IRS PROVIDES GUIDELINES FOR SUBSTITUTE FORMS FOR 1991 TAX YEAR.

Rev. Proc. 92-21

CONTENTS

PART A. GENERAL

     SECTION 1. PURPOSE

     SECTION 1. GENERAL

     EXHIBIT A-1. SCHEDULE A (Preferred)

SECTION 1. PURPOSE

The purpose of this revenue procedure is to provide the general requirements and conditions for the development, printing, and approval of all substitute tax forms to be acceptable for filing in lieu of official IRS produced and distributed forms for Tax Year 1991. All IRS tax forms, whether or not specifically mentioned herein by title or form number, are covered by this general revenue procedure. Certain unique, specialized forms (e.g., Forms 1040-ES, l041-ES, 5498, 1096, 1099 series, W-2 series, W-9, etc.) require the use of other additional revenue procedures to supplement this publication. Persons wanting to submit substitute Forms W-2 should first read Publication 1141, Specifications for Private Printing of Substitute Forms W-2, and W-3. See Sections 18 and 19 for further information on these specific forms.

SEC. 2. SCOPE

01 The Service accepts quality substitute tax forms that are consistent with the official forms they represent, and that do not have an adverse impact on our processing. The IRS Substitute Forms Program administers the formal acceptance and processing of these forms nationwide. While this program deals primarily with paper documents, it also interfaces with other processing and filing mediums such as magnetic tape, optical character recognition, electronic filing, etc., within a totally integrated tax administration system.

02 Only those substitute forms that conform to the corresponding official forms and that comply fully with the requirements set forth herein are acceptable. Applicants for approval of substitute Form W-2 should first see Publication 1141.

03 This revenue procedure is updated annually to reflect pertinent tax year form changes and to meet processing and/or legislative requirements.

SEC. 3. NATURE OF CHANGES

01 Various editorial changes have been made.

02 References to other Revenue Procedures listed in Part A, Section 18 were updated where appropriate.

03 A new subparagraph has been inserted in Part A, Section 6, regarding the non-acceptability of carbon copies or photocopies of Forms 940, 940-EZ, 941, 942 and 943.

04 Part B, Section 21. Forms for Electronically Filed Returns, was revised and updated.

05 In several places we have inserted a message concerning the need for substitute forms to be legible.

06 All Exhibits were updated.

07 Part A, Section 7 has been revised to provide better information on assigning Forms Approval Numbers for both paper and electronically filed returns.

08 Part A, Section 10 has been revised to prohibit the use of alpha or numeric characters as horizontal or vertical dividing lines on substitute forms.

09 Entire contents updated to reflect Tax Year 1991 requirements.

SEC. 4. DEFINITIONS

01 Substitute Form. A tax form (or related schedule) that differs in any way from the official version and is intended to replace the entire form that is printed and distributed by the Service. This term also covers those approved substitute forms exhibited in this revenue procedure.

02 Printed (or Preprinted) Form. A form produced using conventional printing processes. Also, a printed form which has been reproduced by photocopying or similar processes.

03 Preprinted Pin-Fed Form. A printed form that has marginal perforations for use with automated and high-speed printing equipment.

04 Computer-Prepared Substitute Form. A preprinted form in which the taxpayer's tax entry information has been inserted by a computer, computer-printer or other computer type equipment, such as word-processing equipment.

05 Computer-Generated Substitute Form. A form that is entirely designed and printed by the use of a computer printer (may be on either lined or color-barred paper) so that all the line number, line captions, and the tax amount data entries are in the same computer typeface. No graphics usually appear on the form.

06 Computer-Generated Tax Return. A tax return that is entirely designed and printed by the use of a computer printer, such as a laser printer, etc., on plain white paper, as an exact textual and graphic reproduction of the corresponding Service tax return. Examples of tax returns are Forms 1040, 1040A, 1040EZ, 1041, 1065, 1120, etc.

07 Manually prepared form. A preprinted reproduced form in which the taxpayer's tax entry information is entered by an individual using a pen, pencil, typewriter, or other nonautomated equipment.

08 Graphics. Those parts of a printed tax form that are not tax amount entries nor called-for information. Generally, these are line numbers, captions, shadings, instructions, special indicators, borders, rules, and strokes created by typesetting, photographics, photocomposition, etc.

09 Acceptable Reproduced Form. A legible photocopy of an original form or of an unchanged reproduction proof supplied by the Service. (A reproduction proof is not a substitute form, but may subsequently be used as a computer-prepared substitute.)

10 Supporting Statement (Supplemental Schedule). A document providing detailed information to support an entry for a line(s) on an official or approved substitute form and filed with (attached to) a tax return. (A supporting statement is not a tax form and does not take the place of an official form, unless specifically permitted elsewhere in this procedure).

11 Specific Forms Terms. The following terms are used throughout this revenue procedure in reference to all substitute forms.

1 Format. The overall physical arrangement and general layout of a substitute form, as represented by the official form version.

2 Sequence. The same numeric and logical placement order of data, as reflected on the official form version. Sequence is an integral part of the total format requirement.

3 Line Reference (Code). The line numbers, letters or alpha- numerics used to identify each captioned line on the official forms; and printed to the immediate left of each caption or data entry field.

4 Item caption. The textual portion of each line on the form, identifying the specific data elements required.

5 Data Entry Field. All areas designated on a form for the insertion of data, such as dollar amounts, quantities, responses, check-boxes, etc.

SEC. 5. MESSAGE TO TAX RETURN PREPARERS

01 If you plan to change or modify any tax forms, you must follow these procedures, and, in many cases, you must get official approval before using substitute forms. The Service is continuing a program to identify and contact tax return preparers using unapproved forms that do not conform to this revenue procedure, and thus impede processing of the returns.

SEC. 6. HIGHLIGHTS OF PERMITTED CHANGES AND REQUIREMENTS

01 THINGS YOU CAN DO TO INTERNAL REVENUE SERVICE PRINTED TAX FORMS TO MAKE THEM SUITABLE FOR USE AS SUBSTITUTE TAX FORMS WITHOUT PRIOR APPROVAL.

1 You can photocopy most tax forms and use them instead of the official ones. Generally, forms that totally conform to the requirements specified in this revenue procedure may be privately printed without prior approval. The entire substitute form, including entries, must be legible. Proposed substitutes not conforming to requirements must be submitted for prior approval.

(A) See excluded forms in .01.7 below.

2 You can reproduce any current tax form as cut sheets, snap- sets, and marginally-punched, pin-fed forms so long as you use an official Service version as the master copy. Official versions are supplied by the Service, such as those in the taxpayer's tax package, those in Package X, those printed in revenue procedures, reproduction proofs sold by the Service, and over-the-counter forms available at IRS and other governmental public offices or buildings.

3 You can adjust the graphics on specified areas of printed Forms 1040 and 1040A (and other forms) to allow for computer-printed or word processor fill-in. Only the areas listed in this revenue procedure may be adjusted without specific prior approval.

4 You can print and duplicate the substitute "worksheet-type" versions of Schedules A and B of Form 1040 (see exhibits). The Service will accept these substitute schedules instead of the official versions. These Schedules serve different purposes. One allows the form to contain state tax information which is blocked out before filing with the service. The other allows the form to be used singly or as part of a snapset.

5 You can create a "signature form" as a valid substitute form. Many tax forms (including returns) have a taxpayer signature requirement as part of the form layout. The jurat/perjury statement/signature line areas must be retained and worded exactly as on the official form. The requirement for a signature by itself does not prohibit a tax form from being properly computer generated.

6 You can computer-generate TAX RETURNS THEMSELVES (i.e., forms requiring a signature and that establish tax liability; including, but not limited to: Forms 1040, 1040A, 1040EZ, 1120, 940, 941, 5500 series returns and schedules, 1041, 720, 1065, and all similar tax return forms) on plain white paper, but only as exact textual and graphic reproductions of the official Service forms. These returns may be filled in by a computer, word processor, or the like, but THE FORMS THEMSELVES MUST BE PRINTED EXACTLY LIKE THE SERVICE (OFFICIAL) VERSIONS.

(a) Schedules are considered to be an integral part of a complete tax return when assigned consecutive page numbers and printed contiguously with page one of the return. Form 706, United States Estate (and Generation-Skipping Transfer) Tax Return, is an example of this situation, where Schedules A through R have pages numbered as part of the basic return. For a Form 706 to be approved, the entire form including Schedules A through R must be submitted.

(b) However, Schedules 1, 2, and 3 of Form 1040A are examples of when schedules can be separately computer-generated. Although IRS- printed as a continuation of Form 1040A, the two pages of each of these schedules do not have consecutive page numbers, and may, therefore, be separated from Form 1040A and submitted as computer- generated substitute schedules.

(c) A "tax return" must remain complete, with its signature covering the entire return including all its assigned or associated (numbered) pages.

7 Some Service forms should never be reproduced as photocopies, or submitted on carbon copies, for use as substitute forms. This is because only the original or official versions are acceptable for filing with the IRS, due to their use in critical Service programs that normally require use of only OCR scannable documents.

(a) Forms W-2, W-2G, W-3, 1096, 1098, 1099-A, 1099-B, 1099-DIV, 1099-G, 1099-INT, 1099-MISC, 1099-OID, 1099-PATR, 1099-R, 1099-S, 2284, 5498, 8109, and 8109-B are the major forms that fall in this excluded category.

(b) In addition, the payment vouchers for Forms, 940, 940-EZ, 941, 942 and 943 may not be reproduced as photocopies, or submitted for carbon copies, as substitute forms.

(c) Most of these forms have provisions for assessment of penalties for submitting non-OCR scannable substitute versions. For further information, see Publication 1179, Specifications for Paper Document Reporting and Paper Substitutes for Forms 1096, 1098, 1099 Series, 5498, and W-2G (revised annually).

02 THINGS YOU CANNOT DO TO INTERNAL REVENUE SERVICE PRINTED TAX FORMS TO MAKE THEM SUITABLE FOR USE AS SUBSTITUTE TAX FORMS.

1 You cannot, without prior Service approval, change any Internal Revenue Service tax forms or use your own (non-approved) versions, unless specifically permitted by this revenue procedure. Only minor changes are permitted to an official tax form, as OMB approval for IRS use was based on the specific format and content of each form submitted by IRS. Once approved, IRS does not have the authority to change (or authorize changes to) the official forms.

2 You cannot adjust any of the graphics on Forms 1040, 1040A and 1040EZ (except in those areas specified in this revenue procedure) without prior approval from the Service.

3 You cannot use your own version of Schedule A (Form 1040) unless you first get it approved. The Service wants only one Schedule A -- either yours or ours; yours needs prior approval from the Service.

4 With some exceptions, you cannot omit filling out pertinent referenced (numbered or lettered) lines of the official Schedule A (and other tax forms) when attaching a supporting statement. Exceptions to line completion requirements are listed in this revenue procedure.

5 You cannot use your own preprinted label on tax returns filed with the Service, unless you fully comply with the exception criteria specified in Section 17.06.

03 THINGS YOU CAN DO TO FILE COMPUTER-PREPARED/GENERATED FORMS. PRIOR APPROVAL IS NOT REQUIRED TO DO ITEMS 1, 2, 3 AND 4 BELOW.

