SPECIFICATIONS FOR FILING 1995 FORM 1042-S ON MAGNETIC OR ELECTRONIC MEDIA ARE PUBLISHED.

Rev. Proc. 96-11

NOTE: THIS REVENUE PROCEDURE MAY BE USED TO PREPARE TAX YEAR 1995 FORM 1042-S FOR SUBMISSION TO INTERNAL REVENUE SERVICE (IRS) USING ANY OF THE FOLLOWING:

     MAGNETIC TAPE

PLEASE NOTE:

ALL CHANGES IN THE PUBLICATION, FORMAT AND EDITORIAL, HAVE BEEN HIGHLIGHTED BY THE USE OF ITALICS AND DOUBLE UNDERLINES.

CONTENTS

 PART A. GENERAL

SECTION. 1. PURPOSE

.01 The purpose of this revenue procedure is to provide the specifications under which withholding agents may file Form 1042-S, Foreign Person's U.S. Source Income Subject to Withholding, Magnetically or Electronically.

.02 This revenue procedure supersedes the following: Rev. Proc. 93-16 1993-8 C.B. 844, published as Pub. 1187 (02-93), Specifications for Filing Form 104; Foreign Person's U.S. Source Income Subject to Withholding, Electronically or on Magnetic Tape, and 5 1/4-, or 3 1/2-Inch Magnetic Diskettes.

.03 Revenue procedures are generally revised annually to reflect legislative and form changes. Comments concerning this revenue procedure, or suggestions for making it more helpful and user friendly, can be addressed to Internal Revenue Service, Martinsburg Computing Center, P. O. Box 1359, Martinsburg, WV 25401 ATTN: Information Returns Branch, Mail Stop 360.

.04 It is unlawful to intentionally transmit a computer virus to the Internal Revenue Service. Violators will be subject to a fine and/or imprisonment.

SECTION 2. NATURE OF CHANGES -- CURRENT YEAR (TAX YEAR 1995)

.01 IN THIS PUBLICATION, ALL PERTINENT CHANGES FROM THE LAST REVISION HAVE BEEN HIGHLIGHTED BY THE USE OF ITALICS AND DOUBLE UNDERLINE. THIS HAS BEEN DONE FOR THE CONVENIENCE OF THE FILERS IN IDENTIFYING NEW INFORMATION. FILERS ARE STILL ADVISED TO READ THE PUBLICATION IN ITS ENTIRETY.

.02 EDITORIAL CHANGES -- GENERAL

The following changes have been made to the revenue procedure:

a) In Contents, Part A. General -- Section 6. Vendor List has been added to provide guidance to those filers who may need assistance or must engage a vendor to file on their behalf.

b) Part A. Sec. 3.01 -- The closing hour of operation at IRS/MCC has changed from 6:00 p.m. to 4:30 p.m. Eastern Time.

c) Part A. Sec. 3.07 -- Text regarding the Information Reporting Program Centralized Call Site has been updated to reflect the change from a pilot operation in select areas of the country, to a nationwide service for the payer community.

d) Part A. Sec. 4.01 -- A paragraph has been added to inform the withholding agents of filing requirements with regard to the threshold of 250 returns. A NOTE was added to make filers aware of the penalty which may be imposed when failing to comply.

e) Part A. Sec. 4.04 -- A note has been added for filers, who may engage a service bureau to file on their behalf, to be sure not to file duplicate data.

f) Part A. Sec. 5.08 -- A statement has been added advising transmitters, who have received a waiver approval letter, to keep it on file.

g) Part A. Sec. 9.01 -- A statement has been added alerting filers of the importance of signing Form 4804. A NOTE was also added to direct filers to indicate the correct tax year on computer generated forms.

h) Part A. Sec. 9.07 -- Statements have been inserted regarding the Notice 210.

i) Part A. Sec. 9.11 -- Information instructing filers on retention of returns filed or the ability to reconstruct was added.

j) Part A. Sec. 10.02 -- A statement to alert filers regarding the use of a delivery service other than U.S. Postal has been added to emphasize the importance of the postmark in relationship to the due date of the return.

k) Part A. Sec. 10.04 -- A qualifying statement has been included in the event the due date of March 15 occurs on a legal holiday, Saturday or Sunday.

l) Part A. Sec. 11 -- Information for submitting a request for Extension of Time to File Form 1042 and Form 1042S has changed to reflect the correct procedures to follow.

m) Part A. Sec. 11.01 -- A significant change was added requiring filers requesting an extension of time for more than 50 withholding agents to do so magnetically or electronically.

n) Part A. Sec. 11.14 -- The statement regarding extension of time to file for Form 1042, Annual Withholding Tax Return for U.S. Source Income of Foreign Persons, has been changed for greater clarity.

o) Part A. Sec. 13 -- Corrected Returns has been revised. PLEASE READ THIS SECTION CAREFULLY.

p) Part A. Sec. 15 -- Additional words and definitions have been added for clarification in the use of this publication.

q) Part A. Sec. 16 -- Major Problems Encountered has been revised. PLEASE READ THIS SECTION CAREFULLY.

.03 EDITORIAL CHANGES -- MAGNETIC MEDIA SPECIFICATIONS

a) Throughout the publication, the beginning "number 22" has been added to explain that all magnetic and electronic filing of Form 1042-S requires a Transmitter Control Code (TCC) beginning with the numbers "22".

b) Part B. Sec. 1.03 -- Moved virus information to Part A, Section 1.04, and deleted the statement indicating IRS/MCC will return media which has been found to be contaminated with a virus.

c) Part B. Sec. 2, Tape Specifications, -- Changed BPI to CPI, explained compatible tape files, and labeled and unlabeled tapes.

d) Part B. Sec. 4 -- 5 1/4-inch and 3 1/2-inch Diskette Specifications, .02, .03, and .04 were added for additional information.

e) Part B. Sec. 7, Recipient "Q" Record, field positions 113-121, -- Explained the use of Taxpayer Identification Number and the accompanying letter.

f) Part B. Sec. 7, field positions 137-138, -- Explained the use of OC, Other Countries.

g) Part B. Sec. 7, field positions 309-323, -- Added "note" to use either the Province or the Province Code for Canada, not both.

h) Part B. Sec. 7, field positions 324-332, -- Added U. S. Territories to the title.

i) Part B. Sec. 7, field positions 355-356, -- Added "Notes" concerning use of certain income codes.

j) Part B. Sec. 7, field positions 357-358, -- Added "Note" concerning income code 20.

k) Part B. Sec. 7, field position 370, -- Added "Notes" for clarification for certain income codes.

l) Part B. Sec. 8, Withholding Agent "W" Record, field positions 2-3, -- Changed "Payment Year" to "Tax Year" for consistency with "Q" Record.

m) Part C. Bisynchronous (Mainframe) Electronic Filing Specifications has been added to this publication for those filers who meet the filing requirements for magnetically or electronically filed media and chose mainframe filing as their mode of transmission.

n) Part D. Asynchronous (IRP-BBS) Electronic Filing Specifications has been added to assist filers who chose Bulletin Board Filing as the vehicle of transmission.

o) Part E. Record Format For Filing Extensions Of Time Magnetically or Electronically has been added for those filers who must request an extension for more than 50 withholding agents.

.04 PROGRAMMING CHANGES -- MAGNETIC MEDIA SPECIFICATIONS

a) Part B. Sec. 3 -- New section added, "Tape Cartridge Specifications."

b) PART B. SECTION 6 -- TRANSMITTER "T" RECORD

(1) All "REQUIRED" fields were identified.

(2) Tax Year, field positions 2-3, -- Must be incremented by one (from 94 to 95) unless reporting for prior year data.

c) PART B. SEC. 7 -- RECIPIENT "Q" RECORD.

(1) All "Required" fields were identified.

(2) Removed all references to "two or more consecutive imbedded blanks between name parts is not acceptable."

(3) Review entire Country Code List, field positions 137-138, for additions and deletions.

(4) Added two new recipient codes, field positions 357-358, -- Codes 10 Fiduciary (estate) and 11 Fiduciary (Other).

(5) Added a new Exemption Code 5, field position 370, (Portfolio interest exempt under an Internal Revenue Code Section).

(6) Added new correction indicators, "V" and "C", field position 371, and explained the process of correcting documents using those codes.

(7) Clarified "Note" for field positions 372-373; removed the tax rate chart, and gave reference to the location of it in Publication 515. The Publication 1187 may not be revised each year.

(8) Added Income Code 16 (Compensation for Independent Personal Services) to field positions 430-439 (Foreign Student Withholding Allowance Amount) and field positions 440-449 (Net Income Amount)

d) PART B. SEC. 8 -- WITHHOLDING AGENT "W" RECORD

(1) All "REQUIRED" fields were identified.

(2) Tax Year, field positions 2-3, -- Must be incremented by one (from 94 to 95) unless reporting for prior year data.

e) PART B. SEC. 9 -- END OF TRANSMISSION "Y" RECORD

(1) All "REQUIRED" fields were identified.

SECTION 3. WHERE TO FILE AND HOW TO CONTACT THE IRS MARTINSBURG COMPUTING CENTER (IRS/MCC)

.01 All Form 1042-S filed magnetically or electronically are processed at IRS/MCC. Inquiries concerning application procedures, extension of time to file, request for a waiver from the magnetic media filing requirements, or filing procedures specified in this revenue procedure should be directed to IRS/MCC. Filers may contact IRS/MCC by telephone at (304) 263-8700 (not a toll free number). The hours of operation are 8:30 a.m. to 4:30 p.m., Eastern Time.

.02 Send magnetic media files, and any correspondence to MCC at the following addresses:

If by Postal Service:

     IRS, Martinsburg Computing Center

.04 The IRP-BBS software provides a menu-driven environment which allows filers to access different parts of the bulletin board. Whenever possible, IRS/MCC personnel will provide assistance in resolving communication problems with IRP-BBS.

.05 The telephone number for the IRS/MCC fax machine is (304) 264-5602.

.06 IRS/MCC has installed Telecommunications Devices for the Deaf (TDD). The number is (304) 267-3367.

.07 INFORMATION REPORTING PROGRAM CENTRALIZED CALL SITE. THE CALL SITE IS LOCATED AT IRS/MCC AND OPERATES IN CONJUNCTION WITH THE INFORMATION REPORTING PROGRAM. THE CALL SITE PROVIDES SERVICE TO THE PAYER COMMUNITY (FINANCIAL INSTITUTIONS, EMPLOYERS, AND OTHER TRANSMITTERS OF INFORMATION RETURNS.)

