Rev. Proc. 67-19

The Internal Revenue Service has been asked to clarify when `other compensation' should be reported on Form 1099, U.S. Information Return, and when it should be reported on Form W-2, Wage and Tax Statement.

Reporting of certain `other compensation' must be made on Form W-2 for the calendar year 1966 when the recipient of the compensation was an employee of the payer.

Payments to independent contractors of fees, commissions, and other compensation related to nonemployee services should be reported on Form 1099 in column 7.

Where certain employee pension, profit-sharing, or stock bonus plans are administered by a trust, which is not the employer making payment to an employee, the trustees should report applicable amounts distributed to participants in column 6 of Form 1099. For example, the amount of premium paid by a trust for current life insurance protection under a life insurance contract purchased pursuant to a qualified pension or profit-sharing plan must be reported in column 6 on Form 1099, together with any other amount distributed under the plan to an employee (to the extent it is includible in his gross income) if the aggregate amount is $600 or more during the calendar year. This reporting requirement is also applicable to distributions made by insurance companies pursuant to qualified annuity plans. However, the premiums applied by the employer for current life insurance protection under such non-trusteed qualified annuity plans must be reported by the employer as `other compensation' on Form W-2.

Distributions ² on behalf of an `owner-employee' under a selfemployed retirement plan aggregating $10 or more during the calendar year must be reported on Form 1099 in column 7.

The cost of group-term life insurance on the life of an employee carried directly or indirectly by his employer is reported as `other compensation' on Form W-2 to the extent that it is includible in the employee's gross income under section 79(a) of the Internal Revenue Code of 1954. See section 6052 of the Code.

Forms 1099 which have been prepared will be accepted by the Service if the amounts reportable in columns 6 and 7 are entered in either column for the calendar year 1966.

Where Forms W-2 have been prepared for amounts reportable in column 6 or 7 of Form 1099, the Service has no objection to the use of Form W-2 for the calendar year 1966, provided the amounts are reported as `other compensation' and the aggregation rules are applied.

¹ Based on Technical Information Release 882, dated Jan. 30, 1967.

² In TIR 882 the word `contributions' should have been `distributions.'