1 You can duplicate the approved, computer-generated formats of Schedules A and B (shown in this revenue procedure), and use them without further approval.

2 You can fill in official Internal Revenue Service supplied forms using computer or word-processing equipment. Internal Revenue Service forms are designed for a vertical spacing of six lines to the inch, with money amount columns wide enough to allow for the computer printing of ten characters (typewriter spacing is 10 characters per inch).

3 You can change certain specified areas on the Forms 1040 and 1040A (spelled out in the revenue procedures) to assist computer- printing requirements and to allow for a little more room on certain lines.

4 If you meet the requirements, standards, and qualifications of this revenue procedure, you can, without prior approval, computer- generate your own substitutes of the tax forms (except for actual tax returns) not exhibited here. (See Agreement in Sec. 21.)

SEC. 7. APPROVAL

01 Basic Requirements. Preparers who desire to file substitute privately designed and printed tax forms and/or computer-generated and computer-prepared tax forms must develop such substitutes using these guidelines. These substitutes, unless excepted by revenue procedure, must be approved by the Service before being filed.

02 Requests for Approval

1 The Service cannot approve your substitute form until the official form has been published. Please propose your substitute after you have examined the official form.

(a) The Service sometimes releases advance proof copies of selected major tax forms that are subject to further changes and OMB approval before their release in final format for printing and release to the public. You may submit proposed substitutes of these advance proof forms, but until the final forms evolve we can only grant interim approval, based solely on these early proofs. These advance proofs are subject to significant change before forms are finalized. If these advance proofs are used as the basis for your substitute forms, you will be responsible for subsequently updating your final forms to agree with the final official version before use.

2 You should know the Service revenue procedure relating to the official form to meet your needs. Any alteration of forms must be within the limits acceptable to the Service. It is possible that, from one filing period to another, a change in law or a change in internal need (processing, audit, compliance, etc.) may change the allowable limits for the alteration of the official form.

3 When specific approval of any substitute form (other than Employee Plan applications described in Part B, Section 19, or an Electronically Filed return described in Part B, Section 21, which should be submitted to the addresses in those respective Sections) is desired, a sample of the proposed substitute should be forwarded for consideration by letter to the Internal Revenue Service, Attention: Substitute Forms Program Coordinator, R:R:R, 1111 Constitution Avenue, N.W., Washington, DC 20224. To expedite multiple forms approval, we prefer that your proposed forms be submitted in separate sets by return. For example, Forms 1040 and their normally related schedules or attachments should be submitted separately from Forms 1120, 1065, etc., if at all possible. Schedules and forms (e.g., Forms 3468, 4136, etc.) that can be used with more than one type of return (e.g., 1040, 1041, 1120, etc.) should be submitted only once for approval, regardless of the number of different tax returns with which they may be ultimately associated.

4 As no Service office except the ones specified in Section 7.02.3 above are authorized to approve substitute forms, unnecessary delay may result if forms are sent elsewhere for approval. All forms submitted to any other office must be forwarded to the above address for formal control, review, and official approval. No IRS office is authorized to allow deviations from this revenue procedure.

5 The Service does not review or approve the logic of specific software programs, nor confirm the calculations entered on forms output from these programs that are submitted for approval. The accuracy of the program itself remains the responsibility of the software package developer, distributor, or user. The Substitute Forms Program is primarily concerned with the pre-filing quality review of the final forms output, produced by whatever means, that are expected to be processed by IRS field offices. For the above reasons, it is suggested that you submit forms without including any "taxpayer" information such as names, addresses, monetary amounts, etc.

03 When to Send Proposed Substitutes. Proposed substitutes should be sent to the address listed in .02 above, as much in advance of the filing period for the form as possible. This is to allow adequate time for analysis and response and to permit notice to our field offices that your substitute is acceptable. Quarterly filed forms, such as the Form 941, must be submitted by the first day of the last quarter.

04 Accompanying Statement. When the sample substitute is submitted, there should be an accompanying statement that lists the form number of each substitute requested and detail those items that deviate from the official form in position, arrangement, appearance, line numbers, additions, deletions, etc. Included with each of the items should be a detailed reason or justification for the change and an approximation of the number of forms expected to be filed.

05 Approval/Non-Approval Letter. The Service sends a formal letter of approval/non-approval. Approval letters may contain qualifications for use of the substitutes. Non-approval letters may specify the changes required for approval, but also may require resubmission for approval. Telephone contact is used when warranted.

06 Duration of Approval

1 Approvals are good for only one calendar year (January through December) or, in the case of corporation tax forms (with the exception noted below), for the remainder of the quarters in the calendar year.

2 Please Note: In most cases each new filing season requires a new approval, even if the official form does not change. See the exceptions in 3 and 4 below.

3 Exception: Quarterly tax forms in the 94X series (Forms 941, 942, etc.) are approved only for one quarter. Each new quarter requires a new approval.

4 Exception: Limited continued use of a change approved for one tax year may be allowed for the same form in the following tax year. See .07 below for the limitations and for other requirements. Examples of such changes are the use of abbreviated words, revised form spacing, compressed text lines, shortened captions, etc., which do not change the consistency of lines or text on the official forms.

07 Limited Continued Use of an Approved Change

1 If you received written approval of a previous tax year substitute form governed by this revenue procedure and continue to use the approved change on your current tax year substitute form, you may revise your form to include this change and, without additional written approval, use it as a current tax year substitute form, provided you comply with the requirements in this revenue procedure. See exception in 2 below.

2 If you received written approval for a specific change on a specific form last year, such as deleting the vertical lines used to separate dollars and cents on some forms and schedules e.g., Schedules A & B of Form 1040, you may again make the same change on the same form this year if the item changed is present on this year's official form. Thus, the change allowed in last year's approved substitute Schedule A, for example, can be continued in your new substitute for this year. The new substitute does not have to be sent to the IRS and written approval is not required. However, the new substitute must conform to the official current year IRS form in other respects: date, Office of Management and Budget (OMB) approval number, sequence number, Paperwork Reduction Act Notice Statement, arrangement, item caption, line number, line reference, data sequence, etc. It must also comply with this revenue procedure -- which may have eliminated, added to, or otherwise changed the guideline(s) which affected the change approved last year. Additionally, you will be bound by the "Agreement" in Section 21.

3 Exception: Those written approvals which stated that the approved change or form would not be allowed in any other tax year, or for a temporary, limited, or interim approval pending resolution of a failure to meet one or more Service-prescribed requirements.

4 This authorization for continued use of an approved change is limited to the continuation of design logic from an immediately prior tax year substitute form to a current tax year substitute form.

08 Requested Copies. In our letter of approval, you may be requested to send to the Service eleven (11) copies of each approved form. When received, the copies will be used to notify Internal Revenue Service Centers that your substitute forms are approved. The requested forms should be assembled in sets. A set constitutes a return with the related schedules and forms in the same order as they will be filed, i.e., Form 1040, Schedules A, B, C, etc., and associated Forms 2119, 2441, etc.

09 Responsibility. Following the receipt of initial approval for a substitute forms package, or of a software output program to print substitute forms, it is the responsibility of the originator (designer or distributor) to provide each subsequent client firm or individual with the pertinent Service forms requirements which must be met for continuing acceptability. Examples of this responsibility include the use of prescribed print paper, font size, legibility, state tax data deletion, the legal requirements of the Paperwork Reduction Act Notice for informing all users of substitute forms of the official use and collection requirements stated in the instructions for the official IRS forms, completion of documents, etc.

10 Forms Approval Number. The Substitute Forms Program Coordinator Office, R:R:R, will assign a unique forms approval number to each firm that submits substitute paper forms for approval. This will be a permanently assigned control number that should be used on every form created by a particular firm.

1 This number should be printed at the bottom left margin area on the first page of every approved substitute paper form.

2 The Forms Approval Number for paper returns consists of 4-6 positions, set out in the following example configuration: (H9432)

(a) The first position (an alpha character) identifies the individual assigning the number within the Service.

(b) The second position (a numeric digit) identifies the year of issue of a number.

(c) The third position (a numeric digit) identifies the IRS Service Center with responsibility within the geographic location of the firm's home or national office location.

(d) The fourth, fifth, and sixth positions will be used as required to identify the assigned numeric approval number (i.e., 1, 22, or 333, etc.).

3 This number should not be used on optically scanned (OCR) forms, except for certain specified Forms 1040-ES.

11 Forms Approval Number for Electronically Filed Returns. The Electronic Filing Systems Office, R:E, will assign approval numbers for those forms included in the Electronic Filing Program.

1 This number should be printed at the bottom left margin area on the first page of every approved substitute electronically filed form.

2 This Forms Approval Number consists of 9 positions, set out in the following example configuration: (EFIBLOC29)

(a) The first and second positions (2 alpha positions) will identify the office assigning the number;

(b) The third position (1 numeric) will identify the year digit;

(c) The fourth, fifth, sixth, and seventh positions (4 alpha characters) will identify the firm name; and

(d) For Individual Income Tax Returns (Forms 1040 series), the eight and ninth positions (2 numerics) will identify the service center at which the returns should be filed. For Business Returns, the eighth and ninth positions will identify the service center at which the return should be filed.

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

01 Legal Requirements of the Paperwork Reduction Act of 1980. Public Law 96-511 requires that: (1) OMB approve all Service tax forms, (2) each IRS form contains (in the upper right corner) the OMB approval number and any expiration date, and (3) each IRS form (or its instructions) state why IRS is collecting the information, how it will be used, and whether or not the information is required to be furnished. This information must be provided to every user of any official or substitute tax forms.

02 Application of Act to Substitute Forms.

1 Approval Number and Date Is Required. All substitute forms must contain in the upper right corner (see marginal Printing, Sec. 12.02.1(c)) the OMB number and any expiration date that is on the official form.

2 Format Required (2 options).

(a) OMB No. XXXX-XXXX (preferred) or OMB # XXXX-XXXX

(b) OMB No. XXXX-XXXX (Preferred) Expires XXXXXX (mmddyy) or OMB # XXXX-XXXX Expires XXXXXX (mmddyy)

3 Required Explanation to Users of Substitute Forms. You must also inform the users of your substitute forms of the Service use and collection requirements stated in the instructions for the official Service form. If you provide your users or customers with the official IRS instructions, page 1 of each form must retain the Paperwork Reduction Act Notice Statement as on the official forms (usually in the lower left corner of the forms). Otherwise, you must duplicate the material in the statement and add the phrase, "For Paperwork Reduction Act Notice, See Separate Instructions."

(a) If the Service instructions are not provided to users of your forms, the exact text of the Paperwork Reduction Act Notice must be furnished separately. This notice reads, "We ask for this information to carry out the Internal Revenue laws of the United States. You are required to give us this information. We need it to insure that you are complying with these laws and to allow us to figure and collect the right amount of tax."

(b) If Service instructions are not provided, a copy of the alternative statement provided to users of your forms must be included with the forms you submit for approval.

03 Obtaining OMB Number, Date and Statement. The OMB approval number, expiration date, and use and collection requirements may be obtained from the official printed form (or its instructions), the reproduction proof (or instructions), or from the Service.

