORM 5472

SECTION 22. FORMS FOR ELEC-TRONICALLY FILED RETURNS

SECTION 23. FTD MAGNETICTAPE PAYMENTS

SECTION 24. EFFECT ON OTHERDOCUMENTS

PART C. EXHIBITS

EXHIBIT A–1. SCHEDULE A (Pre-ferred)

EXHIBIT A–2. SCHEDULE A (Ac-ceptable)

EXHIBIT B–1. SCHEDULE B (Pre-ferred)

EXHIBIT B–2. SCHEDULE B (Ac-ceptable)

EXHIBIT CG–A. SCHEDULE A(Computer generated)

EXHIBIT CG–B. SCHEDULE B(Computer generated)

EXHIBIT BW–1. FORM 941 - Ac-ceptable black and white substitute

EXHIBIT BW–2. SCHEDULE B,Form 941 - Acceptable black andwhite substitute

EXHIBIT L–1. LIST OF FORMSREFERRED TO IN REVENUEPROCEDURE

EXHIBIT L–2. PAYMENTVOUCHER SPECIFICATIONS

Rev. Proc. 96–48

PART A. GENERAL

SEC. 1. PURPOSE

The purpose of this revenue proce-dure is to provide the general require-ments and conditions for the develop-ment, printing, and approval of allsubstitute tax forms to be acceptable forfiling in lieu of official IRS producedand distributed forms. All IRS tax formsof the types identified in Section 2.03,whether or not specifically mentionedherein by title or form number, are cov-ered by this general revenue procedure.Certain unique, specialized forms re-quire the use of other additional revenueprocedures to supplement this publica-

tion (see Part A, Sections 15 and 16 fora list of revenue procedures). Personswanting to submit substitute Forms W–2should first read Publication 1141, Gen-eral Rules and Specifications for PrivatePrinting of Substitute Forms W–2 andW–3.

SEC. 2. SCOPE

.01 The Service accepts quality sub-stitute tax forms that are consistent withthe official forms they represent, andthat do not have an adverse impact onour processing. The IRS SubstituteForms Program administers the formalacceptance and processing of theseforms nationwide. While this programdeals primarily with paper documents, italso interfaces with other processing andfiling media such as magnetic tape,optical character recognition, electronicfiling, etc., within a totally integratedtax administration system..02 Only those substitute forms that

comply fully with the requirements setforth herein are acceptable..03 The following forms are covered

by this revenue procedure:1 Tax returns and their related forms

and schedules.2 Applications for permission to file

returns electronically and forms submit-ted as required documentation forelectronically-filed returns.3 Powers of Attorney.4 Estimated tax payment vouchers.5 Forms and schedules relating to

partnerships, exempt organizations, andemployee plans..04 The following forms are not cov-

ered:1 Federal Tax Deposit (FTD) cou-

pons.2 Requests for information or docu-

mentation initiated by the Service.3 Forms used internally by the Ser-

vice.4 State tax forms.5 Forms developed by other agencies

(except for Form TD F 90–22.1, Reportof Foreign Bank and Financial Ac-counts)..05 Exhibit L–1 lists the form num-

bers mentioned in this document andtheir titles..06 This revenue procedure is up-

dated as required to reflect pertinent taxyear form changes and to meet process-ing and/or legislative requirements.

SEC. 3. NATURE OF CHANGES

.01 Instructions for barcoding Forms1040A and related schedules and attach-

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ments, which appeared in Revenue Pro-cedure 95–46, have not been added tothis procedure. While barcodes will ap-pear on the official forms, they are notrequired on substitute returns..02 Statement of Intention for Form

1040 processing deleted..03 Payment vouchers for Forms

1040, 941, 940, 940–EZ, 943, 945, and2290 are required for tax year 1996forms..04 Minor revisions have been made

to the addresses for the Substitute W–2Coordinator and the Employee PlansOCR Forms Coordinator..05 References to OMB expiration

dates have been deleted. These dates arebeing phased out as forms are revised..06 Revision to preparer’s informa-

tion instructions. Preparer’s data willnow be preprinted on Page 2 of Form1040EZ..07 Definition of conditional approval

modified. Forms will not be acceptedfor conditional approval (i.e. based ondrafts) after the final version has beenpublished..08 Requirement to have forms which

are filed quarterly approved each quarterhas been deleted. Quarterly forms mustbe approved during the year if the formhas been revised..09 Assignment of Forms Approval

Number changed to assignment ofSource Codes..10 Non-tax material (e.g., logos, firm

names) may not be printed anywherealong the top margin..11 Paragraph referencing separate

approval numbers for electronically filedreturns deleted..12 Printing specifications now re-

quire that fill-in data (i.e. taxpayer en-tries) be no smaller than eight points inheight..13 Form 3975, Tax Practitioner An-

nual Mailing List Application Update,may only be used to order Package X.Other publications may be ordered byphone..14 The reproduction proof and

reader list programs are being discontin-ued as of October 1, 1996. Additionalinformation has been added regardingthe IRIS Bulletin Board, the Internet,and tax forms on CD–ROM..15 Graphics changes revised for

Form 1040, Page 2..16 Additional information has been

added to the specifications for substituteenvelopes..17 The section on Form 945 require-

ments for scanning has been deleted.

.18 Reference added to Form 5471,Schedule J; reference deleted for Form5471, Schedule P..19 The exhibit which lists the forms

referenced in this document has beenupdated..20 An exhibit showing the specifica-

tions for payment voucher scanlines hasbeen added..21 Various editorial changes.

SEC. 4. DEFINITIONS

.01 Substitute Form. A tax form (orrelated schedule) that differs in any wayfrom the official version and is intendedto replace the entire form that is printedand distributed by the Service. This termalso covers those approved substituteforms exhibited in this revenue proce-dure..02 Printed (or Preprinted) Form. A

form produced using conventional print-ing processes. Also, a printed formwhich has been reproduced by photo-copying or similar processes..03 Preprinted Pin-Fed Form. A

printed form that has marginal perfora-tions for use with automated and high-speed printing equipment..04 Computer-Prepared Substitute

Form. A preprinted form in which thetaxpayer’s tax entry information hasbeen inserted by a computer, computer-printer or other computer type equip-ment, such as word-processing equip-ment..05 Computer-Generated Substitute

Tax Return or Form. A tax return orform that is entirely designed andprinted by the use of a computer printer,such as a laser printer, etc., on plainwhite paper. This return or form mustconform to the physical layout of thecorresponding Service form although thetypeface may differ. The text shouldmatch the text on the officially-printedform as closely as possible; condensedtext and abbreviations will be consid-ered on a case-by-case basis. Exception:All jurats (perjury statements) must bereproduced verbatim..06 Manually-prepared form. A

preprinted reproduced form in which thetaxpayer’s tax entry information is en-tered by an individual using a pen,pencil, typewriter, or other non-automated equipment..07 Computer-Generated Answer

Sheet Format Tax Return. A tax returnthat contains the taxpayer’s significantline entries only, and is formatted threecolumns per page with tax form head-

ings, a summary, and jurat. This returnis printed on plain white paper using acomputer printer..08 Graphics. Those parts of a printed

tax form that are not tax amount entriesnor called-for information. Generally,these are line numbers, captions, shad-ings, instructions, special indicators,borders, rules, and strokes created bytypesetting, photographics, photocompo-sition, etc..09 Acceptable Reproduced Form. A

legible photocopy of an original form..10 Supporting Statement (Supple-

mental Schedule). A document providingdetailed information to support an entryfor a line(s) on an official or approvedsubstitute form and filed with (attachedto) a tax return. (A supporting statementis not a tax form and does not take theplace of an official form, unless specifi-cally permitted elsewhere in this proce-dure.).11 Specific Forms Terms. The fol-

lowing terms are used throughout thisrevenue procedure in reference to allsubstitute forms, with the exception ofthe 1040PC ‘‘answer sheet format’’ taxreturn.1 Format. The overall physical ar-

rangement and general layout of a sub-stitute form.2 Sequence. The same numeric and

logical placement order of data, as re-flected on the official form version.Sequence is an integral part of the totalformat requirement.3 Line Reference (Code). The line

numbers, letters or alpha-numerics usedto identify each captioned line on theofficial forms; and printed to the imme-diate left of each caption or data entryfield.4 Item caption. The textual portion of

each line on the form, identifying thespecific data elements required.5 Data Entry Field. All areas desig-

nated on a form for the insertion ofdata, such as dollar amounts, quantities,responses, check-boxes, etc.

SEC. 5. GENERAL REQUIREMENTSFOR APPROVAL

.01 If you plan to change or modifyany tax returns or forms per Section7.01 below, you can, without furtherapproval, generate your own substitutesof the tax forms. See Agreement inSection 21..02 If your changes are more exten-

sive, you must get official approvalbefore using substitute forms. Thesechanges include the use of typefaces and

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sizes other than those found on theoffical form and the condensing of lineitem descriptions to save space..03 Schedules(a) Schedules are considered to be an

integral part of a complete tax returnwhen assigned consecutive page num-bers and printed contiguously with pageone of the return. Form 706, UnitedStates Estate (and Generation-SkippingTransfer) Tax Return, is an example ofthis situation, where Schedules Athrough S have pages numbered as partof the basic return. For a Form 706 tobe approved, the entire form includingSchedules A through S must be submit-ted.(b) However, Schedules 1, 2, and 3

of Form 1040A are examples of sched-ules that can be separately computer-generated. Although IRS-printed as acontinuation of Form 1040A, none ofthese schedules have page numbers thatrequire them to be filed with Form1040A, and may, therefore, be separatedfrom Form 1040A and submitted ascomputer-generated substitute schedules..04 The Service is continuing a pro-

gram to identify and contact tax returnpreparers, forms developers, and soft-ware publishers who use or distributeunapproved forms that do not conformto this revenue procedure, and thusimpede processing of the returns.

SEC. 6. HIGHLIGHTS OFPERMITTED CHANGES ANDREQUIREMENTS

.01 METHODS OF REPRODUCINGINTERNAL REVENUE SERVICEPRINTED TAX FORMS TO MAKESUCH REPRODUCTIONS SUITABLEFOR USE AS SUBSTITUTE TAXFORMS WITHOUT PRIOR AP-PROVAL.1 You can photocopy most tax forms

and use them instead of the officialones. The entire substitute form, includ-ing entries, must be legible. However,some Service forms should never bereproduced as photocopies, or submittedon carbon copies, for use as substituteforms. These forms are input throughOCR scanning equipment and substi-tutes must meet the specifications foundin Part B of this revenue procedure orthe appropriate revenue procedure re-ferred to in Part A, Section 16.(a) Forms W–2, W–2G, W–2AS,

W–2GU, W–3, 1096, 1098, 1099–A,1099–B, 1099–C, 1099–DIV, 1099–G,1099–INT, 1099–MISC, 1099–OID,1099–PATR, 1099–R, 1099–S, 5498,

8109, and 8109–B are the major formsthat fall in this excluded category.(b) Most of these forms have provi-

sions for assessment of penalties forsubmitting non-OCR scannable substi-tute versions. For further information,see Publication 1179, Specifications forPaper Document Reporting and PaperSubstitutes for Forms 1096, 1098, 1099Series, 5498, and W–2G (revised annu-ally).(c) All payment vouchers (Forms

940–V, 940–EZ(V), 941–V, 943–V,945–V, 1040–V, and 2290–V) must bereproduced. Substitute vouchers must bethe same size as the officially printedvouchers. Vouchers that are prepared forprinting on a laser printer may include ascanline. See Exhibit L–2 for scanlinespecifications.2 You can reproduce any current tax

form as cut sheets, snapsets, andmarginally-punched, pin-fed forms solong as you use an official Serviceversion as the master copy. Officialversions are supplied by the Service,such as those in the taxpayer’s taxpackage, those printed in revenue proce-dures, and over-the-counter forms avail-able at IRS and other governmentalpublic offices or buildings. Forms arealso available on CD–ROM, and onlinevia the IRS bulletin board and theInternet (see Sections 19 and 20).3 If you reproduce either Form 1040,

1040A or 1040EZ as described in thepreceding paragraph, you can adjust thegraphics on specified areas to allow forcomputer-printed or word processor fill-in. Only the areas listed in Part B of thisrevenue procedure may be adjustedwithout specific prior approval.4 You can reproduce a ‘‘signature

form’’ as a valid substitute form. Manytax forms (including returns) have ataxpayer signature requirement as partof the form layout. The jurat/perjurystatement/signature line areas must beretained and worded exactly as on theofficial form. The requirement for asignature by itself does not prohibit atax form from being properly computer-generated.5 You can computer-generate Answer

Sheet Format Tax Returns on plain bondpaper using IRS-accepted software forthe 1040PC format for return types1040EZ, 1040, 1040A, and attachments,forms, and schedules..02 THINGS YOU CANNOT DO TO

INTERNAL REVENUE SERVICEPRINTED TAX FORMS TO MAKETHEM SUITABLE FOR USE AS SUB-STITUTE TAX FORMS.

1 You cannot, without prior Serviceapproval, change any Internal RevenueService tax forms or use your own(non-approved) versions, unless specifi-cally permitted by this revenue proce-dure.2 You cannot adjust any of the graph-

ics on Forms 1040, 1040A and 1040EZ(except in those areas specified in PartB of this revenue procedure) withoutprior approval from the Service.3 You cannot use your own pre-

printed label on tax returns filed withthe Service, unless you fully complywith the exception criteria specified inPart A, Section 14.02.