.08 THE CALL SITE ACCEPTS CALLS FROM ALL AREAS OF THE COUNTRY. THE NUMBER TO CALL IS (304) 263-8700 OR TELECOMMUNICATIONS DEVICE FOR THE DEAF (TDD) (304) 267-3367. THESE ARE TOLL CALLS. HOURS OF OPERATION FOR THE CALL SITE ARE MONDAY THROUGH FRIDAY, 8:30 A.M. TO 4:30 P.M. EASTERN TIME. THE CALL SITE IS OPEN THROUGHOUT THE YEAR TO ANSWER QUESTIONS RELATED TO MAGNETIC MEDIA AND TAX LAW FILING OF FORM 1042-S, QUESTIONABLE W-4'S, FORM 8027, ALL INFORMATION RETURNS, AND BACKUP WITHHOLDING DUE TO MISSING AND INCORRECT TAXPAYER IDENTIFICATIONS NUMBERS. DUE TO THE HIGH DEMAND FOR ASSISTANCE AT THE END OF JANUARY AND FEBRUARY, IT IS ADVISABLE TO CALL AS SOON AS POSSIBLE TO AVOID THESE PEAK FILING SEASONS.

.09 FOR ASSISTANCE WITH REGARD TO THE REPORTING OF FORM 1042-S, NONRESIDENT ALIEN WITHHOLDING, MAGNETIC MEDIA FILING, AND PROCESSING REQUIREMENTS, CONTACT:

     Martinsburg Computing Center

     Office of the Assistant Commissioner (International)

SECTION 4. FILING REQUIREMENTS

.01 UNDER SECTION 6011(e)(2)(A) OF THE INTERNAL REVENUE CODE, ANY PERSON, INCLUDING A CORPORATION, PARTNERSHIP, INDIVIDUAL, ESTATE, AND TRUST, WHO IS REQUIRED TO FILE 250 OR MORE INFORMATION RETURNS MUST FILE SUCH RETURNS MAGNETICALLY/ELECTRONICALLY. WITHHOLDING AGENTS WHO MEET THE THRESHOLD OF 250 OR MORE FORM 1042-S ARE REQUIRED TO SUBMIT THEIR INFORMATION ELECTRONICALLY OR MAGNETICALLY. EVEN IF THE WITHHOLDING AGENT DOES NOT MEET THE REQUIRED FILING THRESHOLD OF 250 DOCUMENTS, IRS ENCOURAGES THEM TO DO SO.

NOTE: THOSE WITHHOLDING AGENTS WHO ARE REQUIRED TO FILE ON MAGNETIC MEDIA BUT FAIL TO DO SO, AND DO NOT HAVE AN APPROVED WAIVER, MAY BE SUBJECT TO A PENALTY OF $50 PER RETURN FOR FAILURE TO FILE FORM 1042-S ON MAGNETIC MEDIA. THE PENALTY APPLIES SEPARATELY TO ORIGINAL AND CORRECTED RETURNS.

.02 Filers who are required to submit their Form 1042-S on magnetic media may choose to submit their documents electronically instead. Filers who transmit their information electronically are considered to have satisfied the magnetic media filing requirements.

.03 The filing requirement applies individually to each reporting entity as defined by its separate Taxpayer Identification Number (TIN) (Social Security Number [SSN] or Employer Identification Number [EIN]). For example, if filing for a corporation with several branches or locations and each uses the same name and EIN, the filer must aggregate the total volume of returns to be filed for that EIN and apply the filing requirement accordingly.

.04 This requirement applies separately to original and corrected documents. For example, 300 original documents are filed magnetically or electronically. If 200 documents were filed with erroneous information, corrections may be submitted on paper forms.

NOTE: IF FILERS MEET THE FILING REQUIREMENTS AND ENGAGE A SERVICE BUREAU TO PREPARE MEDIA ON THEIR BEHALF, THE FILERS SHOULD NOT REPORT DUPLICATE DATA WHICH MAY CAUSE PENALTY NOTICES TO BE GENERATED.

.05 These requirements shall not apply if the withholding agent submits an application for and is granted an undue hardship waiver. (See Part A. Sec. 5.)

.06 For additional information on filing requirements, please refer to the 1995 Paper Instructions for FORM 1042-S.

SECTION 5. FORM 8508, REQUEST FOR WAIVER FROM FILING INFORMATION RETURNS ON MAGNETIC MEDIA

.01 Withholding agents required to file Form 1042-S magnetically or electronically may receive a waiver if the requirement would create an undue hardship. The withholding agent may request a waiver by submitting Form 8508, Request for Waiver From Filing Information Returns on Magnetic Media, to IRS/MCC.

.02 A separate Form 8508 must be submitted by each withholding agent. Filers are encouraged to submit Form 8508 at least 45 days before the due date of the return.

.03 IF A WAIVER FOR ORIGINAL DOCUMENTS IS APPROVED, ANY CORRECTIONS FOR THE SAME TYPE OF RETURNS WILL BE COVERED UNDER THIS WAIVER. IF A WITHHOLDING AGENT SUBMITS THE ORIGINAL FORM 1042-S ON MAGNETIC MEDIA, CORRECTIONS, LESS THAN 250, MAY BE SUBMITTED ON PAPER. HOWEVER, IF YOU CAN SUBMIT YOUR ORIGINAL RETURNS ON MAGNETIC MEDIA BUT NOT YOUR CORRECTIONS, YOU MUST REQUEST A WAIVER FOR THOSE EXCEEDING THE 250.

.04 Waivers are evaluated on a case-by-case basis and are approved or denied based on regulation criteria set forth under section 6011(e) of the Internal Revenue Code. The transmitter must allow a minimum of 30 days for IRS/MCC to respond to a waiver request.

.05 Failure to provide all of the information requested on the Form 8508 and/or the cost estimates, if applicable, will result in an automatic denial of the waiver request.

.06 An approved waiver will only provide exemption from magnetic or electronic filing for one tax year. A WAIVER MAY NOT BE REQUESTED FOR MORE THAN ONE TAX YEAR AT A TIME. If needed, the withholding agent must apply each year for a waiver.

.07 A copy of Form 8508 may be obtained by calling 1-800-829-3676. Form 8508 may be photocopied or computer-generated as long as it contains all the information requested on the original form.

.08 IF A WAIVER REQUEST IS APPROVED, THE TRANSMITTER SHOULD KEEP THE APPROVAL LETTER ON FILE.

.09 An approved waiver from filing information returns magnetically or electronically does not provide exemption from filing; the withholding agent must still file information returns on acceptable paper forms with the Philadelphia Service Center. DO NOT INCLUDE A COPY OF THE APPROVED WAIVER WITH THE PAPER FORMS.

SECTION 6. VENDOR LIST

.01 IRS/MCC PREPARES A LIST OF VENDORS WHO SUPPORT MAGNETIC MEDIA OR ELECTRONIC FILING. THIS LIST CONTAINS THE NAMES OF SERVICE BUREAUS THAT WILL PRODUCE FILES ON THE PRESCRIBED TYPES OF MAGNETIC MEDIA OR VIA ELECTRONIC FILING. IT ALSO CONTAINS THE NAMES OF VENDORS WHO PROVIDE SOFTWARE PACKAGES FOR PAYERS WHO WISH TO PRODUCE MAGNETIC MEDIA OR ELECTRONIC FILES ON THEIR OWN COMPUTER SYSTEMS. THIS LIST IS PROVIDED AS A COURTESY AND IN NO WAY IMPLIES IRS/MCC APPROVAL OR ENDORSEMENT.

NOTE: IF FILERS MEET THE FILING REQUIREMENTS AND ENGAGE A SERVICE BUREAU TO PREPARE MEDIA ON THEIR BEHALF, THE FILERS SHOULD NOT REPORT DUPLICATE DATA WHICH MAY CAUSE PENALTY NOTICES TO BE GENERATED.

.02 A WITHHOLDING AGENT MAY CONTACT IRS/MCC VIA TELEPHONE OR LETTER (SEE PART A. SEC. 3) TO ACQUIRE THE VENDOR LIST (PUBLICATION 1582). THIS INFORMATION IS ALSO AVAILABLE FROM THE INFORMATION REPORTING PROGRAM BULLETIN BOARD SYSTEM (IRP/BBS). VENDOR NAMES WILL NOT BE PROVIDED OVER THE TELEPHONE.

.03 A VENDOR, WHO OFFERS A SOFTWARE PACKAGE, HAS THE ABILITY TO PRODUCE MAGNETIC MEDIA FOR CUSTOMERS, OR HAS THE CAPABILITY TO ELECTRONICALLY FILE INFORMATION RETURNS, AND WOULD LIKE TO BE INCLUDED ON THE LIST, MUST SUBMIT A WRITTEN REQUEST TO IRS/MCC. THE REQUEST SHOULD BE SUBMITTED BY AUGUST 15 AND MUST INCLUDE:

(a) COMPANY NAME

(b) ADDRESS (INCLUDE CITY, STATE, AND ZIP CODE)

(c) TELEPHONE NUMBER (INCLUDE AREA CODE)

(d) CONTACT PERSON

(e) TYPE(S) OF SERVICE PROVIDED (E.G., SERVICE BUREAU AND/OR SOFTWARE)

(f) TYPE(S) OF MEDIA OFFERED (E.G., MAGNETIC TAPE, TAPE CARTRIDGE OR 5 1/4, 3 1/2-INCH DISKETTES OR ELECTRONIC FILING)

.04 THE VENDOR LIST IS UPDATED ANNUALLY. THEREFORE, ANY CHANGES TO INFORMATION ALREADY ON THE VENDOR LIST MUST BE RECEIVED BY IRS/MCC NO LATER THAN AUGUST 15 TO BE INCLUDED ON THE MOST CURRENT VENDOR LIST.

SECTION 7. FORM 4419, APPLICATION FOR FILING INFORMATION RETURNS MAGNETICALLY/ELECTRONICALLY

.01 Withholding agents or their agents must complete and submit Form 4419, Application for Filing Information Returns Magnetically/Electronically, before they may file Form 1042-S magnetically or electronically. Applications FOR TAPE, TAPE CARTRIDGE, DISKETTES, AND IRP-BBS may be submitted at any time during the year; however, the Form 4419 must be filed at least 30 days before March 15 in order to allow time to receive a response from IRS/MCC and timely file the returns.

.02 A copy of Form 4419 may be obtained by calling 1-800-TAX-FORM (1-800-829-3676). Instructions on the back of this form should be read carefully. This form may be photocopied.

.03 The filer will receive an approval letter that will contain a five-digit Transmitter Control Code (TCC) BEGINNING WITH THE NUMBERS "22". DO NOT SUBMIT Form 1042-S USING A TCC ASSIGNED FOR THE PURPOSE OF FILING OTHER INFORMATION RETURNS. Form 1042-S may not be filed electronically or magnetically until an application has been approved and a TCC assigned. For documents to be filed electronically using IBM 3780 bisynchronous protocols, Form 4419 must be submitted at least 45 days prior to the due date of the returns.

A magnetic media reporting package containing the current revenue procedure, forms, labels, and instructions will be sent annually to the attention of the contact person indicated on Form 4419.