SEC. 9. GENERAL GUIDELINES

01 Official Form is the Standard. Because a substitute form is a variation from the official form, you should know the requirements of the official form for the year of use before you modify it to meet your needs. For the most frequently used tax forms, the quickest way to obtain an official form is to request reproduction proofs of these forms. (See Sec. 20.)

02 Design. Each form must follow the design of the official form as to format arrangement, item caption, line numbers, line references, and sequence.

03 State Tax Information Prohibited. State tax information must not appear (be visible) on the federal tax return or associated form or schedule which is filed with the Internal Revenue Service, except where amounts are claimed on or required by the federal return, e.g., line 5, Schedule A (Form 1040). (See Sec. 13.05 Block Out Methods.)

04 Federal and State Columns. When a form is designed with both federal and state columns, the federal column must be to the left of the state column and adjacent to the line caption. Again, state tax information must not be on a federal tax form.

05 Vertical Alignment of Amount Fields.

1 When a form is to be computer-prepared, you may remove the vertical line in the amount field that separates dollars from cents. When a form is to be computer-generated, vertically align the amount entry fields where possible. You must also use one of the ten- character amount formats shown in Part B, Sec. 3.04. Amount fields may be "rounded off" to dollars only, where form instructions specifically permit such entries.

2 When a form is to be manually prepared, the federal column must have a vertical line or some type of indicator in the amount field to separate dollars from cents if the official form has a vertical line. The cents column must be at least 3/16 or 2/10 inch wide.

06 Attachment Sequence Number. Please note that most forms have an "attachment sequence number" located just below the year designation in the upper right corner of the form. The Service uses this number to indicate the order in which forms are processed when filed with a return. On computer-prepared forms it must be printed in no less than 12-point bold-face type and centered below the form's year designation. On computer-generated forms, place the sequence number following the year designation for the tax form and separate with an asterisk. It is not necessary to duplicate the "Attachment Sequence Number" wording, except for the actual number. (See Forms Exhibits at end of this Revenue Procedure.)

07 Attachment Sequence Numbers Required. The attachment sequence number is required on most IRS forms. Please note that some of the numbers necessarily change each year. The specific sequence numbers used on official IRS forms must be duplicated on the representative substitute form. If a sequence number is not provided on the official form, it is not required on a substitute of that form either.

08 Paid Preparer's Information and Signature Area.

1 On Forms 1040A, 1040, and 1120, etc., the "Paid Preparer's Use Only" area may not be rearranged or relocated. You may, however, add three extra lines to the paid preparer's address area without prior approval. This applies to other tax forms as well.

2 On Form 1040EZ this information must be provided at the bottom of the form below the taxpayer's signature area. As an alternative, the printed Paid Preparer's Information and Signature Area from either a Form 1040 or 1040A may be attached to the bottom of Form 1040EZ.

09 Assembly of Forms. When filing a return, (i.e., Form 1040), the return must be arranged in this order: (1) the tax return, (2) Form 1040 schedules and forms in sequence number order, (3) all others (Form 1120, 1120S, 1065, 1041, etc.), lettered schedules (Schedule D, etc.) in alphabetical order and numbered forms in numerical order (Forms 2220, 4626, etc.), (4) supporting statements in the same sequence as the forms they support, and (5) additional information required or voluntarily submitted. In this way, they are received in the order in which they must be processed. If you do not send them to us in this order, the Service has to delay the return package to disassemble them and place them in this order before processing is continued.

SEC. 10. PHYSICAL ASPECTS AND REQUIREMENTS: PAPER

01 Paper Content. The paper must be:

1 Chemical wood writing paper that is equal to or better than the quality used for the official form;

2 at least 18 pound (17" x 22", 500 sheets) or

3 at least 45 pound (25" x 38", 500 sheets).

02 Paper Prohibited. Carbon-bonded paper is prohibited from use for all substitute forms filed with the Service.

03 Paper with Chemical Transfer Properties -- Limited Use.

Chemical transfer paper for all substitute forms may be used only when the following specifications are met.

1 Each ply within the chemical transfer set of forms must be labeled.

2 Only the top ply (ply one and white in color), the one which contains chemical on the back only (coated back), may be filed with the Service. For example, a set containing three plies would be constructed as follows: ply one (coated back), "Federal Return, File with IRS"; ply two (coated front and back), "Taxpayer's copy", and ply three (coated front), "Preparer's copy."

3 The file designation, "Federal Return, File with IRS," for ply one must be printed in the bottom right margin (just below the last line of the form) in 12-point, bold-face type. It is not mandatory, but recommended, that the file designation, "Federal Return, File with IRS," be printed in a contrasting ink for visual emphasis.

4 Carbon Paper. We prefer that you do not attach any carbon paper to any return you file with the Service.

04 Paper and Ink Color. We prefer that the color of paper substantially duplicates that of the original form. You may use white paper. This means that your substitute must be printed in black ink and may be on white or on the color paper the Service form is printed on. Forms 1040A, 1040EZ, and 1040 substitute reproductions may be in black ink without the colored screening. The only exception to this rule is Form 1041-ES, which should always be printed with a very light gray shading in the color screened area. This is necessary to assist us in expeditiously separating this form from the very similar Form 1040-ES.

05 Page Size. Substitute or reproduced forms and computer prepared/generated substitutes may be the same size as the official form (8" x 11", in most cases) or they may be the standard commercial size (8-1/2" x 11") exclusive of pin-feed holes. The thickness of the stock cannot be less than .003 inch.

06 Lined Paper. Computer-generated substitute forms must be submitted on quality machine paper. Lined, color-barred paper is also acceptable. Lined paper may assist Service employees during processing of the returns by allowing speedy and accurate location of tax entries corresponding to line captions. The lines provide the basic means for eye-travel from one side of the form to the other, and significantly reduce processing errors. Only original forms should be filed with IRS, as copies frequently do not meet legibility requirements, especially copies of forms originally printed on color- barred paper stock.

07 Exceptions to Lined paper Requirement. If your printer has underlining capability, you do not have to use lined or color-barred paper. You should consistently underline every other text line on the form. This may be every second, third, or fourth line of text. The underlining must be a continuous line and extend from the left text margin to the right text margin and be the same length for all lines on the page. Also, the use of printed vertical and horizontal graphics can produce an acceptable linear image of the official form, and is an approvable exception on a case by case basis.

SEC. 11. PHYSICAL ASPECTS AND REQUIREMENTS: PRINTING

01 Printing Medium. The private printing of all substitute tax forms must be by conventional printing processes, photocopying, computer-graphics, or similar reproduction processes.

02 Legibility. All forms must have a high standard of legibility, both as to printing and reproduction and as to fill-in matter. The Service reserves the right to reject those with poor legibility. The ink and printing method used must ensure that no part of a form (including text, graphics, data entries, etc.) develops "smears" or similar quality deterioration, including any subsequent copies or reproductions made from an approved master substitute form, either during preparation or during Service processing.

03 Type Font. Many federal tax forms are printed using "Helvetica" as the basic type font. We request that you use this type font when composing substitute forms.

04 Print Spacing. Substitute forms should be printed using a 6 lines/inch vertical print option. They should also be printed horizontally in 10 pitch pica (i.e., 10 print characters per inch) or 12 pitch elite (i.e., 12 print positions per inch).

05 Image Size. The image size of printed substitute forms should be as close as possible to that of the official form. You may omit any text on both computer-prepared and computer-generated forms that is solely instructional.

06 Title Area Changes. To allow a large top margin for marginal printing and more lines per page (see Sec. 12 below), the title line(s) for all substitute forms (not including the form's year designation and sequence number, when present), may be photographically reduced by 40 percent or reset as one line of type. When reset as one line, the type size may be no smaller than 14-point. You may omit "Department of the Treasury, Internal Revenue Service" and all reference to instructions in the form's title area.

07 Remove Government Printing Office Symbol. When privately printing substitute tax forms, the Government Printing Office symbol and/or jacket number must be removed. In the same place, using the same type size, print the Employer Identification Number (EIN), the Social Security Number (SSN) of the printer or designer, or the IRS assigned Forms Approval Number. (We prefer this last number be printed in the lower left area of the first page of each form.)

08 Printing On One Side of Paper. While it is preferred that both sides of the paper be used for substitute and reproduced forms, resulting in the same page arrangement as that of the official form or schedule, the Service will not object if only one side of the paper is used.

09 Photocopy Equipment. The Service does not undertake to approve or disapprove the specific equipment or process used in reproducing official forms. Photocopies of forms must be entirely legible and satisfy the conditions stated in this and other revenue procedures.

10 Reproductions. Reproductions of official forms and substitute forms which do not meet the requirements of this revenue procedure may not be filed instead of the official forms. Illegible photocopies are subject to being returned to the filer for resubmission of legible copies.

11 Removal of Instructions. You may remove all references to instructions. No prior approval is needed. One exception is that the statement "For Paperwork Reduction Act Notice, See Instructions", must be retained or a similar statement provided on each form.

SEC. 12. PHYSICAL ASPECTS AND REQUIREMENTS: MARGINS

01 Margin Size.

1 The format of a reproduced tax return when printed on the page must have margins on all sides at least as large as the margins on the official form. This allows room for Service employees to make the necessary entries on the form during processing.

2 A one-half to one-quarter inch margin must be maintained across the top, bottom, and both sides (exclusive of any pin-fed holes) of all computer-generated substitutes. The margin area is also used by Service employees to make necessary entries on the form during processing.

3 The marginal, perforated strips containing the pin-fed holes must be removed from all forms prior to filing with the Service.

02 Marginal Printing.

1 Non-Tax Material Allowed in Limited Areas.

(a) On any 8 or 8 1/2-inch-wide Service or substitute form, you may print your logo, company or firm name, identifying and collation symbols, etc., in the left half of the top margin.

(b) With the exception of the actual tax return forms (i.e., Forms 1040, 1040A, 1040EZ, 1120, 940, 941, etc.), you may also print in the left vertical margin and in the left half of the bottom margin.

(c) Printing is never allowed in the right half of the top of the tax return form (i.e., Forms 1040, 1040A, 1040EZ, 1120, 940, 941, etc). The Service uses this area to imprint a File Location Number for each return.

2 Prior Approval Not Required. Prior approval is not required for the marginal printing allowed in 1 above when used with the unchanged exhibits in this revenue procedure or when printed on an official form, on a photocopy of an official form, or on an (unchanged) IRS reproduction proof.

3 Prior Approval Required. The marginal printing allowance in 1 above is also the guide for the preparation of acceptable substitute forms. There is no exception to the requirement that no printing is allowed in the right half of the top margin of the tax return form.

SEC. 13. APPROVED SUBSTITUTE FORMATS FOR FORM 1040 SCHEDULES

01 Exhibits of Approved Formats. Two sets of exhibits (Exhibits A-1, B-1, A-2 and B-2) are at the end of this revenue procedure. They are acceptable substitutes for the official forms. They are intended to be used in place of the official forms and may be used without prior approval. Both sets are usable for manual entry or computer preparation. Vertical spacing is six (6) lines to the inch. You may also refer to them as examples of how the guidelines in this revenue procedure may be used in some specific cases. Please note that the Service does not supply reproduction proofs for these exhibits.