SEC. 7. APPROVAL

.01 Basic Requirements. Preparerswho desire to file substitute privatelydesigned and printed tax forms and/orcomputer-generated and computer-prepared tax forms must develop suchsubstitutes using these guidelines. Thesesubstitutes, unless excepted by revenueprocedure, must be approved by theService before being filed. A softwaredeveloper who wants to market, distrib-ute, or use for its own clientele, a taxpreparation package featuring the1040PC tax return format, must first filean application to participate in the pro-gram. Only after successfully fulfillingtest requirements will a developer’s soft-ware package be accepted by the Ser-vice to produce 1040PC tax returns..02 Requests for Approval1 The Service cannot grant final ap-

proval of your substitute form until theofficial form has been published. How-ever, the Service usually releases ad-vance proof copies of selected major taxforms that are subject to further changesand OMB approval before their releasein final format for printing and distribu-tion to the public. We encourage sub-mission of proposed substitutes of theseadvance proof forms, and will grantconditional approval based solely onthese early proofs. These advance proofsare subject to significant change beforeforms are finalized. If these advanceproofs are used as the basis for yoursubstitute forms, you will be responsiblefor subsequently updating your finalforms to agree with the final officialversion before use. These revisions neednot be submitted for further approval.Conditional approval will not be grantedafter the final version of an official formis published.2 Submission of substitute forms

must be based on the appropriate rev-

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enue procedures. There is a list in PartA, Section 15. Any alteration of formsmust be within the limits acceptable tothe Service. It is possible that, from onefiling period to another, a change in lawor a change in internal need (processing,audit, compliance, etc.) may change theallowable limits for the alteration of theofficial form.3 When specific approval of any sub-

stitute form (other than those specifiedin 7.02.4 and 7.02.5 below, or forms forwhich different instructions are pub-lished in other revenue procedures) isdesired, a sample of the proposed substi-tute should be forwarded for consider-ation by letter to the Internal RevenueService, Attention: Substitute FormsProgram Coordinator, T:FP:S, Room2712, 1111 Constitution Ave. NW,Washington, DC 20224. To expeditemultiple forms approval, we prefer thatyour proposed forms be submitted inseparate sets by return. For example,Forms 1040 and their normally relatedschedules or attachments should be sub-mitted separately from Forms 1120,1065, 5500 Series, etc., if at all possible.Schedules and forms (e.g., Forms 3468,4136, etc.) that can be used with morethan one type of return (e.g., 1040,1041, 1120, etc.) should be submittedonly once for approval, regardless of thenumber of different tax returns withwhich they may be ultimately associ-ated. In addition, all pages of a multi-page form or return should be submittedin the same package.4 The following forms should not be

submitted to IRS (or the Social SecurityAdministration, if applicable) for spe-cific approval: W–2, W–3, 1096, 1098,1099 Series, 5498, and W–2G. If youare uncertain of any specification setforth in the appropriate revenue proce-dures and want that specification clari-fied, you may submit a letter citing thespecification in question, your interpre-tation of that specification, and an ex-ample of the form to the followingaddresses:

Forms W–2 and W–3:Internal Revenue ServiceAttn: Substitute Form W–2 Coordinator,CP:CO:SC:A

1111Constitution Avenue, NW,Room 7238

Washington, DC 20224

Forms 1096, 1098, 1099 Series, 5498,and W–2G:

Internal Revenue ServiceAttn: IRP Coordinator, T:S:P:S(Salubria Building)

1111Constitution Avenue, NWWashington, DC 20224

5 For Form 1040PC approval, seePart B, Section 14. For approval ofOCR scannable application forms forEmployee Plans, see Part B, Section 21.6 As no Service office except the

ones specified in this procedure areauthorized to approve substitute forms,unnecessary delay may result if formsare sent elsewhere for approval. Allforms submitted to any other officemust be forwarded to the appropriateoffice for formal control, review, andofficial approval. No IRS office is au-thorized to allow deviations from thisrevenue procedure.7 The Service does not review or

approve the logic of specific softwareprograms, nor confirm the calculationsentered on forms output from theseprograms that are submitted for ap-proval. The accuracy of the programitself remains the responsibility of thesoftware package developer, distributor,or user. The Substitute Forms Programis primarily concerned with the pre-filing quality review of the final formsoutput, produced by whatever means,that are expected to be processed byIRS field offices. For the above reasons,it is suggested that you submit formswithout including any ‘‘taxpayer’’ infor-mation such as names, addresses, mon-etary amounts, etc..03 When to Send Proposed Substi-

tutes. Proposed substitutes which arerequired to be submitted per this Rev-enue Procedure should be sent to theaddress listed in .02 above, as much inadvance of the filing period for the formas possible. This is to allow adequatetime for analysis and response..04 Accompanying Statement. When

the sample substitute is submitted, thereshould be an accompanying statementthat lists the form number of eachsubstitute requested and detail thoseitems that deviate from the official formin position, arrangement, appearance,line numbers, additions, deletions, etc.Included with each of the items shouldbe a detailed reason or justification forthe change and an approximation of thenumber of forms expected to be filed..05 Approval/Non-Approval Letter.

The Service will send either a formalletter of approval/non-approval or, whenprovided by the originator, a checksheetfor the forms included in the package,provided no lengthy explanations arerequired. Approval letters may containqualifications for use of the substitutes.

Non-approval letters may specify thechanges required for approval, but alsomay require resubmission for approval.Telephone contact is used when pos-sible..06 Duration of Approval1 Most signature tax returns and

many of their schedules and relatedforms have the tax (liability) yearprinted in the upper right hand corner.Approvals for these forms are usuallygood for one calendar year (Januarythrough December of the year of filing)or, in the case of corporation tax forms(with the exception noted below), forthe remainder of the quarters in thecalendar year. Quarterly tax forms in the94X series require approval for anyquarter in which the form has beenrevised.2 If the preprinted year is the only

change made to a form described in 1above, the form for the upcoming yearis not subject to review. Otherwise eachnew filing season requires a new ap-proval. Limited continued use of achange approved for one tax year maybe allowed for the same form in thefollowing tax year. See .07 below forthe limitations and for other require-ments. Examples of such changes arethe use of abbreviated words, revisedform spacing, compressed text lines,shortened captions, etc., which do notchange the consistency of lines or texton the official forms.3 Other forms may have expiration

dates displayed in the upper right handcorner. Approval of these forms is usu-ally valid through the expiration date.Occasionally, these forms or their in-structions will be revised before theexpiration date. If substantial change ismade to the form, new substitutes mustbe submitted for approval. If the expira-tion date changes due to revisions to theinstructions, minor editorial changes tothe form or to extend the date withoutrevision to the form, it is not subject toreview..07 Limited Continued Use of an Ap-

proved Change1 If you received written approval of

a previous tax year substitute form gov-erned by this revenue procedure andcontinue to use the approved change onyour current tax year substitute form,you may revise your form to includethis change and, without additional writ-ten approval, use it as a current tax yearsubstitute form, provided you complywith the requirements in this revenueprocedure. See exception in 3 below.

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2 If you received written approval fora specific change on a specific form lastyear, such as deleting the vertical linesused to separate dollars and cents onsome forms and schedules e.g., Sched-ules A & B of Form 1040, you mayagain make the same change on thesame form this year if the item changedis present on this year’s official form.Thus, the change allowed in last year’sapproved substitute Schedule A, for ex-ample, can be continued in your newsubstitute for this year. The new substi-tute does not have to be sent to the IRSand written approval is not required.However, the new substitute must con-form to the official current year IRSform in other respects: date, Office ofManagement and Budget (OMB) ap-proval number, attachment sequencenumber, Paperwork Reduction Act No-tice Statement, arrangement, item cap-tion, line number, line reference, datasequence, etc. It must also comply withthis revenue procedure—which mayhave eliminated, added to, or otherwisechanged the guideline(s) which affectedthe change approved last year. Addition-ally, you will be bound by the ‘‘Agree-ment’’ in Section 21.3 Exception: Those written approvals

which state that the approved change orform would not be allowed in any othertax year, or for a temporary, limited, orinterim approval pending resolution of afailure to meet one or more Service-prescribed requirements.4 This authorization for continued

use of an approved change is limited tothe continuation of design logic from animmediately prior tax year substituteform to a current tax year substituteform..08 Requested Copies. Generally, you

must send us one copy of each formbeing submitted for approval. Howeverif you are producing forms for differentcomputer systems (e.g., IBM (or com-patible) vs. MacIntosh) or differenttypes of printers (laser vs. dot matrix),and these forms differ significantly inappearance, submit one copy for eachtype of system or printer..09 Responsibility. Following the re-

ceipt of initial approval for a substituteforms package, or of a software outputprogram to print substitute forms, it isthe responsibility of the originator (de-signer or distributor) to provide eachsubsequent client firm or individual withthe pertinent Service forms requirementswhich must be met for continuing ac-ceptability. Examples of this responsibil-ity include the use of prescribed print

paper, font size, legibility, state tax datadeletion, the legal requirements of thePaperwork Reduction Act Notice forinforming all users of substitute formsof the official use and collection re-quirements stated in the instructions forthe official IRS forms, completion ofdocuments, etc..10 Source code (formerly) Forms

Approval Number. The Substitute FormsProgram Coordinator Office, T:FP:S,will assign a unique source code to eachfirm that submits substitute paper formsfor approval. This will be a permanentlyassigned control number that should beused on every form created by a particu-lar firm.1 This number should be printed at

the bottom left margin area on the firstpage of every approved substitute paperform.2 The source code for paper returns

consists of three alpha characters.3 This number should not be used on

optically scanned (OCR) forms, exceptfor certain specified Forms 1040–ES.

SEC. 8. OFFICE OF MANAGEMENTAND BUDGET (OMB)REQUIREMENTS FOR ALLSUBSTITUTE FORMS

.01 Legal Requirements of the Paper-work Reduction Act of 1995 (‘‘Act’’).Public Law 104–13 requires that: (1)OMB approve all Service tax forms thatare subject to the Act; (2) each IRSform contains (in the upper right corner)the OMB number, if any; and, 3) eachIRS form (or its instructions) states whyIRS is the information, how it will beused, and whether or not the informationis required to be furnished. This infor-mation must be provided to every userof any official or substitute tax forms..02 Application of Act to Substitute

Forms.1 OMB Number Is Required. All sub-

stitute forms must contain in the upperright corner (see marginal Printing, PartA, Sec. 13.02.1(c)) the OMB numberthat is on the official form.2 Format Required - OMB No.

XXXX–XXXX (Preferred) or OMB #XXXX–XXXX.3 Required Explanation to Users of

Substitute Forms. You must also informthe users of your substitute forms of theService use and collection requirementsstated in the instructions for the officialService form.(a) If you provide your users or cus-

tomers with the official IRS instructions,page 1 of each form must retain either

the Paperwork Reduction Act Notice, ora reference to it as on the official forms(usually in the lower left corner of theforms).(b) If the Service instructions are not

provided to users of your forms, theexact text of the Paperwork ReductionAct Notice must be furnished on theform or separately. This notice reads, inpart, ‘‘We ask for this information tocarry out the Internal Revenue laws ofthe United States. You are required togive us the information. We need it toinsure that you are complying with theselaws and to allow us to figure andcollect the right amount of tax. . . .’’ Youmust also include a copy of the alterna-tive statement provided to users of yourforms with the forms you submit forapproval..03 Obtaining OMB Number and No-

tice. The OMB number and PaperworkReduction Act Notice may be obtainedfrom the official printed form (or itsinstructions), any format produced bythe Service (e.g. CD or BBS download)or directly from the Service.

SEC. 9. GENERAL GUIDELINES

.01 The Official Form is the Stan-dard. Because a substitute form is avariation from the official form, youshould know the requirements of theofficial form for the year of use beforeyou modify it to meet your needs. TheService provides several means of ob-taining the most frequently used taxforms. These include the sale of aCD–ROM, and access to an electronicforms bulletin board (See Part A, Sec-tion 17–19)..02 Design. Each form must follow

the design of the official form as toformat arrangement, item caption, linenumbers, line references, and sequence..03 State Tax Information Prohibited.

State tax information must not appear(be visible) on the federal tax return orassociated form or schedule which isfiled with the Internal Revenue Service,except where amounts are claimed on orrequired by the federal return, e.g., line5, Schedule A (Form 1040). (See Part A,Sec. 14.03 Block Out Methods.).04 Federal and State Columns. When

a form is designed with both federal andstate columns, the federal column mustbe to the left of the state column andadjacent to the line caption. Again, statetax information must not be on a federaltax form..05 Vertical Alignment of Amount

Fields.

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1 When a form is to be computer-prepared, you may remove the verticalline in the amount field that separatesdollars from cents. When a form is to becomputer-generated, vertically align theamount entry fields where possible. Youmust also use one of the ten-characteramount formats shown in Part B, Sec.3.04.2 If the possibility exists that a form

may be manually prepared, the federalcolumn must have a vertical line orsome type of indicator in the amountfield to separate dollars from cents if theofficial form has a vertical line. Thecents column must be at least2⁄10 inchwide..06 Attachment Sequence Number.

Please note that most individual incometax forms have an ‘‘attachment sequencenumber’’ located just below the yeardesignation in the upper right corner ofthe form. The Service uses this numberto indicate the order in which forms areto be attached to the tax return so theymay be processed in that order. Oncomputer-prepared forms it must beprinted in no less than 12-point bold-face type and centered below the form’syear designation. On computer-generatedforms, place the sequence number fol-lowing the year designation for the taxform and separate with an asterisk. It isnot necessary to duplicate the ‘‘Attach-ment Sequence Number’’ wording, ex-cept for the actual number. (See FormsExhibits at end of this Revenue Proce-dure.).07 Attachment Sequence Numbers

Required. The attachment sequencenumber is required on most IRS forms.Please note that some of the numbersnecessarily change each year. The spe-cific sequence numbers used on officialIRS forms must be duplicated on therepresentative substitute form. If a se-quence number is not provided on theofficial form, it is not required on asubstitute of that form either..08 Paid Preparer’s Information and

Signature Area. On Forms 1040EZ,1040A, 1040, and 1120, etc., the ‘‘PaidPreparer’s Use Only’’ area may not berearranged or relocated. You may, how-ever, add three extra lines to the paidpreparer’s address area without priorapproval. This applies to other tax formsas well. Please note that the preparer’sarea on Form 1040EZ is on the bottomof Page 2. Substitute Forms 1040EZwith the preparer area on Page 1 or in adifferent location on Page 2 will not beaccepted.