.04 Once a TCC has been assigned, it is not necessary to reapply each year. If the information provided on Form 4419 changes, (for example, the organization's name or the contact person) notify IRS/MCC in writing so the appropriate files may be updated. In ALL correspondence with IRS/MCC, include the TCC in order to assist IRS personnel in locating the correct files.

.05 If a withholding agent's files are prepared by a service bureau, it may not be necessary to submit an application to obtain a TCC. Some service bureaus will produce files, code their own TCC on the media, and send it to IRS/MCC for the withholding agent. Other service bureaus will prepare magnetic media and return the media to the withholding agent for submission to IRS/MCC. These service bureaus may require the withholding agent to obtain a TCC to be coded in the "T" Record. Withholding agents should contact their service bureaus for further information.

.06 Filers must have a TCC to transmit data electronically. If a filer has been assigned a TCC to file magnetically and later chooses to file electronically, it is not necessary to apply for another TCC as long as the TCC begins with the digits "22".

.07 When initial contact is made with the IRP-BBS, filers will be instructed to assign their own password and do not need prior approval, other than a valid TCC.

SECTION 8. TEST FILES

.01 IRS/MCC does not require test files but encourages first-time magnetic media or electronic filers to submit a test for review prior to the filing season. IRS/MCC will check the file to ensure it meets the specifications of this revenue procedure.

.02 Application Form 4419 must be filed with IRS/MCC and a TCC must be assigned before test files are submitted.

.03 Approved withholding agents or their agents may submit test files to IRS/MCC. IRS/MCC requires that all test files be submitted between December 1 and February 15.

.04 Include a completed Form 4804, 4802, or computer-generated substitute. Clearly mark the "Test" box on Form 4804 and media label Form 5064. On Form 4804 in the block marked "Combined total number of Payee records reported" provide the total number of recipient "Q" records.

.05 If a test file is submitted electronically, the filer will be prompted for what type of file is being transmitted. Choose the option T = Test File. Once the file has been transmitted, complete Form 4804/4802 indicating TEST File in Box 1 and send to IRS/MCC the same day. No processing will begin until this form is received by IRS/MCC. For additional information on electronic filing, see PART C, AND PART D.

.06 IRS/MCC will send an acknowledgment to indicate the test results. Unacceptable magnetic media files, along with documentation identifying the errors, will be returned to the filer for replacement. Resubmission of replacement magnetic media test files must be postmarked no later than February 15. Electronic filers will also receive documentation identifying errors. Electronically filed tests must be resubmitted on or before February 15.

.07 IRS/MCC does not return media once it has been successfully processed.

SECTION 9. FILING OF FORM 1042-S MAGNETICALLY/ELECTRONICALLY AND RETENTION REQUIREMENTS

.01 Form 4804, Transmittal of Information Returns Reported Magnetically/Electronically, Form 4802, Transmittal of Information Returns Reported Magnetically/Electronically (Continuation), or computer-generated substitute, MUST accompany ALL magnetic media shipments. For electronic transmissions, the Form 4804 (and Form 4802, if applicable) must be sent the same day as the electronic transmission. Form 4802 is a continuation of Form 4804 and should only be used if the filer is reporting for multiple withholding agents and has the authority to sign the affidavit on Form 4804. FAILURE TO SIGN THE AFFIDAVIT ON FORM 4804 MAY DELAY PROCESSING OR COULD RESULT IN THE FILES BEING RETURNED UNPROCESSED. Form 4802 is not a stand-alone form; it can only accompany Form 4804.

.02 IRS/MCC encourages the use of computer-generated substitutes for Form 4804/4802 (See NOTE). The substitutes must contain all information requested on the original forms including the affidavit and signature line. Photocopies are acceptable but an original signature is required.

NOTE: BE SURE, WHEN USING COMPUTER GENERATED FORMS, TO CLEARLY MARK WHICH TAX YEAR IS BEING REPORTED. THIS WILL ELIMINATE A PHONE CALL FROM IRS/MCC TO QUESTION THE TAX YEAR.

.03 Current and prior year data may be submitted in the same shipment; however, EACH TAX YEAR MUST BE ON SEPARATE MEDIA, AND A SEPARATE FORM 4804 MUST BE PREPARED TO CLEARLY INDICATE EACH TAX YEAR.

.04 Filers who have prepared their information returns in advance of the due date are encouraged to submit this information to IRS/MCC no earlier than January 1 of the year the return is due.

.05 DO NOT REPORT DUPLICATE INFORMATION. IF A FILER SUBMITS RETURNS MAGNETICALLY/ELECTRONICALLY, IDENTICAL PAPER DOCUMENTS MUST NOT BE FILED. THIS MAY RESULT IN ERRONEOUS PENALTY NOTICES.

.06 Although an authorized agent may sign the affidavit, the withholding agent is responsible for the accuracy of the Form 4804, the returns filed, and will be liable for penalties for failure to comply with filing requirements.

.07 An external label, Form 5064, must be affixed to each tape, tape cartridge, and diskette submitted. If diskettes are used, and the operating system is not MS/DOS compatible, the operating system and hardware information must be provided. Failure to provide this information may result in the media being returned to the filer.

The following information is needed on the label:

(a) Type of filing (i.e., Original).

(b) The tax year of the data (i.e., 1995.)

(c) The transmitter's name.

(d) The five digit Transmitter Control Code (TCC) BEGINNING NUMBERS "22".

(e) Operating system software and hardware used to create the file (i.e., IBM PC/AT-MS/DOS, APPLE MACINTOSH/MACWRITE V2.2).

(f) The total number of "Q" records in the file.

(g) Transmitter's media number. The number assigned to the media by the transmitter.

(h) The sequence of each tape or diskette (i.e., 001 of 008, 002 of 008, . . ., 008 of 008).

Information provided on the Form 5064 will assist IRS/MCC in identifying information that is reported and in locating a specific file if it is necessary to return the file to the transmitter.

.08 On the outside of the shipping container, AFFIX OR ATTACH Form 4801 or a substitute for the form, which reads "DELIVER UNOPENED TO TAPE LIBRARY -- MAGNETIC MEDIA REPORTING _____ BOX _____ of _____" If there is only one container, mark the outside as Box 1 of 1. For multiple containers, include the sequence (for example, Box 1 of 3, 2 of 3, 3 of 3).

.09 When submitting files include the following:

(a) A SIGNED Form 4804;

(b) Form 4802, if applicable;

(c) Form 5064, Media Label affixed to the magnetic media;

(d) and Form 4801, outside label.

.10 IRS/MCC will not pay for or accept "Cash-on-Delivery" or "Charge to IRS" shipments of tax information that an individual or organization is legally required to submit.

.11 IN GENERAL, WITHHOLDING AGENTS SHOULD RETAIN A COPY OF THE INFORMATION RETURNS FILED WITH IRS OR HAVE THE ABILITY TO RECONSTRUCT THE DATA FOR AT LEAST 3 YEARS FROM THE REPORTING DUE DATE.

SECTION 10. DUE DATES

.01 The due dates for filing paper returns with IRS also apply to magnetic media or electronic filing. Filing of Form 1042-S is on a calendar year basis. Files must be submitted to IRS/MCC postmarked no later than March 15.

.02 Form 1042-S returns filed magnetically must be submitted to IRS/MCC postmarked or, (IF OTHER THAN THE U.S. POSTAL SERVICE) RECEIVED no later than March 15. WHEN USING DELIVERY SERVICE OTHER THAN THE U.S. POSTAL SERVICE THE DATE OF RECEIPT WILL BE THE DATE RECEIVED AT IRS/MCC.

.03 COPIES OF FORM 1042-S INFORMATION MUST ALSO BE FURNISHED TO THE RECIPIENT BY MARCH 15.

.04 IF THE DUE DATE OF MARCH 15 FALLS ON A SATURDAY, SUNDAY, OR A LEGAL HOLIDAY, THE RETURN TO IRS AND THE STATEMENT TO RECIPIENT IS CONSIDERED TIMELY IF FILED WITH IRS AND FURNISHED TO THE RECIPIENT ON THE NEXT BUSINESS DAY.

.05 LATE FILED MEDIA COULD RESULT IN A PENALTY FOR FAILURE TO FILE CORRECT INFORMATION RETURNS BY THE DUE DATES. (FOR INFORMATION ON PENALTIES, REFER TO THE PENALTY SECTION OF THE 1995 INSTRUCTIONS FOR FORM 1042-S).

SECTION 11. EXTENSIONS OF TIME TO FILE

.01 For Tax Year 1995 (returns due to be filed in 1996), transmitters requesting an extension of time to file for MORE THAN 50 withholding agents are required to file the extension request on magnetic media or via IRP-BBS or electronically. (See PART E. MAGNETIC/ELECTRONIC SPECIFICATIONS FOR EXTENSION OF TIME.) Transmitters requesting an extension of time for 10 or more withholding agents are encouraged to file the request magnetically or electronically. Acceptable types of media are tape, tape cartridge, 5 1/4- and 3 1/2-inch diskette.

.02 IF A WITHHOLDING AGENT IS REQUESTING AN EXTENSION OF TIME TO FILE FORM 1042-S, EITHER ON PAPER OR MAGNETICALLY/ELECTRONICALLY, THEY MUST SUBMIT FORM 8809, REQUEST FOR EXTENSION OF TIME TO FILE INFORMATION RETURNS (REV. 3-95) TO IRS/MCC BY MARCH 15. IF APPROVED, AN EXTENSION WILL BE GRANTED FOR 30 DAYS. A FORM 2758 IS NO LONGER ACCEPTABLE TO REQUEST AN EXTENSION OF TIME TO FILE FORM 1042-S.

.03 Failure to properly complete and sign the Form 8809 may cause delays in processing the request or result in a denial. Please read and follow the instructions on the back of the Form 8809 carefully.

.04 Withholding agents may request an extension of time to file for 30 days AS SOON AS THEY ARE AWARE that an extension is necessary, but, no later than the due date of the return. It will take a minimum of 30 days for IRS/MCC to respond to an extension request. Under certain circumstances a request for an extension of time could be denied. In such cases, the withholding agent receives a denial letter. When this denial letter is received, the withholding agent has 20 days to provide additional or necessary information and resubmit the extension request to IRS/MCC.

.05 If an additional extension of time is needed, a second Form 8809 may be submitted before the end of the initial extension. Line 7 on the form should be checked to indicate that the original extension has been received and the additional extension is being requested. A SECOND 30-DAY EXTENSION WILL BE APPROVED ONLY IN CASES OF EXTREME HARDSHIP OR CATASTROPHIC EVENT.

.06 A filer may only request an extension of time for the tax year of the returns that are due to be filed with IRS.

.07 A MAGNETICALLY FILED REQUEST FOR AN EXTENSION OF TIME SHOULD BE SENT USING THE FOLLOWING ADDRESSES:

IF BY POSTAL SERVICE:

     IRS-Martinsburg Computing Center

.09 If an extension of time to file magnetically or electronically is granted, do not include a copy of the letter granting the extension with Form 4804 or computer-generated substitute or to the processing site with the paper Form 1042-S.