02 Printing or Duplication of Exhibits A-1 and A-2 and B-1 and B-2. You may (1) print these exhibits or (2) duplicate them photographically or by using photo-reproduction techniques, providing your printed or reproduced images are exactly like the ones in the exhibits. With the exception noted below, nothing can be changed.

03 EXCEPTION. In Exhibit A-1 and A-2 you may change the areas containing "other" items (lines 7, 9b, 19, 20, and 25) as follows: (1) the areas inside the perimeter of the boxes containing the dash leaders (--) may be used to print any particular deduction item associated with the corresponding deduction category, and (2) the dash-leaders may be removed (but you may not change the amount column box size or position).

04 Exhibits A-1 and A-2.

1 Exhibit A-1. The substitute Schedule A format may be used as a single sheet or as one of the copies of a snapset. It is designed to be used in place of the official Schedule A (Form 1040).

2 Exhibit A-2. This substitute Schedule A format may be used as a single sheet when both federal and state tax information is placed on the same form.

3 No State Tax Information. No state tax information can appear on these forms when filed with the Form 1040. The state column may be present but the state tax information must not be visible when fined with the Service. We prefer that the entire state column be completely blocked out.

05 BLOCK OUT METHODS. A suggested method to block out state tax information is: (1) place the substitute form in a clear plastic folder, (2) on the folder, place a strip of opaque material the exact width and length of the column you wish to block out, then (3) photocopy the substitute form while still in the folder. The result will be a form with only the federal tax information visible. Another method is to take a black marking pen and, using either vertical or horizontal strokes, cross out the state figures. Carbon interleaved sets may be used where the amounts entered in the state column are filled in with black carbon overprint. This copy may be filed with the return.

06 Exhibits B-1 and B-2. These exhibits correspond to Exhibits A-1 and A-2, and the provisions in .04.1 and 2 above apply. Both of these exhibits are acceptable for use in place of the official Schedule B (Form 1040).

07 Exhibits A-1 and B-1 or A-2 and B-2. These exhibits may be used as sets when the return calls for both Schedule A and B.

1 Acceptable computer-generated formats for these schedules are also shown in the Exhibits section of this revenue procedure. The exhibits are for Schedules A and B. They are acceptable substitutes for the official versions of these forms. They are intended to be used (without change) in place of the official forms and may be used without prior approval. All lines (including those not used for tax information) must be printed. (Any change to text or format of an exhibit requires prior written approval.) Vertical spacing is six (6) lines to the inch. You may also refer to them as examples of how the guidelines in this revenue procedure may be used in specific cases.

2 A combination of upper and lower case print fonts is acceptable in producing the computer-generated forms included in this procedure.

3 This same logic for computer-generated forms can be applied to any Service form that is normally reproducible as a substitute form, with the exception of tax return forms as discussed elsewhere.

SEC. 14. REQUIRED PREPARATION OF FORMS

01 Completely Fill In Lines. You must completely fill in all the specified numbered or referenced lines as they appear on the official forms on computer-prepared or generated forms, (not just the totals) but all the items that make up the totals as well, before attaching any supporting statement (see Sec. 15 below for exceptions).

02 IRS Processing of Forms. The Service processes the return based on information entered on the official forms or approved substitutes. References are made to attachments only as required by law, and as requirements direct. When you fail to complete all the pertinent lines on the official forms, Service Tax Examiners have to locate the information on your attachment and write it on the proper line of the official form. This time consuming process causes delays in processing the return and increases the potential for errors both in transcription and interpretation.

03 Notification of Preparers. The Service is continuing a program to notify preparers who fail to meet the requirements for acceptable substitute forms, as stated in this revenue procedure, through telephone and/or written contact by the affected IRS office. The notification may include returning unacceptable substitute forms for resubmission of acceptable forms.

SEC. 15. EXCEPTIONS TO LINE COMPLETION REQUIREMENTS

01 Zero Entries. Detailed information for any deduction or income category may be omitted from the printout if the category total to be reported is zero. However, the substitute form must show the total (zero when applicable) for each category. This means when no tax information is applicable, leave the line blank.

02 Lines Captioned "Other" (All Forms). It is not necessary to fill in every numbered or referenced line when the line caption calls for "Other," i.e., "Other (itemize)," "Other (specify)," "Other (attach schedule)," etc. Examples of this exception are lines 7, 9b, 19, 20, and 25 for Schedule A, Form 1040. When this occurs, you may use a supporting statement and enter only the total amount of these "Other" items on the numbered line of the official form. However, we prefer that you use the space on the official form when it is adequate.

03 Schedule A (Form 1040). All numbered and lettered lines must be filled in, if applicable. Supporting statements may be used to give the details of the totals entered on such lines but may not be used as a substitute for a collection of lines. For example, the detailed information for "Taxes" may not be shown on a supporting statement (supplemental schedule) and only line 8 filled in. Lines 5 through 7 must also be completed. Also, for example, the details for "State and local income taxes" may be shown on a supporting statement and the total of such taxes entered on line 5. Also, the total of itemized deductions must be entered on line 26.

1 On line 7 the term "excise tax" must not be entered in lieu of the legitimate automobile-related, state personal property tax. Enter valid personal property taxes identified only as "personal property tax" on Schedule A.

04 Schedule B (Form 1040). Lines 1 and 5 need not be filled in on the form. A supporting statement may be used for the details of interest and dividend income and the appropriate totals of such income entered on lines 4 and 6, unless nominee distribution or accrued interest criteria apply. (See the tax package instructions concerning interest and dividends.)

05 Schedule C (Form 1040). All lines must be filled in when applicable, except the line where "Other expenses -- list type and amount" is listed. (See instruction in .02 above.) Also, all Questions A through J must be present and answered, except that if box (4) on line G is checked, Question H may be skipped.

06 Schedule E (Form 1040)

1 When there are entries on page 1 for any of Part I, the following requirements must be met: (1) In Part I, lines 1 and 2, the questions must be answered and tax information must be entered on the lines provided.

2 Supporting statements may be used for the details of rental and royalty income and expenses. The appropriate totals must be carried over and entered in the total column for lines 3, 4, 11, 19, 20, and 24 through 26.

3 Part II (page 2) -- The income and loss from various partnerships, estates or trusts, small business corporations, etc. also may be detailed on a supporting statement, but the appropriate total income and total loss must be entered on lines 28 through 41.

4 As applicable, either page 1 or page 2 may be filed separately and independently of each other, as a valid Schedule E. Both pages are not required, unless the entered tax data applies to all parts of the form, or unless line 41 requirements apply.

07 Schedule F (Form 1040). If the cash method is used, only page one is needed. Otherwise both pages one and two must be entirely printed. Page two cannot be filed separately.

08 Schedule SE (Form 1040). Either Short Schedule SE (page 1) or Long Schedule SE (page 2) may be used, as applicable. Most taxpayers can use the short Schedule SE. It is only necessary to file the applicable page.

SEC. 16. SUPPORTING STATEMENTS

01 Use of Supporting Statements. Supporting statements are to be used to explain an individual line entry on an official or substitute form. Unless specifically authorized by this revenue procedure (see Sec. 15), they must not be used to avoid completing required lines on the official form, or in lieu of a prescribed official schedule or form. Supporting statements are never to be used until the required official return or form they support are first totally filled in (completed). It is not acceptable to submit a blank or incomplete official form that refers to a supporting statement, and then to submit the form data entries solely on the statement, in lieu of completing a tax return or form.

02 Supporting Statements. Supporting statements must: (1) provide details and explain entries made on the official form, (2) furnish all required information in the same sequence as called for on the official form, (3) furnish any additional information in the order of appearance on the form to which it refers, and (4) show taxpayer's name and social security number (SSN) or employer identification number (EIN), as applicable, and (5) clearly identify which official form it supports.

03 Cross-Reference. Each supporting statement must be referenced to the form it supports, and the entry on the form must be cross- referenced to the supporting statement. For example, put "Statement X" on the top of the supporting statement that contains the identified line number and the supporting information, and put "See Statement X" on the line of the form that references that statement.

04 Extent of Use. You may attach supporting statements to explain or support any line item on an official or approved substitute form.

05 Assembly. For filing purposes, supporting statements are not attached directly to their related forms. Rather, all supporting statements are assembled in the same sequence as the forms they support; they are then placed at the back of the form package, after the lettered and numbered forms (see Sec. 9.09).

06 Multiple Supporting Statements. Supporting statements for each numbered or letter form must have a separate page for its supporting statement(s). Each page should be the size of the form it supports, or it may be 8" x 11" or 8 1/2" x 11".

07 Not Reviewed for Approval. The Service does not give its approval for specific supporting statements. The taxpayer or the tax practitioner for the taxpayer, must meet the needs as they arise, using the guidelines in this revenue procedure.

SEC. 17. SPECIFICATIONS FOR FILING SUBSTITUTE FORMS

01 Filing Substitute Forms. Follow the same instructions as for filing official forms. These instructions are in the taxpayer's tax package, or in the related form instructions.

02 Computer-Prepared Tax Forms. For filing purposes, the Service will accept computer-prepared tax returns (i.e., Forms 1040, 1040A, 1040EZ, 1120, 940, 941, etc.) filled in by a computer or by word- processing equipment or similar manual equipment, but these forms must be preprinted.

03 Computer-Generated Forms. For filing purposes, the Service will accept computer-generated versions of forms that are attached to individual and business income tax returns, provided the substitutes and their manner of completion meet the guidelines prescribed herein.

04 Combination of Manually Prepared and Computer- Prepared/Generated Forms. For filing purposes, the Service will accept substitute tax forms that contain a combination of computer- prepared/generated and manually filled-in information.

05 Taxpayer and Preparer Signatures. All taxpayer signatures on forms to be filed with the Service must be original signatures, affixed subsequent to the reproduction process. However, the income tax preparer can satisfy the manual signature requirement by signing a completed income tax return form, making a legible photocopy of the return form, and having the taxpayer sign and file the photocopy. (See Rev. Rul. 78-370, 1978-2 C.B. 336.)

06 Use Preaddressed Internal Revenue Service Label. When filing a substitute return, always use the preaddressed label provided in the tax package the Service sent to the taxpayer, when available. This label should be requested from taxpayer-clients by the practitioner completing each tax return. The use of this label (or its precisely duplicated label information) is extremely important for the efficient, accurate, and economical processing of a taxpayer's return. Labeled returns indicate that a taxpayer is an established filer and permits us to automatically accelerate processing of those returns. This results in quicker refunds, accurate names/addresses and postal deliveries, and less manual review by IRS functions. If taxpayer name and/or address is incorrect, line out old material and insert the corrections on the preaddressed label provided, or on the surrounding return label area.

1 When the pre-printed Service label is not used, the same pre- printed label information consisting of the social security number (SSN), and all name and address information from that label must be duplicated and printed or typed directly onto, either:

(a) Your own substitute label, or

(b) The prescribed name and address area of the tax return itself.

2 Do not under any circumstances include either the Service pre- printed check digits or a practitioner-derived Name Control on any return prepared and filed with the Service.