.09 Assembly of Forms. If develop-ing software or forms for use by others,please inform your customers/clientsthat the order in which the forms arearranged may affect the processing ofthe package. A return must be arrangedin this order: (1) the tax return, (2)Form 1040: schedules and forms insequence number order; all others(Forms 1120, 1120S, 1065, 1041, etc.):lettered schedules (Schedule D, etc.) inalphabetical order and numbered formsin numerical order (Forms 2220, 4626,etc.), (3) supporting statements in thesame sequence as the forms they sup-port, and (4) additional information re-quired or voluntarily submitted. In thisway, they are received in the order inwhich they must be processed. If you donot send them to us in this order, theService has to delay the return packageto disassemble them and place them inthis order before processing is contin-ued.

SEC. 10. PHYSICAL ASPECTS ANDREQUIREMENTS: PAPER

.01 Paper Content. The paper mustbe:1 Chemical wood writing paper that

is equal to or better than the qualityused for the official form;2 at least 18 pound (179 x 229, 500

sheets) or3 at least 50 pound offset book (259

x 389, 500 sheets)..02 Paper Prohibited. Carbon-bonded

paper is prohibited from use for allsubstitute forms filed with the Service..03 Paper with Chemical Transfer

Properties - Limited Use. Chemicaltransfer paper for all substitute formsmay be used only when the followingspecifications are met.1 Each ply within the chemical trans-

fer set of forms must be labeled.2 Only the top ply (ply one and

white in color), the one which containschemical on the back only (coatedback), may be filed with the Service.For example, a set containing three plieswould be constructed as follows: plyone (coated back), ‘‘Federal Return, Filewith IRS’’; ply two (coated front andback), ‘‘Taxpayer’s copy’’, and ply three(coated front), ‘‘Preparer’s copy.’’3 The file designation, ‘‘Federal Re-

turn, File with IRS,’’ for ply one mustbe printed in the bottom right margin(just below the last line of the form) in12-point, bold-face type. It is not man-datory, but recommended, that the file

designation, ‘‘Federal Return, File withIRS,’’ be printed in a contrasting ink forvisual emphasis.4 Carbon Paper. We prefer that you

do not attach any carbon paper to anyreturn you file with the Service..04 Paper and Ink Color. We prefer

that the color and opacity of papersubstantially duplicates that of the origi-nal form. This means that your substi-tute must be printed in black ink andmay be on white or on the color paperthe Service form is printed on. (See PartB for exceptions regarding scannabledocuments). Forms 1040A and 1040substitute reproductions may be in blackink without the colored shading. Theonly exception to this rule is Form1041–ES, which should always beprinted with a very light gray shading inthe color screened area. This is neces-sary to assist us in expeditiously sepa-rating this form from the very similarForm 1040–ES..05 Page Size. Substitute or repro-

duced forms and computer prepared/generated substitutes may be the samesize as the official form (89 x 119, inmost cases) or they may be the standardcommercial size (81⁄29 x 119) exclusiveof pin-feed holes. The thickness of thestock cannot be less than .003 inch.

SEC. 11. PHYSICAL ASPECTS ANDREQUIREMENTS: PRINTING

.01 Printing Medium. The privateprinting of all substitute tax forms mustbe by conventional printing processes,photocopying, computer-graphics, orsimilar reproduction processes..02 Legibility.1 All forms must have a high stan-

dard of legibility, both as to printing andreproduction and as to fill-in matter.Entries of taxpayer data may be nosmaller than eight points.2 The Service reserves the right to

reject those with poor legibility. The inkand printing method used must ensurethat no part of a form (including text,graphics, data entries, etc.) develops‘‘smears’’ or similar quality deteriora-tion, including any subsequent copies orreproductions made from an approvedmaster substitute form, either duringpreparation or during Service process-ing..03 Type Font. Many federal tax

forms are printed using ‘‘Helvetica’’ asthe basic type font. We request that youuse this type font when composingsubstitute forms.

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.04 Print Spacing. Substitute formsshould be printed using a 6 lines/inchvertical print option. They should alsobe printed horizontally in 10 pitch pica(i.e., 10 print characters per inch) or 12pitch elite (i.e., 12 print positions perinch)..05 Image Size. The image size of

printed substitute forms should be asclose as possible to that of the officialform. You may omit any text on bothcomputer-prepared and computer-generated forms that is solely instruc-tional..06 Title Area Changes. To allow a

large top margin for marginal printingand more lines per page (see Sec. 13below), the title line(s) for all substituteforms (not including the form’s yeardesignation and sequence number, whenpresent), may be photographically re-duced by 40 percent or reset as one lineof type. When reset as one line, the typesize may be no smaller than 14-point.You may omit ‘‘Department of the Trea-sury, Internal Revenue Service’’ and allreference to instructions in the form’stitle area..07 Remove Government Printing Of-

fice Symbol. When privately printingsubstitute tax forms, the GovernmentPrinting Office symbol and/or jacketnumber must be removed. In the sameplace, using the same type size, print theEmployer Identification Number (EIN),the Social Security Number (SSN) ofthe printer or designer, or the IRSassigned source code. (We prefer thislast number be printed in the lower leftarea of the first page of each form.)Also remove the IRS Catalog Number,if one is present in the bottom centermargin, and the Recycle Symbol, if thesubstitute is not produced on recycledpaper..08 Printing On One Side of Paper.

While it is preferred that both sides ofthe paper be used for substitute andreproduced forms, resulting in the samepage arrangement as that of the officialform or schedule, the Service will notobject if only one side of the paper isused..09 Photocopy Equipment. The Ser-

vice does not undertake to approve ordisapprove the specific equipment orprocess used in reproducing officialforms. Photocopies of forms must beentirely legible and satisfy the condi-tions stated in this and other revenueprocedures..10 Reproductions. Reproductions of

official forms and substitute formswhich do not meet the requirements of

this revenue procedure may not be filedinstead of the official forms. Illegiblephotocopies are subject to being re-turned to the filer for resubmission oflegible copies..11 Removal of Instructions. You may

remove all references to instructions. Noprior approval is needed. One exceptionis that the statement, ‘‘For PaperworkReduction Act Notice, See Instructions’’,must be retained or a similar statementprovided on each form.

SEC. 12. PHYSICAL ASPECTS ANDREQUIREMENTS: MARGINS

.01 Margin Size.1 The format of a reproduced tax

return when printed on the page musthave margins on all sides at least aslarge as the margins on the officialform. This allows room for Serviceemployees to make the necessary entrieson the form during processing.2 A one-half to one-quarter inch mar-

gin must be maintained across the top,bottom, and both sides (exclusive of anypin-fed holes) of all computer-generatedsubstitutes. The margin area is also usedby Service employees to make necessaryentries on the form during processing.3 The marginal, perforated strips con-

taining the pin-fed holes must be re-moved from all forms prior to filingwith the Service..02 Marginal Printing.1 Non-Tax Material Allowed in Lim-

ited Areas.(a) Printing is never allowed in the

top margin of the tax return form (i.e.,Forms 1040, 1040A, 1040EZ, 1120,940, 941, 5500 Series, etc.). The Serviceuses this area to imprint a DocumentLocator Number and a DPS UniqueSubmission Identifier for each return.(b) With the exception of the actual

tax return forms (i.e., Forms 1040,1040A, 1040EZ, 1120, 940, 941, etc.),you may print in the left vertical marginand in the left half of the bottommargin, except for the substitute formssource code, which must be placed inthe lower left area of Page 1.2 Prior Approval Not Required. Prior

approval is not required for the marginalprinting allowed in 1 above whenprinted on an official form, on a photo-copy of an official form, or on an(unchanged) IRS reproduction proof.3 Prior Approval Required. The mar-

ginal printing allowance in 1 above isalso the guide for the preparation ofacceptable substitute forms. There is no

exception to the requirement that noprinting is allowed in the top margin ofthe tax return form.

SEC. 13. EXAMPLES OFAPPROVED FORMATS

.01 Examples. Two sets of exhibits(Exhibits A–1, B–1, A–2 and B–2) areat the end of this revenue procedure.These are examples of how the guide-lines in this revenue procedure may beused in some specific cases. Verticalspacing is six (6) lines to the inch.These examples are from a prior yearand are not to be used as substituteforms..02 No State Tax Information. No

state tax information can appear onthese forms when filed with the Form1040. The state column may be presentbut the state tax information must not bevisible when filed with the Service. Weprefer that the entire state column becompletely blocked out..03 BLOCK OUT METHODS. A

suggested method to block out state taxinformation is: (1) place the substituteform in a clear plastic folder, (2) on thefolder, place a strip of opaque materialthe exact width and length of the col-umn you wish to block out, then (3)photocopy the substitute form while stillin the folder. The result will be a formwith only the federal tax informationvisible. Another method is to take ablack marking pen and, using eithervertical or horizontal strokes, cross outthe state figures. Carbon interleaved setsmay be used where the amounts enteredin the state column are filled in withblack carbon overprint. This copy maybe filed with the return..04 Examples of acceptable compu-

ter-generated formats are also shown inthe Exhibits section of this revenueprocedure. The exhibits are for Sched-ules A and B. Vertical spacing is six (6)lines to the inch. You may also refer tothem as examples of how the guidelinesin this revenue procedure may be usedin specific cases.1 A combination of upper and lower

case print fonts is acceptable in produc-ing the computer-generated forms in-cluded in this procedure.2 This same logic for computer-

generated forms can be applied to anyService form that is normally reproduc-ible as a substitute form, with the excep-tion of tax return forms as discussedelsewhere.

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SEC. 14. SPECIFICATIONS FORFILING SUBSTITUTE FORMS

.01 Filing Substitute Forms. To beacceptable for filing, a substitute returnor form must print out in a format thatwill allow the party submitting the re-turn to follow the same instructions asfor filing official forms. These instruc-tions are in the taxpayer’s tax package,or in the related form instructions. Theform must be on the appropriate sizepaper, be legible, and include a juratwhere one appears on the publishedform.1 Note to software publishers: The

Service has received returns producedby software packages with approvedoutput where either the form headingwas altered or the lines were spacedirregularly. This produces an illegible orunrecognizable return or a return withthe wrong number of pages. We realizethat many of these problems are causedby individual printer differences butthey may delay input of return data and,in some cases, generate correspondenceto the taxpayer. Therefore, in the in-structions to the purchasers of yourproduct, both individual and profes-sional, please stress that their returnswill be processed more efficiently ifthey are properly formatted. This in-cludes:(a) having the correct form numbers

and titles at the top of the return and(b) submitting the same number of

pages as if the form were an officialIRS form, with the line items on theproper pages..02 Use Preaddressed Internal Rev-

enue Service Label. If you are a practi-tioner filling out a return for a client ora software publisher who prints instruc-tion manuals, stress the use of thepreaddressed label provided in the taxpackage the Service sent to the taxpayer,when available. The use of this label (orits precisely duplicated label informa-tion) is extremely important for theefficient, accurate, and economical pro-cessing of a taxpayer’s return. Labeledreturns indicate that a taxpayer is anestablished filer and permits us to auto-matically accelerate processing of thosereturns. This results in quicker refunds,accurate names/addresses and postal de-liveries, and less manual review by IRSfunctions.1 If you are producing a software

package that generates name and ad-dress data onto the tax return, do notunder any circumstances program eitherthe Service preprinted check digits or a

practitioner-derived Name Control to ap-pear on any return prepared and filedwith the Service.3 If programming to print forms, use

only the following label informationformat for single filers:000–00–0000JOHN Q. PUBLIC310 OAK DRIVEHOMETOWN, STATE 940004 Use only the following information

for joint filers:000–00–0000 000–00–0000JOHN Q. PUBLICMARY I. PUBLIC310 OAK DRIVEHOMETOWN, STATE 94000

SEC. 15. GUIDANCE FROM OTHERREVENUE PROCEDURES

.01 Guidance for the substitute taxforms not covered in this revenue proce-dure and the revenue procedures whichgovern their use, are as follows:1 Revenue Procedure 94–79, IRS

Publication 1355, Requirements andConditions for the Reproduction, PrivateDesign, and Printing of Substitute Forms1040–ES.2 Revenue Procedures 96–24 and 96–

24a, IRS Publication 1141, GeneralRules and Specifications for PrivatePrinting of Substitute Forms W–2 andW–3.3 Revenue Procedure 96–42, IRS

Publication 1179, Specifications for Pa-per Document Reporting and Paper Sub-stitutes for Forms 1096, 1098, 1099Series, 5498, and W–2G.4 Revenue Procedure 96–11, IRS

Publication 1187, Specifications for Fil-ing Form 1042–S, Foreign Person’s U.S.Source Income Subject to Withholding,on Magnetic Tape.5 Revenue Procedure 96–36, IRS

Publication 1220, Specifications for Fil-ing Forms 1098, 1099, 5498, and W–2GMagnetically or Electronically.6 Revenue Procedure 95–18, IRS

Publication 1223, Specifications for Pri-vate Printing of Substitute Forms W–2cand W–3c.