.10 IRS/MCC WILL ONLY GRANT AN EXTENSION OF TIME TO FILE PAPER OR MAGNETICALLY/ELECTRONICALLY FILED FORM 1042-S, FOREIGN PERSON'S U.S. SOURCE INCOME SUBJECT TO WITHHOLDING.

.11 An approved extension of time for magnetic and electronic filing does not provide additional time for supplying the statement to recipient. Requests for an extension of time to provide the recipient copy must be sent to the IRS/MCC.

.12 REQUEST AN EXTENSION OF TIME TO FURNISH THE STATEMENTS TO RECIPIENTS BY SUBMITTING A LETTER TO IRS/MCC CONTAINING THE FOLLOWING INFORMATION:

(a) WITHHOLDING AGENT'S NAME

(b) TIN

(c) ADDRESS

(d) TYPE OF RETURN

(e) SPECIFY THAT THE EXTENSION REQUEST IS TO PROVIDE STATEMENTS TO RECIPIENTS.

(f) REASON FOR DELAY

(g) SIGNATURE OF WITHHOLDING AGENT OR PERSON DULY AUTHORIZED

REQUESTS FOR AN EXTENSION OF TIME TO FURNISH THE STATEMENTS OF FORM 1042-S ARE NOT AUTOMATICALLY APPROVED; HOWEVER, IF APPROVED, GENERALLY AN EXTENSION WILL ALLOW A MAXIMUM OF 15 ADDITIONAL DAYS FROM THE DUE DATE TO FURNISH THE STATEMENTS TO THE RECIPIENTS. IF THE REQUEST IS DENIED, THE STATEMENTS MUST BE SENT TO THE RECIPIENTS TIMELY. THE REQUEST MUST BE POSTMARKED BY THE DATE ON WHICH THE STATEMENTS ARE DUE TO THE RECIPIENTS.

.13 An approved extension grants additional time to file the Form 1042-S with IRS/MCC ONLY. THIS DOES NOT INCLUDE FORM 1042 WHICH IS AN ACTUAL TAX RETURN. ANY TAX DUE MUST STILL BE PAID TIMELY.

.14 To request an extension of time to file Form 1042, submit Form 2758 with the IRS at the following address;

     Internal Revenue Service Center

.01 All data received at IRS/MCC for processing will be given the same protection as individual income tax returns (Form 1040). IRS/MCC will process the data and determine if the records are formatted and coded according to this revenue procedure.

.02 When the magnetic media is returned to the transmitter for replacement, a listing identifying the type of errors and frequency of such errors will be provided. It is the responsibility of the transmitter to check the entire file for similar errors. The transmitter must correct the problems and submit a replacement file to IRS/MCC.

.03 Some conditions may not require corrective actions. For example, certain recipients should have had tax withheld at a particular rate, but the withholding agent withheld at a different tax rate. The withholding agent should verify that the tax rates in question are in fact the rates at which tax was withheld. A letter must accompany the original and/or replacement files stipulating that the amount withheld is accurate.

.04 The following definitions have been provided to help distinguish between a correction and a replacement:

A CORRECTION is an information return submitted by the transmitter to correct an information return that was successfully processed by IRS/MCC, but contained erroneous information.

A REPLACEMENT is media that IRS/MCC has returned due to format or coding errors encountered during processing.

Media returned should receive prompt attention. AFTER NECESSARY CHANGES HAVE BEEN MADE, THESE FILES ARE TO BE RETURNED TO IRS/MCC WITHIN 45 DAYS FROM THE DATE OF NOTICE OR THE WITHHOLDING AGENT MAY BE SUBJECT TO A FAILURE TO FILE PENALTY. A PENALTY MAY ALSO BE ASSESSED IF THE MEDIA IS RETURNED TO THE WITHHOLDING AGENT MORE THAN TWO TIMES. A PENALTY FOR INTENTIONAL DISREGARD OF FILING REQUIREMENTS WILL BE ASSESSED IF A REPLACEMENT FILE IS NOT RETURNED TO IRS/MCC. (FOR PENALTY INFORMATION, REFER TO THE PENALTY SECTION OF THE 1995 INSTRUCTIONS FOR FORM 1042-S.)

.05 IRS/MCC will not return media after successful processing. Therefore, if the transmitter wants proof that IRS/MCC received a shipment, the transmitter should select a service with tracing capabilities or one that will provide proof of delivery.

.06 IRS/MCC will work with filers as much as possible to assist with processing problems. If the filer is contacted by IRS/MCC, please respond promptly. IRS/MCC may have information that the filer needs to correct their file.

.07 Do not use special shipping containers for transmitting data to IRS/MCC. Shipping containers will not be returned.

SECTION 13. CORRECTED RETURNS

.01 Form 1042-S is required to be filed magnetically or electronically if 250 or more returns are filed. This requirement applies separately to both original and corrected returns.

.02 If Form 1042-S is filed magnetically or electronically, and later the filer determines that corrections are necessary, the corrections may be filed on paper if the 250 correction document threshold has not been met.

.03 If the withholding agent has 250 or more corrections, they MUST be submitted to IRS/MCC magnetically or electronically unless a waiver has been granted. If a waiver was granted for original Form 1042-S, this waiver applies to the corrections as well.

.04 Corrected returns MUST NOT be included on the same media or sent in the same electronic transmission with original returns.

.05 Form 4804 and Form 4802 must be submitted with corrected magnetically/electronically submitted files.

.06 The record sequence for filing corrections is the same as for original returns.

.07 REVIEW THE CHART THAT FOLLOWS. EACH CORRECTION REQUIRES TWO TRANSACTIONS.

                  GUIDELINES FOR FILING CORRECTED.

a. PREPARE A NEW FORM 4804/4802 THAT INCLUDES INFORMATION RELATED TO THIS FILE.

b. MARK "CORRECTION" IN BLOCK 1 OF FORM 4804.

c. PREPARE A NEW FILE. MAKE A SEPARATE "T" RECORD. THE INFORMATION IN THE "T" RECORD WILL BE EXACTLY THE SAME AS IT WAS IN THE ORIGINAL SUBMISSION.

d. THE RECIPIENT "Q" RECORD MUST CONTAIN EXACTLY THE SAME INFORMATION AS SUBMITTED PREVIOUSLY EXCEPT INSERT A "V" IN FIELD POSITION 371, CORRECTED RETURN INDICATOR.

e. PREPARE A "W" RECORD.

TRANSACTION 2: REPORT THE CORRECT INFORMATION

a. PREPARE A NEW FILE WITH THE CORRECT INFORMATION IN ALL RECORDS.

b. MAKE A SEPARATE "T" RECORD FOR EACH TRANSMITTER.

c. THE "Q" RECORD MUST SHOW THE CORRECT INFORMATION AS WELL AS A "C" IN FIELD POSITION 371, CORRECTED RETURN INDICATOR.

d. PREPARE A "W" RECORD.

e. "V" AND "C" CODED CORRECTED RETURNS SUBMITTED TO IRS/MCC MAY BE ON THE SAME TAPE OR DISKETTE, BUT MUST HAVE SEPARATE "T" RECORDS.

f. CHECK THE "CORRECTION BOX" ON THE FORM 5064.

.08 SEE THE 1995 "INSTRUCTIONS FOR FORM 1042-S" FOR INFORMATION ON FILING PAPER CORRECTIONS.

SECTION 14. EFFECT ON PAPER DOCUMENTS

.01 Magnetic or electronic reporting eliminates the need to submit paper Form 1042-S to IRS.

.02 Even though the threshold for filing Form 1042-S magnetically or electronically is 250 or more, IRS encourages transmitters to submit all returns magnetically or electronically.

.03 The address for filing paper Form 1042-S and Form 1042 is:

     Internal Revenue Service Center

.04 If the returns were filed magnetically or electronically with IRS/MCC, do not send paper returns to Philadelphia. Duplicate filing may cause penalty notices to be generated.

SECTION 15. DEFINITION OF TERMS

 ELEMENT                   DESCRIPTION

PLEASE READ THE FOLLOWING LIST OF MAJOR PROBLEMS ENCOUNTERED. BEFORE SUBMITTING FILES, REVIEW THE CONTENT AND FORMAT CAREFULLY TO ENSURE THE SPECIFICATIONS IN THIS PUBLICATION HAVE BEEN CORRECTLY FOLLOWED. CHECK TO BE SURE THE CONTENT OF EACH TYPE OF RECORD IS ACCURATE. THIS MAY ELIMINATE THE NEED FOR IRS/MCC TO RETURN THE FILE FOR REPLACEMENT, AND THEREFORE REDUCE THE LIKELIHOOD OF A PENALTY ASSESSMENT FOR INCORRECT SUBMISSIONS. If due to unavoidable circumstances the data would be unacceptable to IRS/MCC, (e.g., math or tax rate errors), include a letter of explanation with each submission.

Listed below are some of the most common problems:

1. Records formatted incorrectly.

Failure to format records correctly will result in files being returned for replacement.

2. Incorrect or missing Transmitter Control Code.

Filers MUST use the unique Transmitter Control Code (TCC) assigned for Form 1042-S reporting (BEGINNING NUMBERS "22"). Application procedures are provided in Part A. Sec. 7 of this revenue procedure.

3. Missing Form 4804

Form 4804, Transmittal of Information Returns Reported Magnetically/Electronically, must accompany each magnetic media shipment or electronic transmission. Forms 1042-S filed magnetically or electronically are not considered complete until a signed Form 4804 is received by IRS/MCC.

4. Incorrect format of the Recipient Name Line.

The recipient's surname should be reported first, followed by given names. HOWEVER, IF THE RECIPIENT'S SURNAME IS NOT ENTERED IN POSITION 139, THE FILER MUST ENTER AN ASTERISK THAT IMMEDIATELY PRECEDES THE RECIPIENT'S SURNAME. If the surname is reported first, the asterisk MUST be omitted, since an asterisk is not valid in the first position of Recipient Name Line One.

5. Incorrect record sequence.

To be acceptable, records must be in a specific sequence. If this sequence is not followed, the file will be returned for replacement. (Refer to Part B. Sec. 5)

6. INCORRECT BLOCK SIZE.

SOME OF THE FILES RECEIVED AT IRS/MCC ARE BLOCKED INCORRECTLY CAUSING MEDIA TO BE RETURNED. REFER TO PART B. MAGNETIC MEDIA SPECIFICATIONS. SEC. 2. TAPE SPECIFICATIONS FOR THE CORRECT BLOCK SIZE FOR SUBMITTING FORM 1042-S MAGNETICALLY. A BLOCK MAY NOT EXCEED 15,000 CHARACTERS, ALTHOUGH, SHORTER BLOCKS MAY BE USED.