3 Use only the following label information format for single filers:

     000-00-0000

     000-00-0000 000-00-0000

08 Voluntarily Submitted Information. Additional information required or voluntarily submitted should be on the same size paper as the official form and attached to the return following the supporting statements. (See Sec. 9.09)

SEC. 18. GUIDANCE FROM OTHER REVENUE PROCEDURES

01 Guidance for the substitute tax forms not covered in this revenue procedure and the revenue procedures which govern their use, are as follows:

1 Revenue Procedure 88-55, IRS Publication 1355, Requirements and Conditions for the Reproduction, Private Design, and Printing of Substitute Forms 1040-ES.

2 Revenue Procedure 91-45, IRS Publication 1141, General Rules and Specifications for Private Printing of Substitute Forms W-2 and W-3.

3 Revenue Procedure 91-36, IRS Publication 1179, Specifications for Paper Document Reporting and Paper Substitutes for Forms 1096, 1098, 1099 Series, 5498, and W-2G.

4 Revenue Procedure 91-46, IRS Publication 1187, Specifications for Filing Form 1042S, Foreign Person's U.S. Source Income Subject to Withholding, on Magnetic Tape.

5. Revenue Procedure 91-33, IRS Publication 1220, Specifications for Filing Forms 1098, 1099, 5498, and W-2G Electronically or on Magnetic Tape, Tape Cartridge, 3 1/2, 5 1/4 and 8 inch Magnetic Diskettes.

6 Revenue Procedure 83-63, IRS Publication 1223, Specifications for Private Printing of Substitute Forms W-2c and W-3c.

7 Revenue Procedure 90-43, IRS Publication 1255, Requirements and Conditions for Filing Forms 1098, 1099 Series, 5498 and W-2G on 8 inch Diskette.

SEC. 19. ORDERING REVENUE PROCEDURES

01 If you receive Publication 1045, Information for Tax Practitioners, you may use the Form 3975, Order Blank for Revenue Procedures, contained therein to order the following revenue procedures:

1 Pub. 1167, the revenue procedure on substitute printed, computer-prepared, and computer-generated tax forms and schedules.

2 Pub. 1220, the revenue procedure on electronic or magnetic tape and magnetic diskette reporting for information returns (Forms 1098, 1099 series, 5498, and W-2G).

3 Pub. 1345, Handbook for Electronic Filers of Individual Income Tax Returns (Tax Year 1991).

02 The following revenue procedures can now only be ordered individually. They are no longer in the Practitioner Program.

1 Pub. 1141, the revenue procedure on specifications for private printing for Forms W-2, and W-3.

2 Pub. 1355, the revenue procedure on the requirements for substitute Form 1040-ES.

3 Pub. 1179, the revenue procedure on paper substitute information returns (Forms 1098, 1099 series, 5498, 1096, and W- 2G).

4 Pub. 1192, Catalog of Reproducible Forms, Instructions, and Publications.

5 Pub. 1223, the revenue procedure on substitute Forms W-2c and W-3c.

6 Pub. 1239, Requirements and Conditions for Submitting Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips, on Magnetic Tape (Rev. Proc. 89-55).

7 Pub. 1245, Magnetic Tape Reporting for Forms W-4 ( Rev. Proc. 90-9).

8 Pub. 1255, the revenue procedure on 8 inch magnetic diskette reporting for information returns (Forms 1098, 1099 series, 5498, and W-2G).

03 The revenue procedures listed above in 02 may be obtained by calling the appropriate Forms Distribution Center address below, according to your geographic state location. Be sure to order using IRS Publication number. If you are located in:

1 Alaska, Arizona, California, Colorado, Hawaii, Idaho, Montana, Nevada, New Mexico, Oregon, Utah, Washington, Wyoming, call your request to:

     WADC

     CADC

     EADC

01 The Service provides for the public camera-ready reproduction proofs of many of its printed tax forms. These reproduction proofs can only be ordered by using Form 6747, Order for Reproduction Proofs. Form 6747 can be obtained from the EADC (see address above) by ordering IRS Publication 1192, Catalog of Reproducible Forms, Instructions and Publications (which contains Form 6747).

1 Recorded forms distribution information is continuously available, and may be accessed by dialing (804) 329-6670 or 1056 (not toll-free numbers). This recording provides for the receipt of form requests and inquiries at the end of the taped message.

02 Basic specifications such as margin, pagination, etc., will be printed in the margins of the reproduction proofs and must be removed before printing. The official reproduction proof margins across the top, bottom, and sides must be maintained on all reproductions and substitute forms.

03 A charge of $1.00 per page will be made for each reproduction proof regardless of page size. Remittance is to be submitted with your order for reproduction proofs.

SEC. 21. AGREEMENT

Any person or company who uses substitute forms and makes all or part of the changes specified in this revenue procedure, agrees to the following stipulation: The Service presumes the changes are made in accordance with these procedures and, as such, will be noninterruptive to the processing of the tax return. Should any of the changes prove to be not exactly as described, and as a result become disruptive to the Service during processing of the tax return, the person or company agrees to accept the determination of the Service as to whether or not the form may continue to be used during the filing season, and also agrees to work with the Service in correcting noted deficiencies. Notification of deficiencies may be made by letter, phone contact, or both.

PART B. -- SPECIFIC

SECTION 1. GENERAL

The specifications contained in this part of the revenue procedure define specific, detailed requirements for certain forms and conditions. These specifications must be adhered to in producing acceptable substitute forms as defined herein.

SEC. 2. CONDITIONS-TAX RETURNS (FORM 1040, 1040A, 1040EZ, 1120, ETC.)

01 Acceptable Forms.

1 COMPUTER-GENERATED VERSIONS. Computer-generated versions of a tax return form (e.g., Form 1040, 1040A, 1040EZ, 1120, etc., which requires a signature and that establishes tax liability) are now permitted, but only under the following conditions.

(a) These substitute returns must be printed on plain white paper. Lined or color-barred paper may be used for all other (non- tax return) forms.

(b) Substitute returns (e.g., Forms 1040, 1040A, 1040EZ, 1120, etc.) must be exact textual and graphic reproductions of the Service tax returns that they represent. No text can be added, deleted, or changed. The end product result should be basically a mirror image of the Service tax return to be acceptable. It must be readily identifiable as a valid tax return.

(c) Various computer-graphic print mediums such as laser printing, dot matrix addressable printing, etc., may be utilized to produce the substitute forms.

(d) The substitute return must be the same exact number of pages, and contain the same page text as the official return.

(e) All computer-generated tax returns MUST be submitted for approval prior to their use.

(f) See Exhibit CG-1040 in this revenue procedure for examples of acceptable type substitute computer-generated tax returns.

02 Prohibited Forms.

1 Tax returns (e.g., Forms 1040, etc.) CANNOT be computer- generated on lined or color-barred paper, using the basic non-graphic layouts acceptable for all other (non-tax return) substitute forms and schedules.

2 Tax returns that differ in any manner from the official IRS forms, which makes them non-standard or unacceptable.

3 Any substitute tax return not approved prior to filing with the Service.

03 Changes permitted to the forms 1040, 1040A & 1040EZ.

1 Certain changes (listed below) are permitted to the graphics of the form without prior approval, but these changes apply only to preprinted forms as described in 01 above.

2 Changes not requiring prior approval are good only for the annual filing period, which is the current Tax Year.

3 Other Changes Not Listed. All changes not listed here require prior approval from the Service BEFORE the form may be filed with the Service.

SEC. 3. CHANGES PERMITTED TO GRAPHICS (FORMS 1040A, 1040 AND 1040EZ).

01 Adjustments

You may make minor vertical and horizontal spacing adjustments to allow for computer or word-processing printing. This includes widening the amount columns or tax entry areas so long as the adjustments do not exceed other provisions stated in revenue procedures. No prior approval is needed for these changes. However, the users of forms with such changes are bound by the "Agreement" in Part A, Section 21.

02 Name and Address Area.

1 The horizontal rules and instructions within the name and address area may be removed and the entire area left blank; no line or instruction can remain in the area. However, the statement regarding use of the IRS mail label should be retained.

2 The heavy ruled border (when present) that outlines the name and address area must not be removed, relocated, expanded or contracted.

3 Required Format

(a) When the name and address area is left blank, as provided in 1 above, the following format must be used when printing the taxpayer's name and address. Otherwise, unless the taxpayer's preprinted label is affixed over the information entered in this area, the lines must be filled-in as shown.

1st name line (35 characters maximum)

2nd name line (35 characters maximum)

In-care-of name line (35 characters maximum)

City, State (24 char. max.), one blank char., & ZIP (five char.)

(b) When there is no in-care-of name line, the name and address will consist of only three lines (single filer) or four lines (joint filer). Examples of the formats follow:

Example of name and address (joint filer) with no in-care-of name line:

     JOHN Z. JONES

     JOHN Z. JONES

1 The vertical lines separating the format arrangement of the SSN/EIN may be removed.

2 When the vertical lines are removed, the SSN and EIN formats must be 000-00-0000 or 00-0000000, respectively.

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 following the whole dollar amounts whether or not the vertical line that separates the dollars from the cents is present.

3 You may omit printing the cents, but all amounts entered on the form must follow a consistent format. You are strongly urged to round off the figures to whole dollar amounts, following the official return instructions.

4 When printing money amounts, you must use one of the following ten-character formats: (a) 0,000,000. (b) 000,000.00

5 When there is no entry for a line leave the line blank.

05 "Paid Preparer's Use Only" Area.

1 On all forms, where present, the paid preparer's information area may not be rearranged or relocated.

2 You may add three lines and remove the horizontal rules in the preparer's address area.

3 Form 1040EZ preparers must sign the return and provide all other required information. This information should be provided at the bottom of the form below the taxpayer's signature area. (See Part A, Section 9.)

SEC. 4. CHANGES PERMITTED TO FORM 1040A GRAPHICS

No prior approval is needed for the following changes (for use with computer-prepared forms only):

01 Line 4.

This line may be compressed vertically (to allow for same line entry for the name of the qualifying child) by using the following caption: "Head of household; child's name" (name field).

02 Other Lines.

Any line whose caption takes up two or more vertical lines may be compressed to one line by using contractions, etc., and by removing instructional references.

03 Page 2 (Form 1040A).

All lines must be present and numbered in the order shown on the official form. These lines may also be compressed as in .02 above.

04 Color Screening.

It is not necessary to duplicate the color-screening used on the official form. A substitute Form 1040A may be printed in black and white only, with no color screening.

SEC. 5. OTHER CHANGES PROHIBITED

No other changes to the Form 1040A graphics are allowed without prior approval.

SEC 6. CHANGES PERMITTED TO THE FORM 1040 GRAPHICS

No prior approval is needed for the following changes (for use with computer-prepared forms only):

01 Line 4.

This line may be compressed horizontally (to allow for a larger entry area for the name of the qualifying child) by using the following caption: "Head of household; child's name" (name field).

02 Line 6c.

The vertical lines separating columns (1) through (5) may be removed. The captions may be shortened to allow a one-line caption for each column.