SEC. 16. ORDERINGPUBLICATIONS

.01 In 1996, Form 3975, Tax Practi-tioner Annual Mailing List Application/Update, which is available in Publica-tion 1045, Information for TaxPractitioners, may be only be used toorder Package X, Informational Copiesof Tax Forms and Instructions. Therevenue procedures listed below may be

ordered by calling 1–800–TAX–FORM(1–800–829–3676). Identify the re-quested document by IRS publicationnumber. The following publications ad-dress the filing of substitute forms, aswell as documents on magnetic tape:1 Pub. 1141, the revenue procedure

on specifications for private printing forForms W–2 and W–3.2 Pub. 1167, the revenue procedure

on substitute printed, computer-prepared,and computer-generated tax forms andschedules.3 Pub. 1179, the revenue procedure

on paper substitute information returns(Forms 1096, 1098, 1099 series, 5498,and W–2G).4 Pub. 1192, Catalog of Reproducible

Forms and Instructions.5 Pub. 1220, the revenue procedure

on electronic or magnetic tape and mag-netic diskette reporting for informationreturns (Forms 1098, 1099 series, 5498,and W–2G).6 Pub. 1223, the revenue procedure

on substitute Forms W–2c and W–3c.7 Pub. 1239, Specifications for Filing

Form 8027, Employer’s Annual Infor-mation Return of Tip Income and Allo-cated Tips, on Magnetic Tape.8 Pub. 1245, Magnetic Tape Report-

ing for Forms W–4.9 Pub. 1345, Handbook for Elec-

tronic Filers of Individual Income TaxReturns (Tax Year 1996). (This is anannual publication; tax year is subject tochange.)10 Pub. 1345–A, Handbook for Elec-

tronic Filers of Individual Income TaxReturns (Tax Year 1996). This publica-tion, printed in the late fall, supplementsPublication 1345.11 Pub. 1355, the revenue procedure

on the requirements for substitute Form1040–ES..02 If you are mailing your order, the

address to use is determined by yourlocation. If you are located in:1 Alaska, Arizona, California, Colo-

rado, Hawaii, Idaho, Kansas, Montana,Nevada, New Mexico, Oklahoma, Or-egon, Utah, Washington, Wyoming,Guam, Northern Marianas, or AmericanSamoa, mail your request to:Western Area Distribution CenterRancho Cordova, CA 95743–00012 Alabama, Arkansas, Illinois, Indiana,Iowa, Kentucky, Louisiana, Michigan,Minnesota, Mississippi, Missouri, Ne-braska, North Dakota, Ohio, South Da-kota, Tennessee, Texas, or Wisconsin,mail your request to:

18

Central Area Distribution CenterP.O. Box 8903Bloomington, IL 61702–89033 Connecticut, Delaware, District ofColumbia, Florida, Georgia, Maine,Maryland, Massachusetts, New Hamp-shire, New Jersey, New York, NorthCarolina, Pennsylvania, Rhode Island,South Carolina, Vermont, Virginia, WestVirginia, as well as all foreign countriesand Puerto Rico, mail your request to:Eastern Area Distribution CenterP.O. Box 85074Richmond, VA 23261–50744 Taxpayers in the Virgin Islands

should mail their requests to:V.I. Bureau of Internal Revenue9601 Estate ThomasCharlotte Amalie, St. Thomas, VI 00802

SEC. 17. ORDERINGREPRODUCTION PROOFS

The reproduction proof program willbe discontinued in October 1996. Formsare available on the IRS BBS, theInternet and on CD–ROM. See Sections19 and 20.

SEC. 18. READER LIST PROGRAM

The reader list program will be dis-continued in October 1996. Forms areavailable on the IRS BBS, the Internetand on CD–ROM. See Sections 19 and20.

SEC. 19. INTERNAL REVENUEINFORMATION SYSTEMS BULLETINBOARD AND THE INTERNET

.01 Copies of tax forms and somepublications may be downloaded asprint files from the Internet or from theInternal Revenue Information Systems(IRIS) Bulletin Board. Forms can bedownloaded in several file formats.Those choosing to use the portabledocument file format (.pdf files) forviewing in Microsoft Windows or on aMacintosh can also download a freecopy of the Adobe Acrobat Reader..02 Access the Internet via one of the

following: World Wide Web - http://www.irs.ustreas.gov, FTP = ftp.irs.ustreas.gov, or Telnet - iris.irs.ustreas.gov. This service is free but time on theInternet is subject to the fees charged byyour Internet provider..03 IRIS can be reached via Fed-

World, an aggregation of federal BBSmaintained by the Department of Com-merce. IRIS can be reached directly bymodem at (703) 321–8020; FedWorld’smain number is (703) 321–3339. Theseare toll calls.

SEC. 20. FEDERAL TAX FORMS ONCD–ROM

.01 The IRS also offers access tocurrent and prior year tax forms andinstructions through its Federal TaxForms CD–ROM. The CD will be is-sued in two cumulative releases for the1996 tax year..02 The CD will contain over 600

current year tax forms, instructions, andTaxpayer Information Publications(TIPs). Also included are prior yearforms and instructions from 1991 andTIPs from 1994. All necessary softwareto view the files must be installed fromthe CD–ROM. Software for MicrosoftWindows 3.x and Macintosh System 7.5and later is included on the disk. Thesoftware will also run under Windows95..03 All products are presented in

Adobe’s Portable Document Format(PDF). A copy of the Adobe AcrobatReader is on the CD. In addition, theTIPs will be provided in the StandardGeneralized Markup Language (SGML)..04 For system requirements and to

order the 1996 Federal Tax Forms CD–ROM (stock number 648–096–00004–6), contact the Government Printing Of-fice’s (GPO) Superintendent ofDocuments:1 by telephone - (202) 512–1800;

select option 1;2 by fax - (202) 512–2250;3 through GPO’s Federal Bulletin

Board - (202) 512–1387; after signontype ‘‘/go irs’’;4 through GPO’s World Wide Web

site at http://www.gpo.gov/su_docs;5 by mail using the order form con-

tained in IRS Publication 1045 (Infor-mation for Tax Practitioners); or6 by mail to Superintendent of Docu-

ments, P.O. Box 371954, Pittsburgh, PA15250–7954..05 The cost of the CD is $25 and it

will be released in February 1997.Please reference stock number 648–096–00004–6. Those who order before De-cember 2, 1996 will also receive theJanaury early release CD containing taxproducts issued to that point.

SEC. 21. AGREEMENT

Any person or company who usessubstitute forms and makes all or part ofthe changes specified in this revenueprocedure, agrees to the following stipu-lation: The Service presumes thechanges are made in accordance withthese procedures and, as such, will benoninterruptive to the processing of the

tax return. Should any of the changesprove to be not exactly as described,and as a result become disruptive to theService during processing of the taxreturn, the person or company agrees toaccept the determination of the Serviceas to whether or not the form maycontinue to be used during the filingseason, and also agrees to work with theService in correcting noted deficiencies.Notification of deficiencies may bemade by letter, phone contact, or bothand may include the return of unaccept-able forms for resubmission of accept-able forms.

PART B. SPECIFIC

SEC. 1. GENERAL

The specifications contained in thispart of the revenue procedure definespecific, detailed requirements for cer-tain forms and conditions. These specifi-cations must be adhered to in producingacceptable substitute forms as definedherein.

SEC. 2. CONDITIONS-TAXRETURNS (FORM 1040, 1040A,1120, ETC.)

.01 Acceptable Forms.1 Computer-Generated Versions. Com-

puter-generated versions of a tax return form(e.g., Form 1040, 1040A, 1120, etc., whichrequires a signature and that establishes taxliability) are permitted under the followingconditions:(a) These substitute returns must be

printed on plain white paper.(b) Substitute returns and forms must

conform to the physical layout of thecorresponding Service form although thetypeface may differ. The text shouldmatch the text on the officially-published form as closely as possible;condensed text and abbreviations will beconsidered on a case-by-case basis. Ex-ception: All jurats (perjury statements)must be reproduced verbatim. No textcan be added, deleted, or changed inmeaning. It must be readily identifiableas a valid tax return.(c) Various computer-graphic print

media such as laser printing, dot matrixaddressable printing, etc., may be usedto produce the substitute forms.(d) The substitute return must be the

same exact number of pages, and con-tain the same line text as the officialreturn.(e) All computer-generated tax re-

turns MUST be submitted for approval

19

prior to their original use. Should youreceive an approval letter for a returnand the following year’s return has nochanges except the preprinted year, thelatter return is not subject to approval.Exception: If the approval letter speci-fies a one-time exception for your re-turn, the next year’s return must beapproved.2 Computer Generated Condensed

Format Versions. The accepted con-densed print format version for indi-vidual returns is the 1040PC ‘‘answersheet format’’ tax return..02 Prohibited Forms.1 Tax returns (e.g., Forms 1040, etc.)

CANNOT be computer-generated onlined or color-barred paper, using thebasic non-graphic layouts acceptable forall other (non-tax return) substituteforms and schedules.2 Tax returns that differ from the

official IRS forms in a manner thatmakes them non-standard or unprocess-able..03 Changes Permitted To The Forms

1040 and 1040A.1 Certain changes (listed below) are

permitted to the graphics of the formwithout prior approval, but thesechanges apply only to preprinted formsas described in .01 above.2 Changes not requiring prior ap-

proval are good only for the annualfiling period, which is the current TaxYear. Such changes are valid in subse-quent years only if the official formdoes not change.3 Other Changes Not Listed. All

changes not listed here require priorapproval from the Service BEFORE theform may be filed with the Service.

SEC. 3. CHANGES PERMITTED TOGRAPHICS (FORMS 1040A AND1040)

.01 AdjustmentsYou may make minor vertical and

horizontal spacing adjustments to allowfor computer or word-processing print-ing. This includes widening the amountcolumns or tax entry areas so long asthe adjustments do not exceed otherprovisions stated in revenue procedures.No prior approval is needed for thesechanges. However, the users of formswith such changes are bound by the‘‘Agreement’’ in Part A, Section 21..02 Name and Address Area.1 The horizontal rules and instruc-

tions within the name and address areamay be removed and the entire area leftblank; no line or instruction can remain

in the area. However, the statementregarding use of the IRS mail labelshould be retained.2 The heavy ruled border (when

present) that outlines the name andaddress area must not be removed, relo-cated, expanded or contracted.3 Required Format(a) When the name and address area

is left blank, as provided in 1 above, thefollowing format must be used whenprinting the taxpayer’s name and ad-dress. Otherwise, unless the taxpayer’spreprinted label is affixed over the infor-mation entered in this area, the linesmust be filled-in as shown1st name line (35 characters maxi-mum)2nd name line (35 characters maxi-mum)In-care-of name line (35 charactersmaximum)City, State (24 char. max.), one blank

char., & ZIP (five char.)(b) When there is no in-care-of name

line, the name and address will consistof only three lines (single filer) or fourlines (joint filer). Examples of the for-mats follow:Example of name and address (joint

filer) with no in-care-of name line:JOHN Z. JONESMARY I. JONES1234 ANYWHERE ST., APT 111ANYTOWN, STATE 12321Example of name and address (single

filer) with in-care-of name line:JOHN Z. JONESC/O THOMAS A. JONES4311 SOMEWHERE AVE.SAMETOWN, STATE 54345.03 Social Security Number (SSN)

and Employer Identification Number(EIN) Area.1 The vertical lines separating the

format arrangement of the SSN/EINmay be removed.2 When the vertical lines are re-

moved, the SSN and EIN formats mustbe 000–00–0000 or 00–0000000, respec-tively..04 Cents Column.1 You may remove the vertical rule

that separates the dollars from the cents.2 All entries in the amount column

should have a decimal point followingthe whole dollar amounts whether or notthe vertical line that separates the dol-lars from the cents is present.3 You may omit printing the cents,

but all amounts entered on the formmust follow a consistent format. You arestrongly urged to round off the figuresto whole dollar amounts, following the

official return instructions. Where sev-eral amounts are summed together, thetotal should be rounded off subsequentto the addition (i.e, indivdual amountsshould not be rounded off for computa-tion purposes).4 When printing money amounts, you

must use one of the following ten-character formats: (a) 0,000,000. (b)000,000.005 When there is no entry for a line

leave the line blank..05 ‘‘Paid Preparer’s Use Only’’ Area.1 On all forms, the paid preparer’s

information area may not be rearrangedor relocated.2 You may add three lines and re-

move the horizontal rules in thepreparer’s address area.

SEC. 4. CHANGES PERMITTED TOFORM 1040A GRAPHICS

No prior approval is needed for thefollowing changes (for use withcomputer-prepared forms only):.01 Line 4.This line may be compressed horizon-

tally (to allow for same line entry forthe name of the qualifying child) byusing the following caption: ‘‘Head ofhousehold; child’s name’’ (name field)..02 Other Lines.Any line whose caption takes up two

or more vertical lines may be com-pressed to one line by using contrac-tions, etc., and by removing instructionalreferences..03 Page 2 (Form 1040A).All lines must be present and num-

bered in the order shown on the officialform. These lines may also be com-pressed as in .02 above..04 Color Screening.It is not necessary to duplicate the

color-screening used on the officialform. A substitute Form 1040A may beprinted in black and white only, with nocolor screening.

SEC. 5. OTHER CHANGESPROHIBITED

No other changes to the Form 1040Agraphics are allowed without prior ap-proval, except for the removal of in-structions and references to instructions.

SEC. 6. CHANGES PERMITTED TOTHE FORM 1040 GRAPHICS

No prior approval is needed for thefollowing changes (for use withcomputer-prepared forms only):

20

.01 Line 4.This line may be compressed horizon-

tally (to allow for a larger entry area forthe name of the qualifying child) byusing the following caption: ‘‘Head ofhousehold; child’s name’’ (name field)..02 Line 6c.The vertical lines separating columns

(1) through (4) may be removed. Thecaptions may be shortened to allow aone-line caption for each column..03 Other Lines.Any other line whose caption takes

up two or more vertical lines may becompressed to one line by using con-tractions, etc., and by removing instruc-tional references..04 Line 21 - Other Income.1 The fill-in portion of this line may

be expanded vertically to three lines.2 The amount entry box must remain

a single entry..05 Line 38 - TaxYou may change the line caption to

read ‘‘Tax’’ and computer-print thewords ‘‘Total includes tax from’’ andeither ‘‘Forms(s) 8814’’, ‘‘Form 4970’’,or ‘‘Form 4972’’..06 Line 42You may change the caption to read:

‘‘Other credits from Form’’ andcomputer-print only the form(s) thatapply..07 Color Screening.It is not necessary to duplicate the

color-screening used on the officialform. A substitute Form 1040 may beprinted in black and white only, with nocolor screening.