7. INCORRECT COUNTRY CODE IN POSITIONS 137-138 OF THE RECIPIENT "Q" RECORD AND RATE OF TAX WITHHELD.

IF THE LETTERS OC (WHICH SHOULD BE USED ONLY WHEN ABSOLUTELY NECESSARY) ARE USED, THE RATE OF TAX WITHHELD MUST BE THE MAXIMUM APPLICABLE RATE.

8. INCORRECT COUNTRY NAME IN POSITIONS 335-354 OF THE RECIPIENT "Q" RECORD.

THIS IS A REQUIRED FIELD; PLEASE READ THE DESCRIPTION AND REMARKS PORTION CAREFULLY. THIS MAY OR MAY NOT BE THE SAME COUNTRY AS INDICATED IN COUNTRY CODE, FIELD POSITION 137-138. DO NOT USE OTHER COUNTRY; USA; US; OUTSIDE OF USA; UNITED STATES.

9. INCORRECT TAX RATE, FIELD POSITION 372-373 OF THE RECIPIENT "Q" RECORD.

THIS IS A REQUIRED FIELD WITH VERY SPECIFIC ACCEPTABLE CODES. PLEASE ENSURE THE ACCURACY OF THE CORRECT TAX RATE DEPENDING ON THE PROPER COUNTRY CODE AND/OR EXEMPTION CODE.

10. INCORRECT EXEMPTION CODE IN FIELD POSITION 370.

THIS IS A REQUIRED FIELD WHICH CAUSES MANY PROCESSING ERRORS. PLEASE READ CAREFULLY THE DESCRIPTION AND REMARKS PORTION, ALONG WITH THE NOTE AT THE BOTTOM TO ELIMINATE THE POSSIBILITY OF ERRORS.

11. INCORRECT RECIPIENT ADDRESS FIELDS.

BE SURE TO USE SPECIFIC BREAKDOWN OF THE ADDRESS IN THE FOLLOWING POSITIONS:

      244-283 STREET ADDRESS

SECTION 1. GENERAL

.01 These specifications prescribe the required format and content of the records to be included in the MAGNETIC MEDIA file. Usually, IRS/MCC will be able to process any compatible file. Deviations cannot and will not be permitted in any of the data fields.

.03 Regardless of the type of media used or if returns are filed electronically, the record length must be 500 positions.

SECTION 2. TAPE SPECIFICATIONS

.01 In most instances, IRS/MCC can process any compatible magnetic tape file IF THE FOLLOWING SPECIFICATIONS ARE MET:

(a) 9-track EBCDIC (Extended Binary Coded Decimal Interchange Code) with:

(1) Odd parity

(2) Recording density -- 1600 or 6250 CPI

(b) 9-track ASCII (American Standard Coded Information Interchange) with:

(1) Odd Parity

(2) Recording density -- 1600 or 6250 CPI

(3) If using UNISYS Series 1100/2200, an Interchange tape with ASCII Recording mode should be used.

(4) If both ASCII and EBCDIC recording is available, ASCII should be used.

.02 All COMPATIBLE tape files must have the following characteristics: Type OF TAPE--1/2 INCH (12.7 MM) WIDE, COMPUTER-GRADE MAGNETIC TAPE ON REELS OF UP TO 2,400 FEET 731.52 M) WITHIN THE FOLLOWING SPECIFICATIONS:

(a) Tape thickness: 1.0 or 1.5 mils, and

(b) Reel diameter: 10 1/2-inch (26.67 cm), 8 1/2-inch (21.59 cm), 7-inch (17.78 cm), or 6-inch.

.03 The tape records may be blocked subject to the following:

(a) A block may not exceed 15,000 tape positions.

(b) If the use of blocked records would result in a short block, all remaining positions of the block must be filled with 9's; however, the last block of the file may be filled with 9's or truncated. Do not pad a block with blanks.

(c) All records, except the header and trailer labels, may be blocked or unblocked. A record may not contain any control fields or block descriptor fields which describe the length of the block or the logical records within the block. The number of logical records within a block (the blocking factor) must be constant in every block with the exception of the last block which may be shorter (see item b above). The block length must be evenly divisible by 500.

(d) Records may not span blocks.

.04 LABELED OR UNLABELED TAPES MAY BE SUBMITTED.

.05 Tape header and trailer labels, record marks, and tape marks are all optional. If used, they must conform to the following standards:

(a) Header labels must begin with VOL1, VOL2, HDR1, HDR2, or 1HDR. They must be the first record(s) on the reel immediately before the Transmitter "T" Record. Header labels may not exceed 80 characters in length.

(b) Trailer labels must begin 1EOR, 1EOF, EOF1, or EOR1. They must be the last record(s) on the reel, after the "Y" record and tape mark (if a tape mark is used). Trailer labels may not exceed 80 characters in length.

(c) Tape marks must be IBM 001111 (Octal 17) in even parity. They always appear immediately after the "Y" record. If both header and trailer labels are used, the tape mark must follow the header label and must precede and/or follow the trailer label(s).

SECTION 3. TAPE CARTRIDGE SPECIFICATIONS

.01 IN MOST INSTANCES, IRS/MCC CAN PROCESS TAPE CARTRIDGES THAT MEET THE FOLLOWING SPECIFICATIONS:

(A) MUST BE IBM 3480, 3490 OR AS400 COMPATIBLE.

(B) MUST MEET AMERICAN NATIONAL STANDARD INSTITUTE (ANSI) STANDARDS, AND HAVE THE FOLLOWING CHARACTERISTICS:

(1) TAPE CARTRIDGES WILL BE 1/2-INCH TAPE CONTAINED IN PLASTIC CARTRIDGES WHICH ARE APPROXIMATELY 4-INCHES BY 5-INCHES BY 1-INCH IN DIMENSION.

(2) MAGNETIC TAPE WILL BE CHROMIUM DIOXIDE PARTICLE BASED 1/2-INCH TAPE.

(3) TAPE CARTRIDGES MUST BE 18-TRACK OR 36-TRACK PARALLEL. (SEE NOTE.)

(4) TAPE CARTRIDGES WILL CONTAIN 37,871 CPI OR 75,742 CPI (CHARACTERS PER INCH).

(5) MODE WILL BE FULL FUNCTION.

(6) THE DATA MAY BE COMPRESSED USING EDRC (MEMOREX) OR IDRC (IBM) COMPRESSION.

(7) EITHER EBCDIC (EXTENDED BINARY CODED DECIMAL INTERCHANGE CODE) OR ASCII (AMERICAN STANDARD CODED INFORMATION INTERCHANGE) MAY BE USED, BUT WE HIGHLY ENCOURAGE ASCII.

.02 THE TAPE CARTRIDGE RECORDS DEFINED IN THIS REVENUE PROCEDURE MAY BE BLOCKED SUBJECT TO THE FOLLOWING:

(A) A BLOCK MUST NOT EXCEED 15,000 TAPE POSITIONS.

(B) IF THE USE OF BLOCKED RECORDS WOULD RESULT IN A SHORT BLOCK, ALL REMAINING POSITIONS OF THE BLOCK MUST BE FILLED WITH 9'S; HOWEVER, THE LAST BLOCK OF THE FILE MAY BE FILLED WITH 9'S OR TRUNCATED. DO NOT PAD A BLOCK WITH BLANKS.

(C) ALL RECORDS, EXCEPT THE HEADER AND TRAILER LABELS, MAY BE BLOCKED OR UNBLOCKED. A RECORD MAY NOT CONTAIN ANY CONTROL FIELDS OR BLOCK DESCRIPTOR FIELDS WHICH DESCRIBE THE LENGTH OF THE BLOCK OR THE LOGICAL RECORDS WITHIN THE BLOCK. THE NUMBER OF LOGICAL RECORDS WITHIN A BLOCK (THE BLOCKING FACTOR) MUST BE CONSTANT IN EVERY BLOCK WITH THE EXCEPTION OF THE LAST BLOCK WHICH MAY BE SHORTER (SEE ITEM B ABOVE). THE BLOCK LENGTH MUST BE EVENLY DIVISIBLE BY 500.

(D) RECORDS MAY NOT SPAN BLOCKS.

.03 TAPE CARTRIDGES MAY BE LABELED OR UNLABELED.

.04 FOR THE PURPOSES OF THIS REVENUE PROCEDURE, THE FOLLOWING MUST BE USED:

TAPE MARK:

(A) USED TO SIGNIFY THE PHYSICAL END OF THE RECORDING ON TAPE.

(B) FOR EVEN PARITY, USE BCD CONFIGURATION 001111 (8421).

(C) MAY FOLLOW THE HEADER LABEL AND PRECEDE AND/OR FOLLOW THE TRAILER LABEL.

NOTE: FILERS SHOULD INDICATE ON THE FORM 5064 LABEL AND TRANSMITTAL FORM 4804 WHETHER THE CARTRIDGE IS 18- OR 36-TRACK, AND IF CARTRIDGES ARE ASCII OR EBDIC FORMAT.

SECTION 4. 5 1/4-INCH AND 3 1/2-INCH DISKETTE SPECIFICATIONS

(a) 5 1/4- or 3 1/2-inches in diameter.

(b) Data must be recorded in standard ASCII code. FOR 5 1/4-INCH DISKETTES, DATA MAY BE RECORDED USING EBCDIC IF THE DISKETTE IS CREATED ON AN IBM SYSTEM 36.

(c) Records must be a fixed length of 500 bytes per record.

(d) Delimiter character commas (,) must not be used.

(e) Positions 499 and 500 of each record MUST CONTAIN carriage return/line feed (cr/lf) characters IF APPLICABLE.

(f) Filename of 1042TAX must be used. Do not enter any other data in this field. If a file will consist of more than one diskette, the filename 1042TAX will contain a 3 digit extension. This extension will indicate the sequence of the diskettes within the file. For example, the first diskette will be named 1042TAX.001, the second diskette will be 1042TAX.002, etc.

(g) A diskette file may consist of multiple diskettes as long as the filename conventions are followed.

(h) Diskettes must meet one of the following specifications:

      Capacity     Tracks     Sides/Density     Sector Size

.03 IRS/MCC PREFERS THAT 5 1/4- AND 3 1/2-INCH DISKETTES BE CREATED USING MS/DOS; HOWEVER, DISKETTES CREATED USING OTHER OPERATING SYSTEMS MAY BE ACCEPTABLE. ALTHOUGH, 3 1/2-INCH DISKETTES CREATED ON A SYSTEM 36 OR AS400 ARE NOT ACCEPTABLE. IRS/MCC HAS EQUIPMENT THAT CAN CONVERT DISKETTES CREATED UNDER VIRTUALLY ANY OPERATING SYSTEM TO THE APPROPRIATE MS/DOS FORMAT. IRS/MCC STRONGLY RECOMMENDS THAT TRANSMITTERS SUBMIT A TEST FILE FOR 5 1/4- AND 3 1/2-INCH DISKETTES, ESPECIALLY IF THEIR DATA WAS NOT CREATED USING MS/DOS.