03 Other Lines.

Any other line whose caption takes up two or more vertical lines may be compressed to one line by using contractions, etc., and by removing instructional references.

04 Line 22.

1 This line may be expanded vertically to a maximum of 3 lines.

2 The amount entry box must remain a single entry.

05 Line 38.

You may change the line caption to read "Tax" and computer-print either the words "FROM TAX TABLE," "TAX RATE SCHEDULE," OR "FORM 8615" as the appropriate text.

06 Line 39.

You may change the caption to read: "Additional taxes from Form" and computer-print only the form(s) that apply.

07 Line 44. You may change the caption to read: "General business credit from Form" and computer-print only the form(s) that apply.

08 Line 49.

You may change the caption to read: "Recapture taxes from Form" and computer-print only the form(s) that apply.

09 Color Screening.

It is not necessary to duplicate the color-screening used on the official form. A substitute Form 1040 may be printed in black and white only, with no color screening.

SEC. 7. OTHER CHANGES PROHIBITED

No other changes to the Form 1040 graphics are permitted without prior approval.

SEC. 8. ACCEPTABLE FORMATS FOR COMPUTER-GENERATED FORMS AND SCHEDULES

01 Exhibits of acceptable computer-generated formats for the schedules usually attached to the Form 1040 are shown in the Exhibits section of this revenue procedure.

02 Use of Acceptable Formats. If your computer-generated forms appear exactly like the exhibits, no prior authorization is needed.

03 Changes to exhibits are not permitted without prior approval. Any change to the text or format of any of the exhibits requires prior written approval.

SEC. 9. COMPUTER-GENERATED FORMS NOT SHOWN AS EXHIBITS IN THIS REVENUE PROCEDURE

01 Those desiring to computer-generate forms not shown here may do so, but they must design such forms themselves by following the manner and style of those in the Exhibits section of this revenue procedure, and by taking care to observe other requirements and conditions stated here.

02 Computer-generated forms so designed do not require prior approval from the Service. However, the user of such forms is bound by the "Agreement" in Part A, Sec. 21 above. The Service encourages the submission of all proposed forms for review and approval.

03 If you wish, you may submit any substitute form to the Service for approval consideration, or you may submit only a representative sample of your forms.

SEC. 10. INSTRUCTIONS FOR PREPARING COMPUTER-GENERATED SUBSTITUTES

01 Format Arrangement

The format of each substitute schedule or form must follow the format of the official schedule or form as to item captions, line references, line numbers, sequence, form arrangement and format, etc. Basically try to make the form look like the official one, with readability and consistency being primary factors. You may use periods and/or other special characters to separate the various parts and sections of the form. DO NOT use alpha or numeric characters for these purposes. With the exceptions in .02 below, all line numbers and items must be printed even though an amount is not entered on the line.

02 Line Numbers.

1 When a line on an official form is designated by a number or a letter, that designation (reference code) must be used on a substitute form.

2 The reference code must be printed to the left of the corresponding captioned line and also immediately preceding the data entry field even if there is no reference code immediately preceding the data entry field on the official form. If an entry field contains multiple lines but shows the line references only one time on the left and right side of the form, do not use more than the same number of line references on the substitute return.

3 In addition, the reference code that is immediately before the data field must either be followed by a period or enclosed in parentheses. There also must be at least two blank spaces between the period or the right parenthesis and the first digit of the data field. (See example below.)

4 A decimal point (i.e., a period) should be used for each money amount regardless of whether the amount is reported in dollars and cents or in whole dollars, or whether or not the vertical line that separates the dollars from the cents is present. The decimal points must be vertically aligned when possible.

 Example:

With the exceptions noted below, when printing multiple page forms the entire form with all its parts and pages must be printed. When printed on continuous forms, they must be burst and pin-fed holes removed before filing with the return.

04 Exception to Forms that must be entirely printed in whole or in part.

1 On Schedule E, it is not necessary to print both pages if data does not apply. Either page one or page two can be printed and filed separately.

2 On Schedule F, depending on which accounting method is used (cash or accrual), the following will apply. If the cash accounting method is used only page one of Schedule F needs to be printed. Otherwise both page one and two must be entirely printed. Page two cannot be filed separately.

3 On Schedule SE, it is not necessary to print both pages. You may print either the Short Schedule SE (page 1), or the Long Schedule SE (page 2) as applicable.

SEC. 11. ADDITIONAL INSTRUCTIONS FOR ALL FORMS

01 Internal control numbers and identifying symbols of the computer preparer may be shown on the substitute, if the use of such numbers or symbols is acceptable to the taxpayer and the taxpayer's representative. If shown, such information must not be printed in the top one-half inch clear area, from the center to the right edge, of any form or schedule requiring a signature. With the exception of the actual tax return form (i.e., Forms 1040, 1120, 940, 941, etc.), you may also print in the left vertical and bottom left margins. The bottom left margin you may use extends 3 1/2 inches from the left edge of the form. (See Part A, Sec. 12 for more information on this subject.)

02 Descriptions for captions, lines, etc., appearing on the substitute forms may be limited to one print line by using abbreviations and contractions, and by omitting articles, prepositions, etc. However, sufficient key words must be retained to permit ready identification of the caption, line or item.

1 Explanatory detail and/or intermediate calculations for derivation of fine line totals, may be included on the substitute. We prefer that such calculations be submitted in the form of a supporting statement. If intermediate calculations are included on the substitute, the line on which they appear may not be numbered or lettered. Intermediate calculations may not be printed in the right column. This column is reserved for official numbered and lettered lines that correspond to the ones on the official form. If a supporting statement is submitted, intermediate calculations or subtotals may be formatted at the preparer's option.

2 Text prescribed for the official form, which is solely instructional in nature, e.g., "Attach this schedule to Form 1040," "See instructions," etc., may be omitted from the substitute form.

3 Information for more than one schedule or form may not be shown on the same printout page. It is strongly recommended that a substitute form not exceed the same number of pages used for the official form.

(a) Both sides of the paper may be printed for multiple page official forms; but it is unacceptable to intermix single page schedules of forms, except for Schedules A and B which are printed back to back by the Service. For example, Schedule E can be printed on both sides of the paper, because the official form is multiple page, with page two continued on the back. However, for example, do not print Schedule E on the front page and Schedule SE on the back, or Schedule A on the front and Form 3903 on the back, etc. Both pages of a substitute form must match the official form version it represents, except that the back page may be blank if the Service form only contains the instructions thereon.

4 Identify all computer-prepared substitutes clearly; print the form designation one-half inch from the top margin and one and one- half inches from the left margin; print the title centered on the first line of print; and print the taxable year and, where applicable, the sequence number on the same line one-half to one inch from right margin. Include the taxpayer's name and SSN on all forms and attachments. Also print the OMB number and (when applicable) the forms expiration date, as reflected on the official form.

5 The state tax column may be present, but the state tax information must NOT be visible on the copy filed with the Service. When a form is designed with both federal and state columns, the federal column must be to the left of the state column and adjacent to the line caption.

6 Attach all payments (check or money order -- no cash) to the front of the tax return, on top of any Forms W-2 or W-2G.

7 Negative (or loss) monetary amount entries should be enclosed in brackets, or signed minus, to assist in the accurate computation and input of form data. On many official forms the Service preprints brackets in selected negative data fields, and these designations should be retained or inserted on affected substitute forms.

SEC. 12. FILING SUBSTITUTE FORMS WITH THE SERVICE

Follow the same instructions as for filing official forms. These instructions are in the taxpayer's tax package.

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

01 The Form 1040EZ is designed in OCR format. IRS has the capability to machine read this form by optical character recognition (OCR) equipment (Scan-Optics-System 540 and Recognition Equipment Inc. - Input 80 Model B Scanner).

02 It is optional to produce the 1040EZ substitute as a normal (black and white) reproduction, or as an actual OCR version. The following criteria applies if the form is to be OCR scannable. Otherwise, you may print this form under the above general guidelines of this Revenue Procedure.

03 An acceptable substitute OCR Form 1040EZ must generally be an exact replica of the official OCR reproduction proof with respect to layout, content and required OCR characteristics.

04 The specific paper requirements which must be met for the development of a substitute (privately printed) OCR Form 1040EZ include the following:

1 Color and quality of paper -- Paper must be white, OCR grade bond, with no fluorescent additives or water marks, 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 bond (.0035").

5 Dirt -- Must not exceed 10 parts per million.

6 Finish (smoothness) -- Must be between 90 and 160 units (Sheffield).

7 Porosity -- Paper should have a Gurley reading between 15 and 95.

8 Gloss -- Paper with shiny or lustrous appearance (glossy) should be avoided.

9 Size -- Form trim size must be 8" x 11".

05 The specific ink requirements which must be met for this form include the following:

1 Print Color -- The face of the form prints in black and green, the back prints in black only (70% screen).

2 Ink -- Green ink used must be highly reflective OCR type, such as Sinclair and Valentine J-27975, or an exact match. Black ink used must be non-reflective.

3 Face Registration -- Black to green must be .02" (plus or minus) both horizontally and vertically.

4 Face Screen -- Forms contain a green screened background equal to a 15% tone of 110-line screen. Follow registration marks on repro- proof for screen positioning. Handprinted boxes are included on Page 1 of the reproduction proof and should be printed as a 50% value of the recommended OCR green ink. Inks used for handprint boxes must reflect at least 90% of the background on which it is printed as measured in the visible range.

5 Face Margins -- Approximately 2/6" head from top trimmed edge to screen (1/2" to black image). 1/6" outside from trimmed edges to screen. Exact margins are provided with reproduction proofs.

6 Back Margins -- 1/2" head, 5/16" foot, and 5/16" sides.

7 Back Screen -- Back copy should be screened for 70% tone value.

06 Typography

Type must be substantially identical in both size and shape with corresponding type on the official form reproduction proof.

07 To assure proper alignment and position of hand-printed characters representing return lines 1 through 9 tax data, they must be handprinted (entered) into the preprinted amount field boxes on the form. A #2 lead wooden pencil, or blue, and/or black ink pen (ball point, fountain, or felt-tipped) is recommended as the writing tool which will consistently provide the required stroke width and print contrast on entered characters.

08 Reading of handprinted characters requires adherence to the following techniques.

1 Enter numeric amount digits carefully and clearly. Fill at least 2/3 of the individual character box height, keeping the character within the box with no overlapping or touching characters. Specific required digit constraints are shown below.

2 When entering "fours", keep the top open.

3 When entering "ones", do not use serifs.

4 When entering "twos", do not add extra loops.

5 All character lines must be connected, with no gaps.

09 Color Screening. On a non-OCR Form 1040EZ only, it is not necessary to duplicate the color-screening used on the official form. A substitute (non-OCR) Form 1040EZ may be printed in black and white, with no color screening required.

10 All the general and detailed provisions of this Revenue Procedure apply (in addition to this specific OCR Section) for the development of substitute OCR Forms 1040EZ.

SEC. 14. COMPUTER GENERATED ALTERNATIVE RETURNS PIPER, 1040 OCR FORMAT

01 The Internal Revenue Service is offering a new approach for filing individual income tax returns. PIPER (Paper Input Processed as Electronic Returns) is a scannable alternative to the conventional preprinted tax return. Tax returns are filed by accepted tax preparers using approved software in a scannable answer sheet format.