SEC. 7. OTHER CHANGESPROHIBITED

No other changes to the Form 1040graphics are permitted without prior ap-proval except for the removal of instruc-tions and references to instructions.

SEC. 8. ACCEPTABLE FORMATSFOR COMPUTER-GENERATEDFORMS AND SCHEDULES

.01 Exhibits of acceptable computer-generated formats for the schedules usu-ally attached to the Form 1040 areshown in the Exhibits section of thisrevenue procedure..02 Use of Acceptable Formats. If

your computer-generated forms appearexactly like the exhibits, no prior autho-rization is needed.

SEC. 9. COMPUTER-GENERATEDFORMS NOT SHOWN AS EXHIBITSIN THIS REVENUE PROCEDURE

.01 Those desiring to computer-generate forms not shown here may doso, but they must design such formsthemselves by following the manner andstyle of those in the Exhibits section ofthis revenue procedure, and by takingcare to observe other requirements andconditions stated here..02 Computer-generated forms so de-

signed do not require prior approvalfrom the Service. However, the user ofsuch forms is bound by the ‘‘Agree-ment’’ in Part A, Sec. 21 above. TheService encourages the submission of allproposed forms for review and approval..03 If you wish, you may submit any

substitute form to the Service for ap-proval consideration, if the proposedform is covered in Part A, Section 2.03.

SEC. 10. INSTRUCTIONS FORFORMATTINGCOMPUTER-GENERATEDSUBSTITUTES

.01 Format ArrangementThe format of each substitute sched-

ule or form must follow the format ofthe official schedule or form as to itemcaptions, line references, line numbers,sequence, form arrangement and format,etc. Basically try to make the form looklike the official one, with readability andconsistency being primary factors. Youmay use periods and/or other similarspecial characters to separate the variousparts and sections of the form. DO NOTuse alpha or numeric characters forthese purposes. With the exceptions in.02 below, all line numbers and itemsmust be printed even though an amountis not entered on the line..02 Line Numbers.1 When a line on an official form is

designated by a number or a letter, thatdesignation (reference code) must beused on a substitute form.2 The reference code must be printed

to the left of the corresponding cap-tioned line and also immediately preced-ing the data entry field even if there isno reference code immediately preced-ing the data entry field on the officialform. If an entry field contains multiplelines but shows the line references onlyone time on the left and right side of theform, do not use more than the samenumber of line references on the substi-tute return.3 In addition, the reference code that

is immediately before the data field

must either be followed by a period orenclosed in parentheses. There also mustbe at least two blank spaces between theperiod or the right parenthesis and thefirst digit of the data field. (See examplebelow.)4 A decimal point (i.e., a period)

should be used for each money amountregardless of whether the amount isreported in dollars and cents or in wholedollars, or whether or not the verticalline that separates the dollars from thecents is present. The decimal pointsmust be vertically aligned when pos-sible.Example:5 STATE & LOCAL INC.TAX. . . . . . . . . . . . . . . . . . .5. 495.00

6 REAL ESTATETAXES . . . . . . . . . . . . . . . .6.

7 PERSONAL PROPERTYTAXES . . . . . . . . . . . . . . . .7. 198.00

or5 STATE & LOCAL INC.TAX. . . . . . . . . . . . . . . . . . (5) 495.00

6 REAL ESTATETAXES . . . . . . . . . . . . . . . (6)

7 PERSONAL PROPERTYTAXES . . . . . . . . . . . . . . . (7) 198.00.03 Multiple Page Forms.When submitting multiple page

forms, send all pages of the form in thesame package.

SEC. 11. ADDITIONALINSTRUCTIONS FOR ALL FORMS

.01 Internal control numbers andidentifying symbols of the computerpreparer may be shown on the substi-tute, if the use of such numbers orsymbols is acceptable to the taxpayerand the taxpayer’s representative. Ifshown, such information must not beprinted in the top one-half inch cleararea of any form or schedule requiring asignature. With the exception of theactual tax return form (i.e., Forms 1040,1120, 940, 941, 5500 Series, etc.), youmay print in the left vertical and bottomleft margins. The bottom left marginyou may use extends 31⁄2 inches fromthe left edge of the form. (See Part A,Sec. 12 for more information on thissubject.).02 Descriptions for captions, lines,

etc., appearing on the substitute formsmay be limited to one print line byusing abbreviations and contractions,and by omitting articles, prepositions,etc. However, sufficient key words mustbe retained to permit ready identificationof the caption, line or item.

21

1 Explanatory detail and/or interme-diate calculations for derivation of finalline totals, may be included on thesubstitute. We prefer that such calcula-tions be submitted in the form of asupporting statement. If intermediatecalculations are included on the substi-tute, the line on which they appear maynot be numbered or lettered. Intermedi-ate calculations may not be printed inthe right column. This column is re-served for official numbered and letteredlines that correspond to the ones on theofficial form. If a supporting statementis submitted, intermediate calculations orsubtotals may be formatted at thepreparer’s option.2 Text prescribed for the official

form, which is solely instructional innature, e.g., ‘‘Attach this schedule toForm 1040,’’ ‘‘See instructions,’’ etc.,may be omitted from the substituteform.3 Information for more than one

schedule or form may not be shown onthe same printout page. It is stronglyrecommended that a substitute form notexceed the same number of pages usedfor the official form.(a) Both sides of the paper may be

printed for multiple page official forms;but it is unacceptable to intermix singlepage schedules of forms, except forSchedules A and B which are printedback to back by the Service. For ex-ample, Schedule E can be printed onboth sides of the paper, because theofficial form is multiple page, with pagetwo continued on the back. However,for example, do not print Schedule E onthe front page and Schedule SE on theback, or Schedule A on the front andForm 8615 on the back, etc. Both pagesof a substitute form must match theofficial form version it represents, ex-cept that the back page may be blank ifthe Service form only contains the in-structions thereon.4 Identify all computer-prepared sub-

stitutes clearly; print the form designa-tion one-half inch from the top marginand one and one-half inches from theleft margin; print the title centered onthe first line of print; and print thetaxable year and, where applicable, thesequence number on the same line one-half to one inch from right margin.Include the taxpayer’s name and SSNon all forms and attachments. Also printthe OMB number as reflected on theofficial form.5 The state tax column may be

present, but the state tax informationmust NOT be visible on the copy filed

with the Service. When a form is de-signed with both federal and state col-umns, the federal column must be to theleft of the state column and adjacent tothe line caption.6 Negative (or loss) monetary amount

entries should be enclosed in brackets,or signed minus, to assist in the accuratecomputation and input of form data. Onmany official forms the Service pre-prints brackets in selected negative datafields, and these designations should beretained or inserted on affected substi-tute forms.

SEC. 12. FILING SUBSTITUTEFORMS WITH THE SERVICE

Instruct the taxpayer to follow thesame instructions as for filing officialforms, unless filing the forms as a taxpreparer. These instructions are in thetaxpayer’s tax package.

SEC. 13. SPECIAL FORM 1040EZOPTICAL CHARACTERRECOGNITION/IMAGE CHARACTERRECOGNITION (OCR/ICR)REQUIREMENTS

.01 The Form 1040EZ is designed inOCR/ICR format. IRS has the capabilityto machine read this form by opticalcharacter recognition/image characterrecognition (OCR/ICR) equipment.Form 1040EZ data may also be filedelectronically or on Form 1040PC..02 An acceptable substitute OCR/

ICR Form 1040EZ must generally be anexact replica of the official OCR/ICRreproduction proof with respect to lay-out, content and required OCR/ICRcharacteristics..03 The specific paper requirements

which must be met for the developmentof a substitute (privately printed) OCR/ICR Form 1040EZ include the follow-ing:1 olor and quality of paper—Paper

must be white, OCR/ICR grade bond,with no fluorescent additives or watermarks, and with zero rag content.2 Reflectivity of paper—Must be

80% or greater.3 Opacity—The paper opacity ratio

must be 80% or more.4 Paper Weight—Specified paper

weight is 20 lb. OCR/ICR bond(.00359).5 Dirt—Must not exceed 10 parts per

million.6 Finish (smoothness)—Must be be-

tween 90 and 160 units (Sheffield).7 Porosity—Paper should have a

Gurley reading between 15 and 95.

8 Gloss—Paper with shiny or lus-trous appearance (glossy) should beavoided.9 Size—Form trim size must be 89 x

119..04 The specific ink requirements

which must be met for this form includethe following:1 Print Color—The face of the form

prints in black and green, the backprints in black only (70% screen).2 Ink—Green ink used must be

highly reflective OCR/ICR type, such asFlint J–27975, or an exact match. Blackink used must be non-reflective.3 Face Registration—Black to green

must be .029 (plus or minus) bothhorizontally and vertically.4 Face Screen—Forms contain a

green screened background equal to a15% tone of 110-line screen. Followregistration marks on repro-proof forscreen positioning. Handprinted boxesare included on Page 1 of the reproduc-tion proof and should be printed as a50% value of the recommended OCR/ICR green ink. Inks used forhandprinted boxes must reflect at least90% of the background on which it isprinted as measured in the visible range.5 Face Margins—Approximately2⁄69

head from top trimmed edge to screen(1⁄29 to black image).1⁄69 outside fromtrimmed edges to screen.6 Back Margins—1⁄29 head,5⁄169 foot,

and 5⁄169 sides.7 Back Screen—Back copy should be

screened for 70% tone value..05 TypographyType must be substantially identical

in both size and shape with correspond-ing type on the official form reproduc-tion proof..06 To assure proper alignment and

position of hand-printed characters rep-resenting return lines 1 through 10 taxdata, they must be handprinted (entered)into the preprinted amount field boxeson the form. A #2 lead wooden pencil,or blue, and/or black ink pen (ball point,fountain, or felt-tipped) is recommendedas the writing tool which will consis-tently provide the required stroke widthand print contrast on entered characters..07 Reading of handprinted characters

requires adherence to the followingtechniques.1 Enter numeric amount digits care-

fully and clearly. Fill at least2⁄3 of theindividual character box height, keepingthe character within the box with nooverlapping or touching characters. Spe-cific required digit constraints are shownbelow.

22

2 When entering ‘‘fours’’, keep thetop open.3 When entering ‘‘ones’’, do not use

serifs.4 When entering ‘‘twos’’, do not add

extra loops.5 All character lines must be con-

nected, with no gaps..08 All the general and detailed pro-

visions of this Revenue Procedure apply(in addition to this specific OCR/ICRSection) for the development of substi-tute OCR/ICR Forms 1040EZ.

SEC. 14. COMPUTER GENERATEDALTERNATIVE RETURNS, FORM1040PC FORMAT RETURN

.01 The Internal Revenue Service isoffering a new approach for filing indi-vidual income tax returns. The 1040PCFormat Return is an alternative to theconventional preprinted tax return. The1040PC is an answer sheet return, gen-erated on a personal computer, in three-column format that prints only tax datathat is input into the software. Taxreturns are filed by tax preparers andtaxpayers using commercially availabletax preparation software packages thatinclude the 1040PC Format Return printoption.1 1040PC Format Returns are

computer-prepared, printed on plainwhite paper, signed and mailed to thedesignated processing center and areprocessed like any other conventionallyfiled return.2 Preparers, or taxpayers, must pur-

chase IRS accepted tax preparation soft-ware packages that include the 1040PCprint option. All that is necessary toparticipate in 1040PC is a personalcomputer, accepted software, a printer,and plain white paper. 1040PC is attrac-tive to tax preparers and taxpayers whomight not be interested or capable ofElectronic Filing.3 The Direct Deposit option is avail-

able to taxpayers filing 1040PC returns.Balance due returns may also be filedusing 1040PC. The payment may beforwarded to the Service Center with aseparate payment voucher (Form 1040–V).4 All software used to generate the

1040PC Format Return must be testedand accepted by the Internal RevenueService. Testing will validate 1040PCreturns generated by the software andthat the software program is in compli-ance with validity and consistencychecks in the IRS 1040PC Project speci-fications. Software developers who wish

to participate in the 1040PC programmust submit Form 9356, Application forSoftware Developers to Participate inthe 1040PC Answer Sheet for IndividualIncome Tax Returns, to the 1040PCFiling Section.5 Upon successful completion of

software acceptance testing, the softwaredeveloper will be issued a softwareacceptance code that will be embeddedinto the software and print on every1040PC return generated. This is not thesame as the Forms Approval Numberwhich is referenced in Part A, Section 8,or the approval number which is gener-ated for OCR Scannable ApplicationForms for Employee Plans in Part B,Section 19.6 The Internal Revenue Service be-

lieves that 1040PC will prove beneficialto taxpayers, tax preparers, and theService. For specific information aboutthe alternative computer generated1040PC Format Return, refer to Publica-tion 1678, Project 1040PC, Handbookfor 1040PC Format Preparers and Publi-cation 1630, Project 1040PC, Specifica-tions for Software Developers. You mayalso call (202) 283–0180 or write:Internal Revenue Service1040PC Filing Office, T:S:P:I1111Constitution Ave. NWWashington, DC 20224

SEC. 15. SPECIAL FORM 941REQUIREMENTS - OCRSPECIFICATIONS

.01 The official Form 941 and Sched-ule B (Form 941) are designed in OCR/ICR format. The Service has the capa-bility to machine read these forms byoptical character recognition/image char-acter recognition (OCR/ICR) equipment(Scan-optics 9000 Series), if submittedin acceptable OCR/ICR format..02 Form 941 and Schedule B (Form

941) may be produced either in OCR/ICR scannable format or as black andwhite substitute forms which can berecognized by the scanning equipment.The specific criteria in .03 and .04 applyif the substitute form is to be producedfor OCR processing. Specification forblack and white substitutes are in Sec-tion 16..03 An acceptable substitute OCR/

ICR Form 941 or Schedule B must bean exact replica of the official reproduc-tion proof with respect to layout, con-tent, and required OCR/ICR characteris-tics..04 The specific paper requirements

which must be met for the development

of substitute (privately printed) formsgenerally duplicate those specified inPart B, Section 13, with the followingexception:1 Size—Form 941 trim size must be

81⁄29 X 119..05 The specific ink requirements

which must be met for these formsinclude the following:1 Print Color—Black and Red2 Ink—Red ink must be a highly

reflective (not less than 80%) OCR/ICRtype ink, such as Sinclair/ValentineJ6983 or an exact match. Black inkreflectance must not be greater than15%.3 Handprinted Boxes (including the

numbers outside the boxes)—Thesehandprinted boxes (for IRS entries anduse only) are included on the reproduc-tion proof, and should be printed as a50% screen value of the recommendedOCR/ICR red ink. Inks used forhandprinted boxes must be 15% or lesswhen tested using the MacBeth or Kid-der testers (see #5 below).4 Face Margins—Minimum margins

require 1⁄29 head; center sides; and5⁄169foot.5 Testers—The following two print

testers may be used for Form 941. Anyother type tester must first be approvedby the IRS.(a) MacBeth PCM–IIUse ‘‘C’’ scale. The Print Contrast

Signal (PCS) must range between .01minimum to .06 maximum.(b) Kidder 082 AUse infrared scale. PCS values must

fall in the range of .12 minimum to .21maximum. White calibration disk mustbe set at 100%. Sensitivity must be setat ‘‘1’’.