.04 TRANSMITTERS ARE ENCOURAGED TO USE HIGH DENSITY DISKETTES. LOW DENSITY DISKETTES ARE ACCEPTABLE BUT MUST BE FORMATTED IN LOW DENSITY.

SECTION 5. DATA SEQUENCE SPECIFICATIONS

.01 The first position of each record indicates the record type:

                Transmitter                T

(a) Single tape, cartridge, or diskette:

(1) A Transmitter "T" Record; then

(2) One or more Recipient "Q" Records followed by a corresponding Withholding Agent "W" Record then;

(3) Additional "Q" and "W" Record sequences for other withholding agents as needed; then

(4) An End of Transmission "Y" Record.

(b) Multiple tapes and cartridges: (see NOTE)

(1) A Transmitter "T" Record at the beginning of each tape and cartridge; then

(2) Sequence of Recipient "Q" Records followed by corresponding Withholding Agent "W" Records; then

(3) A sequence of Recipient "Q" Records may be continued from one tape to the next if they apply to the same withholding agent, without the necessity of repeating the "W" Record. The sequence might be, for example, QQQQ (end of one tape); TQQQQW (beginning of next tape); then

(4) An End of Transmission "Y" Record ending the last tape.

(c) Multiple diskettes: (see NOTE)

(1) A Transmitter "T" Record; then

(2) One or more Recipient "Q" Records followed by a corresponding Withholding Agent "W" Record; then

(3) Additional "Q" and "W" Record sequences for other withholding agents as needed; then

(4) A sequence of Recipient "Q" Records may be continued from one diskette to the next if they apply to the same withholding agent, without the necessity of repeating the "W" Record. The sequence might be, for example, QQQQ (end of one diskette); QQQQW (beginning of next diskette); then

(5) An End of Transmission "Y" Record ending the last diskette.

.03 The minimum file transmitted must consist of a Transmitter "T" Record, a Recipient "Q" Record, and Withholding Agent "W" Record, and an End of Transmission "Y" Record.

NOTE: DUE TO DIFFERENCES IN THE PROCESSING OF 1042-S INFORMATION FILED ON TAPES, TAPE CARTRIDGES, AND DISKETTES, IT IS REQUIRED THAT THERE BE A "T" RECORD AT THE BEGINNING OF EACH TAPE OR CARTRIDGE, BUT NOT AT THE BEGINNING OF EACH DISKETTE IN A SHIPMENT.

SECTION 6. THE TRANSMITTER "T" RECORD

.01 This record identifies the entity preparing and transmitting the file. The transmitter and the withholding agent may be the same, but they need not be. The first record of a file MUST be a Transmitter "T" record, (preceded only by header labels, if any), and must appear on each tape and CARTRIDGE, otherwise the file will be returned for replacement. FOR TAPE AND CARTRIDGE FILES ONLY, the Sequence Number, position 4-5 of the "T" record must be increased by 1 (one) for each tape and cartridge. The "T" Record is a fixed length of 500 positions.

.02 If the field is not applicable, allow for the field by entering blanks or zeros as instructed.

                  RECORD NAME: TRANSMITTER "T" RECORD

 117-125   ZIP Code         9    REQUIRED. Enter the ZIP code of the

.01 The "Q" Record contains complete name and address information for both Withholding Agent and Recipient of Income, together with all the particulars of the income paid and tax withheld. Complete Withholding Agent data is required because each Recipient "Q" Record is treated as if it were a separate Form 1042-S, and is processed independently of other records.

.02 Since the "Q" Record is restricted to one type of income, and one tax rate, under certain circumstances it would be necessary to write more than one "Q" Record. Following are some of the circumstances when more than one "Q" record for a payee would be required:

(a) Different sources of income. For example, Recipient X derived income from Capital Gains (Income Code 09) and Industrial Royalties (Income Code 10). A separate "Q" record must be reported for each income code; providing Gross Income Paid and U.S. Federal Tax Withheld pertaining to the corresponding code.

(b) Change in Country Code during the year. For example, the withholding agent received notification via Form 1001 that the recipient changed from country X to country Y. A separate "Q" record must be reported for each country code; providing Gross Income Paid, Tax Rate and U.S. Federal Tax Withheld. The amounts reported must be based on each country code and the period of time under that country code.

(c) Change in a country's tax treaty rate during the year. For example, effective April 1, country X changes its tax treaty rate from 10% to 20%. A separate "Q" record must be reported for each of the tax rates. Provide the Gross Income Paid, Tax Rate, and U.S. Federal Tax Withheld for the period of time under that tax rate.

(d) Gross Income Paid of more than one billion dollars. Report a Gross Income Paid of 99999999999 (dollars and cents) in the first Recipient "Q" record. The second Recipient "Q" record will contain the remaining money amount.

.03 Failure to provide multiple recipient "Q" records when necessary will generate math computation errors during processing and therefore, result in the file being returned for replacement.

.04 All recipient "Q" Records for a particular Withholding Agent must be written before the corresponding Withholding Agent "W" Record, and before "Q" Records for another Withholding Agent may begin.

.05 If the field is not applicable, allow for the field by entering blanks or zeros as instructed.

RECORD NAME: RECIPIENT "Q" RECORD

 Position  Field Title   Length  Description and Remarks

 122-136   Account Number  15    Enter the account number assigned by

                   RECORD NAME: RECIPIENT "Q" RECORD

 Position  Field Title   Length  Description and Remarks

 309-323   Province        15    Enter the name of the Province,

 324-332   Postal Code      9    Enter a Foreign or U.S. Postal Code

/**/ NOTE: IF INCOME CODE 20 IS USED, ALSO USE RECIPIENT CODE 09 (ARTIST OR ATHLETE) INSTEAD OF RECIPIENT CODE 01 (INDIVIDUAL), 02 (CORPORATION), OR 03 (PARTNERSHIP).

 357-358  Recipient Code    2    REQUIRED. Enter the appropriate code

NOTE 2: INCOME CODE 20 IS USED, ALSO USE RECIPIENT CODE 09 (ARTIST OR ATHLETE) INSTEAD OF RECIPIENT CODE 01 (INDIVIDUAL), 02 (CORPORATION), OR 03 (PARTNERSHIP)

 359-369   Gross Income    11    REQUIRED. Enter the Paid gross

/**/ NOTE: NON-U.S. SOURCE INCOME PAID TO A NONRESIDENT ALIEN IS NOT SUBJECT TO U.S. TAX. USE EXEMPTION CODE 3 WHEN ENTERING AN AMOUNT FOR INFORMATION REPORTING PURPOSES.

/***/ NOTE: EXEMPTION CODE "5" CAN ONLY BE USED IN CONJUNCTION WITH INCOME CODES "1", "2", "3", "4", OR "5".

            RECORD NAME: RECIPIENT "Q" RECORD -- Continued

.01 Enter a "W" Record after the last "Q" Record submitted for a particular Withholding Agent. The "W" Record serves as a summary of the preceding "Q" Record data, and enables IRS to cross check the correctness of information received.

.02 Several "W" Records for different withholding agents may appear on the same Transmitter's file. Also, the "W" Record may refer to "Q" Records on more than one reel, provided all of the preceding "Q" Records are for the same withholding agent.

.03 A "W" Record may only be followed by new Recipient "Q" Records for the next Withholding Agent, if any, or by a tape mark and/or trailer label when more reels follow this reel, or by an End of Transmission "Y" Record, when this is the last reel of the file. The "W" Record cannot be the last record on the file.

.04 Each "W" Record has a fixed length of 500 positions.

.05 If the field is not applicable, allow for the field by entering blanks or zeros as instructed.

                   RECORD NAME: RECIPIENT "W" RECORD

.01 The "Y" Record is a fixed record length of 500 positions and all positions listed are required. The "Y" Record is a summary of the number of withholding agents and total number of tape reels in the entire file.

.02 This record will be written after the last "W" Record of the entire file. End the last reel ONLY of a file with an End of Transmission "Y" Record. The "Y" Record may only be preceded by a "W" Record. It may only be followed by a tape mark, or a tape mark and a trailer label (if trailer labels are used), or a trailer label.

.03 Please note that if submitting a multi-reel file, there will only be one End of Transmission "Y" record. The End of Transmission "Y" record will be the last record in the final block on the last reel in the file.

              RECORD NAME: END OF TRANSMISSION "Y" RECORD

SECTION 1. GENERAL

.01 Bisynchronous electronic filing of Form 1042-S information returns is offered as an alternative to magnetic media (tape, tape cartridge, or diskette) or paper filing, but is not a requirement. This method uses IBM 3780 communications protocols and is used primarily by mainframe filers. Electronic filing will fulfill the magnetic media requirements for those payers who are required to file magnetically. If may also be used by payers who are under the filing threshold.

.02 Electronic filing of information returns is not affiliated with the Form 1040 electronic filing program. These two programs are totally independent, and separate approval to participate in each of them must be obtained. All inquiries concerning the electronic filing of information returns should be directed to IRS/MCC. IRS/MCC personnel cannot answer questions or assist taxpayers in the filing of Form 1040 tax returns. Filers with questions of this nature will be directed to the Taxpayer Service toll free number (1-800-1040) for assistance.

.03 Filers participating in the electronic filing program for information returns will submit their returns to IRS/MCC by way of modems, and not through magnetic media or paper filing.

.04 If a request for extension is approved, transmitters who file electronically will be granted an extension of 30 days to file. Part A. Sec. 11 explains procedures for requesting extensions of time. Filers are encouraged to file their data as soon as possible.

.05 The formats of the "T," "Q," "W," and "Y," Records are the same for electronically filed records as they are for 5 1/4- and 3 1/2-inch diskettes, tapes and tape cartridges. For electronically filed documents, each transmission is considered a separate file; therefore, each transmission must have an End of Transmission (EOT) "Y" Record.

SECTION 2. ELECTRONIC FILING APPROVAL PROCEDURE

.01 Filers must obtain, or already have, a Transmitter Control Code (TCC) assigned to them prior to submitting their files electronically. Refer to Part A. Sec. 7 for information on how to obtain a TCC.

.02 Filers using bisynchronous protocols must obtain an IRS/MCC-assigned password prior to submitting test or actual data files. To obtain a password, the following steps must be taken:

(a) Bisynchronous filers who already have a TCC TO FILE FORM 1042-S (BEGINNING NUMBERS "22") MUST SUBMIT EITHER Form 4419 or a letter to indicate that they wish to file information returns electronically. IF YOU DO NOT HAVE A TCC NUMBER OR ONE THAT BEGINS WITH "22", A NEW NUMBER WILL BE ASSIGNED.

If a letter is submitted, it must contain the following:

1) Name and address of transmitter.

2) Transmitter Control Code.

3) Name and phone number of a contact person within the filer's organization to whom a password will be assigned.