1 PIPER converts computer prepared returns into an electronic filing format. The PIPER, 1040 OCR Format, returns must be computer prepared, printed on plain bond paper, signed and mailed to the designated processing center. PIPER returns are then optically scanned, converted to electronic filing format and then processed like any other electronically filed return.

2 PIPER, 1040 OCR Format, is available to tax preparers whose clients will file 1991 tax year Individual Income Tax Returns. During the 1992 filing season, schedules and forms will be limited to the following:

Form 1040, U.S. Individual Income Tax Return

Form 1040A, U.S. Individual Income Tax Return

Form 1040EZ, Income Tax Return for Single Filers With No Dependents

Schedules A & B, Itemized Deductions and Interest and Dividend Income

Schedule C, Profit or Loss From Business

Schedule D, Capital Gains and Losses

Schedule E, Supplemental Income and Loss

Schedule EIC, Earned Income Credit

Schedule SE, Self-Employment Tax

Schedule R, Credit for the Elderly or the Disabled

Form 2106, Employee Business Expenses

Form 2119, Sale of Your Home

Form 2110, Underpayment of Estimated Tax by Individuals and Fiduciaries

Form 2441, Child and Dependent Care Expenses

Form 3903, Moving Expenses

Form 4562, Depreciation and Amortization

Form 5329, Return for Additional Taxes Attributable to Qualified Retirement Plans (Including IRAs), Annuities, and Modified Endowment Contracts

Form 8829, Expenses for Business Use of Your Home

Additional forms and schedules will be included for tax year 1992.

3 Participating preparers must file a formal application, Form 8633-A, Application to Participate in the 1992-1040 Optical Character Recognition (OCR) Project for Individual Income Tax Returns, and undergo acceptance testing to be eligible. All that is necessary to participate in PIPER is a personal computer, accepted software, a laser or high quality printer, and plain bond paper. PIPER will be attractive to smaller tax preparers who might not be interested in or capable of Electronic Filing. PIPER can be used by Electronic Filers for taxpayers who do not wish to use the Electronic Filing System.

4 Tax preparers in all 63 districts may participate in PIPER, 1040 OCR Format, for tax year 1991. PIPER, 1040 OCR Format, returns will be processed in the Cincinnati, Philadelphia, Ogden, and Andover Service Centers. The Direct Deposit option is available to taxpayers filing PIPER returns. Balance due returns may be filed using PIPER. The payment will be forwarded to the Service Center with a separate payment voucher.

5 All software used to generate the PIPER, 1040 OCR Format, return must be tested and accepted by the Internal Revenue Service. Testing will validate that output generated by the software complies with specifications contained in the Project PIPER Revenue Procedure for Return Preparers (Publication 1484) and Record Specifications for Software Developers (Publication 1483).

6 Upon successful completion of Preparer Acceptance Testing (PATS), an applicant will be issued an acceptance letter and PIPER Identification Number (PIN). Software developers will also be issued a software acceptance number.

7 The Internal Revenue Service believes that PIPER will prove beneficial to taxpayers, tax preparers, and the Service. For specific information about the alternative tax return 1040 OCR Format refer to Publication 1484, Project PIPER Revenue Procedures for Return Preparers, and Publication 1483, Project PIPER Record Specifications for Software Developers. You may also call (202) 874-0949 or write:

     PIPER Project Office

01 The Form 941 is designed in OCR format. The Service has the capability to machine read this form by Optical Character Recognition (OCR) equipment (Recognition Equipment Inc.-Input 80 Model B Scanner), if submitted in acceptable OCR format.

02 Effective with forms filed for the first quarter of 1988, the Form 941 should be produced only in OCR scannable format. The following specific criteria apply if the substitute form is to be produced for OCR processing.

03 An acceptable substitute OCR Form 941 must be an exact replica of the official reproduction proof with respect to layout, content, and required OCR characteristics.

04 The specific paper requirements which must be met for the development of substitute (privately printed) forms generally duplicate those specified in Part B, Section 13, with the following exception:

1 Size -- Form 941 trim size must be 8-1/2" x 11".

05 The specific ink requirements which must be met for these forms include the following:

1 Print Color -- Black and Red

2 Ink -- Red ink must be a highly reflective (not less than 80%) OCR type ink, such as Sinclair/Valentine J6983 or an exact match. Black ink reflectance must not be greater than 15%.

3 Handprint Boxes (including the numbers outside the boxes) -- These handprint boxes (for IRS entries and use only) are included on the reproduction proof, and should be printed as a 50% screen value of the recommended OCR red ink. Inks used for handprinted boxes must be 15% or less when tested using the MacBeth or Kidder testers (see #5 below).

4 Face Margins -- Minimum margins require 1/2" head; center sides; and 5/16" foot.

5 Testers -- The following two print testers may be used for Form 941. Any other type tester must first be approved by the IRS.

(a) MacBeth PCM-II

Use "C" scale. Range must be between .01 minimum to .05 maximum.

(b) Kidder 082 A

Use infrared scale. PSC values must fall in the range of .32 minimum to .38 maximum. White calibration disk must be set at 100%. Sensitivity must be set at "1".

SEC. 16. PAPER SUBSTITUTES FOR FORM 1042S

01 Paper substitutes for Form 1042S that totally conform to the specifications contained in this procedure may be privately printed without prior approval from the Internal Revenue Service. Proposed substitutes not conforming to these specifications must be submitted for consideration.

1 The request should be submitted by November 15 of the year prior to the year the form is to be used. This is to allow the Service adequate time to respond and the submitter adequate time to make any corrections. These requests should contain a copy of the proposed form, the need for the specific deviation(s), and the number of information returns to be printed.

2 Form 1042S is subject to annual review and possible change. Withholding agents and form suppliers are cautioned against overstocking supplies of the privately printed substitutes.

3 Copies of the official form for the reporting year may be obtained from most Service offices. The Service provides only cut sheets (no carbon interleaves) of these forms. Continuous fan- fold/pin-fed forms are not provided.

02 Instructions for Withholding Agents

1 Only original copies may be filed with the Service. Carbon copies and reproductions are not acceptable.

2 The term "Recipient's U.S. tax identifying no.," for an individual means the social security number (SSN), consisting of nine digits separated by hyphens as follows: 000-00-0000. For all other recipients, the term means employer identification number (EIN). The EIN consists of nine digits separated by one hyphen as follows: 00- 0000000. The tax identifying number must be in one of these formats.

3 Withholding agents are requested to type or machine print whenever possible, provide quality data entries on the forms (that is, use black ribbon, insert data in the middle of blocks well separated from other printing and guidelines), and take other measures to guarantee a clear, sharp image. Withholding agents are not required, however, to acquire special equipment solely for the purposes of preparing these forms.

4 On corrected returns, the words CORRECTED RETURN must be typed in all capital letters in the top 1/4 inch, right of center margin. All required information must be completed on a corrected return since it replaces and supersedes the information return previously filed.

5 Substitute forms prepared in continuous or strip form must be burst and stripped to conform to the size specified for a single form before they are filed with the Service. The dimensions are found below.

(a) Computer cards are acceptable, provided they meet all requirements regarding layout, content, and size.

03 Substitute Forms Format Requirements.

1 Privately printed substitute Forms 1042S must be exact replicas of the official forms with respect to layout and contents. Only the dimensions of the substitute form may differ and the printing of the Government Printing Office symbol must be deleted. The exact dimensions are found below.

2 Line 1 must be present, line 2 may be omitted if it is not needed. If line 2 is omitted, also omit line 3.

3 None of the boxes can be omitted. Each box (a through h) must be present and in the exact order. The box for each payment amount must contain the appropriate caption.

4 Color and Quality of paper.

(a) Paper for Copy A must be white chemical wood bond, or equivalent, 20 pound (basis 17 x 22 - 500), plus or minus 5 percent; or offset book paper, 50 pound (basis 25 x 38 - 500). No optical brighteners may be added to the pulp or paper during manufacture. The paper must consist of principally bleached chemical woodpulp or recycled printed paper. It also must be suitably sized to accept ink without feathering.

(b) Copies B, C, D (for Recipient), and E (for Withholding Agent) are provided in the official assembly solely for the convenience of the withholding agent. Withholding agents may choose the format, design, color and quality of the paper used for these copies.

5 Color and Quality of Ink -- All printing must be in a high quality non-glass black ink. Bar codes should be free from picks and voids.

6 Typography -- Type must be substantially identical in size and shape to corresponding type on the official form. All rules on the document are either 1 point (0.015 inch) or 3 point (0.045 inch). Vertical rules must be parallel to the left edge of the document; horizontal rules, parallel to the top edge.

7 Dimensions -- The official form is 8 inches wide x 5-1/2 inches deep, exclusive of a 1/2 snap stub on the left side of the form. The snap feature is not required on substitutes.

(a) The width of a substitute Copy A must be a minimum of 7 inches and a maximum of 8 inches, although adherence to the size of the official form is preferred. If the width of the substitute Copy A is reduced from that of the official form, the width of each field on the substitute form must be reduced proportionately. The left margin must be 1/2 inch and free of all printing other than that shown on the official form.

(b) The depth of a substitute Copy A must be a minimum of 5-1/6 inches and a maximum of 5-1/2 inches.

8 Carbonized forms or "spot carbons" are not permissible. Interleaved carbons, if used, must be of good quality to preclude smudging and should be black.

9 Other Copies -- Copies B, C, and D are required to be furnished for the convenience of payees who are required to send a copy of the form with other federal and state returns they file. Copy E may be desired as a withholding agent's record/copy.

04 Additional Instructions

1 Arrangement of Assembly -- If all five parts are present, the parts of the assembly shall be arranged from top to bottom as follows: Copy A (Original), "For Internal Revenue Service," Copies B, C, and D, "For Recipient," and Copy E "For Withholding Agent."

SEC. 17. SPECIFICATIONS FOR FILING SUBSTITUTE SCHEDULES K-1

Prior approval is NOT required for a substitute Schedule K-1 that accompanies Form 1065 (for partnership), a Form 1120S (for small business corporation), or a Form 1041 (for fiduciary) when the substitute Schedule K-1 meets all of the following requirements.

01 The Schedule K-1 must contain the payer and recipient's name, address and SSN/EIN.

02 The Schedule K-1 must contain all line items required for use by the taxpayer.

03 The line items must be in the same order and arrangement as those on the official form.

04 The line items must be numbered, titled, and/or captioned exactly as shown on the official form.

05 Each taxpayer's information must be on a separate sheet of paper. Therefore, all continuously printed substitutes must be separated, by taxpayer, before filing with the Service.

06 Schedules K-1 for recipients must have instructions for required line items attached.

07 You may be subject to penalties if you file Schedules K-1 with the Service and furnish Schedules K-1 to partners, shareholders, or beneficiaries that do not conform to the specifications of this revenue procedure.

08 The amount of each partner's, shareholder's or beneficiary's share of each line item must be shown. The furnishing of a total amount for each line item and a percentage (or decimal equivalent) to be applied to such total amount by the partner, shareholder, or beneficiary does not satisfy the law and the specifications of this revenue procedure.