SEC. 16. SPECIAL FORM 941REQUIREMENTS - BLACK ANDWHITE SPECIFICATIONS

Note: This requirement will take ef-fect at a future date. Until writtennotice is given, either this version or aduplicate of the current Form 941 inblack and white is acceptable.

.01 Exhibits BW–1 and BW–2 areexhibits of acceptable black and whitesubstitutes Forms 941 and Schedule B.The general specifications for black andwhite substitutes are as follows:(a) No vertical or horizontal rules,

except for the IRS internal use boxes inthe upper right corner of Form 941 andthe signature line.(b) The ID code (‘‘4141’’ or ‘‘5151’’)

must be printed in OCR–A or Courier

23

font and data fields must be printed in anon-proportional typeface (preferablyCourier).(c) All data positions in the instruc-

tions that follow include the margins.Character positions are counted from theleft edge based on 10 characters perinch; print lines are counted from thetop edge based on six lines per inch.(d) The boxes labeled ‘‘IRS Use’’ on

Form 941 must be displayed as shownon the official form. If possible, usedotted or broken lines. The boxes startin position 17 and cover print lines 19through 21..02 The other checkboxes on Form

941 must not be displayed. The formmust be programmed to display non-numeric data at the following locations:(a) ID Code - starts in line 6, position

19.(b) Taxpayer identification (entity)

data (name, address, etc.) - starts in line9, position 20.(c) State Deposit Code - line 11,

position 12.(d) Different address checkbox - line

21, position 13.(e) Final Return Checkbox - line 23,

postion 39.(f) Seasonal employer checkbox -

line 24, position 62.(g) Social Security and Medicare

taxes checkbox - line 35, position 60.(h) Overpayment boxes (line 16) -

line 51, positions 23 and 43.(i) Semiweekly depositors checkbox -

line 53, position 77.(j) Monthly depositors checkbox -

line 54, position 77..03 Amount fields - Do not reproduce

the dollar signs on lines 6a, 6b, 7, or 9.The decimal point for the first amounton lines 6a, 6b, and 7 must be placed inposition 48. The decimal point foramounts in items 2 through 15(righthand column) must be placed inposition 75. The print lines for theamounts are:

Item Print Line Item Print Line

2 26 9 373 27 10 394 28 11 415 30 12 436a 31 13 456b 32 14 477 33 15 498 35.04 The monthly summary amounts

on line 17 must be displayed on printline 58. Decimal points must be dis-

played in positions 19, 37, 56, and 74for columns (a) through (d), respec-tively..05 Schedule B (Form 941)(a) Display the ID Code (5151) on

print line 6, position 20. Display thename (positions 9–49), EIN (53–66),and quarter ended (69–78) on print line9.(b) The daily amounts appear on the

following print lines:

First month - lines 15, 17, 19, 21, 23,25, and 27

Second month - lines 31, 33, 35, 37,39, 41, and 43

Third month - lines 47, 49, 51, 53, 55,57, and 59

Subtotal A - line 28Subtotal B - line 44Subtotal C - line 60Total D - line 61

(b) The body of this form has fivecolumns. The following character posi-tions refer to the placement of a decimalpoint in the amount. The amounts willthe expand two characters to the rightfor cents and a variable number to theleft for dollars.

Column 1 - days 1 through 7 - position17

Column 2 - days 8 through 14 - posi-tion 32

Column 3 - days 15 through 21 - posi-tion 46

Column 4 - days 22 through 28 - posi-tion 61

Column 5 - days 29 through 31 andtotals - position 76

Please do not fill in the area under day31.

SEC. 17. PAPER SUBSTITUTES FORFORM 1042–S

.01 Paper substitutes for Form1042–S, Foreign Person’s U.S. SourceIncome Subject to Withholding, thattotally conform to the specificationscontained in this procedure may beprivately printed without prior approvalfrom the Internal Revenue Service. Pro-posed substitutes not conforming tothese specifications must be submittedfor consideration.1 The request should be submitted by

November 15 of the year prior to theyear the form is to be used. This is toallow the Service adequate time to re-spond and the submitter adequate timeto make any corrections. These requestsshould contain a copy of the proposedform, the need for the specific devia-

tion(s), and the number of informationreturns to be printed.2 Form 1042–S is subject to annual

review and possible change. Withhold-ing agents and form suppliers are cau-tioned against overstocking supplies ofthe privately printed substitutes.3 Copies of the official form for the

reporting year may be obtained frommost Service offices. The Service pro-vides only cut sheets (no carbon inter-leaves) of these forms. Continuous fan-fold/pin-fed forms are not provided..02 Instructions for Withholding

Agents1 Only original copies may be filed

with the Service. Carbon copies andreproductions are not acceptable.2 The term ‘‘Recipient’s U.S. tax-

payer identification number,’’ for an in-dividual means the social security num-ber (SSN) or individual taxpayeridentification number (ITIN), consistingof nine digits separated by hyphens asfollows: 000–00–0000. For all other re-cipients, the term means employer iden-tification number (EIN). The EIN con-sists of nine digits separated by onehyphen as follows: 00–0000000. Thetaxpayer identification number must bein one of these formats.3 Withholding agents are requested to

type or machine print whenever pos-sible, provide quality data entries on theforms (that is, use black ribbon, insertdata in the middle of blocks well sepa-rated from other printing and guide-lines), and take other measures to guar-antee a clear, sharp image. Withholdingagents are not required, however, toacquire special equipment solely for thepurposes of preparing these forms.4 On corrected returns, the words

CORRECTED RETURN must be typedin all capital letters in the top1⁄4 inch,right of center margin. All requiredinformation must be completed on acorrected return since it replaces andsupersedes the information return previ-ously filed.5 Substitute forms prepared in con-

tinuous or strip form must be burst andstripped to conform to the size specifiedfor a single form before they are filedwith the Service. The dimensions arefound below.(a) Computer cards are acceptable,

provided they meet all requirements re-garding layout, content, and size..03 Substitute Forms Format Require-

ments.1 Privately printed substitute Forms

1042–S must be exact replicas of theofficial forms with respect to layout and

24

contents. Only the dimensions of thesubstitute form may differ and the print-ing of the Government Printing Officesymbol must be deleted. The exact di-mensions are found below.2 Line 1 must be present, line 2 may

be omitted if it is not needed. If line 2is omitted, also omit line 3.3 None of the boxes can be omitted.

Each box (a through h) must be presentand in the exact order. The box for eachpayment amount must contain the ap-propriate caption.4 Color and Quality of paper.(a) Paper for Copy A must be white

chemical wood bond, or equivalent, 20pound (basis 17 x 22–500), plus orminus 5 percent; or offset book paper,50 pound (basis 25 x 38–500). Nooptical brighteners may be added to thepulp or paper during manufacture. Thepaper must consist of principallybleached chemical woodpulp or recycledprinted paper. It also must be suitablysized to accept ink without feathering.(b) Copies B, C, D (for Recipient),

and E (for Withholding Agent) are pro-vided in the official assembly solely forthe convenience of the withholdingagent. Withholding agents may choosethe format, design, color and quality ofthe paper used for these copies.5 Color and Quality of Ink—All

printing must be in a high qualitynon-gloss black ink. Bar codes shouldbe free from picks and voids.6 Typography—Type must be sub-

stantially identical in size and shape tocorresponding type on the official form.All rules on the document are either 1point (0.015 inch) or 3 point (0.045inch). Vertical rules must be parallel tothe left edge of the document; horizontalrules, parallel to the top edge.7 Dimensions—The official form is 8

inches wide X 51⁄2 inches deep, exclu-sive of a1⁄2 snap stub on the left side ofthe form. The snap feature is not re-quired on substitutes.(a) The width of a substitute Copy A

must be a minimum of 7 inches and amaximum of 8 inches, although adher-ence to the size of the official form ispreferred. If the width of the substituteCopy A is reduced from that of theofficial form, the width of each field onthe substitute form must be reducedproportionately. The left margin must be1⁄2 inch and free of all printing otherthan that shown on the official form.(b) The depth of a substitute Copy A

must be a minimum of 51⁄6 inches anda maximum of 51⁄2 inches.

8 Carbonized forms or ‘‘spot car-bons’’ are not permissible. Interleavedcarbons, if used, must be of good qual-ity to preclude smudging and should beblack.9 Other Copies—Copies B, C, and D

are required to be furnished for theconvenience of payees who are requiredto send a copy of the form with otherfederal and state returns they file. CopyE may be desired as a withholdingagent’s record/copy..04 Additional Instructions1 Arrangement of Assembly—If all

five parts are present, the parts of theassembly shall be arranged from top tobottom as follows: Copy A (Original)‘‘For Internal Revenue Service,’’ CopiesB, C, and D ‘‘For Recipient,’’ and CopyE ‘‘For Withholding Agent.’’

SEC. 18. SPECIFICATIONS FORFILING SUBSTITUTE SCHEDULESK–1

Prior approval is NOT required for asubstitute Schedule K–1 that accompa-nies Form 1065 (for partnership), aForm 1120S (for small business corpora-tion), or a Form 1041 (for fiduciary)when the substitute Schedule K–1 meetsall of the following requirements..01 The Schedule K–1 must contain

the payer and recipient’s name, addressand SSN/EIN..02 The Schedule K–1 must contain

all line items required for use by thetaxpayer..03 The line items must be in the

same order and arrangement as those onthe official form..04 The line items must be numbered,

titled, and/or captioned exactly as shownon the official form..05 Each taxpayer’s information must

be on a separate sheet of paper. There-fore, all continuously printed substitutesmust be separated, by taxpayer, beforefiling with the Service..06 Schedules K–1 for recipients

must have instructions for required lineitems attached..07 You may be subject to penalties

if you file Schedules K–1 with theService and furnish Schedules K–1 topartners, shareholders, or beneficiariesthat do not conform to the specificationsof this revenue procedure..08 The amount of each partner’s,

shareholder’s or beneficiary’s share ofeach line item must be shown. Thefurnishing of a total amount for eachline item and a percentage (or decimalequivalent) to be applied to such total

amount by the partner, shareholder, orbeneficiary does not satisfy the law andthe specifications of this revenue proce-dure..09 If you file Schedules K–1 not

conforming to the above specifications,IRS may consider these as not process-able and return them to you to be filedcorrectly. You may also be subjected tothe penalty as mentioned in .07 above.

SEC. 19. PROCEDURES FORPRINTING INTERNAL REVENUESERVICE ENVELOPES

.01 Organizations are now permittedto produce substitute tax return enve-lopes. Use of substitute return envelopesthat comply with the requirements setforth in this section will assist in deliv-ery of mail by the U.S. Postal Serviceand facilitate internal sorting once theenvelopes are received at the InternalRevenue Service Centers. The perma-nent five digit ZIP codes assigned to theten service centers are listed below.These ZIP codes must be utilized whenmailing returns to the prescribed servicecenter:ATLANTA GA 39901KANSAS CITY MO 64999AUSTIN TX 73301PHILADELPHIA PA 19255MEMPHIS TN 37501ANDOVER MA 05501CINCINNATI OH 45999HOLTSVILLE NY 00501OGDEN UT 84201FRESNO CA 93888.02 The sorting of returns by form

type is accomplished by the preprintedbar codes on return envelopes that areincluded in each specific type of formor package mailed to the taxpayer. The32 bit bar code located to the left of theaddress on each envelope identifies thetype of form that person is filing andassist the Service in consolidating likereturns together for processing. Failureto use the envelopes furnished by theService results in additional processingtime and effort, and possibly delays thetimely deposit of funds, processing ofreturns, and issuance of refund checks..03 The Internal Revenue Service will

not furnish or sell bulk quantities ofpreprinted tax return envelopes to tax-payers or tax practitioners. A suitablealternative has been developed whichwill accommodate the sorting needs ofboth the IRS and the U.S. Postal Ser-vice. The new alternative is based onthe use of ZIP + 4 or 9 digit ZIP codesfor mailing various types of tax returns

25

to the different area service centers.Essentially, the Postal Service will uti-lize the last four digits to identify andsort the various form types into separategroups for processing. The list of add-onfour digits or + 4 portion of the 9 digitZIP codes with the related form designa-tions is provided below and is to be-come a permanent part of the five digitservice center ZIP codes shown above.