(b) Within 30 days of receiving the application or letter, IRS/MCC will send Form 6086, Time Sharing Operation (TSO) Password Assignment, to the filer which will contain the password to be used for electronic submissions.

(c) Upon receipt of Form 6086, the user (person who will actually transmit the data) will separate the acknowledgment from the password. Both the user and the user's manager must sign the acknowledgment and mail to:

     Chief, Security and Disclosure Branch

(e) For security reasons, all bisynchronous passwords will expire periodically, and a new password will automatically be assigned. If filers have any questions relating to the security procedures, and/or they need to report their password has been compromised, they must contact IRS/MCC as soon as possible by calling 1-304-263-8700, or writing to:

     IRS/MCC

SECTION 3. TEST FILES

.01 Filers are not required to submit a test file. The purpose of test files is to resolve any data or communication problems prior to the filing season. If a filer wishes to submit an electronic test file for Tax Year 1995, it must be submitted to IRS/MCC December 1, 1995, through February 15, 1996.

.02 If a filer encounters problems while transmitting electronic test files, IRS/MCC should be contacted for assistance.

.03 A password must be obtained before submitting an electronic test file.

.04 Bisynchronous electronic test files will be processed and filers will be notified as to the acceptability of their data within 5 workdays of the date the data and transmittal Form 4804 are received by IRS/MCC.

SECTION 4. ELECTRONIC SUBMISSIONS

.01 ELECTRONICALLY FILED INFORMATION MAY BE SUBMITTED TO IRS/MCC 7 DAYS A WEEK, 24 HOURS A DAY, EXCEPT FOR ROUTE MAINTENANCE/BACKUP WHICH IS PERFORMED DAILY AT 4:00 A.M. EASTERN TIME. Technical assistance will be available Monday through Friday between 8:30 a.m. and 4:30 p.m. Eastern Time by calling (304) 263-8700.

.02 Lengthy transmissions (100,000 OR MORE RECORDS) are not encouraged since the transmission may be interrupted by line noise problems. IT IS ADVISABLE TO BREAK LENGTHY FILES INTO MULTIPLE TRANSMISSIONS.

.03 The time required to transmit information returns electronically will vary depending on the modern speed, if IBM 3780 data compression is used, and if the records are blocked. The following transmission rate was based on an actual test filed received at MCC using 4800 bps, no compression, and one record per block:

     4500 records 50 minutes

.01 All data submitted electronically is verified by transmittal Form 4804. The transmitter must send the signed Form 4804 the same day the transmission is made. No return is considered filed until a Form 4804 is received by IRS/MCC.

.02 Form 4804 can be ordered by calling the IRS toll free forms and publications order number 1-800-TAX-FORM (4-800-829-3676) or it may be computer-generated. If a filer chooses to computer-generate Form 4804, all of the information contained on the original form, including the affidavit, must also be contained on the computer-generated form.

.03 The filer whose TCC is used in the "T" Record is responsible for submitting the transmittal Form 4804.

.04 Forms 4804 may be mailed to the following addresses:

If by Postal Service:

     IRS-Martinsburg Computing Center

SECTION 6 IBM 3780 BISYNCHRONOUS COMMUNICATION SPECIFICATIONS

.01 Transmissions using IBM 3780 bisynchronous protocols must be in EBCDIC character code. Modems must be compatible with either Bell 208B for 4800 bps transmissions, or AT&T 2296A for 9600 bps transmissions. Both modems are dial-up type modems using the Public Switched Telephone Network. IBM 3780 data compression is acceptable for any bisynchronous transmission. Records may be blocked up to 4096 bytes with INTER RECORD SEPARATORS.

.02 IRS/MCC will accept information returns filed electronically over switched telecommunications network circuits. For 4800 bps, the circuit will be (304) 264-7080. For 9600 bps, the circuit will be (304) 264-7040. Both circuits are equipped for bisynchronous transmission using the IBM 3780 protocol.

.03 The 4800 bps line terminates at a Bell 208B modem. The Bell 208B modem uses phase-shift keying and eight-phase modulation to transmit binary serial data signals over the telephone line in half-duplex mode. The following options have been selected:

     -- Transmit level set to -4 dBm

     -- Receiver Responds to Remote Loopback

.01 For bisynchronous filing there are two additional identifier records which must be used to transmit data. These records are 500 positions in length and are the first ($$REQUEST) and second ($$ADD) records sent in an electronic transmission.

The purpose of these records is to provide the password and identity of the transmitter. The $$REQUEST, $$ADD and the data file should be transmitted as one file. In some cases, filers have attempted to send the $$REQUEST and $$ADD as separate files. Doing this will result in a failed transmission.

.02 With the exception of these additional records, the file format for electronic filing is the same as for magnetic media filing. The format of each of these records is as follows:

                      RECORD NAME: $$REQUEST

.04 Upon receiving a data file and transmittal Form 4804, IRS/MCC will release the data for further processing. If the media cannot be processed, the filer will be notified by either letter or telephone that the data must be retransmitted. This file name, if necessary, will be provided by IRS/MCC and is to be placed in positions 45-51 of the $$ADD record when the file is retransmitted.

RECORD NAME: $$ADD

 Field

SECTION 1. GENERAL

.01 Asynchronous electronic filing of Form 1042-S originals, corrections, and replacements of information returns is offered as an alternative to magnetic media (tape, tape cartridge, or diskette) or paper filing, but is not a requirement. Electronic filing using the Information Reporting Program Bulletin Board System (IRP-BBS) will fulfill the magnetic media requirements for those filers who are required to file magnetically. It may also be used by those payers who are under the filing threshold requirement, but would prefer to file their information returns this way. If the original file was sent magnetically, but was returned for replacement, the replacement may be transmitted electronically. Also, if the original file was submitted via magnetic media, any corrections may be transmitted electronically. Also, if the original file was submitted via magnetic media, any corrections may be transmitted electronically.

.02 The electronic filing of information returns is not affiliated with the Form 1040 electronic filing program. These two programs are totally independent, and filers must obtain separate approval to participate in each of them. All inquiries concerning the electronic filing of information returns should be directed to IRS/MCC. IRS/MCC personnel cannot answer questions or assist taxpayers in the filing of Form 1040 tax returns. Filers with questions of this nature will be directed to the Taxpayer Service toll free number (1-800-829-1040) for assistance.

.03 Filers participating in the electronic filing program for information returns will submit their returns to IRS/MCC by way of modems and not through magnetic media or paper filing.

.04 If a request for extension is approved, transmitters who file electronically will be granted an extension of 30 days to file. Part A. Sec. 11 explains procedures for requesting extensions of time. Filers are encouraged to file their data as soon as possible.

.05 The formats of the "T," "Q," "W," and "Y" Records are the same for electronically filed records as they are for 5 1/4- and 3 1/2-inch diskettes, tapes, and tape cartridges. For electronically filed documents, each transmission is considered a separate file.

SECTION 2. ELECTRONIC FILING APPROVAL PROCEDURE

.01 Filers must obtain, or already have, a Transmitter Control Code (TCC) assigned to them prior to submitting their files electronically. Filers who currently have a TCC for magnetic filing of FORM 1042-S (BEGINNING WITH NUMBERS "22") do not have to request a second TCC for electronic filing. Refer to Part A. Sec. 7 for information on how to obtain a TCC.

.02 Once a TCC is obtained, filers using IRP-BBS assign their own passwords and do not need special approval.

.03 With all passwords, it is the user's responsibility to remember the password and not allow the password to be compromised. However, if filers do forget their password, call (304) 263-8700 for assistance. NOTE: PASSWORDS ON THE IRP-BBS ARE CASE SENSITIVE.

SECTION 3. TEST FILES

.01 Filers are not required to submit a test file; however, the submission of a test file is encouraged for first time electronic filers in order to resolve any data or communication problems prior to the filing season. If filers wish to submit an electronic test file for Tax Year 1995, it MUST be submitted to IRS/MCC December 1, 1995, through February 15, 1996.

.02 If problems are encountered while transmitting the electronic test file, contact IRS/MCC for assistance.

.03 Filers can verify the status of their transmitted test data by dialing the IRP-BBS. This information will be available within 10 workdays after their transmission is received by IRS/MCC.

SECTION 4. ELECTRONIC SUBMISSIONS

.01 Electronically filed information may be submitted to IRS/MCC 24 hours a day, 7 days a week. Technical assistance will be available Monday through Friday between 8:30 a.m. and 4:30 p.m. Eastern Time by calling (304) 263-8700.

.02 Filers may submit as many documents as they choose electronically. Filers are allowed 240 minutes a day; however, more time may be requested if needed.

.03 Do not transmit data using IRP-BBS January 1 through January 7. This will allow time for the IRP-BBS to be updated to reflect current year changes.

.04 Data compression is encouraged when submitting information returns by way of the IRP-BBS. MCC has the ability to decompress files created using several popular software compression programs such as ARC, LHARC, and PKZIP. Software data compression can be done alone or in conjunction with V.42bis hardware compression. TRANSMISSION TIME CAN BE REDUCED BY AS MUCH AS 85 PERCENT WHEN DATA COMPRESSION IS USED; THEREFORE, IT IS HIGHLY RECOMMENDED.

The time required to transmit information returns electronically will vary depending on the modem speed and the type of data compression used, if any. However, transmissions to IRP-BBS will be significantly faster than electronic filing to the mainframe.

The following are actual transmission rates achieved in test uploads at MCC using compressed files (PKZIP) and the xmodem protocol. The actual transmission rates will vary depending on the protocol that is used. (Uploads will be approximately 25% faster when using the XMODEM-1K or ZMODEM protocols.)

 Transmission

SECTION 5. TRANSMITTAL REQUIREMENTS

.01 THE RESULTS OF THE ELECTRONIC TRANSMISSION WILL BE POSTED TO THE (F)ILE STATUS AREA OF THE IRP-BBS, HOWEVER, NO FURTHER PROCESSING WILL OCCUR UNTIL THE SIGNED FORM 4804 IS RECEIVED. The transmitter must send the signed Form 4804 the same day the electronic transmission is made. No return is considered filed until a Form 4804 is received by IRS/MCC.

.02 Form 4804 can be ordered by calling the IRS toll free forms and publication order number 1-800-TAX-FORM, (1-800-829-3676) downloaded from the IRP-BBS, or it may be computer generated. If a filer chooses to computer-generate Form 4804, all of the information contained on the original form, including the affidavit, must also be contained on the computer-generated form.

.03 The filer whose TCC is used in the "T" Record is responsible for submitting the transmittal Form 4804.

.04 Forms 4804 may be mailed to the following addresses:

If by Postal Service:

     IRS-Martinsburg Computing Center

SECTION 6. INFORMATION REPORTING PROGRAM BULLETIN BOARD SYSTEM (IRP-BBS) SPECIFICATIONS

.01 The IRP-BBS is an electronic bulletin board system available to filers of information returns. In addition to filing information returns electronically, the IRP-BBS provides other capabilities. Some of the advantages of IRP-BBS are as follows:

(1) Notification within 10 workdays as to the acceptability of the data transmitted.