09 If you file Schedules K-1 not conforming to the above specifications, IRS may consider these as not processable and return them to you to be filed correctly. You may also be subjected to the penalty as mentioned in .07 above.

SEC. 18. PROCEDURES FOR PRINTING INTERNAL REVENUE SERVICE ENVELOPES

01 Organizations are now permitted to produce substitute tax return envelopes. Use of substitute return envelopes that comply with the requirements set forth in this section will assist in delivery of mail by the U.S. Postal Service and facilitate internal sorting once the envelopes are received at the Internal Revenue Service Centers. The permanent five digit ZIP codes assigned to the ten service centers are listed below. These ZIP codes must be utilized when mailing returns to the prescribed service center:

     ATLANTA GA 39901

03 The Internal Revenue Service will not furnish or sell bulk quantities of preprinted tax return envelopes to taxpayers or tax practitioners. A suitable alternative has been developed which will accommodate the sorting needs of both the IRS and the U.S. Postal Service. The new alternative is based on the use of ZIP + 4 or 9 digit ZIP codes for mailing various types of tax returns to the different area service centers. Essentially, the Postal Service will utilize the last four digits to identify and sort the various form types into separate groups for processing. The list of add-on four digits or + 4 portion of the 9 digit ZIP codes with the related form designations is provided below and is to become a permanent part of the five digit service center ZIP codes shown above.

      FORM ZIP +          PACKAGE

1 Any deviations from the specifications outlined on the position/design sheets must be approved in advance. Use of preparer company names, addresses and logos are permissible so long as prescribed clear areas are not invaded. Use of carbon based ink is essential for effective address and bar code reading. Envelope construction can be of side seam or diagonal seam design. Continuous pin-fed construction is not desirable, but is permissible if the glued edge is at the top. This requirement is firm as mail opening equipment is designed to slice or otherwise open the bottom edge of each envelope.

05 The above procedures or guidelines are written for the user having envelopes preprinted. Many practitioners may wish to have volumes of the different envelopes with differing ZIP codes/form designations preprinted for reasons of low volume, warehousing, waste, etc. In this case, the practitioner can type or machine print the addresses with the appropriate ZIP codes to accommodate sorting. If the requirements/guidelines outlined in this section cannot be met, then use of only the appropriate five digit service center ZIP code is needed.

SEC. 19. SPECIFICATIONS FOR OCR SCANNABLE APPLICATION FORMS FOR EMPLOYEE PLANS

01 Forms 4461, 4461-A, 4461-B, 5300, 5303, 5307, 5310, 5310-A, and 6406 are OCR scannable documents submitted to key district offices for employee plans matters. They may be submitted as Computer-generated substitute forms if the requirements of this section are satisfied.

02 An OCR data sheet must be generated according to the following requirements:

1 Set at least 1" margin at top, bottom, and both sides.

2 A data element consists of a less than sign, information or at least 5 blank spaces, and a greater than sign (delimiters). All data elements from page one of the application forms in .01 above must be printed on the OCR data sheet, even if no information is entered between the delimiters.

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 be two lines. However, only one set of delimiters may bracket the field, even if the field is on two lines.

6 Each data element must appear on the OCR data sheet in the same sequence as printed on the preprinted form, reading top to bottom and from left to right.

7 Each data field must be sequentially numbered at left commencing with 1. See Notice 90-38 for examples of the acceptable format.

8 The data sheet must be printed on 8-1/2" x 11" white nonrecycled paper suitable for use with printing equipment and duplicating machines. A photocopy is not acceptable. Heavyweight bond paper and onion skin paper are not acceptable.

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 than sign (delimiters).

11 Do not fold or staple the OCR data sheet. It may remain loose, or be paper or spring clipped to the application.

12 At the top of the OCR data sheet add the heading "OCR Data Sheet, File With Application Form, Approval Number (leave nine spaces for approval number)".

03 The OCR data sheet must be submitted for approval to: EP OCR Forms Coordinator, E:O:D, Room 2235, 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 application form except as described in .05 below. This copy may be a photocopy, or a Computer-Generated Substitute Form. Computer-generated substitute forms may be submitted for approval to the address in .04 above. However, except for the OCR data sheet, such approval is not required if the requirements of this Revenue Procedure are satisfied. If approval is requested, leave 9 spaces for the approval number above the OMB approval number.

05 The OCR data sheet replaces one copy of page one of the application which must otherwise be submitted in duplicate. To avoid confusion when generating the OCR data sheet, the following wording should be deleted from the first page of the application, "File page 1 of the form in duplicate" and "Both copies of this page must be signed". If the Procedural Requirements Checklist is being generated, the following line items should be modified as indicated. Item (e) or (f) "Have you submitted page 1 in duplicate?" should be modified to read, "Have you submitted the OCR data sheet?", and item (f) or (g) "Have you signed both copies of page 1 of the application?" should be modified to read, "Have you signed the application?"

06 Nonscannable EP application forms, e.g., Form(s) 5302, 5305, and 5306 may be computer-generated. They need not be submitted for approval if the requirements of this Revenue Procedure are satisfied. If approval is desired, these forms may be submitted to the address in .03 above.

SEC. 20. PROCEDURE FOR SUBSTITUTE FORM 5471 AND FORM 5472

01 Instructions for Preparing Substitute Forms 5471, Information Return With Respect To Certain Foreign Corporations, and their accompanying Schedules M, N and O, and Forms 5472, Information Return of a Foreign-Owned Corporation, or a Foreign Corporation Engaged In a U.S. Trade or Business (Under Sections 6038A and 6038B of the Internal Revenue Code).

1 Paper and Computer-Generated Substitutes for Form 5471 and the accompanying Schedules M, N, and O, and Form 5472 that totally conform to the specifications contained in this procedure may be privately printed, but must have prior approval and are subject to annual review from the Internal Revenue Service.

2 Copies of the official forms for the reporting year may be obtained from most Service offices. The Service provides only cut sheets of these forms. Continuous fan-folded/pin-fed forms are not provided.

3 The Service will accept QUALITY substitute tax forms that are consistent with the official forms they represent, AND that do not have an adverse impact on our processing. Therefore, only those substitute forms that conform to, and do not deviate from the corresponding official forms, are acceptable.

02 Computer-Prepared Tax Forms

If the substitute returns and schedules meet the guidelines prescribed herein, the Service will for filing purposes accept computer-prepared Forms 5471 and 5472 filled in by a computer, word processing equipment or similar automated equipment or a combination of computer-prepared/generated and filled in information, filed separately or attached to individual or business income tax returns.

03 Format Arrangement

1 The substitute must follow the design of the official form as to format, arrangement, item caption, line numbers, line references, and sequence. It must be an exact textual and graphic MIRROR image of the official form for it to be acceptable.

2 The filer must use one of the official ten character amount formats. All entries in the amount column should have a decimal point following the whole dollar amounts whether or not the vertical line that separates the dollars from the cents is present. It must follow a consistent format.

3 The reference code must be printed to the left of the corresponding captioned line and also immediately preceding the data entry field EVEN if there is no reference code preceding the data entry field on the official form. The reference code that is immediately before the data field must either be followed by a period or enclosed in parentheses. There also must be at least two blank spaces between the period or the right parenthesis and the first digit of the data field.

4 The size of the page must be the same as the official form (8- 1/2" x 11").

5 The acceptable print is "Helvetica".

6 The spacing of the print must be 6 lines/inch vertical, 10 or 12 print characters per inch horizontally.

7 A 1/2 to 1/4 inch margin must be maintained across the top, bottom, and both sides (exclusive of any pin feed holes).

8 The substitute form must be of the same number of pages as the official one.

9 The preprinted brackets in the money fields should be retained.

10 The filer must COMPLETELY fill in all the specified numbers or referenced lines as they appear on the official form, (not just totals), BEFORE attaching any supporting statement.

11 Supporting statements are NEVER to be used until the required official form they support are first totally filled in (completed). A blank or incomplete form that refers to a supporting statement, in lieu of completing a tax return is unacceptable.

12 Descriptions for captions, lines, etc., appearing in the substitute forms may be limited to one print line by using abbreviations and contractions, and by omitting articles, prepositions, etc. However, sufficient key words must be retained to permit ready identification of the caption, line or item.

13 Text prescribed for the official form, which is solely instructional in nature, e.g., "Attach this schedule to Form 1040," "See instructions," etc., may be omitted from the form.

04 Filing Instructions

Instructions for filing substitute forms are the same as for filing official forms.

SEC. 21. FORMS FOR ELECTRONICALLY FILED RETURNS

01 Since the 1986 filing season, the Service has been accepting current processing year electronically filed refund returns. Effective for tax year 1991, we will also accept balance due returns that are filed electronically. Electronic filing is a method by which qualified filers transmit tax return information directly to an IRS Service Center over telephone lines, in the format of the official Internal Revenue Service forms.

Anyone wishing to participate in the Electronic Filing Program must submit a Form 8633, Application to Participate in the Electronic Filing Program. (Note: For Business returns, prospective participants must submit a Form 9041, Application for Electronic/Magnetic Media Filing of Forms 1041, 1065, 5500-C/R, and 5500EZ.)

2 The taxpayer signature which does not appear on the electronically transmitted tax return, is obtained by the qualified electronic filer on Form 8453, U.S. Individual Income Tax Declaration for Electronic Filing, for Forms 1040, 1040A and 1040EZ. Form 8453, which serves as a transmittal for the associated non-electronic (paper) documents, such as Forms W-2, W-2G, 1099-R, etc., is a one- page form and can only be approved through the Substitute Forms Program in that format. For specific information about electronic filing, refer to Publication 1345, Handbook for Filers of Individual Income Tax Returns. (NOTE: For Business returns, the electronic/magnetic media participants must use the official Form 8453-E, F or P, or an approved substitute that duplicates the official form in language, format, content, color and size.)

3 A participant in the electronic filing program who wants to develop a substitute form should follow the guidelines for preparing substitue forms throughout this publication, and send a sample of the form for approval to the Electronic Filing Systems Office, Substitute Forms coordinator at the following address:

     Internal Revenue Service

SEC. 22. FTD MAGNETIC TAPE PAYMENTS

01 REVENUE PROCEDURE 89-48 (IRS PUBLICATION 1315) provides the requirements and instructions for reporting agents who submit quarterly Federal Tax Deposits (FTD) payment information on magnetic tape. Magnetic tape submissions for FTD can be made for Forms 940, 941, 942, 943, 720, CT-1, 990-PF, 990-T, 990-C, 1042, 1120, and Form 941 (Schedule A) Backup Withholding.

02 Revenue Procedure 89-49 (Pub. 1374) provides the requirements and instructions for certain banks and fiduciaries to submit Form 1041-ES payments on magnetic tape through the Federal Tax Deposit (FTD) system.

SEC. 23. EFFECT ON OTHER DOCUMENTS

This revenue procedure supersedes Revenue Procedure 91-16, 1991- 1 C.B. 487.

[Editor's note: Exhibits A-1 through CG-1040(2) illustrate physical specifications of the forms discussed. These illustrations are not suitable for electronic reproduction.]