FORM ZIP + FOUR PACKAGEXXXXX–0001 ReservedXXXXX–0002 1040XXXXX–0005 941XXXXX–0006 940XXXXX–0008 943XXXXX–0011 1065XXXXX–0012 1120XXXXX–0013 1120SXXXXX–0014 1040EZXXXXX–0015 1040AXXXXX–0020 5500–C/RXXXXX–0024 5500EZXXXXX–0027 990XXXXX–0031 2290XXXXX–0044 5500.04 The Reproducible Program that in

past years supplied the envelope Repro-duction Proofs will be abolished Sep-tember 30, 1996. The IRS will nolonger provide camera copy to practitio-ners for the production of envelopes.Practitioners must develop their owncamera copy..05 Use of preparer company names,

addresses, and logos is permissible solong as prescribed clear areas are notinvaded. The government recommendsthat the envelope stock have an averageopacity not less than 89 percent andcontain a minimum of 50 percent wastepaper. Use of carbon based ink is essen-tial for effective address and bar codereading. Envelope construction can be ofside seam or diagonal seam design. Thegovernment recommends that the size ofthe envelope should be 53⁄49 by 99.Continuous pin-fed construction is notdesirable, but is permissible if the gluededge is at the top. This requirement isfirm as mail opening equipment is de-signed to slice or otherwise open thebottom edge of each envelope..06 The above procedures or guide-

lines are written for the user havingenvelopes preprinted. Many practitionersmay not wish to have volumes of thedifferent envelopes with differing ZIPcodes/form designations preprinted forreasons of low volume, warehousing,waste, etc. In this case, the practitionercan type or machine print the addresseswith the appropriate ZIP codes to ac-

commodate sorting. If the requirements/guidelines outlined in this section cannotbe met, then use of only the appropriatefive digit service center ZIP code isneeded.

SEC. 20. SPECIFICATIONS FOROCR SCANNABLE APPLICATIONFORMS FOR EMPLOYEE PLANS

.01 Forms 4461, 4461–A, 4461–B,5300, 5303, 5307, 5310, 5310–A, and6406 are OCR scannable documentssubmitted to key district offices foremployee plans matters. They may besubmitted as Computer-generated substi-tute forms if the requirements of thissection are satisfied..02 An OCR data sheet must be gen-

erated according to the following re-quirements:1 Set at least 19 margin at top, bot-

tom, and both sides.2 A data element consists of a less

than sign, information or at least 5 blankspaces, and a greater than sign (delimit-ers). All data elements from page one ofthe application forms in .01 above mustbe printed on the OCR data sheet, evenif no information is entered between thedelimiters.3 Add at least 2 spaces before and

after each delimiter.4 Each data element must start at the

left margin.5 One line for each data field, except

employer and plan name fields may betwo lines. However, only one set ofdelimiters may bracket the field, even ifthe field is on two lines.6 Each data element must appear on

the OCR data sheet in the same se-quence as printed on the preprintedform, reading top to bottom and fromleft to right.7 Each data field must be sequen-

tially numbered at left commencing with1. See Notice 90–38 for examples of theacceptable format.8 The data sheet must be printed on

81⁄29 X 119 white nonrecycled papersuitable for use with printing equipmentand duplicating machines. A photocopyis not acceptable. Heavyweight bondpaper and onion skin paper are notacceptable.9 Use 10 pitch type in a standard

business font (e.g., courier, elite, pica).10 Add at least two spaces before

and after each less than and greater thansign (delimiters).

11 Do not fold or staple the OCRdata sheet. It may remain loose, or bepaper or spring clipped to the applica-tion.12 At the top of the OCR data sheet

add the heading ’’OCR Data Sheet, FileWith Application Form, Approval Num-ber (leave nine spaces for approvalnumber)’’..03 The OCR data sheet must be

submitted for approval to: EP OCRForms Coordinator, E:EP:FC, Room2232, 1111 Constitution Ave., N.W.,Washington, DC 20224..04 The OCR data sheet must be

submitted with a complete word-for-word identical copy of the applicationform except as described in .05 below.This copy may be a photocopy, or aComputer-Generated Substitute Form.Computer-generated substitute formsmay be submitted for approval to theaddress in .03 above. However, exceptfor the OCR data sheet, such approval isnot required if the requirements of thisRevenue Procedure are satisfied. If ap-proval is requested, leave nine spacesfor the approval number above theOMB approval number..05 The OCR data sheet replaces one

copy of page one of the applicationwhich must otherwise be submitted induplicate. To avoid confusion when gen-erating the OCR data sheet, the follow-ing wording should be deleted from thefirst page of the application, ‘‘File page1 of the form in duplicate’’ and ‘‘Bothcopies of this page must be signed’’. Ifthe Procedural Requirements Checklistis being generated, the following lineitems should be modified as indicated.Item (e) or (f) ‘‘Have you submittedpage 1 in duplicate?’’ should be modi-fied to read, ‘‘Have you submitted theOCR data sheet?’’, and item (f) or (g)‘‘Have you signed both copies of page 1of the application?’’ should be modifiedto read, ‘‘Have you signed the applica-tion?’’.06 Nonscannable EP application

forms, e.g., Form(s) 5305 and 5306,may be computer-generated. They neednot be submitted for approval if therequirements of this Revenue Procedureare satisfied. If approval is desired,these forms may be submitted to theaddress in .03 above.

SEC. 21. PROCEDURE FORSUBSTITUTE FORM 5471 ANDFORM 5472

.01 Instructions for Preparing Substi-tute Forms 5471, Information Return of

26

U.S. Persons With Respect To CertainForeign Corporations, and their accom-panying Schedules J, M, N, and O, andForms 5472, Information Return of a25% Foreign-Owned U.S. Corporationor a Foreign Corporation Engaged In aU.S. Trade or Business (Under Sections6038A and 6038C of the Internal Rev-enue Code).1 Paper and Computer-Generated

Substitutes for Form 5471 and the ac-companying Schedules J, M, N, and O,and Form 5472 that totally conform tothe specifications contained in this pro-cedure may be privately printed, butmust have prior approval and are subjectto annual review from the Internal Rev-enue Service.2 Copies of the official forms for the

reporting year may be obtained frommost Service offices. The Service pro-vides only cut sheets of these forms.Continuous fan-folded/pin-fed forms arenot provided.3 The Service will accept QUALITY

substitute tax forms that are consistentwith the official forms they represent,AND that do not have an adverseimpact on our processing. Therefore,only those substitute forms that conformto, and do not deviate from the corre-sponding official forms, are acceptable..02 Computer-Prepared Tax FormsIf the substitute returns and schedules

meet the guidelines prescribed herein,the Service will for filing purposesaccept computer-prepared Forms 5471and 5472 filled in by a computer, wordprocessing equipment or similar auto-mated equipment or a combination ofcomputer-prepared/generated and filledin information, filed separately or at-tached to individual or business incometax returns..03 Format Arrangement1 The substitute must follow the de-

sign of the official form as to format,arrangement, item caption, line numbers,line references, and sequence. It must bean exact textual and graphic MIRRORimage of the official form for it to beacceptable.2 The filer must use one of the

official ten character amount formats.All entries in the amount column shouldhave a decimal point following thewhole dollar amounts whether or not thevertical line that separates the dollarsfrom the cents is present. It must followa consistent format.3 The reference code must be printed

to the left of the corresponding cap-tioned line and also immediately preced-ing the data entry field EVEN if there is

no reference code preceding the dataentry field on the official form. Thereference code that is immediately be-fore the data field must either be fol-lowed by a period or enclosed in paren-theses. There also must be at least twoblank spaces between the period or theright parenthesis and the first digit ofthe data field.4 The size of the page must be the

same as the official form (81⁄29 X 119).5 The acceptable print is

‘‘Helvetica’’.6 The spacing of the print must be 6

lines/inch vertical, 10 or 12 print charac-ters per inch horizontally.7 A 1⁄2 to 1⁄4 inch margin must be

maintained across the top, bottom, andboth sides (exclusive of any pin feedholes).8 The substitute form must be of the

same number of pages as the officialone.9 The preprinted brackets in the

money fields should be retained.10 The filer must COMPLETELY fill

in all the specified numbers or refer-enced lines as they appear on the offi-cial form, (not just totals), BEFOREattaching any supporting statement.11 Supporting statements are NEVER

to be used until the required officialform they support are first totally filledin (completed). A blank or incompleteform that refers to a supporting state-ment, in lieu of completing a tax returnis unacceptable.12 Descriptions for captions, lines,

etc., appearing in the substitute formsmay be limited to one print line byusing abbreviations and contractions,and by omitting articles, prepositions,etc. However, sufficient key words mustbe retained to permit ready identificationof the caption, line or item.13 Text prescribed for the official

form, which is solely instructional innature, e.g., ‘‘Attach this schedule toForm 1040’’, ‘‘See instructions,’’ etc.,may be omitted from the form..04 Filing InstructionsInstructions for filing substitute forms

are the same as for filing official forms.

SEC. 22. FORMS FORELECTRONICALLY FILED RETURNS

.01 Since the 1986 filing season, theService has been accepting current pro-cessing year electronically filed refundreturns. Since tax year 1991, we acceptbalance due returns that are filed elec-tronically. Electronic filing is a methodby which qualified filers transmit tax

return information directly to an IRSService Center over telephone lines, inthe format of the official Internal Rev-enue Service forms.Anyone wishing to participate in the

Electronic Filing Program for individualincome tax returns must submit a Form8633, Application to Participate in theElectronic Filing Program. (Note: ForBusiness returns, prospective partici-pants must submit a Form 9041, Appli-cation for Electronic/Magnetic MediaFiling of Business and Employee Ben-efit Plan Returns.).02 The taxpayer signature does not

appear on the electronically transmittedtax return and is obtained by the quali-fied electronic filer on Form 8453, U. S.Individual Income Tax Declaration forElectronic Filing, for Forms 1040,1040A and 1040EZ. Form 8453, whichserves as a transmittal for the associatednon-electronic (paper) documents, suchas Forms W–2, W–2G, and 1099–R, is aone-page form and can only be ap-proved through the Substitute FormsProgram in that format. For specificinformation about electronic filing, referto Publication 1345, Handbook for Elec-tronic Filers of Individual Income TaxReturns. (NOTE: For Business returns,the electronic/magnetic media partici-pants must use the official Form8453–E, F or P, or an approved substi-tute that duplicates the official form inlanguage, format, content, color andsize.).03 A participant in the electronic

filing program who wants to develop asubstitute form should follow the guide-lines for preparing substitute formsthroughout this publication, and send asample of the form for approval to theSubstitute Forms Coordinator at the ad-dress in Part A, Section 7. Forms 8453prepared using a font where all IRS-approved wording will not fit on asingle page will not be accepted assubstitute forms. This applies primarilyto dot-matrix printers, although formsprepared similarly on laser and inkjetprinters will also be rejected. PLEASENOTE: Use of unapproved forms couldresult in suspension of the participantfrom the electronic filing program.

SEC. 23 FTD MAGNETIC TAPEPAYMENTS

.01 REVENUE PROCEDURE 89–48(IRS PUBLICATION 1315) provides therequirements and instructions for report-ing agents who submit Federal TaxDeposits (FTD) payment information on

27

magnetic tape. Magnetic tape submis-sions for FTD can be made for Forms940, 941, 942, 943, 720, CT–1, 990–PF, 990–T, 990–C, 1042, 1120, andSchedule A (Form 941) Backup With-holding..02 Revenue Procedure 89–49 (Pub.

1374) provides the requirements andinstructions for certain banks and fidu-ciaries to submit quarterly Form1041–ES payments on magnetic tapethrough the Federal Tax Deposit (FTD)system.

SEC. 24. EFFECT ON OTHERDOCUMENTS

This revenue procedure supersedesRevenue Procedures 95–16, I.R.B.1995–8, and 95–46, I.R.B. 95–46.

28

OMB No. 1545-0074SCHEDULES A&B Schedule A—Itemized Deductions(Form 1040)

(Schedule B is on back)Department of the TreasuryInternal Revenue Service © Attach to Form 1040. © See Instructions for Schedules A and B (Form 1040).

AttachmentSequence No. 07

Name(s) shown on Form 1040 Your social security number

Caution: Do not include expenses reimbursed or paid by others.Medicaland DentalExpenses

1Medical and dental expenses (see page A-1)122

3Multiply line 2 above by 7.5% (.075)3Subtract line 3 from line 1. If line 3 is more than line 1, enter -0-4 4

5State and local income taxes5Taxes You Paid 6Real estate taxes (see page A-2)6

Other taxes. List type and amount ©8(Seepage A-1.)

8Add lines 5 through 89 9

Home mortgage interest and points reported to you on Form 109810InterestYou Paid

10

Home mortgage interest not reported to you on Form 1098. If paidto the person from whom you bought the home, see page A-2and show that person’s name, identifying no., and address ©

11(Seepage A-2.)

11

12Points not reported to you on Form 1098. See page A-3for special rules

12

13 Investment interest. If required, attach Form 4952. (Seepage A-3.) 13

14 14Add lines 10 through 13

Gifts to Charity 15

15 Gifts by cash or check. If you made any gift of $250 ormore, see page A-3

16Other than by cash or check. If any gift of $250 or more,see page A-3. If over $500, you MUST attach Form 8283

16

17Carryover from prior year1718 Add lines 15 through 17 18

Casualty or theft loss(es). Attach Form 4684. (See page A-4.)19Casualty and Theft Losses 19

Unreimbursed employee expenses—job travel, uniondues, job education, etc. If required, you MUST attachForm 2106 or 2106-EZ. (See page A-4.) ©

20Job Expensesand MostOtherMiscellaneousDeductions

22 Other expenses—investment, safe deposit box, etc. Listtype and amount ©

(Seepage A-4 forexpenses todeduct here.)