(2) Immediate access to the latest changes and updates that affect the Information Reporting Program at IRS/MCC (program, legislative, etc.).

(3) Access to publications such as the Publication 1187 as soon as they are available.

(4) Capability to communicate with IRS/MCC personnel.

(5) Ability to retrieve information and files applicable to the IRP-BBS.

.02 The IRP-BBS is available for public use and accessible using various personal computer communications equipment; however, electronic submission of information returns is limited to holders of valid TCCs. A TCC is not needed to access those portions of the IRP-BBS that contain forms and publications or to leave questions or messages for IRS/MCC personnel.

.03 Filers using IRP-BBS can determine the acceptability of files submitted by checking the file status area of the bulletin board. These reports are not immediately available but will be available 10 workdays after the transmission is received by IRS/MCC.

.04 Contact the IRP-BBS by dialing (304) 264-7070. The communication software settings for IRP-BBS are:

     -- No parity

.05 Due to the large number of communication products available, it is impossible to provide specific information on a particular software package or hardware configuration. Filers should contact their software or hardware supplier for assistance.

.06 IRP-BBS software provides a menu-driven environment allowing access to different parts of IRP-BBS. Whenever possible, IRS/MCC personnel will provide assistance in resolving any communication problems with IRP-BBS.

.07 IRP-BBS can be accessed at speeds from 1200 to 28,800 bps. The speed is automatically negotiated for connection at the speed of the calling modem. The communication standards supported include Industry Standard 212A, V.22bis, V.32, V.32bis, V.34, and V.FC. Point-to-point error control is supported using the V.42 ITU-T standard or MNP 2-4. Data compression is supported using V.42bis ITU-T standard or MNP5.

SECTION 7. IRP-BBS FIRST LOGON PROCEDURES

.01 The following information will be requested to set up the filer's user profile when logging onto the IRP-BBS for the first time.

(A) # Chars per line on screen (10-132)? (Most computers have 80 character screen display)

(B) Enter the letter, that corresponds to the filer's terminal, from the following:

         < A > IBM PC       < B > IBM w/ANSI        < C > Atari

(C) Upper/lower case, line feed needed, 0 (zero) nulls after each < CR >, do you wish to modify this? (Most users answer no.)

(D) Do you wish to have a pause after each display page (Y/N)? (Most users answer yes.)

(E) How many lines per display page (10-80)? (Most computers have a 24 line screen display.)

COMMON USER PROBLEMS

 PROBLEM               PROBABLE CAUSE          SOLUTION

SECTION 1. GENERAL INFORMATION

NOTE: The specifications which follow for requesting an extension of time magnetically or electronically DO NOT APPLY to Form 1042. Form 1042 is not an information return.

.01 The specifications in Part E include the required 200-byte record format for extension of time to file requests submitted on magnetic media or via IRP-BBS. Also included are the instructions for the information that is to be entered in the record. Withholding AGENTS ARE ADVISED TO READ THIS SECTION IN ITS ENTIRETY TO ENSURE PROPER FILING.

.02 REQUESTS FOR EXTENSIONS OF TIME MAY BE MADE FOR FORM 1042-S.

.03 FOR TAX YEAR 1995 (RETURNS DUE TO BE FILED IN 1996), TRANSMITTERS REQUESTING AN EXTENSION OF TIME TO FILE FOR MORE THAN 50 WITHHOLDING AGENTS ARE REQUIRED TO FILE THE EXTENSION REQUEST ON MAGNETIC MEDIA OR VIA IRP-BBS. TRANSMITTERS REQUESTING AN EXTENSION OF TIME FOR 10 OR MORE WITHHOLDING AGENTS ARE ENCOURAGED TO FILE THE REQUEST MAGNETICALLY OR ELECTRONICALLY. ACCEPTABLE TYPES OF MEDIA ARE TAPE, TAPE CARTRIDGE, AND 5 1/4- AND 3 1/2-INCH DISKETTE.

.04 For an extension request filed on magnetic media, the transmitter must send the completed, signed Form 8809, Request for Extension of Time to File Information Returns, in the same package as the corresponding media. FOR EXTENSION REQUESTS FILED ELECTRONICALLY, THE TRANSMITTER MUST SEND THE FORM 8809 THE SAME DAY THE TRANSMISSION IS MADE.

.05 WITHHOLDING AGENTS, OR TRANSMITTERS SUBMITTING A REQUEST FOR EXTENSION OF TIME FOR MULTIPLE WITHHOLDING AGENTS, SHOULD NOT SUBMIT A LIST OF AGENT'S NAMES AND TINS WITH THE FORM 8809 WITH THE MAGNETIC MEDIA OR ELECTRONIC FILES.

.06 To be considered, an extension request must be postmarked or transmitted by the due date of the return; otherwise, the request will be denied.

.07 The extension record format is also on the IRP-BBS and can be downloaded. SEE PART D FOR MORE INFORMATION ON HOW TO CONTACT THE IRP-BBS.

.08 A magnetically-filed request for an extension of time should be sent using the following addresses:

If by Postal:

     IRS-Martinsburg Computing Center

.09 IF USING A DELIVERY SERVICE OTHER THAN POSTAL SERVICE, THE ACTUAL DATE OF RECEIPT BY IRS/MCC WILL BE USED AS THE RECEIVED DATE. THIS SHOULD BE CONSIDERED IN MEETING FILING REQUIREMENTS TIMELY.

.10 Withholding Agents who submit their extension of time requests magnetically or electronically will receive a letter from IRS/MCC with an attached list of multiple withholding agents and their TINs (EIN or SSN) specifying approval and/or denial.

.11 Do not submit tax year 1995 extension of time to file requests on magnetic media or electronically before January 1, 1996.

.12 FILERS MAY REQUEST AN EXTENSION OF TIME AS SOON AS THEY ARE AWARE THAT AN EXTENSION IS NECESSARY BUT NOT LATER THAN THE DUE DATE OF THE RETURN. IT WILL TAKE A MINIMUM OF 30 DAYS FOR IRS/MCC TO RESPOND TO AN EXTENSION REQUEST. UNDER CERTAIN CIRCUMSTANCES A REQUEST FOR AN EXTENSION OF TIME COULD BE DENIED. IN SUCH CASES, THE WITHHOLDING AGENT RECEIVES A DENIAL LETTER. WHEN THIS DENIAL LETTER IS RECEIVED, THE TRANSMITTER HAS 20 DAYS TO PROVIDE THE ADDITIONAL OR NECESSARY INFORMATION AND RESUBMIT THE EXTENSION REQUEST TO IRS/MCC.

.13 Each piece of magnetic media must have an external label containing the following information:

(a) Withholding agent's name (Transmitter's name if reporting for multiple withholding agents)

(b) Transmitter Control Code (TCC) BEGINNING WITH THE NUMBERS "22."

(c) Tax year

(d) The words "Extension of Time"

(e) Record count

Form 5064 (Media Label) or transmitter generated substitute may be used.

.14 A request for an extension of time to file is not automatically granted. Approval or denial is dependent on information provided on the Form 8809.

.15 If an additional extension of time is needed, a second Form 8809 may be submitted before the end of the initial extension. Line 7 on the form should be checked to indicate that the original extension has been received and the additional extension is being requested. A SECOND 30-DAY EXTENSION WILL BE APPROVED ONLY IN CASES OF EXTREME HARDSHIP OR CATASTROPHIC EVENT.

.16 See Part A. Sec. 11, for complete information on requesting an extension of time to file information returns. If there are additional questions or concerns, contact IRS/MCC.

SECTION 2 MAGNETIC TAPE, TAPE CARTRIDGE, 5 1/4- AND 3 1/2-INCH DISKETTE, AND IRP-BBS SPECIFICATIONS

.01 Tape specifications are as follows:

(a) 9 track.

(b) EBCDIC (Extended Binary Coded Decimal Interchange Code) or ASCII (American Standard Coded Information Interchange) recording mode.

(c) 1600 or 6250 BPI.

(d) Fixed block size of 4000 bytes.

(e) Record length of 200 bytes.

(f) Labeled or unlabeled tapes may be submitted.

.02 Tape cartridge specifications are as follows:

(a) Must be IBM 3480, 3490 or AS400 compatible.

(b) Must meet American National Standard Institute (ANSI) standards and have the following characteristics:

(1) Tape cartridges will be 1/2 inch tape contained in plastic cartridges which are approximately 4 inches by 5 inches by 1 inch in dimension.

(2) Magnetic tape will be chromium dioxide particle based 1/2 inch tape.

(3) Cartridges will be 18-track or 36-track parallel. [Indicate on Form 5064, Media Label, in the box "Operating System/Hardware," whether the tape cartridge is 18- or 36-track.

(4) Mode will be full function.

(5) The data may be compressed using EDRC (Memorex) or IDRC (IBM) compression.

(6) Either EBCDIC or ASCII.

(c) Fixed block size of 4000 bytes.

(d) Record length of 200 bytes.

(e) Labeled or unlabeled tape cartridges may be submitted.

.03 Diskette specifications are as follows:

(a) 5 1/4- or 3 1/2-inches in diameter.

(b) ASCII recording mode only. Additional specifications may be found in Part B. Sec. 4, of this revenue procedure.

(c) Record length of 200 bytes.

(d) Diskettes must be created using the MS/DOS operating system.

(e) Filename of IRSEOT must be used. No other filenames are acceptable. If a file will consist of more than one diskette, the filename IRSEOT will contain a three-digit extension. This extension will indicate the sequence of the diskettes within the file. For example, the first diskette will be named IRSEOT.001, the second diskette will be name IRSEOT.002, etc.

(f) Delimiter character commas (,) must not be used.

(g) Positions 199 and 200 of each record have been reserved for use as carriage return/line feed (cr/lf) characters, if applicable.

.04 IRP-BBS specifications include:

(a) Transmitter must have Transmitter Control Code Number (TCC). (Be sure to use the TCC assigned for submitting 1042-S information.)

(b) IRP-BBS access phone number is (304) 264-7070.

(c) Communications software settings are:

     -- No parity

(e) Data compression is encouraged.

See Part D, IRP-BBS Electronic Filing Specifications, for detailed information on filing with IRS/MCC via IRP/BBS.

SECTION 3. RECORD LAYOUT

.01 Positions 6 through 174 of the following record should contain information about the WITHHOLDING AGENT for whom the extension of time to file is being requested. Do not enter transmitter information, unless filing for multiple withholding agents, in these fields. ONLY ONE TCC MAY BE PRESENT IN A FILE. PLEASE BE SURE TO USE THE TCC ASSIGNED FOR 1042-S FILING WHICH BEGINS WITH DIGITS 22.

                          RECORD NAME: $$ADD