Add lines 20 through 2223Enter amount from Form 1040, line 3224Multiply line 24 above by 2% (.02)25Subtract line 25 from line 23. If line 25 is more than line 23, enter -0-26 26

Other—from list on page A-4. List type and amount © 27OtherMiscellaneousDeductions 27

28TotalItemizedDeductions 28

Schedule A (Form 1040) 1996For Paperwork Reduction Act Notice, see Form 1040 instructions.

24

20

2223

If you made agift and got abenefit for it,see page A-3.

25

Enter amount from Form 1040, line 32

NO. Your deduction is not limited. Add the amounts in the far right columnfor lines 4 through 27. Also, enter on Form 1040, line 34, the larger ofthis amount or your standard deduction.

YES. Your deduction may be limited. See page A-5 for the amount to enter.

©

Note:Personalinterest isnotdeductible.

%

7Personal property taxes7

21Tax preparation fees21

Is Form 1040, line 32, over $117,950 (over $58,975 if married filing separately)?

96

Exhibit A-1 (Preferred Format)

OMB No. 1545-0074SCHEDULES A&B Schedule A—Itemized Deductions(Form 1040)

(Schedule B is on back)Department of the TreasuryInternal Revenue Service © Attach to Form 1040. © See Instructions for Schedules A and B (Form 1040).

AttachmentSequence No. 07

Name(s) shown on Form 1040 Your social security number

Caution: Do not include expenses reimbursed or paid by others.Medicaland DentalExpenses

1Medical and dental expenses (see page A-1)122

3Multiply line 2 above by 7.5% (.075)3Subtract line 3 from line 1. If line 3 is more than line 1, enter -0-4 4

5State and local income taxes5Taxes You Paid 6Real estate taxes (see page A-2)6

Other taxes. List type and amount ©8(Seepage A-1.)

8Add lines 5 through 89 9

Home mortgage interest and points reported to you on Form 109810InterestYou Paid

10

Home mortgage interest not reported to you on Form 1098. If paidto the person from whom you bought the home, see page A-2and show that person’s name, identifying no., and address ©

11(Seepage A-2.)

11

12Points not reported to you on Form 1098. See page A-3for special rules

12

13 Investment interest. If required, attach Form 4952. (Seepage A-3.) 13

14 14Add lines 10 through 13

Gifts to Charity 15

15 Gifts by cash or check. If you made any gift of $250 ormore, see page A-3

16Other than by cash or check. If any gift of $250 or more,see page A-3. If over $500, you MUST attach Form 8283

16

17Carryover from prior year1718 Add lines 15 through 17 18

Casualty or theft loss(es). Attach Form 4684. (See page A-4.)19Casualty and Theft Losses 19

Unreimbursed employee expenses—job travel, uniondues, job education, etc. If required, you MUST attachForm 2106 or 2106-EZ. (See page A-4.) ©

20Job Expensesand MostOtherMiscellaneousDeductions

22 Other expenses—investment, safe deposit box, etc. Listtype and amount ©

(Seepage A-4 forexpenses todeduct here.)

Add lines 20 through 2223Enter amount from Form 1040, line 3224Multiply line 24 above by 2% (.02)25Subtract line 25 from line 23. If line 25 is more than line 23, enter -0-26 26

Other—from list on page A-4. List type and amount © 27OtherMiscellaneousDeductions 27

28TotalItemizedDeductions 28

Schedule A (Form 1040) 1996For Paperwork Reduction Act Notice, see Form 1040 instructions.

24

20

2223

If you made agift and got abenefit for it,see page A-3.

25

Enter amount from Form 1040, line 32

NO. Your deduction is not limited. Add the amounts in the far right columnfor lines 4 through 27. Also, enter on Form 1040, line 34, the larger ofthis amount or your standard deduction.

YES. Your deduction may be limited. See page A-5 for the amount to enter.

©

Note:Personalinterest isnotdeductible.

%

7Personal property taxes7

21Tax preparation fees21

Is Form 1040, line 32, over $117,950 (over $58,975 if married filing separately)?

96

Exhibit A-2 (Acceptable Format)

Page 2OMB No. 1545-0074Schedules A&B (Form 1040) 1996

Name(s) shown on Form 1040. Do not enter name and social security number if shown on other side. Your social security number

AttachmentSequence No. 08Schedule B—Interest and Dividend Income

Note: If you had over $400 in taxable interest income, you must also complete Part III.Part IInterestIncome

(See page B-1.)

AmountList name of payer. If any interest is from a seller-financed mortgage and thebuyer used the property as a personal residence, see page B-1 and list thisinterest first. Also, show that buyer’s social security number and address ©

1

Note: If youreceived a Form1099-INT, Form1099-OID, orsubstitutestatement froma brokerage firm,list the firm’sname as thepayer and enterthe total interestshown on thatform.

1

2Add the amounts on line 12

3Excludable interest on series EE U.S. savings bonds issued after 1989 from Form8815, line 14. You MUST attach Form 8815 to Form 1040

3

Subtract line 3 from line 2. Enter the result here and on Form 1040, line 8a ©4 4Note: If you had over $400 in gross dividends and/or other distributions on stock, you must also complete Part III.Part II

DividendIncome

Amount

(See page B-1.)

5 List name of payer. Include gross dividends and/or other distributions on stockhere. Any capital gain distributions and nontaxable distributions will be deductedon lines 7 and 8 ©

Note: If youreceived a Form1099-DIV orsubstitutestatement froma brokeragefirm, list thefirm’s name asthe payer andenter the totaldividendsshown on thatform.

5

66 Add the amounts on line 577 Capital gain distributions. Enter here and on Schedule D*88 Nontaxable distributions. (See the inst. for Form 1040, line 9.)

9Add lines 7 and 891010 Subtract line 9 from line 6. Enter the result here and on Form 1040, line 9 ©

*If you do not need Schedule D to report any other gains or losses, see theinstructions for Form 1040, line 13.

You must complete this part if you (a) had over $400 of interest or dividends; (b) had a foreign account; or(c) received a distribution from, or were a grantor of, or a transferor to, a foreign trust.

Part IIIForeignAccountsandTrusts

NoYes

At any time during 1996, did you have an interest in or a signature or other authority over a financialaccount in a foreign country, such as a bank account, securities account, or other financialaccount? See page B-1 for exceptions and filing requirements for Form TD F 90-22.1

11a

b If “Yes,” enter the name of the foreign country © (Seepage B-1.) During 1996, did you receive a distribution from, or were you the grantor of, or transferor to, a

foreign trust? If “Yes,” see page B-2 for other forms you may have to file12

For Paperwork Reduction Act Notice, see Form 1040 instructions. Schedule B (Form 1040) 1996

Exhibit B-1 (Preferred Format)

Page 2OMB No. 1545-0074Schedules A&B (Form 1040) 1996

Name(s) shown on Form 1040. Do not enter name and social security number if shown on other side. Your social security number

AttachmentSequence No. 08Schedule B—Interest and Dividend Income

Note: If you had over $400 in taxable interest income, you must also complete Part III.Part IInterestIncome

(See page B-1.)

AmountList name of payer. If any interest is from a seller-financed mortgage and thebuyer used the property as a personal residence, see page B-1 and list thisinterest first. Also, show that buyer’s social security number and address ©

1

Note: If youreceived a Form1099-INT, Form1099-OID, orsubstitutestatement froma brokerage firm,list the firm’sname as thepayer and enterthe total interestshown on thatform.

1

2Add the amounts on line 12

3Excludable interest on series EE U.S. savings bonds issued after 1989 from Form8815, line 14. You MUST attach Form 8815 to Form 1040

3

Subtract line 3 from line 2. Enter the result here and on Form 1040, line 8a ©4 4Note: If you had over $400 in gross dividends and/or other distributions on stock, you must also complete Part III.Part II

DividendIncome

Amount

(See page B-1.)

5 List name of payer. Include gross dividends and/or other distributions on stockhere. Any capital gain distributions and nontaxable distributions will be deductedon lines 7 and 8 ©

Note: If youreceived a Form1099-DIV orsubstitutestatement froma brokeragefirm, list thefirm’s name asthe payer andenter the totaldividendsshown on thatform.

5

66 Add the amounts on line 577 Capital gain distributions. Enter here and on Schedule D*88 Nontaxable distributions. (See the inst. for Form 1040, line 9.)

9Add lines 7 and 891010 Subtract line 9 from line 6. Enter the result here and on Form 1040, line 9 ©

*If you do not need Schedule D to report any other gains or losses, see theinstructions for Form 1040, line 13.

You must complete this part if you (a) had over $400 of interest or dividends; (b) had a foreign account; or(c) received a distribution from, or were a grantor of, or a transferor to, a foreign trust.

Part IIIForeignAccountsandTrusts

NoYes

At any time during 1996, did you have an interest in or a signature or other authority over a financialaccount in a foreign country, such as a bank account, securities account, or other financialaccount? See page B-1 for exceptions and filing requirements for Form TD F 90-22.1

11a

b If “Yes,” enter the name of the foreign country © (Seepage B-1.) During 1996, did you receive a distribution from, or were you the grantor of, or transferor to, a

foreign trust? If “Yes,” see page B-2 for other forms you may have to file12

For Paperwork Reduction Act Notice, see Form 1040 instructions. Schedule B (Form 1040) 1996

Exhibit B-2 (Acceptable Format)

33

34

Proof as of

September 1996

(subject to

change)

Form 941 (Rev. 1-96)

Employer’s Quarterly Federal Tax Return941Form(Rev. January 1996) © See separate instructions for information on completing this return.

4141Department of the TreasuryInternal Revenue Service Please type or print.

OMB No. 1545-0029

T

FF

FD

FP

I

T

If address isdifferentfrom priorreturn, checkhere ©

IRS

Use

If you do not have to file returns in the future, check here © and enter date final wages paid ©

If you are a seasonal employer, see Seasonal employers on page 1 of the instructions and check here ©

Number of employees (except household) employed in the pay period that includes March 12th ©12Total wages and tips, plus other compensation23Total income tax withheld from wages, tips, and sick pay34Adjustment of withheld income tax for preceding quarters of calendar year4

5Adjusted total of income tax withheld (line 3 as adjusted by line 4—see instructions)56a× 12.4% (.124) =$Taxable social security wages6a6b$Taxable social security tipsb77 × 2.9% (.029) =$Taxable Medicare wages and tips

8Total social security and Medicare taxes (add lines 6a, 6b, and 7). Check here if wagesare not subject to social security and/or Medicare tax

8

9Adjustment of social security and Medicare taxes (see instructions for required explanation)9

10Adjusted total of social security and Medicare taxes (line 8 as adjusted by line 9—seeinstructions)

10

1111

1212

1313

14

Total taxes (add lines 5 and 10)

14

15

Advance earned income credit (EIC) payments made to employees, if any

15

Net taxes (subtract line 12 from line 11). This should equal line 17, column (d) below (or lineD of Schedule B (Form 941))

16

Total deposits for quarter, including overpayment applied from a prior quarter

Balance due (subtract line 14 from line 13). See instructions

and check if to be:Overpayment, if line 14 is more than line 13, enter excess here © $

Refunded.ORApplied to next return

● Monthly schedule depositors: Complete line 17, columns (a) through (d), and check here

Under penalties of perjury, I declare that I have examined this return, including accompanying schedules and statements, and to the best of my knowledgeand belief, it is true, correct, and complete.Sign

Here Print YourName and Title © Date ©Signature ©

For Paperwork Reduction Act Notice, see page 1 of separate instructions.

× 12.4% (.124) =

44433333 32111111111

101010101010101010109998888876555 8

1

(a) First month liability (b) Second month liability (c) Third month liability (d) Total liability for quarter

17

Enter statecode forstate inwhichdepositsmade(seepage 3 ofinstructions).

Sick Pay $ ± Fractions of Cents $ ± Other $ =

● Semiweekly schedule depositors: Complete Schedule B and check here● All filers: If line 13 is less than $500, you need not complete line 17 or Schedule B.

Monthly Summary of Federal Tax Liability.

EXHIBIT BW-1

©

©

©

©

Proof as of

September 1996

(subject to

change)

Cat. No. 11967Q

OMB No. 1545-0029

Employer’s Record of Federal Tax Liability(Rev. January 1996) © See Circular E for more information about employment tax returns.Department of the TreasuryInternal Revenue Service © Attach to Form 941 or Form 941-SS.Name as shown on Form 941 (Form 941-SS) Employer identification number Date quarter ended

You must complete this schedule if you are required to deposit on a semiweekly schedule, or if your tax liability onany day is $100,000 or more. Show tax liability here, not deposits. (The IRS gets deposit data from FTD coupons.)

A. Daily Tax Liability—First Month of Quarter

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

Total tax liability for first month of quarterB. Daily Tax Liability—Second Month of Quarter

1

2

3

4

5

6

7

8

9

10

11

12

13

14

15

16

17

18

19

20

21

22

23

24

25

26

27

28

29

30

31

Total tax liability for second month of quarterC. Daily Tax Liability—Third Month of Quarter

1

2

3

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Total tax liability for third month of quarterTotal for quarter (add lines A, B, and C). This should equal line 13 of Form 941

SCHEDULE B(FORM 941)

5151

A

B

CD

A

B

CD

Schedule B (Form 941) (Rev. 1-96)For Paperwork Reduction Act Notice, see page 2.

EXHIBIT BW-2

©

©

©

©

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40